Tesla analysis with its product life cycle

1. Name: Yash Mehta
Topic: Tesla
Subject: Management Control System
Submitted To: Prof.Sahil Gor

2. TESLA
Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto,
California. Tesla's current products include electric cars, battery energy storage from home to
grid scale, solar panels and solar roof tiles, as well as other related products and services. Tesla
is ranked as the world's best-selling plug-in and battery electric passenger car manufacturer,
with a market share of 16% of the plug-in segment (which includes hybrids) and 23% of the
battery electric (purely electric) segment 2020 sales. Through its subsidiary Solar City, Tesla
develops and is a major installer of solar photovoltaic systems in the United States. Tesla is
also one of the largest global suppliers of battery energy storage systems, with 3 GWH of
battery storage supplied in 2020.
Founded in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors, the
company's name is a tribute to inventor and electrical engineer Nikola Tesla. Elon Musk, who
contributed most of the funding in the early days, has served as CEO since 2008. According to
Musk, the purpose of Tesla is to help expedite the move to sustainable transport and energy,
obtained through electric vehicles and solar power. Tesla began production of their first car
model, the Roadster, in 2009. This was followed by the Model S sedan in 2012, the Model X
SUV in 2015, the higher volume Model 3 sedan in 2017, and the Model Y crossover in 2020.
The Model 3 is the world's all-time best-selling plug-in electric car, with more than 800,000
delivered through December 2020. Tesla's global vehicle sales were 499,550 units in 2020, a
35.8% increase over the previous year. In 2020, the company surpassed the 1 million mark of
electric cars produced.
TRACKING TESLA
• Nikola Tesla patents power train design built around AC induction motor.1888
• Tesla motors incorporated. 2003
• Tesla roadster launched. 2008
• IPO raised US $226 M at $17/share and closed at $23.89.2010
• The world’s first premium electric sedan is launched - Model S.2012
• Model S named motor trend’s car of the year and achieved 5 star rating from the U.S national
highway traffic safety administration. 2013

3. • Tesla shares some of its patents to promote open source development of electric cars. 2014
• Tesla launched its new crossover vehicle – model X.2015
• Tesla introduced mass market electric vehicle - Model 3.2016
• Model 3 production is scheduled to begin in July .2017
TESLA CAR MODELS
ROADSTER
• Code name: Dark star.
• Production: 2008-2012. • Price : US $109000. • Top speed : 130 km/h. • Battery : 60 mah. •
Mileage : 320 km/charge. • 0-97 km in 3.7 sec.
MODEL S
Code name : white star.
• Full sized luxury all electric sedan. • Production : 2012. • Price : US $71500. • Battery : 70
kwh • Battery charge to 50% in about 20 minute from a Tesla super charger. • Mileage : 340
km/charge. • Top speed : 249 km/h, • Capacity : 5 adults and 2 kids
MODEL X
• Full sized all electric luxury crossover SUV. • Production : 2015. • Price : US $80000. •
Battery : 60 kwh. • Mileage : 320 km/charge. • Top speed : 210 km/h. • Capacity 5 adult. •
Battery charge to 50% in about 20 minute from a Tesla super charger.
Business strategy
(Robotic manufacturing of the Model S at the Tesla Factory in Fremont, California)

4. At the time of Tesla's founding, electric vehicles were very expensive. Tesla's strategy was to
first produce high-price, low volume vehicles, such as sports cars, for which customers are less
sensitive to price. This would allow them to progressively bring down the cost of batteries,
which in turn would allow them to offer cheaper and higher volume cars. Tesla's first vehicle,
the Roadster, was low-volume (less than 2,500 were produced) and priced at over $100,000.
The next models, the Model S and Model X, are more affordable but still luxury vehicles. The
most recent models, the Model 3 and the Model Y, are priced still lower, and aimed at a higher
volume market, selling over 100,000 vehicles each quarter. Tesla continuously updates the
hardware of its cars rather than waiting for a new model year, as opposed to nearly every other
car manufacturer. Tesla does not pay for direct advertisement. The company aims to educate
customers through its showrooms situated in malls and other high-traffic areas, and sells its
vehicles online rather than through a conventional dealer network. The company is the first
automaker in the United States to sell cars directly to consumers.
(The Tesla Patent Wall at its headquarters was removed after the company announced its
patents are part of the open source movement.)
Tesla has a high degree of vertical integration, reaching 80% in 2016. The company produces
vehicle components as well as building proprietary stations where customers can charge their
vehicles. Vertical integration is rare in the automotive industry, where companies typically
outsource 80% of components to suppliers and focus on engine manufacturing and final
assembly.
Tesla generally allows its competitors to license its technology, stating that the purpose of the
company is to accelerate sustainable energy. Licensing agreements include provisions whereby
the recipient agrees not to file patent suits against Tesla, or to copy its designs directly. Tesla
retains control of its other intellectual property, such as trademarks and trade secrets to prevent
direct copying of its technology.

5. INNOVATION & STRATEGY
• Using new technology.
• Product innovation instead of process innovation.
• In-home service and assistance to customers.
• Vehicles are not rivalled.
• Super chargers exclusively for customers.
• Long lasting batteries 200 miles per charge).
MARKETING STRATEGY
• Unique approach.
• Opposite approach.
• Direct sales.
• Online purchase.
• Service plus concept.
Production of Tesla
The plant's first series production vehicle is the Tesla Model S full-sized battery electric sedan.
In 2011, Tesla transitioned from 20 hand-assembled "alpha builds" to 50 "beta builds",
production-validation vehicles built entirely at the Tesla Factory. These cars would also be
used for system integration, engineering testing, and federal crash-testing and certification.
Tesla expected to produce about 5,000 Model S sedans in 2012, with production ramping up
to 20,000 in 2013 if necessary. The first retail delivery of the Model S took place during a
special event held at the Tesla Factory on June 22, 2012. Production grew from 15 to 20 cars
completed/week in August 2012 to over 200 by November 5 and 400 by late December. In late
December Tesla revised their 2012 delivery projections down to 2,500 cars.
Deliveries reached 6,892 units in the last three months of 2013. In December 2013, California
announced it would give Tesla a US$34.7 million tax break to expand production by an
estimated 35,000 vehicles annually from its Fremont, California plant.

6. Tesla announced that production was expected to climb from 600 cars per week in early 2014
to about 1,000 units per week by year-end. Tesla produced 7,535 units during the first quarter
of 2014, and expected to produce 8,500 to 9,000 cars in the second quarter of 2014. As of early
May 2014, the production rate was 700 cars per week. As of 2015, about 1,000 cars were made
per week, mostly to pre-orders. Musk says they averaged around 20 changes to the S per week.
Production of the Model X joined the Model S during 2015, following a short reconfiguration
of the production line in July 2014. The first Model X that didn't need corrections was made in
April 2016. Tesla moved some of the equipment to their Tilburg final assembly plant in the
Netherlands in 2015.
On July 2, 2015, Tesla announced that it had delivered a total of 21,537 vehicles in the first
half of 2015. All vehicles were manufactured at the Fremont plant.
In May 2016 Tesla raised $1.46 billion in stock, of which $1.26 billion is to prepare production
of the Model 3 scheduled for late 2017. Changing from serially producing the Model S and X
to the mass production of Model 3 is viewed by experts as a significant step. Tesla stated in
May 2016 that it does not have that capability and needs to acquire it, which it partly did with
the acquisition of Grohmann Automation in 2016 and purchase of mass production equipment.
Whereas the Roadster was delayed by 9 months, the Model S more than six months, and the
Model X more than 18 months, analysts estimated in December 2016 that the Model 3
production preparation was on schedule for the second half of 2017.
On August 3, 2016, Tesla announced that it was consistently producing 2,000 vehicles per
week at the end of Q2 2016. About 2,500 workers operate the day shift and 2,000 attend the
night shift.
Tesla makes many parts itself, which is unusual in the auto business. Tesla also works with 300
suppliers around the world, of which 50 are in Northern California, and 10 in the San Francisco
Bay Area. Tesla's dashboard supplier SAS rents a 142,188-square-foot building near the
factory, beginning in January 2017 with 200 employees. Other suppliers to have opened
facilities in the area to be close to Tesla include Eclipse Automation and Futures Automotive
Group. Tesla produces many of its seats at its own seat factory a few miles south of the main
factory.
In 2020, due to the COVID-19 pandemic, Tesla implemented virus mitigation efforts in its
Shanghai and Fremont factories. Shanghai resumed production on February 10, while the

7. Fremont and New York factories were to reduce activity by March 24. On May 9, Tesla sued
Alameda County in order to force the reopening of the Fremont Factory. Tesla told its
employees that it had received approval to restart production in the week beginning May 18,
and the lawsuit was dropped on May 20.
Product lifecycle
In this phase, Tesla is introduced stage to growth stage. Their target customer is Early Adopters
to Early Mortality. In this phase company are continuing raising their awareness and educating
customers. Because in this stage many customers must learn about the product and its benefits
before they decide to purchase. Clients in this stage are willing to take more risk, and typically,
they are also willing to pay more to have the latest and greatest product will quickest to learn
about the Tesla, see its potential, and buy it.
The sales are not significantly high, compare to the nominal gasoline car, but is increasing lot
by itself. To put that figure into perspective, for the whole of 2015, Tesla has delivered 50,580
cars. Tesla Model S deliveries in Q4 of 2015 have a 75% rise compared to the same quarter the
last year. Moreover, Tesla has smashed its early delivery record (11,574 ) by 50%.
Tesla’s market share are continuing growth quickly, it in a blue ocean and take a lot of
advantaging from be a first mover in the electronic car industry. They do not have many
competitors. However, the whole electric car industry is dramatically growth during several
years. Because the global warming is one of the biggest issues over round the world. People
and government is increase concerning the planet and air pollution. Zero emission targets is a
long-term global goal for climate protection. This is a kind of challenge but it also a business
opportunity for many company. The future is green market (and digital), this kind of green and
environmentally friendly product gain lot of support from government and it will lead the
company to disruptive market.

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