This document summarizes the history and development of Tesla Motors. It discusses how Tesla was founded by Martin Eberhard and Elon Musk to produce an electric sports car called the Roadster. It describes the personality clashes between Eberhard and Musk that led to Eberhard's departure from the company. The document also outlines obstacles to adoption of electric vehicles like price and range anxiety, and Tesla's strategies to address them, such as creating a nationwide supercharging network. While Tesla had early success with the Model S, the document notes ongoing challenges for the company in achieving sustainable revenues and market share in the automobile industry.

1. CAPARAL. HAMAWY. MAGALIAO. NACILLA. PARAISO. REYES.
BA 190 - STRATEGIC MANAGEMENT
UNIVERSITY OF THE PHILIPPINES
PROF. MITA ANGELA M. DIMALANTA

2. 2013
• 4500-PERSO COMPANY
• CREATED 2 REMARKABLE CARS
• POSTED ITS 1ST QUARTERLY PROFIT
• REPAID ITS GOVERNMENT LOANS
• LOOKED LIKE IT MIGHT SURVIVE
• BENEFITED FROM ENTHUSIASM OF “ECO-WEALTHY”

3. HISTORY

4. HISTORY
• MARTIN ERBERHERD
• ENGINEER LOOKING FOR HIS NEXT BIG PROJECT
• SERIAL ENTREPRENEUR WHO LAUNCHED A NUMBER OF START-UPS
• HAD CONCERNS FOR GLOBAL WARMING & USA’S DEPENDENCE ON THE MIDDLE EAST FOR OIL
• LOOKED FOR A SPORTS CAR THAT WAS ENVIRONMENTALLY FRIENDLY
“IT WAS CLEAR THAT PEOPLE WEREN’T BUYING A PRIUS TO SAVE MONEY ON GAS – GAS WAS
SELLING CLOSE TO INFLATION – ADJUSTED ALL TIME LOWS. THEY WERE BUYING THEM TO MAKE A
STATEMENT ABOUT THE ENVIRONMENT.”

5. HISTORY
• ALTERNATIVE FUEL OPTIONS:
• HYDROGEN FUEL CELLS
• NATURAL GAS
• DIESEL
• ELECTRICITY

6. HISTORY
• AL COCCONI, FOUNDER OF AC PROPULSION & PRODUCER OF TZERO
• TZERO
• COULD GO FROM 0-60 MILES/HOUR IN 4.1 SECONDS
• POWERED WITH EXTREMELY HEAVY LEAD-ACID BATTERIES
• EBERHARD APPROACHED COCCONI WITH IDEA OF USING LIGHTER LITHIUM ION BATTERIES
• HE LICENSED ELECTRIC-DRIVE-TRAIN TECHNOLOGY FROM AC PROPULSION &
ESTABLISHED HIS COMPANY, TESLA MOTORS

7. HISTORY
ELON MUSK
• FOUNDED PAYPAL BUT SOLD IT TO EBAY FOR $1.5 BILLION
• STARTED SPACEX
• ONE OF THE INSPIRATIONS FOR TONY STARK IN IRON MAN SERIES OF MOVIES
• APPROACHED EBERHARD ABOUT BUYING TZERO BUT LATER ON AGREED TO JUST
FINANCE PLAN WITH $6.3 MILLION

8. HISTORY
ROADSTER
• FIRST TESLA PROTOTYPE
• FEATURES: 400 VOLTS OF ELECTRIC POTENTIAL, LIQUID-COOLED
LITHIUM ION BATTERIES, AND A SERIES OF SILICON TRANSISTORS
• GIVE CAR ACCELERATION SO POWERFUL, DRIVER WOULD BE PRESSED BACK
AGAINST THEIR SEAT

9. PERSONALITY CLASHES: EBERHARD VS. MUSK
BOTH WERE TECHNICALLY SAVVY & VIGOROUSLY ADDRESSING PROBLEMS WITHIN TESLA
EBERHARD: “JUST BRILLIANT, AND HE HAS THIS TENACITY THAT IS UNBELIEVABLE. . . HE IS
THE GUY YOU WANT AROUND IN THOSE EARLY DAYS WHEN YOU HAVE NAYSAYERS ALL
AROUND.” BUT ABRASIVE & CRITICAL

10. PERSONALITY CLASHES: EBERHARD VS. MUSK
AT ODDS OVER DECISIONS OF:
BODY PANELS
MARKETING
Use lighter, stronger – and more expensive –
carbon fiber

11. PERSONALITY CLASHES: EBERHARD VS. MUSK
CHASSIS

12. PERSONALITY CLASHES: EBERHARD VS. MUSK
MUSK’S PREFERENCE PREVAILED EVERY TIME
MUSK’S INSISTENCE ON BEST MATERIALS&PARTS +EBERHARD’S INEXPERIENCE AS MANAGER OF A
MAJOR FIRM = DELAYS AND RUNAWAY COSTS
EBERHARD: CEO TO PRESIDENT OF TECHNOLOGY TO NOTHING
MICHAEL MARKS, TEMPORARY CEO FOCUSED ON ROADSTER
ALL-TIME LOW TO ALL-STAR CELEBRITY STATUS
TESLA ANNOUNCED MODEL S - A HIGH PERFORMANCE
ALL-ELECTRIC SEDAN

13. OBSTACLES TO
ADOPTION OF ELECTRIC
VEHICLES

14. PRICE
E-VEHICLES ARE MORE EXPENSIVE
TESLA’S RESPONSE
A. SUPER CHARGER NETWORK
- FREE
- 6 STATIONS IN THE WORLD AS OF 2013
B. GUARANTEES
- FREE REPAIRS & FREE CAR REPLACEMENT WHILE CAR IS UNDER
REPAIR

15. LIMITED RANGE & ASSOCIATED “RANGE
ANXIETY”
PEOPLE ARE CONCERNED ABOUT DRIVING TO PLACES WHERE CHARGING
STATIONS ARE UNAVAILABLE
TESLA’S RESPONSE
A. NOT A BIG ISSUE FOR TESLA’S
CARS DUE TO ITS LONG RANGE CAPACITY

16. COMPETITION IN THE ELECTRIC
VEHICLE

17. HYBRID ELECTRIC VEHICLES
TOYOTA PRIUS, 2000
REQUIRE NO CHANGE IN TYPICAL CONSUMER USAGE HABITS
HAVE EXTREMELY LIMITED ELECTRIC RANGE

18. ALL-ELECTRIC VEHICLES/PLUG-IN ELECTRIC VEHICLES
Nissan Leaf Chevy Volt

19. TESLA’S STRATEGY

20. STRATEGIES

21. LOOKING TO THE FUTURE

22. NOT OUT OF THE WOODS YET
TESLA’S SUCCESS
• REVENUE OF $562 MILLION & PROFIT OF $11.2 MILLION
• MODEL S EARNED CONSUMER REPORT’S HIGHEST RATING
• MAY 2013: COMPANY RAISED $1 BILLION BY ISSUING NEW SHARES
• PAID BACK GOVERNMENT LOAN WITH $679 MILLION CASH STILL AVAILABLE
• SURVIVED INFANCY, APPEARED TO BE SOLVENT, & WAS MEETING SALES OBJECTIVES

23. NOT OUT OF THE WOODS YET
INVESTMENT ANALYSTS SAY
• 2013 PROFITS INCLUDE STOCK WARRANT PROFITS & ZEV CREDIT SALES
• WARRANT REVENUES WOULD NOT BE REPEATED
• NO FORECAST FOR YEARLY DEMAND OF ZEV CREDITS
• NO ONE KNOWS WHETHER REVENUES WERE SUSTAINABLE
• INCREASING COMPETITION
• WHAT’S MARKET SIZE FOR ELECTRIC VEHICLES & WHAT PORTION OF MARKET WOULD PAY HIGHER PRICE OF
A TESLA?
• POSSIBILITY OF TESLA’S STOCK PRICE TO BE AN OVERINFLATED BUBBLE
REFERENCE : HILL, C. & JONES, G. (2013). STRATEGIC MANAGEMENT: AN INTEGRATED APPROACH (11TH ED., PP. C-201-C-210). STAMFORD, CT: CENGAGE LEARNING