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A CASE STUDY ON TESLA MOTORS

Background and Operations of Tesla Motors

Leading the advent of a more sustainable transportation system and its innovations, Tesla
Motors has established quite a reputation in the automotive industry. Since its establishment in
2003, the company has grown to be the biggest manufacturer of electric cars in the market. It
has contributed more than 50,000 cars in roads all over the world as of today (Tesla Motors,
n.d.). Its main goal is to create a transportation system that is more environment-friendly and
sustainable.

Electric cars are charged at home and do not require refuelling of gasoline unlike the cars
designed by other manufacturers. Quite expectedly, these zero-emission cars were not easily
accepted in the market as they were deemed impractical, not to mention consumers were not
really impressed with their rather tacky design. Fortunately, Tesla Motors was able to flip that
equation. By releasing their trailblazer electric sports car for the high-end market, the Tesla
Roadster, they were able to capture the attention of car enthusiasts and change the face of the
green car market.

After releasing the Roadster, Tesla pushed for more space in the industry by releasing their
luxury sedan, the Tesla Model S in 2012. More and more consumers are looking to buy electric
cars because of the innovations that were done by the company. In fact, reservations for their
next model releases are already piling up. There is much anticipation for the Tesla Model X and
Model 3 releases.

How Green is a Tesla Green Car?

The very purpose of an electric car is to promote energy innovation; and Tesla Motors’ goal is to
achieve this without causing any negative impact on the environment. However, a new
technology such as the innovative green car production cannot be made to pass without being
thoroughly criticized by the public. Green cars are, by principle, more environment-friendly than
the conventional fuel-based cars. The process, by which it is being manufactured, on the other
hand, says otherwise. Furthermore, green cars do run on electricity. But, how is electricity being
processed? Does it not come from coal and petroleum too? All things considered, is a Tesla
green car green after all?

The company admits that the degree of being environment-friendly of their cars - take the Model
S for example, mostly depends on where and how often the car is being driven. In the US, each
state has a different mix of energy sources that basically goes into their grid. In other words, a
“cleaner” source of electricity makes a Model S a more environment-friendly car. Generally, it is
still cleaner than the internal-combustion design of their competitors in terms of emissions-per-
mile; considering the efficiency of battery-powered cars in converting stored energy into a useful
form (Oremus, 2013).

Tesla Motors and the Campaign for Environmental Sustainability

Tesla Motors have established its campaign to promote a greener personal transport system
through its electric vehicles; but how does it impact the environment in the industrial context?
Are its processes and operations considered as environment-friendly?

The company is very much aware of the fact that they are indirectly releasing carbon emissions
through power plants – considering that electricity is the main power source of the vehicles. This
is the reason why Tesla moves to promote the absolute removal of indirect carbon emissions by
using Supercharger Stations that only uses grid electric power from solar panels (Walsh, 2014).
Moreover, Tesla is teaming up with SolarCity to provide electric car owners an option to charge
their cars using solar panels in their respective homes. This is like hitting two birds with one
stone. By eliminating the need for coal-based electricity source, they are indirectly reducing
carbon emissions in the atmosphere; and they are promoting the use of renewable energy
source at the same time.

Tesla is basically solving the world’s dependence on gas. Through their revolutionary
innovations in electric vehicle technology, they have addressed an issue that has been thought
as an improbability for many years. By making more convenient adjustments in their electric
cars, and at the same time proving that electric cars are indeed effective, Tesla has convinced
more consumers to patronize their product. The company is winning more and more battles as
they advance into bigger ventures.

In order to cater to their growing consumer demands, Tesla is building their very first
Gigafactory. Panasonic will be a huge investor in this project, along with Tesla’s other major
partners. The best thing about this gigafactory is the company’s plan to run it mainly on wind
and solar energy. Nevada is the perfect site for the factory because it is where the biggest solar
power plant in the world is located.

Tesla does not only serve as a leader in electric car technology, it is also becoming a model for
other companies to consider more environment-friendly processes. Coal mining and processing
has created many environment-related issues and are still causing problems in many places
around the world. If Tesla becomes successful in eliminating the need for non-renewable
sources of energy in order to generate electricity, it can change the face of the automobile
industry forever. Not only will it dramatically reduce the carbon emissions that are released to
the atmosphere, it will also eliminate the issues that are brought about by the processing of
electricity that is coming from natural resources.

Tesla Motors and the Competitive Industry

Of course, Tesla Motors is not the only company that has entered the green car market. Even
though the industry for green cars is not that big compared to the conventional automobile
market, it can be said that competition is not too lax. In fact, Toyota, Ford, Nissan, and Honda
are considered as the biggest competitors for Tesla. Audi, Volkswagen, and BMW are looking to
join the green car industry soon. And these are pretty huge companies. Can Tesla keep its
place in the industry without being squeezed out by giant car manufacturers? What is its
competitive advantage?

Unlike the rest of the automobile manufacturers, Tesla is 100% in the green car industry. Thus,
their focus is only within that market. Research and development is solely dedicated for this
purpose, allowing the company to create better innovations. Also, Tesla has about 5-year head
start over the other companies. While other companies are still building their green car designs,
Tesla is already polishing its own.

The future of the automotive industry is leaning towards the utilization of renewable sources of
energy. This basically means that other companies who are on the other side of the industry are
at a huge disadvantage. Oil is about to run out; but solar power is unlimited. Sooner or later,
they will have to shift to a more sustainable source of energy.

Tesla Motors and the Future of Green Car Technology

At the moment, Tesla’s priority is to maximize its production in order to meet the demands for
the Model S and Model X in the market. They are having troubles in meeting customer demands
with their very limited production. But the public can rest assured that Tesla will not stop
creating better innovations for their products. Once the gigafactory has been installed, Tesla’s
next focus will be on the development and improvement of automated driving technology. As a
matter of fact, the company’s CEO, Mr. Elon Musk has announced the release of their partially
self-driving vehicle by 2017 (Boyadjis, Rassweiler, & Brinley, n.d.).

As the technology for zero-emission cars progress, the issues regarding the automobile
companies’ impact on the environment is being addressed gradually. Someday, there will come
a time when vehicles will solely depend on solar power – among other renewable energy
sources. It may not totally solve Global warming, but it will help the world get there one step at a
time.

References

Boyadjis,M., Rassweiler,A., & Brinley,S. (n.d.). Object moved. Retrieved from

https://www.ihs.com/articles/features/tesla-motors.html

Hill,R. (2012, September). Attention Required! | CloudFlare. Retrieved from

http://www.mindtools.com/pages/article/newTED_08.htm

Oremus,W. (2013, September 9). How green is a Tesla? Electric cars’ environmental impact
depends on where you live. Retrieved from
http://www.slate.com/articles/technology/technology/2013/09/how_green_is_a_tesla_electric_ca
rs_environmental_impact_depends_on_where.html

Tesla Motors. (n.d.). About Tesla | Tesla Motors. Retrieved from

http://www.teslamotors.com/about

Walsh,T. (2014, November 1). Investing in Socially Responsible Companies: Tesla Motors Inc.
Retrieved from http://www.fool.com/investing/general/2014/11/01/investing-in-socially-
responsible-companies-tesl-2.aspx

Watkins,T. (n.d.). An Introduction to Cost Benefit Analysis. Retrieved from

http://www.sjsu.edu/faculty/watkins/cba.htm