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Low Emission Vehicles : Tesla Motors

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From LEV vehicles to underline the principal main aspects of Tesla motors.
Business model innovation provided by Tesla motors through three mechanism: 1) Innovation towards vehicles. 2) Innovation towards batteries. 3) Innovation towards infrastructures.
This presentation will give you information about the Technology development in the industry car (LEV vehicles) and the business model innovation of Tesla, studying its important value configuration.

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Low Emission Vehicles : Tesla Motors

  1. 1. LOW EMISSION VEHICLES
  2. 2. A low-emission vehicle is a motor vehicle that emits relatively low levels of motor vehicle emissions. Since 1990s until now LEV technologies have grown and many car manufacturers have invested in cleaner engines (“green” concept) and tested all kinds of other technologies to reduce car emissions. Three LEV technologies have emerged as potential alternatives for the internal combustion engine (ICE) : hybrid vehicle (HV), electric vehicle (EV) and fuel-cell vehicle (FCV). Energy Sustainability GREEN SOLUTIONS Hydrogen FCV Hydrogen is converted to electricity with high efficiency. No tailpipe Co2 emissions and other pollutations HV ICE + electric motor. Both deliver power to wheels. Engine-generator + electric motor Electricity EV/PIV Electric motor with usage of energy stored in energy storage devices (rechargeable battery)
  3. 3. Period 1997 Type US EU JP Total HV 2 2 4 8 EV (incl. PI) 3 - 8 11 FVC - 1 - 1 Total 5 4 12 20 Untill 1997 car manufacturers focused on batteries in variuos forms (EVs, HVs and PIs). Car manufacturers experimented with LEV technologies, particularly «exoploring batteries». From 1997, when LEVs were brought to the market, to 2010, many car manufacturers were investing in different LEVs technologies and launched in total 320 different LEV models. LEV activity increased over time due to policy interventions that have affcted firms innovation by linking policy interventions with car manufacturers’ LEV engagement. Untill 1997 •EXPLORING BATTERIES 1998-2005 •RISE OF HYDROGEN 2006-2015 •REVIVAL OF ELECTRIC
  4. 4. Period 1998 2005 Type US EU JP Total HV 29 9 33 71 EV (incl. PI) 3 1 6 10 FVC 18 9 24 51 Total 50 19 63 132 From 1998 to 2005, EV development almost halted and car manufacturers focused on FCVs and HVs. In this phase it shows that HVs had a solid share and it compted with FCVs for the dominant LEV design position. HVs were making their way into the mass market. Period 2006 2010 Type US EU JP Total HV 15 22 39 76 EV (incl. PI) 24 22 25 71 FVC 6 5 10 21 Total 45 49 74 168 From 2006 to 2010, the LEV trajectory backs to EVs. The financial crisis reduced battery prices due to increasing production capacity, and urban interest in pollution-free alternatives triggered a new search for alternative technologies reflected in increasing launches of Evs and PIs.
  5. 5. LEVs industry is a complex interplay between local, national and international policies and innovative firms. Governments at different levels have contributed to the LEV trajectory by employing numerous policy instruments over time. Policy instrumentes which directly impact on LEV development are: • Comand-control (policies based on performance standards, CAA and ZEV). • Market-based (sales tax waivers and income tax credits). • Volountary agreements/public-private partnerships (RD&D projects, i.e. ACEA).
  6. 6. A perspective to analyse the influence of government policy on firm LEV innovation in an international context is the co-evolution framework, an interplay between different actors such as government, car manufacturers and customers (SOCIAL-TECNICAL REGIME). SOCIAL-TECNICAL REGIME GOVERNMENT NEW REGULATIONS RADICAL CHANGES CAR MANUFACTURERS RADICAL CHANGES BREAKTHROUGH CUSTOMERS SHIFT IN PREFERENCE Bergek and Berggren said “Instruments implemented in one country can, of course, stimulate innovation in other countries, especially when supply-chains are international”. This affermation implemtents an international perspective on policy impact because car firms operate internationally and are exposed to a variety of government policies at different levels.
  7. 7. LEV trajectory, besides by technological developments, was shaped by the international co-evelution between policies in different geographical areas at different policy levels and car manufacturers’ innovation strategies. LEV trajectory has been influenced and shaped by three diverse mechanisms: • International policy diffusion: government policies impact on other government choices and attitude (vertical vs horizontal policy diffusion). Vertical policy diffusion • Top-down diffusion (Kyoto Protocol 1997) • Bottom-up diffusion Horizonal policy diffusion Policies are diffused across for two main motives: • They may presents a competitive threat. • They may solve a problem in a successful way • International operations of firms (firms being operativ n home and host markets, are affected by several policies and they are at the same time influential on LEV trajectory ). car manufacturers markets are internationally intertwined.
  8. 8. 3) Match between policy regulatory requirments and firm capabilities (it could demand radical or incremental technology: i.e. unreached radical innovation are reused as know-how for «toned-down» incremental technologies). INTERNATIONAL MULTI-LEVEL FRAMEWORK These three mechanisms explain how several local technological trajecories may shape an international trajecotory.
  9. 9. Tesla Motors designs and sells high performance, super efficient electric cars. Tesla Motors cars join style, acceleration, and handling with advanced (Tesla Motors, Mission). Tesla Motors has brought the best of the automotive and technology worlds together to permanently bury the image of an electric car as a step backwards in performance, efficiency, or design. Tesla Motor’s key technology is the 100% electric powertrain. (Tesla Motors, Vision).
  10. 10. 2003 - Founded. 2006 - Prototypes of the Roadster introduced to the public. 2007 - Two batches of 100 Roadster sell. 2008 - Opened the first retail store in Los Angeles. 2009 - Unveleid the Model S. 2010 - IPO launched: Toyota purchases 2.9m shares and Panasonic purchases 1.4m shares. - Announced partnership to develop powertrain system with Toyota RAV4 2011 - Stopped taking Roadster orders. - Unveleid Model X. 2012 - Commecial deliveries of the Models S begin. - Began building Supercharger stations. 2013 - Musk promises US to be covered with Supercharger stations. - First partial recall. - Time Magazine’s Best 25 inventions of 2012. 2014 Gigafactory announcement: - 200th Tesla Charging Station opened (2 months later, 300th opened). - Musk announces anyone can use their patent in good faith. - Model X will enter production. 2015 - 400th Tesla charging station: 1st solar powered charging station. - Model 3 announcement. HISTORY: KEY EVENTS
  11. 11. Electric vehicle (EV) industry is still in the introduction stage in product life cycle, and its dominant design its still dormant. The world’s best-selling EV is the Nissan Leaf, a modest little passenger vehicle, with over 165,000 units sold by March of this year since its release in late 2010. The Mitsubishi Outlander PHEV and the Tesla Model S are the second and third best-selling EVs today. Total global sales of EVs/PHEVs amounted to 320,000 units in 2014, an 80 percent rate of growth and on pace to easily exceed 500,000 in 2015. Market share % 2014
  12. 12. EV manufacturing companies have long taken numerous endeavors to promote EV in the niche markets by providing innovative business models. A business model describes how a firm creates and delivers value to consumers or the means and methods employed to earn the profits expected from its plans/investiments. WHAT TO WHOM HOW Tesla DISRUPTIVE INNOVATION SOLUTIONS represent a clear INNOVATE BUSINESS MODEL DESIGN focusing on technology advantages Effects on market: - New customers attraction. - Existing customers encouragement. VALUABLE MARKET OFFERING COMPETITIVE ADVANTAGE IN THE LONG RUN
  13. 13. Tesla business model innovation involves a pratical reconsideration of five main aspects: •Value proposition (products/services to fulfill customers’ needs) •Customer interface (market segment) •Infrastructure management (distribution channel) •Financial aspects (revenue model – type of payment) •Value configurationFinal stage (resulting stage) VALUE CHAIN It develops in three key dimensions: INNOVATION VEHICLE BATTERY INFRASTRUCTURE SYSTEM EV VALUE CHAIN Emphasizing on: -BATTERY (battery cell manufacturing and battery packing). -VEHICLE (EV design, assembling and sales). -INFRASTRUCTURE ENABLING GRID CONNECTION.
  14. 14. Vehicle: • High Performance • Increased connectivity between users and environment • High-end niche market to mass market EV • New multichannel model, vertical integration on selling • Ownership-as-usual ROADSTER Fancy looking sport car MODEL S Premium family car MODEL X Suv TESLA 3 Mass market family car INTO MARKET PROTOTYPES
  15. 15. Battery: • High range: innovative battery pack technology • User control on battery system • Sold with the vehicle • Relationship with Panasonic Infrastructure system: • Fast charging • Ambitious expansion plan • Always connected with supercharging stations • Different charging technology: free use of patent (open source) • Free entrance for Tesla customers
  16. 16. Tesla, in cooperation with Panasonic and other strategies partners, will autonomously produce its battery through: • Economy of scale (less cost) • Innovate manufacturing • Reduction of waste • Simple optimization by locating manufacturing process under one roof By 2017 Tesla expects to begin cell production TOTAL VERTICAL INTEGRATION HIGH VOLUME OF EV SALES Tesla main challenge is to trigger sustainable transportation worldwide
  17. 17. Energy Storage for a Sustainable Home Powerwall is a home battery that charges using electricity generated from solar panels, or when utility rates are low, and powers your home in the evening. Automated, compact and simple to install, Powerwall enables you to maximise self-consumption of solar power generation. POWERWALL: TESLA HOME BATTERY Solar Powered Day and Night The average home uses more electricity in the morning and evening than during the day when solar energy is plentiful. Without a home battery, excess solar energy is often sold to the power company and purchased back in the evening. This mismatch adds demand on power plants and increases carbon emissions. Powerwall bridges this gap between renewable energy supply and demand by making your home's solar energy available to you when you need it. Two advantages: Reduce Your Electricity Bill and Energy Security.
  18. 18. • New value Consideration with greater integration: From a value chain’ perspective, Tesla’ resulting value configuration involves an high level of vertical integration CONVENTIONAL AUTOMOBILE VALUE CHAIN • Supplier components • Core components • OEM assembling • Energy utilities Tesla INTEGRATED VALUE CONFIGURATION from: Battery packing EV design Retail distribuition Emphasized supercharger network In the future, Tesla will also integrate battery cell manufacturing (Nevada Giga factory). INTEGRATION STRATEGY should reduce: - Coordinate costs between manufacturer and suppliers. - Risk derving from lack of supporting infrastrucure. - Risk deriving from market uncertainty ( > high investments).
  19. 19.  Top-down and flexible product strategy: Tesla Motors product strategy concerns entering high-end market and moving then to wall-market consumer segment. Tesla demostrates a high level of innovation adaption jointly a strategic flexibility in pursuing radical business models (learning by doing attitude). • Strong commitment to range anxiety reduction: Tesla seriously commits to solve the range anxiety problem, pointing its attention to: Large capacity battery pack High performance supercharger station HIGH PERFOMANCE IN VALUE PROPOSITION OF BUSINESS MODEL • Integration of it: Tesla integrates information technology in many aspects of its business model, by involving, for istance, IT in both online and retail outletd distribution channels. GOALS: - To increase user-environment connectivity - To increae the add-on-value of vehicle and after sell sevices

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