The Tesla Model S had received widespread
praise and acclaim not only as the world’s best
electric vehicle but also as a product far superior
to any other brand or model of electric vehicle cur-
rently on the market. In 2013, the Model S was the
most awarded car in the United States. In picking
the 2014 Tesla Model S as the “best overall” model
out of 260 cars tested, Consumer Reports awarded
the Model S a score of 99 out of 100 (the highest
score any vehicle had ever received from the mag-
azine) and described it as “a technological tour de
force” with “blistering acceleration, razor-sharp
handling, compliant ride, and versatile cabin.”1 The
sleek styling and politically correct power source
of the Tesla Model S was thought to explain why
thousands of wealthy individuals in North America
and Europe—anxious to be a part of the migration
from gasoline-powered vehicles to electric-powered
vehicles and to publicly display support for a cleaner
environment—had become early purchasers and
advocates for the vehicle. Indeed, word-of-mouth
praise for the Model S among current owners and
glowing articles in the media were so pervasive that
Tesla had not yet spent any money on advertising to
boost customer traffic in its showrooms. In a presen-
tation to investors, a Tesla officer said, “Tesla own-
ers are our best salespeople.”2
In fall 2013, the Model S ranked as the best-
selling car in 8 of the 25-wealthiest zip codes in the
United States, as ranked by Forbes.3 At the top of
that list was Atherton, California, a Silicon Valley
town near Tesla’s Palo Alto headquarters where the
median home price in 2013 was $6.65 million. Other
Tesla Motors’ Strategy to Revolutionize
the Global Automotive Industry
Arthur A. Thompson
The University of Alabama
I
n his February 2014 Letter to Shareholders, Elon
Musk—an early investor in Tesla Motors and its
current chairman and CEO—was pleased with the
company’s future prospects. Tesla’s strategy was
producing rapidly improving results, and by all indi-
cations the company’s execution of the strategy was
very much on track. Musk’s report left little doubt that
Tesla Motors was making good progress in its journey
to manufacture premium-quality, high-performance
electric vehicles capable of winning widespread
customer acceptance and accelerating the world’s
transition from carbon-producing, gasoline-powered
vehicles to energy-efficient, environmentally respon-
sible electric vehicles.
After suffering five years of losses total-
ing $943.5 million on combined revenues of just
$861 million between 2008 and 2012, Tesla delivered
22,477 of its recently introduced Model S vehicles
to customers in 2013. Production rates had recently
increased to 600 vehicles per week and were expected
to reach 1,000 vehicles per week by year-end 2014.
Tesla reported global revenues of $2.0 billion in 2013
and over $100 million in net income on a non-GAAP
basis. Deliveries to customers in Eu ...
Tesla Motors’ Strategy to Revolutionize the Global Automotive IndustryTran Thang
the Case indicate the strategy of Tesla and give the information for answer questions:
What are the key elements of Tesla Motors' strategy?
which one of the five generic competitive strategies Tesla is employs?
Tesla Motors strategy was no secret in 2006 the chairman and CEO.docxtodd191
Tesla Motors' strategy was no secret: in 2006 the chairman and CEO, Elon Musk, announced:
So, in short, the master plan is:
Build a sports car.
Use that money to build an affordable car.
Use that money to build an even more affordable car.
While doing above, also provide zero emission electric power generation options.
Don't tell anyone.1
The remarkable thing was that by 2015, Tesla had kept to that strategy and executed it almost flawlessly. Phase 1 (“Build a sports car”) was realized with the launch of its Roadster in 2007. Phase 2 (“Use that money to build an affordable car”) began in 2013 with the launch of the Model S.
The acclaim that greeted both cars had propelled Tesla's reputation and its share price. Since its initial public offering in June 2010, Tesla's share price had followed an upward trajectory. On June 12, 2015, Tesla's stock market value was $31.7 billion. By comparison, Fiat Chrysler was valued at $20.5 billion despite that fact that Fiat Chrysler would sell about 2.5 million cars in 2015 against Tesla's 55,000. The optimism that supported Tesla's valuation reflected the company's remarkable achievements during its short history and investors' faith in the ability of Elon Musk to realize his vision “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”2
Indeed, Musk's vision for Tesla extended beyond revolutionizing the automobile industry: Tesla's battery technology would also provide an energy storage system that would change “the fundamental energy infrastructure of the world.”
A central issue in the debate over the appropriate market valuation of Tesla was whether Tesla should be valued as an automobile company or as a technology company. In practice, these two issues could not be separated: Tesla's principal source of revenue would be its cars, but realizing the expectations of earnings growth that were implicit in Tesla's share price required Tesla to maintain technological leadership in electric vehicles. Given that Tesla's rivals were some of the world's largest industrial companies—Toyota, General Motors, Ford, Volkswagen, and Renault–Nissan, to name a few—this was a daunting prospect.
Electric Cars
The 21st century saw the Second Coming of electric cars. Electric cars and buses were popular during the 1890s and 1900s, but by the 1920s they had been largely displaced by the internal combustion engine.
Most of the world's leading automobile companies had been undertaking research into electric cars since the 1960s, including developing electric “concept cars.” In the early 1990s, several automakers introduced electric vehicles to California in response to pressure from the California Air Resources Board. However, the first commercially successful electric cars were hybrid electric vehicles (HEVs). Sales of HEVs in the US grew from 9,350 in 2000 to 352,862 in 2007. By far the most successful HEV, both in the US and globally, was the .
tesla MotorsIn 2015, Tesla Motors was a $3.2 billion company on .docxbradburgess22840
tesla Motors
In 2015, Tesla Motors was a $3.2 billion company on track to set history. It had created two cars that most people agreed were remarkable. Consumer reports had rated Tesla’s Model S the best car it had ever reviewed. Though it was not yet posting profits, sales were growing rapidly and analysts were hopeful that profits would soon follow. It had repaid its government loans ahead of the major auto conglomerates. Most importantly, it looked like it might survive. Perhaps even thrive. This was astonishing as there had been no other successful auto manufacturing start-up in the United States since the 1920s.
The road leading up to Tesla’s position in 2015 had not always been smooth, and there were many doubts that still lingered. Tesla had benefited from the enthusiasm of the “eco-wealthy”—a rather narrow portion of the market. How would Tesla fare when it was in direct competition with General Motors, Ford, and Nissan for the mass market? Would it be able to turn a sustainable profit on its auto-making operations? Furthermore, some questioned whether Tesla’s goals to sell to the mass market even made sense. In the niche market, it had a privileged position with customers that were relatively price-insensitive and were seeking a stylish, high-performance car that made an environmental statement. To compete for the mass market, the car would have to provide good value for the money (involving trade-offs that might conflict with Chairman Elon Musk’s ideals), and the obstacles to charging would have to be overcome.
History of Tesla
In the year 2003, an engineer named Martin Eberhard was looking for his next big project. A tall, slim man with a mop of gray hair, Eberhard was a serial entrepreneur who had launched a number of start-ups, including a company called NuvoMedia, which he sold to Gemstar in a $187 million deal. Eberhard was also looking for a sports car that would be environmentally friendly—he had concerns about global warming and U.S. dependence on the Middle East for oil. When he didn't find the car of his dreams on the market he began contemplating building page 44one himself, even though he had zero experience in the auto industry. Eberhard noticed that many of the driveways that had a Toyota Prius hybrid electric vehicle (or "dork mobile” as he called it) also had expensive sports cars in them—making Eberhard speculate that there could be a market for a high-performance environmentally friendly car. As explained by Eberhard, "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.”a
Eberhard began to consider a range of alternative fuel options for his car: hydrogen fuel cells, natural gas, and diesel. However, he soon concluded that the highest efficiency and performance would come from a pure electric vehicle. Luckily for Eberhard, Al Cocconi (founder of AC Propulsion and one of the or.
Introduction, History of Tesla Motor Inc., Tesla Products, Financial stability of Tesla, Competitors Analysis, international Business Strategy of Tesla, Environmental analysis (PESTLE)
Tesla Motors’ Strategy to Revolutionize the Global Automotive IndustryTran Thang
the Case indicate the strategy of Tesla and give the information for answer questions:
What are the key elements of Tesla Motors' strategy?
which one of the five generic competitive strategies Tesla is employs?
Tesla Motors strategy was no secret in 2006 the chairman and CEO.docxtodd191
Tesla Motors' strategy was no secret: in 2006 the chairman and CEO, Elon Musk, announced:
So, in short, the master plan is:
Build a sports car.
Use that money to build an affordable car.
Use that money to build an even more affordable car.
While doing above, also provide zero emission electric power generation options.
Don't tell anyone.1
The remarkable thing was that by 2015, Tesla had kept to that strategy and executed it almost flawlessly. Phase 1 (“Build a sports car”) was realized with the launch of its Roadster in 2007. Phase 2 (“Use that money to build an affordable car”) began in 2013 with the launch of the Model S.
The acclaim that greeted both cars had propelled Tesla's reputation and its share price. Since its initial public offering in June 2010, Tesla's share price had followed an upward trajectory. On June 12, 2015, Tesla's stock market value was $31.7 billion. By comparison, Fiat Chrysler was valued at $20.5 billion despite that fact that Fiat Chrysler would sell about 2.5 million cars in 2015 against Tesla's 55,000. The optimism that supported Tesla's valuation reflected the company's remarkable achievements during its short history and investors' faith in the ability of Elon Musk to realize his vision “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”2
Indeed, Musk's vision for Tesla extended beyond revolutionizing the automobile industry: Tesla's battery technology would also provide an energy storage system that would change “the fundamental energy infrastructure of the world.”
A central issue in the debate over the appropriate market valuation of Tesla was whether Tesla should be valued as an automobile company or as a technology company. In practice, these two issues could not be separated: Tesla's principal source of revenue would be its cars, but realizing the expectations of earnings growth that were implicit in Tesla's share price required Tesla to maintain technological leadership in electric vehicles. Given that Tesla's rivals were some of the world's largest industrial companies—Toyota, General Motors, Ford, Volkswagen, and Renault–Nissan, to name a few—this was a daunting prospect.
Electric Cars
The 21st century saw the Second Coming of electric cars. Electric cars and buses were popular during the 1890s and 1900s, but by the 1920s they had been largely displaced by the internal combustion engine.
Most of the world's leading automobile companies had been undertaking research into electric cars since the 1960s, including developing electric “concept cars.” In the early 1990s, several automakers introduced electric vehicles to California in response to pressure from the California Air Resources Board. However, the first commercially successful electric cars were hybrid electric vehicles (HEVs). Sales of HEVs in the US grew from 9,350 in 2000 to 352,862 in 2007. By far the most successful HEV, both in the US and globally, was the .
tesla MotorsIn 2015, Tesla Motors was a $3.2 billion company on .docxbradburgess22840
tesla Motors
In 2015, Tesla Motors was a $3.2 billion company on track to set history. It had created two cars that most people agreed were remarkable. Consumer reports had rated Tesla’s Model S the best car it had ever reviewed. Though it was not yet posting profits, sales were growing rapidly and analysts were hopeful that profits would soon follow. It had repaid its government loans ahead of the major auto conglomerates. Most importantly, it looked like it might survive. Perhaps even thrive. This was astonishing as there had been no other successful auto manufacturing start-up in the United States since the 1920s.
The road leading up to Tesla’s position in 2015 had not always been smooth, and there were many doubts that still lingered. Tesla had benefited from the enthusiasm of the “eco-wealthy”—a rather narrow portion of the market. How would Tesla fare when it was in direct competition with General Motors, Ford, and Nissan for the mass market? Would it be able to turn a sustainable profit on its auto-making operations? Furthermore, some questioned whether Tesla’s goals to sell to the mass market even made sense. In the niche market, it had a privileged position with customers that were relatively price-insensitive and were seeking a stylish, high-performance car that made an environmental statement. To compete for the mass market, the car would have to provide good value for the money (involving trade-offs that might conflict with Chairman Elon Musk’s ideals), and the obstacles to charging would have to be overcome.
History of Tesla
In the year 2003, an engineer named Martin Eberhard was looking for his next big project. A tall, slim man with a mop of gray hair, Eberhard was a serial entrepreneur who had launched a number of start-ups, including a company called NuvoMedia, which he sold to Gemstar in a $187 million deal. Eberhard was also looking for a sports car that would be environmentally friendly—he had concerns about global warming and U.S. dependence on the Middle East for oil. When he didn't find the car of his dreams on the market he began contemplating building page 44one himself, even though he had zero experience in the auto industry. Eberhard noticed that many of the driveways that had a Toyota Prius hybrid electric vehicle (or "dork mobile” as he called it) also had expensive sports cars in them—making Eberhard speculate that there could be a market for a high-performance environmentally friendly car. As explained by Eberhard, "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.”a
Eberhard began to consider a range of alternative fuel options for his car: hydrogen fuel cells, natural gas, and diesel. However, he soon concluded that the highest efficiency and performance would come from a pure electric vehicle. Luckily for Eberhard, Al Cocconi (founder of AC Propulsion and one of the or.
Introduction, History of Tesla Motor Inc., Tesla Products, Financial stability of Tesla, Competitors Analysis, international Business Strategy of Tesla, Environmental analysis (PESTLE)
ANALYSIS OF TESLA’S MARKETING STRATEGY IN CHINAAJHSSR Journal
ABSTRACT:Due to the rise of the automobile industry, all kinds of automobile brands have come into
people's eyes. Under China's "five-in-one" policy, it has promoted the development of the domestic new energy
vehicle market and the construction of new energy vehicle infrastructure. At the same time, the domestic sales
of new energy vehicles under the Tesla brand have increased significantly, especially the sales of Model 3 are
ahead of other domestic new energy vehicle brands. But with this alone, it is impossible for Tesla to have the
current situation, indicating that his success is inseparable from his marketing strategy. At the same time, his
success has impacted the traditional automobile industry of domestic brands on the one hand, and on the other
hand triggered the reform of the automobile industry. While injecting fresh blood into the automobile industry,
it also brought a new technological revolution to the automobile industry.Based on the domestic macro and
micro economic conditions and the new energy vehicle development policies issued by the country, coupled
with the use of traditional marketing theories, from the company’s target market and customer needs to the
company’s market positioning, a detailed analysis of Tesla Motors The company's marketing environment in
China finally studied and formulated Tesla Motors' marketing and portfolio strategies in China, namely products,
pricing, promotions and channels.
KEYWORDS:Tesla; New energy vehicles; The marketing strategy
Tesla designs and manufactures electric vehicles (electric cars and trucks), battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services.
is one of the world's most valuable companies and remains the world's most valuable automaker with a market capitalization of more than US$760 billion.
Running head TESLA MOTORS 1TESLA MOTORS3Tesla Motors.docxtoltonkendal
Running head: TESLA MOTORS 1
TESLA MOTORS 3
Tesla Motors
1. Current Situation
Tesla Motors is a company that was founded in 2003 and is headquartered at Palo Alo in California. The company came up with an idea of creating an electric car with an attempt to outdo the performance of gasoline vehicles (Mangram, 2012). The owners of the company, Marc Tarpenning and Martin Eberhand, were inspired to come up with their company by a genius electric engineer, Nikola Tesla, came up with the current alternating current. Nicola Tesla also came up with a sports car that was run in an AC induction motor. Elon Musk, the major investor of Tesla Motors was a risk taker, interested in coming up with a vehicle that was a hundred percent electric, without having to compromise in any aspects of the car.
The first electric sedan launched by Tesla Motors referred to as the Model S was released in 2012. This car attained a safety rating of 5-stars because it was the car of the year in 2013. In a bid to increase performance, Tesla released another version of Model S, which has a dual motor. Additionally, the company also released Model X, which has better aspects than the two versions of Model S. Over time, the company has expanded its operation, and currently manufactures the electric cars in California, and Fremont, with expansion efforts in Lathrop and California.
As of the year 2016, the company has had a net revenue amounting $1,147,048. This amount was an increase in the company’s revenues from the previous year, which was at $939,880. The continuous increase in the company’s revenue has come about because of the reduction in costs by an average of $100,000. Tesla’s shares range at $220 per share, which is an increase from the previous levels whereby the shares had decreased to around $147. The improvement in the company’s revenue and shares is a result of the efforts in product development strategies. From the start of the company, the company has put over $900 million in the research and development activities aimed at improving the performance of its cars.
Strategy
The strategic alignment of Tesla Motors includes manufacturing a high-end vehicle, whose target consumers includes the wealthy individuals in the society. Moreover, the company has concentrated on providing its consumers with a highly priced vehicle, which has made it possible for the enlargement of its customer base. Due to this aspect, the company has managed to expand its operations, taking into consideration the development of a cheaper car that could be sold to the people of the lower social classes.
The company is building a network of up to 120kw fast supercharger equipment. It can replenish 170 miles of range in the battery pack in 30 mins.
2. Challenges and Major Problems
Tesla Motors has been faced by several issues over the years. One of the challenges that the company has experienced has been issues in the battery charging and pack fires. In 2013, three fire accidents were ...
The presentation starts off with history of Tesla and then I explain a little bit about Elon Musk and how he contributed to Tesla. The next slide is about critical success factors of Tesla and then I explain about different models of Tesla cars, followed by the demand for EV consequently the demand for Tesla. Then I move on to SWOT analysis followed by the financials and market cap of Tesla, next I move on to Social Media Benchmarking and finally the conclusion
A Marketing analysis for TESLA company in DBA program by Cairo University. It discussing how TESLA is competing Electric Vehicle Market and advancing the development of such Sector. In addition, Tesla is taking further steps toward future by inventing futuristic cars and innovative technology.
Electric Sales: Tesla Model S Boosts Company StockTier10
Many things come to mind when one thinks of a major American automaker. The Big Three of Ford, General Motors and Chrysler have dominated the automotive market in America for the better part of a century, and until recently, they determined what was standard in the automotive world.
Tesla's New plant in Shanghai - by Fariha Mobarak NoshinFariha Noshin
The presentation was focused on the ongoing trade war between USA and China and how Tesla Motors implemented strategies to sustain the huge slap of tariff on their exports.
Tesla Motors Inc. SWOT AnalysisStrengths -The quality of .docxtodd191
Tesla Motors Inc. SWOT Analysis
Strengths
-The quality of Tesla electric cars on the market can compete with the likes of BMW and Mercedes
-Brand Equity -Product Quality -Eco-friendly Product Line
-Tesla Superchargers are much faster than other charging stations. It covered most regions in the U.S and had made Tesla a feasible option for its consumers,
-The showroom technique of selling cars appeals to consumers
Weaknesses
-Tesla is not able to produce enough to meet consumers demand. Compare to other companies with more capital.
-Batteries are inefficient regarding mileage and the cost associated with producing the battery.
– Limited variety is provided for consumers.
-The selling price is very high.
-Majority of production is in the U.S. Shipping cost is high to deliver vehicles around the world.
Opportunities
-Oil is becoming more scarce and expensive; there will be high demand for electric cars.
- Increase Market Share through High-Growth EV Industry.
-Demand for electric cars is growing -Solar power technology is advancing -More low priced models to tap into the rising middle-class market. -Autonomous driving technology has become popular, and Tesla has plans to release fully autonomous vehicles.
Threats
-Tesla is facing intense competition from luxury and environment-friendly brands.
- Tesla has a premium image, and it will take time to break this image and bring affordable vehicles to consumers. Which will be an excellent way to reduce the competitive threat.
-Legal and regulatory troubles can be costly and can lead to an increase in costs. Tesla operates in many countries and subject to legal and political regulation in those markets.
-People do not want to deal with charging and the amount of time it takes and they believe charges do not give much mileage -Tesla is always the subject of unfair scrutiny.
January 1, 2015. Elon Musk, chief executive officer (CEO) of Tesla is taking it easy on this New Year’s
Day. While having his coffee, he scrolls through some recent issues of The Wall Street Journal on his iPad.
A headline from one current story jumps out at him, “Gasoline prices have declined for 88 consecutive
days, the longest streak of falling prices on record.”1 The slide in gas prices, which began in September
2014, also happened to coincide with the slide in Tesla Motors (TSLA) stock. With increasing oil, and
therefore gas, prices, people had an incentive for purchasing electric cars. Now with gas prices drop-
ping, the incentive to buy would decrease, and the demand for the product would probably drop. This
was one of the challenges facing Musk on this New Year’s Day. Tesla was confronting increasing com-
petition and economic headwinds that were likely going to lower the demand for electric cars. At the
same time, Tesla needed to ramp up production volume to drive down per-vehicle costs.
Musk is a serial entrepreneur longing to leave a legacy, and he believes that Tesla just might be th.
Different dimensions have been used to distinguish types of innovation. Some of the most widely used dimensions include product versus process innovation, radical versus incremental innovation, competence-enhancing versus competence destroying innovation, and architectural versus component innovation.
A graph of technology performance over cumulative effort invested often exhibits an s-shape curve. This suggests that performance improvement in a new technology is initially difficult and costly, but, as the fundamental principles of the technology are worked out, it then begins to accelerate as the technology becomes better understood, and finally diminishing returns set in as the technology approaches its inherent limits.
The following presentation is on the topic-TESLA
It includes :-
# Origin of tesla
# Its foundation
# TESLA'S mission and vision
# Strengths
# Weaknesses
# Opportunity
# Threats
# Its strategy
# Market capture
# Future plan
# Financial problems
# Pricing
# Profit
# FUTURE OF TESLA
# TESLA IN INDIA
Tesla is an American multinational automotive and clean energy company which is headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles (electric cars and trucks), battery energy storage from home to grid scale, solar panels and solar roof tiles, and related products and services. Tesla is one of the world`s most valuable companies and remains the world`s most valuable automaker with a market capitalization of more than US$550 billion.
Please read the case Fraud at WorldCom in the book provided below .docxchristalgrieg
Please read the case Fraud at WorldCom in the book provided below (chapter 13) Page 310
And answer the following questions
1. What is the dilemma?
2. Do shareholders have de facto control over managers? What decisions do shareholders typically make? Please explain
One double-spaced page.
.
Please read the below two discussion posts and provide the response .docxchristalgrieg
Please read the below two discussion posts and provide the response for each discussion in 75 to 100 words.
Post#1
Nowadays, there are numerous advancements in technology. As a result, the traditional workplace has gradually transformed with home offices and virtual workplaces where employees can hold meetings using video teleconferencing tools and communicate through email and other applications such as Slack (Montrief, et al., 2020). This makes the cloud more busy which brings up the need for improved cloud security.
Generally, in a public cloud, there exists a shared responsibility between the user and the Cloud Service Provider (CSP). Due to the rise of cyber-related crimes over the years, security for things like data classification, network controls and physical security need clear owners. The division of such responsibilities is called shared responsibility model for cloud security. “According to Amazon Web Services (AWS), security responsibility is shared by both CSP and CSC and they called it as Shared Security Responsible Model” (Kumar, Raj, & Jelciana, 2018). “While client and endpoint protection, identity and access management and application level controls are a shared responsibility the responsibility resides largely with the client organization” (Lane, Shrestha, & Ali, 2017). However, the responsibilities may vary depending on the cloud service provider and the cloud environment the user is using to operate. Nevertheless, despite the cloud services used, the burden of protecting data lays upon the user.
Normally, security is broken down into two broad categories: security of the cloud and security in the cloud. Security of the cloud is a section of the shared responsibility model handled by the cloud service provider. It comprises of hardware, host operating systems and physical security of the infrastructure. Most of these logistical challenges are offloaded when an organization moves its operations to the cloud. In contrast, security in the cloud is the security responsibility handled by the user. “The cloud service customer is responsible for securing and managing the applications that run in the cloud, the operating systems, data-at-rest, data-in-transit, policies and other responsibilities” (Bennett & Robertson, 2019). Since access to customer data remains the most critical component in cloud computing, it also determined the level of security in the cloud to be implemented by the customer.
The customer is responsible for the following components. First, the customer is responsible for data security. While the provider is responsible for automatically encrypting data in transit and in storage, the customer is expected to configure file system encryption and protection of network traffic. Secondly, the customer is responsible for physical security of computers and other devices used to access the cloud. Thirdly, the customer is responsible for application security. Security of manag.
More Related Content
Similar to The Tesla Model S had received widespread praise and acclaim.docx
ANALYSIS OF TESLA’S MARKETING STRATEGY IN CHINAAJHSSR Journal
ABSTRACT:Due to the rise of the automobile industry, all kinds of automobile brands have come into
people's eyes. Under China's "five-in-one" policy, it has promoted the development of the domestic new energy
vehicle market and the construction of new energy vehicle infrastructure. At the same time, the domestic sales
of new energy vehicles under the Tesla brand have increased significantly, especially the sales of Model 3 are
ahead of other domestic new energy vehicle brands. But with this alone, it is impossible for Tesla to have the
current situation, indicating that his success is inseparable from his marketing strategy. At the same time, his
success has impacted the traditional automobile industry of domestic brands on the one hand, and on the other
hand triggered the reform of the automobile industry. While injecting fresh blood into the automobile industry,
it also brought a new technological revolution to the automobile industry.Based on the domestic macro and
micro economic conditions and the new energy vehicle development policies issued by the country, coupled
with the use of traditional marketing theories, from the company’s target market and customer needs to the
company’s market positioning, a detailed analysis of Tesla Motors The company's marketing environment in
China finally studied and formulated Tesla Motors' marketing and portfolio strategies in China, namely products,
pricing, promotions and channels.
KEYWORDS:Tesla; New energy vehicles; The marketing strategy
Tesla designs and manufactures electric vehicles (electric cars and trucks), battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services.
is one of the world's most valuable companies and remains the world's most valuable automaker with a market capitalization of more than US$760 billion.
Running head TESLA MOTORS 1TESLA MOTORS3Tesla Motors.docxtoltonkendal
Running head: TESLA MOTORS 1
TESLA MOTORS 3
Tesla Motors
1. Current Situation
Tesla Motors is a company that was founded in 2003 and is headquartered at Palo Alo in California. The company came up with an idea of creating an electric car with an attempt to outdo the performance of gasoline vehicles (Mangram, 2012). The owners of the company, Marc Tarpenning and Martin Eberhand, were inspired to come up with their company by a genius electric engineer, Nikola Tesla, came up with the current alternating current. Nicola Tesla also came up with a sports car that was run in an AC induction motor. Elon Musk, the major investor of Tesla Motors was a risk taker, interested in coming up with a vehicle that was a hundred percent electric, without having to compromise in any aspects of the car.
The first electric sedan launched by Tesla Motors referred to as the Model S was released in 2012. This car attained a safety rating of 5-stars because it was the car of the year in 2013. In a bid to increase performance, Tesla released another version of Model S, which has a dual motor. Additionally, the company also released Model X, which has better aspects than the two versions of Model S. Over time, the company has expanded its operation, and currently manufactures the electric cars in California, and Fremont, with expansion efforts in Lathrop and California.
As of the year 2016, the company has had a net revenue amounting $1,147,048. This amount was an increase in the company’s revenues from the previous year, which was at $939,880. The continuous increase in the company’s revenue has come about because of the reduction in costs by an average of $100,000. Tesla’s shares range at $220 per share, which is an increase from the previous levels whereby the shares had decreased to around $147. The improvement in the company’s revenue and shares is a result of the efforts in product development strategies. From the start of the company, the company has put over $900 million in the research and development activities aimed at improving the performance of its cars.
Strategy
The strategic alignment of Tesla Motors includes manufacturing a high-end vehicle, whose target consumers includes the wealthy individuals in the society. Moreover, the company has concentrated on providing its consumers with a highly priced vehicle, which has made it possible for the enlargement of its customer base. Due to this aspect, the company has managed to expand its operations, taking into consideration the development of a cheaper car that could be sold to the people of the lower social classes.
The company is building a network of up to 120kw fast supercharger equipment. It can replenish 170 miles of range in the battery pack in 30 mins.
2. Challenges and Major Problems
Tesla Motors has been faced by several issues over the years. One of the challenges that the company has experienced has been issues in the battery charging and pack fires. In 2013, three fire accidents were ...
The presentation starts off with history of Tesla and then I explain a little bit about Elon Musk and how he contributed to Tesla. The next slide is about critical success factors of Tesla and then I explain about different models of Tesla cars, followed by the demand for EV consequently the demand for Tesla. Then I move on to SWOT analysis followed by the financials and market cap of Tesla, next I move on to Social Media Benchmarking and finally the conclusion
A Marketing analysis for TESLA company in DBA program by Cairo University. It discussing how TESLA is competing Electric Vehicle Market and advancing the development of such Sector. In addition, Tesla is taking further steps toward future by inventing futuristic cars and innovative technology.
Electric Sales: Tesla Model S Boosts Company StockTier10
Many things come to mind when one thinks of a major American automaker. The Big Three of Ford, General Motors and Chrysler have dominated the automotive market in America for the better part of a century, and until recently, they determined what was standard in the automotive world.
Tesla's New plant in Shanghai - by Fariha Mobarak NoshinFariha Noshin
The presentation was focused on the ongoing trade war between USA and China and how Tesla Motors implemented strategies to sustain the huge slap of tariff on their exports.
Tesla Motors Inc. SWOT AnalysisStrengths -The quality of .docxtodd191
Tesla Motors Inc. SWOT Analysis
Strengths
-The quality of Tesla electric cars on the market can compete with the likes of BMW and Mercedes
-Brand Equity -Product Quality -Eco-friendly Product Line
-Tesla Superchargers are much faster than other charging stations. It covered most regions in the U.S and had made Tesla a feasible option for its consumers,
-The showroom technique of selling cars appeals to consumers
Weaknesses
-Tesla is not able to produce enough to meet consumers demand. Compare to other companies with more capital.
-Batteries are inefficient regarding mileage and the cost associated with producing the battery.
– Limited variety is provided for consumers.
-The selling price is very high.
-Majority of production is in the U.S. Shipping cost is high to deliver vehicles around the world.
Opportunities
-Oil is becoming more scarce and expensive; there will be high demand for electric cars.
- Increase Market Share through High-Growth EV Industry.
-Demand for electric cars is growing -Solar power technology is advancing -More low priced models to tap into the rising middle-class market. -Autonomous driving technology has become popular, and Tesla has plans to release fully autonomous vehicles.
Threats
-Tesla is facing intense competition from luxury and environment-friendly brands.
- Tesla has a premium image, and it will take time to break this image and bring affordable vehicles to consumers. Which will be an excellent way to reduce the competitive threat.
-Legal and regulatory troubles can be costly and can lead to an increase in costs. Tesla operates in many countries and subject to legal and political regulation in those markets.
-People do not want to deal with charging and the amount of time it takes and they believe charges do not give much mileage -Tesla is always the subject of unfair scrutiny.
January 1, 2015. Elon Musk, chief executive officer (CEO) of Tesla is taking it easy on this New Year’s
Day. While having his coffee, he scrolls through some recent issues of The Wall Street Journal on his iPad.
A headline from one current story jumps out at him, “Gasoline prices have declined for 88 consecutive
days, the longest streak of falling prices on record.”1 The slide in gas prices, which began in September
2014, also happened to coincide with the slide in Tesla Motors (TSLA) stock. With increasing oil, and
therefore gas, prices, people had an incentive for purchasing electric cars. Now with gas prices drop-
ping, the incentive to buy would decrease, and the demand for the product would probably drop. This
was one of the challenges facing Musk on this New Year’s Day. Tesla was confronting increasing com-
petition and economic headwinds that were likely going to lower the demand for electric cars. At the
same time, Tesla needed to ramp up production volume to drive down per-vehicle costs.
Musk is a serial entrepreneur longing to leave a legacy, and he believes that Tesla just might be th.
Different dimensions have been used to distinguish types of innovation. Some of the most widely used dimensions include product versus process innovation, radical versus incremental innovation, competence-enhancing versus competence destroying innovation, and architectural versus component innovation.
A graph of technology performance over cumulative effort invested often exhibits an s-shape curve. This suggests that performance improvement in a new technology is initially difficult and costly, but, as the fundamental principles of the technology are worked out, it then begins to accelerate as the technology becomes better understood, and finally diminishing returns set in as the technology approaches its inherent limits.
The following presentation is on the topic-TESLA
It includes :-
# Origin of tesla
# Its foundation
# TESLA'S mission and vision
# Strengths
# Weaknesses
# Opportunity
# Threats
# Its strategy
# Market capture
# Future plan
# Financial problems
# Pricing
# Profit
# FUTURE OF TESLA
# TESLA IN INDIA
Tesla is an American multinational automotive and clean energy company which is headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles (electric cars and trucks), battery energy storage from home to grid scale, solar panels and solar roof tiles, and related products and services. Tesla is one of the world`s most valuable companies and remains the world`s most valuable automaker with a market capitalization of more than US$550 billion.
Please read the case Fraud at WorldCom in the book provided below .docxchristalgrieg
Please read the case Fraud at WorldCom in the book provided below (chapter 13) Page 310
And answer the following questions
1. What is the dilemma?
2. Do shareholders have de facto control over managers? What decisions do shareholders typically make? Please explain
One double-spaced page.
.
Please read the below two discussion posts and provide the response .docxchristalgrieg
Please read the below two discussion posts and provide the response for each discussion in 75 to 100 words.
Post#1
Nowadays, there are numerous advancements in technology. As a result, the traditional workplace has gradually transformed with home offices and virtual workplaces where employees can hold meetings using video teleconferencing tools and communicate through email and other applications such as Slack (Montrief, et al., 2020). This makes the cloud more busy which brings up the need for improved cloud security.
Generally, in a public cloud, there exists a shared responsibility between the user and the Cloud Service Provider (CSP). Due to the rise of cyber-related crimes over the years, security for things like data classification, network controls and physical security need clear owners. The division of such responsibilities is called shared responsibility model for cloud security. “According to Amazon Web Services (AWS), security responsibility is shared by both CSP and CSC and they called it as Shared Security Responsible Model” (Kumar, Raj, & Jelciana, 2018). “While client and endpoint protection, identity and access management and application level controls are a shared responsibility the responsibility resides largely with the client organization” (Lane, Shrestha, & Ali, 2017). However, the responsibilities may vary depending on the cloud service provider and the cloud environment the user is using to operate. Nevertheless, despite the cloud services used, the burden of protecting data lays upon the user.
Normally, security is broken down into two broad categories: security of the cloud and security in the cloud. Security of the cloud is a section of the shared responsibility model handled by the cloud service provider. It comprises of hardware, host operating systems and physical security of the infrastructure. Most of these logistical challenges are offloaded when an organization moves its operations to the cloud. In contrast, security in the cloud is the security responsibility handled by the user. “The cloud service customer is responsible for securing and managing the applications that run in the cloud, the operating systems, data-at-rest, data-in-transit, policies and other responsibilities” (Bennett & Robertson, 2019). Since access to customer data remains the most critical component in cloud computing, it also determined the level of security in the cloud to be implemented by the customer.
The customer is responsible for the following components. First, the customer is responsible for data security. While the provider is responsible for automatically encrypting data in transit and in storage, the customer is expected to configure file system encryption and protection of network traffic. Secondly, the customer is responsible for physical security of computers and other devices used to access the cloud. Thirdly, the customer is responsible for application security. Security of manag.
Please read the below discussion post and provide response in 75 to .docxchristalgrieg
Please read the below discussion post and provide response in 75 to 100 words
Post#1
Cloud security plays an important role in every field like business and personal world. With a large number of benefits it has some myths also. Cloud security is solely the cloud provider’s responsibility: a standard misconception is that the cloud provider automatically takes care of all the safety needs of the customer’s data and process while in the cloud. Password policies, release management for software patches, management of user roles, security training of staff, and data management policies are all responsibilities of the purchasers and a minimum of as critical because the security is done by the general public cloud provider. While users are hardening internal security, don’t assume that cloud provider backs up data and will be able to restore it just in case of a security breach. It is instrumental and important that users simply implement a backup solution that backs up data that's hosted on the cloud to an onsite backup or to a different cloud provider. In addition, in case of a security breach, user will get to restore data from backups. “There is indeed a good case to make for fair taxation and that uneven effective tax rates can distort competition and lead to smaller tax revenues” (Bauer, 2018).
Don’t get to manage the cloud: many people believe that since the cloud infrastructure is usually basically just a managed service, that the safety of the services is additionally managed. Many cloud based systems are left inadvertently unsecured because the customer doesn't know that they have to try to something to secure them, as they assume that the provider has done what an in-house staff would traditionally have done by default. Cloud security requires an equivalent discipline for security of any data center. Cloud data centers are as resilient as any, but the weakness comes if the policies, processes and tools aren’t regularly monitored by the IT operations staff responsible (Determann, 2016).
Ignore BYOD and be more secure: not supporting and implementing a BYOD policy does not mean an enterprise will be less at risk of a data breach, SVP of cloud and hosting sales. The BYOD movement is here to stay. Some experts recommend deploying a mobile content management (MCM) solution, as protecting the data will be what ultimately defines business’ security and compliance requirements. “Despite the Australian Federal Government's ‘cloud-first’ strategy and policies, and the Queensland State Government's ‘digital-first’ strategy, cloud services adoption at local government level has been limited—largely due to data security concerns” (Ali, Shrestha, Chatfield, & Murray, 2020). Cloud data isn’t saved on mobile devices: I still hear people speaking about cloud deployment as if using this service means users are not saving any enterprise data on mobile devices, which this might make device data protection a moot point. Apps that are connecting to de.
Please read the assignment content throughly Internet Resources .docxchristalgrieg
Please read the assignment content throughly
Internet Resources Chart [due Mon]
Assignment Content
Create
a chart of Internet-based resources for early childhood literacy development.
Include
at least two different resources for each of the following topics:
Oral language
Environmental print
Morphemic analysis
Spelling
Vocabulary
Summarize
each resource. A total of 700 words should be used in the chart.
Submit
your assignment.
.
Please read the article by Peterson (2004). Your responses to th.docxchristalgrieg
Please read the article by Peterson (2004). Your responses to the following questions must be typed. Please be sure to include an APA-style citation
1. What is the purpose of this review paper
2. Describe
Incidental teaching
Mand-model
Time delay
Milieu language teaching
How are they the same?
How are they different?
3. What is discrete trial training? How is naturalistic teaching different?
4. What is generalization in language acquisition? How does naturalistic teaching promote generalization in language acquisition?
5. What were the conclusions of this review?
6. Be sure to provide and APA-style source citation for Peterson (2004) at the end of your paper
.
Please read the article which appears below. Write and submit an.docxchristalgrieg
Please read the article which appears below. Write and submit an
600 word report.
There is no right or wrong answer. Your report will be graded on your understanding of the problem of teenagers in high school having babies - and the attitude of the teens - whether you agree or disagree it is a good idea for the school to open a day care center to help these mothers (tell us why you agree or disagree), whether you agree or disagree with the teacher who wrote this article - tell us why you agree or disagree - why sociologists might want to study problems like this one, what sociologists might be able to contribute to solving problems like the one described . Link your answer to material we are studying. How well you express yourself - grammatical construction - spelling - is important. Maybe you can't make up your mind about this article. That's OK too. But it is important that you explain WHY.
Material you studied about agents of social change, primary and secondary groups in the chapters on
Culture - Socialization- Social Interaction - Social Structures - Groups and Organizations- should give you lots of ideas for your assignment.
They're Having Babies. Are We Helping?
By Patrick Welsh
The girls gather in small groups outside Alexandria's T.C. Williams High School most mornings, standing with their babies on their hips, talking and giggling like sorority sisters. Sometimes their mothers drop the kids (and their kids) off with a carefree smile and a wave. As I watch the girls carry their children into the Tiny Titans day-care center in our new $100 million building, I can't help wondering what Sister Mary Avelina, my 11th-grade English teacher, would have thought.
Okay, I'm an old guy from the 1950s, an era light-years from today. But even in these less censorious times, I'm amazed -- and concerned -- by the apparently nonchalant attitude both these girls and their mothers exhibit in front of teachers, administrators and hundreds of students each day. Last I heard, teen pregnancy is still a major concern in this country -- teenage mothers are less likely to finish school and more likely to live in poverty; their children are more likely to have difficulties in school and with the law; and on and on.
But none of that seems to register with these young women. In fact, "some girls seem to be really into it," says T.C. senior Mary Ball. "They are embracing their pregnancies." Nor is the sight of a pregnant classmate much of a surprise to the students at T.C. anymore. "When I was in middle school, I'd be shocked to see a pregnant eighth-grader," says Ball. "Now it seems so ordinary that we don't even talk about it."
Teenage pregnancy has been bright on American radar screens for the past year: TV teen starlet Jamie Lynn Spears's pregnancy caused a minor media storm last December. The pregnant-teen movie "Juno" won Oscar nods. And there was Bristol Palin, daughter of Alaska Gov. Sarah Palin, bringing the issue front and center d.
Please Read instructions Role Model LeadersChoose one • 1 .docxchristalgrieg
Please Read instructions
Role Model Leaders
Choose one • 1 point
In a study by Kouzes and Posner, who was identified as the person that the majority of people would select as their most important role model for leadership?
Teacher or coach
Business leader
Family member
Community or religious leader
QUESTION 2
Five Practices
Choose one • 1 point
Which of the following is
not
one of the Five Practices of Exemplary Leadership?
Model the Way
Leave a Legacy
Encourage the Heart
Enable Others to Act
QUESTION 3
Organizational Behavior
Choose one • 1 point
Organizational Behavior is a defined business function that has nothing to do with human behavior.
True
False
QUESTION 4
Leader and Constituents
Choose one • 1 point
What strengthens and sustains the relationship between leader and constituents is that leaders are:
Obsessed with what is best for others, not themselves
Obsessed with what is best for making the most money for themselves
Obsessed with what is best for themselves, not others
Obsessed with what is best for the business, not others
QUESTION 5
The Most Fundamental Truth
Choose one • 1 point
According to Kouzes and Posner, which of the Ten Truths about Leadership is the most fundamental truth of all?
Credibility is the Foundation of Leadership
Challenge is the Crucible for Greatness
You Can’t Do It Alone
You Make a Difference
QUESTION 6
Credibility
Choose one • 1 point
A culture of leadership ______________ and ______________ is created when people at all levels genuinely expect each other to be credible, and they hold each other accountable for the actions that build and sustain credibility.
Excellence and integrity
Independence and coerciveness
Confidence and charisma
Dissatisfaction and distrust
QUESTION 7
Organizational Behavior
Choose one • 1 point
The study of Organizational Behavior helps us to understand organizational culture, power, and political behavior.
True
False
QUESTION 8
Organization’s vision and values
Choose one • 1 point
Who is the person that has the most influence over your desire to stay or leave an organization, and your commitment to the organization’s vision and values?
CEO
Co-workers
Board of Directors
Your most immediate manager
QUESTION 9
Willingly Follow
Choose one • 1 point
In a survey by Kouzes and Posner, which of the following characteristics scored the highest that people looked for in someone that they would be willing to follow:
Independent
Supportive
Honest
Straightforward
QUESTION 10
Expectation of Leaders
Choose one • 1 point
In addition to the three factors that measure source credibility, the vast majority of constituents have one other expectation of leaders. They expect leaders to be:
Admired
Forward-looking
Independent
Enthusiastic
QUESTION 11
Leadership is a Relationship
Choose one • 1 point
Leadership is a relationship between those who aspire to lead and those who are learning to lead
.
Tru.
Please read each attachment for instructions, please answer each q.docxchristalgrieg
Please read each attachment for instructions, please answer each question all 8 with an answer after reading each attachment. Do not answer each question in a running paragraph. question/answer in at least 200 -300 word detailed with references from attachments and one extra where needed.
I do not have a second chance to correct
Activity: Counseling Immigrants
Instructions:
This activity is composed of three parts. In order to complete part I, you must read the article “Counseling Haitian Students and their Families: Issues and Interventions.” In order to complete part II, you must read the “APA Immigration Report Executive Summary,” and in order to complete part III, you must read “Counseling Model for Immigrants.”
Part I
1) Explain the differences between what parents are expected to do in American schools and what parents are expected to do in Haitian schools.
2) Why did Jean’s parents did not seek contact with teachers?
3) Haitian students face significant prejudice from teachers and classmates based on their race, the negative image of voudou, their former classification as a high-risk group for AIDS, and the violence and corruption of Haiti’s domestic politics. Name the interventions suggested by Joseph (1984).
Part II
1. The United States today has approximately _______ million immigrants—the largest number in its history. As a nation of immigrants, the United States has successfully negotiated larger proportions of newcomers in its past (______% in 1910 vs. _____% today). Notably, nearly _________ ____________of the foreign-born are naturalized citizens or authorized noncitizens.
2. Nearly a ___________ of children under the age of 18 have an immigrant __________.
3. One third of the foreign-born population in the United States is from ________, and a total of _______% originate from Latin America (U.S. Census Bureau, 2010).The four states with the largest numbers of immigrants (California, __________, New Mexico, and _________) have already become “majority/minority” (______ than ________% White) states (U.S. Census Bureau, 2011a).
4. Immigrants arrive in the United States with varied levels of education. At one end of the spectrum are highly educated immigrant adults (Portes & Rumbaut, 2006) who comprise a ___________ of all U.S. __________, ________% of the nation’s __________ and ____________ workers with bachelor’s degrees, and _______% of scientists with ______________.
5. An estimated ________ languages are currently spoken in homes in the United States.
6. Psychological acculturation refers to the dynamic process that immigrants experience as they __________ to the culture of the new country.
7. The constellation of presenting issues for immigrants tends to fall within the areas of _________________- based presenting problems, __________-based presenting problems, and _________________, ____________, and ______________–based problems.
8. To increase the accessibility and efficacy of services, clinicians and p.
PLEASE READ BEFORE STARTING! 500 WORD PAPER ONLY USING THE NOTES I.docxchristalgrieg
**PLEASE READ BEFORE STARTING! 500 WORD PAPER ONLY USING THE NOTES I HAVE PROVIDED BELOW. ESSAY QUESTION IS RIGHT BELOW AS WELL.**
Three common approaches to understanding leading – traits, behaviors, and situational or contingency approaches - may or may not be effective in leading/managing a healthcare program. Briefly summarize each and its appropriateness for healthcare management.
Health Program Management (Longest, 2015)
“Leading effectively means influencing participants to make contributions that help accomplish the mission and objectives established for a program.” (Longest, 2015, p. 139)
Traits approach
“Based on the proposition that traits - encompassing skills, abilities, or characteristics - inherent in some people explain why they are more effective at leading than others.” (Longest, 2015, p. 140)
Kirkpatrick and Locke (1991, 48) stated, “Key leader traits include: drive (a broad term which includes achievement, motivation, ambition, energy, tenacity, and initiative); leadership, motivation (the desire to lead but not to seek power as an end in itself); honesty and integrity; self-confidence (which is associated with emotional stability); cognitive ability; and knowledge.” (as cited in Longest, 2015, p. 140)
Behaviors approach
“Traits cannot fully explain effectively leading, is based on the assumption that particular behaviors or sets of behaviors that make up a style of leading might be associated with success in leading.” (Longest, 2015, p. 140)
Planning, clarifying, monitoring, problem solving, supporting, recognizing, developing, empowering, advocating change, envisioning change, encouraging innovation, facilitating collective learning, networking, external monitoring, representing (Longest, 2015, p. 142)
Tannenbaum and Schmidt’s continuum of leader styles model: (Longest, 2015, p. 147)
Autocratic leaders - makes decisions and announces them to other participants
Consultative leaders - convince other participants of the correctness of a decision by carefully explaining the rationale for the decision and its effect on the other participants and on the program
Participative leaders - present tentative decisions that will be changed in other participants can make a convincing case for different decisions
Democratic leaders - define the limits of the situation and problem to be solved and permit other participants to make the decision
Laissez-faire leaders - permit other participants to have great discretion in decision making
“Leaders must adapt and change styles to fit different situations.” (Longest, 2015, p. 147)
“An autocratic style might be appropriate in certain clinical situations in programs where work frequently involves a high degree of urgency. But this style could be disastrous in other situations, such as when a manager must decide how to offer a new service in a program or improve communication with participants.” (Longest, 2015, p. 147)
Situational/Contingency approach
“.
Please read Patricia Benners Five Stages of Proficiency. Explai.docxchristalgrieg
Please read Patricia Benner's Five Stages of Proficiency. Explain the importance of this theory through a nurse's perspective. No references are required. Your summary should be at least 300 words using good spelling and grammar. Can be single or double spaced.
Attached Files:
Dr. Patricia Benner is a nursing theorist who first developed a model for the stages of clinical competence in her classic book “From Novice to Expert: Excellence and Power in Clinical Nursing Practice”. Her model is one of the most useful frameworks for assessing nurses’ needs at different stages of professional growth. She is the Chief Faculty Development Officer for Educating Nurses, the Director of the Carnegie Foundation for the Advancement of Teaching National Nursing Education and honorary fellow of the Royal College of Nursing.
Dr. Benner was born in Hampton, Virginia, and received her bachelor’s degree in Nursing from Pasadena College in 1964, and later a master’s degree in Medical-Surgical Nursing from the University of California, Berkeley. After completing her doctorate in 1982, she became an Associate Professor in the Department of Physiological Nursing at the University of California, San Francisco. Dr. Benner is an internationally known lecturer and researcher on health, and her work has influenced areas of clinical practice as well as clinical ethics.
This nursing theory proposes that expert nurses develop skills and understanding of patient care over time through a proper educational background as well as a multitude of experiences. Dr. Benner’s theory is not focused on how to be a nurse, rather on how nurses acquire nursing knowledge – one could gain knowledge and skills (“knowing how”), without ever learning the theory (“knowing that”). She used the Dreyfus Model of Skill Acquisition as a foundation for her work. The Dreyfus model, described by brothers Stuart and Hubert Dreyfus, is a model based on observations of chess players, Air Force pilots, army commanders and tank drivers. The Dreyfus brothers believed learning was experiential (learning through experience) as well as situation-based, and that a student had to pass through five very distinct stages in learning, from novice to expert.
Dr. Benner found similar parallels in nursing, where improved practice depended on experience and science, and developing those skills was a long and progressive process. She found when nurses engaged in various situations, and learned from them, they developed “skills of involvement” with patients and family. Her model has also been relevant for ethical development of nurses since perception of ethical issues is also dependent on the nurses’ level of expertise. This model has been applied to several disciplines beyond clinical nursing, and understanding the five stages of clinical competence helps nurses support one another and appreciate that expertise in any field is a process learned over time.
Dr. Benner’s Stages of Clinical Competence
Stage 1 Novice: .
***************Please Read Instructions **************
OBJECTIVES:
Use personal influence with a group or team.
Identify the behaviors that exemplify the leadership truths.
Understand the stages of team development.
Explain how motivation impacts performance.
GOAL:
The purpose of this assignment is to provide an opportunity to express understanding of content associated with the chapters covered in Week Two (
Values Drive Commitment
,
Focusing on the Future Sets Leaders Apart
, and
You Can't Do It Alone
). For this assignment, you must use the Full Sail Online Library resources for at least one source in answering the questions. Make sure you clearly indicate which source(s) are from the online library. To access the Full Sail Library sources, go to Connect/Departments/Library. You will see a list of databases available. The library is open Monday-Friday 8:00 am - 9:00 pm and Saturday 8:00 am - 5:00 pm and can be reached at x8438.
Chapter Five
discusses the importance of
working in teams
and the
importance of emotional intelligence
in both your personal and social skills. How well are you in these areas? The goal of this week's discussion is to use the resources from this week to
develop, create, and implement a team activity with you being the leader.
INSTRUCTIONS:
First Post – due Thursday by 11:59pm EST *Due date extended due to the nature of the activity. Use this time to create an amazing activity!
Persuade at least four to eight people to do some notable activity together for at least two hours
that they would not otherwise do without your intervention. Your only restriction is that you cannot tell them why you are doing this.
The group can be any group of people: friends, family, teammates, club members, neighbors, students, or work colleagues
. It can be almost any activity
except for
watching television, eating, going to a movie, or just sitting around talking. It must be more substantial than that. Some options include a party, an organized debate, a songfest, a long hike, a visit to a museum, or volunteer work such as picking up litter, visiting a nursing home, or helping on a community project.
After completing your leadership activity, be prepared to discuss:
1. What was the activity selected?
Use specifics to describe your activity including
who attended (friends, family, co-workers, etc), location, and date. What did it feel like to make something happen in the world that would not have happened otherwise without you?
2.
Emotional Intelligence (EQ)
is important to develop to build relationships with others. How did you use EQ to empower others, listen to individual needs, and build relationships?
3. With this act of leadership,
what values did you exemplify
? (Use the
Values Drive Commitment c
hapter
concepts in your response.)
4. Were your members a group or a team? Using the
stages of team development
(Forming, Storming, Norming, Performing), describe the specific behaviors that de.
Please react to this student post. remember references and plarigari.docxchristalgrieg
Please react to this student post. remember references and plarigarism
Descending Spinal Tract
Corticospinal, reticulospinal, and vestibulospinal
Sends impulses from the brain to muscle groups
Control muscle tone, posture, and motor movements
Efferent
A
scending Spinal Tract
Spinothalamic and spinocerebellar
Sends sensory signals to accomplish complex tasks
Ascending tracts recognize exact stimulus and location
Contains fibers that discriminate rough from light touch, temperature and pain
Afferent
If the spinal cord is completely severed, then complete loss of function below the point if injury is expected (Ball, Dains, Flynn, Solomon & Stewart, 2015).
The nervous system is a group of nerves and neurons that transmit messages to different parts of the body. It is in charge of coordinating and controlling the body (Ball et al., 2015). The nervous system is divided into the central and the peripheral nervous system, further subdivided into autonomic, sympathetic and parasympathetic. The central nervous system is comprised of the brain. The peripheral nervous systems is comprised of the cranial and spinal nerves and the ascending and descending pathways (Ball et al., 2015). With all parts functioning properly the nervous system is able to receive and identify stimuli, control voluntary and involuntary body functions (Ball et al., 2015).
The three major units of the brain are the cerebrum, the cerebellum and the brainstem (Ball et al., 2015).
The difference between the ascending and descending tracts is that the ascending is sensory (afferent) because it delivers information to the brain and the descending tract delivers motor (efferent) information to the periphery (Ball et al., 2015)
The pituitary gland regulates metabolic processes and controls growth, lactation, and vasoconstriction through hormonal regulation (Ball et al., 2015).
The fourth cranial nerve is called trochlear and it is in charge of the downward and inward movement of the eye (Ball et al., 2015).
Risk factors for cerebrovascular accidents include hypertension, obesity, sedentary lifestyle, smoking, stress, high cholesterol/triglycerides/lipoproteins, congenital conditions and family history of cerebrovascular accidents (Ball et al., 2015).
The 5.07 monofilament test is used to test sensation in different parts of the foot in patients suffering from diabetes mellitus or peripheral neuropathy (Ball et al., 2015).
The 0 to 4+ scale is used to grade the response when testing the reflex. 0 indicates no response and 4+ indicates hyperactive reflex (Ball et al., 2015).
Older adults may be taking medication for other conditions that can affect their balance, mental status and coordination and it is important know this in order to rule out whether a symptom is due to a side effect or a cause for concern (Ball et al., 2015).
Meningitis that occurs during the first year may cause epilepsy later on in life, also any infection in the first year of life can impa.
Please provide the following information about your culture which is.docxchristalgrieg
Please provide the following information about your culture which is the ANCIENT EMPIRE:
Content
Introduction with a thesis statement
Provide a brief history of your culture
Explain how your chosen culture is represented in the United States
Is your culture individualistic or collectivistic? Provide at least one example
What are some of the artistic (art, music, architecture, dance) contributions of your culture?
What are some values of your culture? Provide at least three examples
Discuss your culture’s religion(s)? Include name and basic belief system of at least one of the major faiths
What are some of the sex and gender role differences in your culture? Provide at least three examples
Discuss what we would need to know to acculturate into your culture (if it is a culture from the past, what would we need to do in order to fit in during that timeframe). Provide at least one concrete suggestion
Conclusion
Specific Paper Requirements:
Four-page minimum: six-page maximum (Times New Roman, 1-inch marginsm 12-pt. font, double-spaced)
Quality of writing: Must contain in-text citations in APA format
Spelling and Grammar
Correct APA style format
A minimum of three or more credible sources (books, journal articles, magazine/newspaper articles, etc.)
Paper Outline:
Introduction
History
Cultural Context
Represented in the United States
Individualistic/Collective
Artistic
Values
Religion
Sex and Gender Roles
Acculturation
Conclusion
References
.
Please proof the paper attached and complete question 6 and 7..docxchristalgrieg
Please proof the paper attached and complete question 6 and 7.
Moore Plumbing Supply Company
Capital Structure
Mort Moore founded Moore Plumbing Supply after returning from duty in the South Pacific during World War II. Before joining the armed forces, he had worked for a locally owned plumbing company and wanted to continue with that type of work once the war effort was over. Shortly after returning to his hometown of Minneapolis, Minnesota, he became aware of an unprecedented construction boom. Returning soldiers needed new housing as they started families and readjusted to civilian life. Mort felt that he could make more money by providing plumbing supplies to contractors rather than performing the labor, and he decided to open a plumbing supply company. Mort’s parents died when he was young and was raised by his older brother, Stan, who ran a successful shoe business during the 1920’s. Stan often shared stories about owning his own business and in particular about a large expansion that was completed just before the market collapsed. Because of the economic times, Stan lost the business but was lucky to find employment with the railroad. He dutifully saved part of each paycheck and was so thankful that his brother returned home safely that he decided to use his sizable savings to help his brother open his business. Mort kept in mind his brother’s failed business and vowed that his company would operate in such a way that it would minimize its vulnerability of general business downturns.
Moore’s extensive inventory and reasonable prices made the company the primary supplier of the major commercial builders in the area. In addition, Mort developed a loyal customer base among the home repair person, as his previous background allowed him to provide excellent advice about specific projects and to solve unique problems. As a result, his business prospered and over the past twenty years, sales have grown faster than the industry. Because of the large orders, the company receives favorable prices from suppliers, allowing Moore Plumbing Supply to remain competitive with the discount houses that have sprung up in the area. Over the years, Mort has kept his pledge and the company has remained a very strong financial position. It had a public sale of stock and additional stock offers to fund expansions including regional supply outlets in Milwaukee, Wisconsin and Sioux City, Iowa.
Recently, Stan decided that the winters were too long and he wanted to spend the coldest months playing golf in Florida. He retired from the day-to-day operations but retained the position of President and brought in his grandson, Tom Moore, to run the company as the new Chief Executive Officer. Tom was an excellent choice for the position. After graduating summa-cum-laud with a degree in communications from the University of Wisconsin, he worked in the Milwaukee operation where he was quickly promoted to manager. In ten years, sa.
Please prepare PPT( 5 Slides and 1 citation slide) and also explain .docxchristalgrieg
Please prepare PPT( 5 Slides and 1 citation slide) and also explain all slides in word format about 300 words to give presentation
Types of Stakeholders:
Suppliers - Sandeep
Owners - Sandeep
Employees - Sandeep
Stakeholder Impact of Ethics on Stakeholders – Ravi/Rushil/Sandeep/Krishna
References
.
Please prepare a one-pageProject Idea that includes the .docxchristalgrieg
Please prepare a
one-page
Project Idea
that includes the following:
1. What type of project
would you like to do: develop a proposal for a new business; develop a plan to green an existing business; creative project; or research project?
2. What is the big idea
that you would like to pursue? (1-2 sentences)
3. Why
did you decide on this idea? (2-3 sentences)
4. If working in a team
, please list each team member and include either one specific role that they will play in the project or one link to a helpful resource that they have found that will inform the team’s project.
If doing an individual project
, please list at least one resource that will inform your thinking.
5. Develop a
proposed timeline
for the project (including the deliverables below, plus additional steps needed to produce the deliverables).
See the project guidelines under Course Documents or linked
here
for more information.
.
Please prepare at least in 275 to 300 words with APA references and .docxchristalgrieg
Please prepare at least in 275 to 300 words with APA references and citation.
1) Please describe the meaning of diversification. How does diversification reduce risk for the investor?
2) What is the opportunity cost of capital? How can a company measure opportunity cost of capital for a project that is considered to have average risk?
.
Please provide references for your original postings in APA form.docxchristalgrieg
Please provide references for your original postings in APA format.
1. Discuss the types of backup locations, per the text and Powerpoint presentation raeadings for the week.
2. Would a single backup location be adequate or should a combination be used? What combination would you recommend?
.
Please provide an update to include information about methodology, n.docxchristalgrieg
Please provide an update to include information about methodology, new literature discovered, or even questions regarding current progress. Topic selection is Cyber Security in Industry 4.0: The Pitfalls of Having Hyperconnected Systems can be found at https://www.jstage.jst.go.jp/article/iasme/10/1/10_100103/_pdf. APA citation is the following. Dawson, M. (2018). Cyber Security in Industry 4.0: The Pitfalls of Having Hyperconnected Systems. Journal of Strategic Management Studies, 10(1), 19-28. (250 words)
.
Please provide an evaluation of the Path to Competitive Advantage an.docxchristalgrieg
Please provide an evaluation of the Path to Competitive Advantage and Motivation and
Feedback and answer the following questions:
1. How can managers enhance employee motivation through performance management
techniques?
2. It is well known that individuals on international assignments operate under unique
contextual and cultural realities. How would motivation differ in such environments?
*********
1 page follow APA 7 citation.
.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Acetabularia Information For Class 9 .docxvaibhavrinwa19
Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
Normal Labour/ Stages of Labour/ Mechanism of LabourWasim Ak
Normal labor is also termed spontaneous labor, defined as the natural physiological process through which the fetus, placenta, and membranes are expelled from the uterus through the birth canal at term (37 to 42 weeks
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
The Tesla Model S had received widespread praise and acclaim.docx
1. The Tesla Model S had received widespread
praise and acclaim not only as the world’s best
electric vehicle but also as a product far superior
to any other brand or model of electric vehicle cur-
rently on the market. In 2013, the Model S was the
most awarded car in the United States. In picking
the 2014 Tesla Model S as the “best overall” model
out of 260 cars tested, Consumer Reports awarded
the Model S a score of 99 out of 100 (the highest
score any vehicle had ever received from the mag-
azine) and described it as “a technological tour de
force” with “blistering acceleration, razor-sharp
handling, compliant ride, and versatile cabin.”1 The
sleek styling and politically correct power source
of the Tesla Model S was thought to explain why
thousands of wealthy individuals in North America
and Europe—anxious to be a part of the migration
from gasoline-powered vehicles to electric-powered
vehicles and to publicly display support for a cleaner
environment—had become early purchasers and
advocates for the vehicle. Indeed, word-of-mouth
praise for the Model S among current owners and
glowing articles in the media were so pervasive that
Tesla had not yet spent any money on advertising to
boost customer traffic in its showrooms. In a presen-
tation to investors, a Tesla officer said, “Tesla own-
ers are our best salespeople.”2
In fall 2013, the Model S ranked as the best-
selling car in 8 of the 25-wealthiest zip codes in the
United States, as ranked by Forbes.3 At the top of
that list was Atherton, California, a Silicon Valley
2. town near Tesla’s Palo Alto headquarters where the
median home price in 2013 was $6.65 million. Other
Tesla Motors’ Strategy to Revolutionize
the Global Automotive Industry
Arthur A. Thompson
The University of Alabama
I
n his February 2014 Letter to Shareholders, Elon
Musk—an early investor in Tesla Motors and its
current chairman and CEO—was pleased with the
company’s future prospects. Tesla’s strategy was
producing rapidly improving results, and by all indi-
cations the company’s execution of the strategy was
very much on track. Musk’s report left little doubt that
Tesla Motors was making good progress in its journey
to manufacture premium-quality, high-performance
electric vehicles capable of winning widespread
customer acceptance and accelerating the world’s
transition from carbon-producing, gasoline-powered
vehicles to energy-efficient, environmentally respon-
sible electric vehicles.
After suffering five years of losses total-
ing $943.5 million on combined revenues of just
$861 million between 2008 and 2012, Tesla delivered
22,477 of its recently introduced Model S vehicles
to customers in 2013. Production rates had recently
increased to 600 vehicles per week and were expected
to reach 1,000 vehicles per week by year-end 2014.
Tesla reported global revenues of $2.0 billion in 2013
and over $100 million in net income on a non-GAAP
4. ury cars in the United States was widespread. In the
first nine months of 2013 in the United States, unit
sales of Tesla’s Model S sedan (14,200 vehicles)
were higher than sales of Mercedes’ top-of-the line
S-Class sedan (9,600 vehicles), BMW’s 700 series
luxury sedan (9,600 vehicles), the Lexus LS 460
luxury sedan (9,200 vehicles), BMW’s 600 series
(8,000 vehicles), Audi’s premium-priced A7 series
(6,700 vehicles), and the Porsche Panamera sedan
(4,300 vehicles).4
According to Jessica Caldwell, senior analyst at
Edmunds.com (a respected website for automotive
industry data):5
Influential people set trends while the mainstream
aspires to follow. We’ve seen this countless times in
many different retail sectors. Cars are no different, albeit
more expensive than most other purchases. Additionally,
with the proclivity of tech geek being chic, the Sili-
con Valley area will set trends faster than traditional
high-income markets like New York that have roots in
(highly vilified) banking.
So, as Tesla increases the number of models on
offer and price points, it could find itself in demand by
more than just those in these wealthy enclaves. After
all, most luxury car companies find the most volume in
their entry-level vehicles.
Headed into 2014, Tesla Model S owners
in 20 countries were driving their vehicles almost
1 million miles every day—and had driven their
vehicles a total of 200 million cumulative miles.
Management believed that more than 80 percent of
Model S owners were using their Model S as their
5. primary vehicle. All the available evidence pointed
to Tesla’s Model S as being the best electric vehicle
the world had ever seen.
COMPANY BACKGROUND
Tesla Motors was incorporated in July 2003 by
Martin Eberhard and Marc Tarpenning, two Silicon
Valley engineers who believed it was feasible to
produce an “awesome” electric vehicle. The name-
sake of Tesla Motors was the genius Nikola Tesla
(1856–1943), an electrical engineer and scientist
who once worked with Thomas Edison and later
became known for his impressive inventions (of
which more than 700 were patented) and his contribu-
tions to the design of modern alternating-current (AC)
power transmission systems and electric motors.
Tesla Motors’ first vehicle, the Tesla Roadster (an
all-electric sports car) introduced in early 2008, was
powered by an AC motor that descended directly
from Nikola Tesla’s original 1882 design.
Financing Early Operations
Eberhard and Tarpenning financed the company
until Tesla Motors’ first round of investor funding in
February 2004. Elon Musk contributed $6.35 million
of the $6.5 million in initial funding and, as the
company’s majority investor, assumed the posi-
tion of chairman of the company’s board of direc-
tors. Martin Eberhard put up $75,000 of the initial
$6.5 million, with two private equity investment groups
and a number of private investors contributing the
remainder to Tesla’s initial funding as well.6 Shortly
thereafter, the company had a second round of inves-
tor funding amounting to $13 million, with Musk
and a third private equity investment group being the
6. principal capital contributors.
In May 2006, a third round of investor funding
raised $40 million in additional capital for the young
company, the majority of which was contributed by
Elon Musk and an investment group called Tech-
nology Partners. This third round included capital
contributions from Google cofounders Sergey Brin
and Larry Page, former eBay president Jeff Skoll,
Hyatt heir Nick Pritzker, and three other venture
capital firms. A fourth round of private financing in
May 2007 brought in an additional $45 million in
new investment capital. But the company continued
to burn through the investment capital that had been
raised—largely because of heavy product R&D
expenditures and several product design changes.
These costs forced a fifth financing round that raised
$40 million in investment capital in February 2008.
tho20598_case17_C245-C273.indd 246 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-247
at a price of $17 per share; of the shares sold to the
public, 11,880,600 shares were offered by the com-
pany and 1,419,400 shares were offered by selling
stockholders. In addition, the selling stockholders
granted the underwriters a 30-day option to purchase
up to an additional aggregate of 1,995,000 shares of
common stock to cover overallotments, if any. Tes-
la’s shares began trading on Tuesday, June 29, 2010,
7. on the NASDAQ under the ticker symbol “TSLA.”
Tesla Motors was the first American car company to
go public since Ford Motor Company’s IPO in 1956.
In October 2012, Tesla completed a follow-on offer-
ing of 7.97 million shares from which it received net
proceeds of $222.1 million.
Management Changes
In August 2007, with the company plagued by pro-
duction delays, cofounder Martin Eberhard was
ousted as Tesla’s CEO and replaced with an interim
CEO who headed the company until Ze’ev Drori, an
Israeli-born American technology entrepreneur and
avid car enthusiast, was named the company’s presi-
dent and CEO in November 2007. Drori was specifi-
cally tasked by the company’s board of directors to
get the delayed Tesla Roadster into production and
start deliveries to customers as fast as possible. To
combat continuing production delays (the latest of
which involved problems in designing and develop-
ing a reliable, tested transmission that would last
many miles) and “out-of-control” costs that were
burning through the company’s investment capital
at a rate that disturbed investors, Drori conducted
a performance review of the company’s more than
250 employees and contractors and proceeded to
fire or lay off roughly 10 percent of the workforce,
including several executives, high-ranking members
of the company’s automotive engineering team, and
other heretofore key employees.10 Although Drori suc-
ceeded in getting the Tesla Roadster into production in
March and initiating deliveries to customers, in Octo-
ber 2008 Musk decided it made more sense for him to
take on the role as Tesla’s chief executive—while con-
tinuing to serve as chairman of the board—because he
8. was making all the major decisions anyway. Drori
was named vice chairman but then opted to leave the
company in December 2008. By January 2009, Tesla
had raised $187 million and delivered 147 cars. Musk
declared that the company would be cash flow–
positive by mid-2009.
Of the $145 million in investment capital raised in
these first five financing rounds, Elon Musk contrib-
uted about $74 million, making him the company’s
largest shareholder.7
In May 2009, when the company was struggling
to cope with still another cash crunch and also over-
come a series of glitches in getting the Model S into
production, Germany’s Daimler AG, the maker of
Mercedes vehicles, announced that it was acquiring
an equity stake of almost 10 percent in Tesla for a
reported $50 million and that a Daimler executive
would become a member of Tesla’s board of direc-
tors.8 Daimler’s investment signaled a strategic part-
nership with Tesla to accelerate the development of
Tesla’s lithium-ion battery technology and electric
drive train technology and to collaborate on electric
cars being developed at Mercedes. In July 2009,
Daimler announced that Abu Dhabi’s Aabar Invest-
ments had purchased 40 percent of Daimler’s own-
ership interest in Tesla.9
In June 2009, following two years of lobbying
effort by Tesla on behalf of its loan applications,
the company received approval for about $465 mil-
lion in low-interest loans from the U.S. Department
of Energy (DOE) to accelerate the production of
affordable, fuel-efficient electric vehicles; the loans
were part of the DOE’s $25 billion Advanced Tech-
9. nology Vehicle Manufacturing Program, created in
2007 during the George Bush administration and
funded in September 2008, which provided incen-
tives to new and established automakers to build
more fuel-efficient vehicles and reduce the country’s
dependence on foreign oil. Tesla intended to use
$365 million for production engineering and assem-
bly of its forthcoming Model S and $100 million for
a powertrain manufacturing plant employing about
650 people that would supply all-electric powertrain
solutions to other automakers and help accelerate
the availability of relatively low-cost, mass-market
electric vehicles.
In September 2009, Tesla Motors raised $82.5
million from Daimler, Fjord Capital Partners, Aabar
Investments, and other undisclosed investors; Elon
Musk did not contribute to this funding round. Tesla
indicated that the funds raised would be used pri-
marily to open additional sales and service centers
for its vehicles.
In June 2010, Tesla Motors became a public
company, raising $226 million with an initial public
offering of 13,300,000 shares of common stock sold
tho20598_case17_C245-C273.indd 247 10/25/14 11:04 AM
Final PDF to printer
C-248 PART 2 Cases in Crafting and Executing Strategy
Elon Musk
10. Elon Musk was born in South Africa, taught him-
self computer programming, and, at age 12, made
$500 by selling the computer code for a video game
he invented.11 In 1992, after spending two years at
Queen’s University in Ontario, Canada, Musk trans-
ferred to the University of Pennsylvania, where he
earned an undergraduate degree in business and a
second degree in physics. During his college days,
Musk spent some time thinking about two impor-
tant matters that he thought would merit his time
and attention later in his career: One was that the
world needed an environmentally clean method of
transportation; the other was that it would be good
if humans could colonize another planet.12 After
graduating from the University of Pennsylvania,
he decided to move to California and pursue a PhD
in applied physics at Stanford but with the specific
intent of working on energy storage capacitors that
could be used in electric cars. However, he promptly
decided to leave the program after two days to pur-
sue his entrepreneurial aspirations instead.
Musk’s first entrepreneurial venture was to join
up with his brother, Kimbal, and establish Zip2, an
Internet software company that developed, hosted,
and maintained some 200 websites involving “city
guides” for media companies, including the New
York Times, the Chicago Tribune, and other newspa-
pers in the Hearst, Times Mirror, and Pulitzer Pub-
lishing chains. In 1999 Zip2 was sold to a wholly
owned subsidiary of Compaq Computer for $307
million in cash and $34 million in stock options—
Musk received a reported $22 million from the sale.13
In March 1999, Musk cofounded X.com, a
Silicon Valley online financial services and e-mail
11. payment company. One year later, X.com acquired
Confinity, which operated a subsidiary called Pay-
Pal. Musk was instrumental in the development of
the person-to-person payment platform and, seeing
a big market opportunity for such an online pay-
ment platform, decided to rename X.com as PayPal.
Musk pocketed about $150 million in eBay shares
when PayPal was acquired by eBay for $1.5 billion
in eBay stock in October 2002.
In June 2002, Elon Musk, with an investment
of $100 million of his own money, founded his
third company, Space Exploration Technologies
(SpaceX), to develop and manufacture space launch
vehicles, with a goal of revolutionizing the state of
rocket technology and ultimately enabling people
to live on other planets. He vowed to revolutionize
the space industry with a low-cost, reliable satellite
launcher that charged $6 million a flight—less than
half the going rate for small payloads. Upon hearing
of Musk’s new venture into the space flight busi-
ness, David Sacks, one of Musk’s former colleagues
at PayPal, said, “Elon thinks bigger than just about
anyone else I’ve ever met. He sets lofty goals and
sets out to achieve them with great speed.”14 In 2011,
Musk vowed to put a man on Mars in 10 years.15 In
May 2012, a SpaceX Dragon cargo capsule powered
by a SpaceX Falcon Rocket completed a near flaw-
less test flight to and from the International Space
Station; the successful test flight prompted Musk
to say that the mission, in his view, marked a turning
point toward rapid advancement in space transpor-
tation technology, one that would pave the way
for routine cargo deliveries and commercial space
flights.16 Since May 2012, under a $1.6 billion con-
12. tract with NASA, the SpaceX Dragon had delivered
cargo to and from the Space Station three times,
in the first of at least 12 cargo resupply missions.
As of 2013, SpaceX was both profitable and cash
flow– positive; it had completed nearly 50 launches,
representing some $5 billion in contracts, and had
3,000 employees. Headquartered in Hawthorne,
California, SpaceX was owned by management,
employees, and private equity firms; Elon Musk was
the company’s CEO and chief designer.
Elon Musk’s other active business venture was
SolarCity Inc., a full-service provider of solar sys-
tem design, financing, solar panel installation, and
ongoing system monitoring for homeowners, munic-
ipalities, businesses (including Toyota, Walmart,
Walgreens, and eBay), over 100 schools (including
Stanford University), nonprofit organizations, and
military bases. Going into 2014, SolarCity managed
more solar systems for homes than any other solar
company in the United States. SolarCity had reve-
nues of $163.8 million in 2013, but the company had
lost money every year it had been in business, with
the losses growing in size every year since 2009.
Nonetheless, investors were bullish on SolarCity’s
future prospects; the company’s stock price ranged
from a low of $48 to a high of $86 in the first five
months of 2014. Elon Musk was the chairman of
SolarCity’s board of directors and owned 22.9 per-
cent of the outstanding shares of the company as of
April 4, 2014.
tho20598_case17_C245-C273.indd 248 10/25/14 11:04 AM
Final PDF to printer
13. CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-249
rather, he was releasing his design in hopes that oth-
ers would take on such projects.
Since 2008, many business articles had been writ-
ten about Musk’s brilliant entrepreneurship in creat-
ing companies with revolutionary products that either
spawned new industries or disruptively transformed
existing industries. In a 2012 Success magazine article,
Musk indicated that his commitments to his spacecraft,
electric car, and solar panel businesses were long-term
and deeply felt.18 The author quoted Musk as saying,
“I never expect to sort of sell them off and do some-
thing else. I expect to be with those companies as far
into the future as I can imagine.” Musk indicated he
was involved in SolarCity and Tesla Motors “because
I’m concerned about the environment,” while “SpaceX
is about trying to help us work toward extending life
beyond Earth on a permanent basis and becoming a
multiplanetary species.” The same writer described
Musk’s approach to a business as one of rallying
employees and investors without creating false hope.19
The article quoted Musk as saying:
You’ve got to communicate, particularly within the
company, the true state of the company. When people
really understand it’s do or die but if we work hard
and pull through, there’s going to be a great outcome,
people will give it everything they’ve got.
Asked if he relied more on information or
instinct in making key decisions, Musk said he
14. makes no bright-line distinction between the two:20
Data informs the instinct. Generally, I wait until the
data and my instincts are in alignment. And if either
the data or my instincts are out of alignment, then I
sort of keep working the issue until they are in align-
ment, either positive or negative.
Musk was widely regarded as being an inspiring
and visionary entrepreneur with astronomical ambi-
tion and willingness to invest his own money in risky
and highly problematic business ventures—on sev-
eral occasions, Musk’s ventures had approached the
brink of failure in 2008–2009 and then unexpectedly
emerged with seemingly bright prospects. He set
stretch performance targets and high product- quality
standards, and he pushed hard for their achieve-
ment. He exhibited perseverance, dedication, and
an exceptionally strong work ethic—he typically
worked 85 to 90 hours a week. Most weeks, Musk
split his time between SpaceX and Tesla. He was
at SpaceX’s Los Angeles–based headquarters on
Monday and Thursday and at various Tesla facilities in
On August 12, 2013, Musk published a blog
post detailing his design for a solar-powered, city-
to-city elevated transit system called the Hyper-
loop that could take passengers and cars from Los
Angeles to San Francisco (a distance of 380 miles)
in 30 minutes. He then held a press call to go over
the details. In Musk’s vision, the Hyperloop would
transport people via aluminum pods enclosed inside
steel tubes. He described the design as looking like a
shotgun, with the tubes running side by side for most
of the route and closing the loop at either end.17 The
tubes would be mounted on columns 50 to 100 yards
15. apart, and the pods inside would travel up to 800
miles per hour. The pods could be enlarged to ferry
cars, as well as people—with enlarged pods, Musk
said, “You just drive on, and the pod departs.” Musk
estimated that a Los Angeles–to–San Francisco
Hyperloop could be built for $6 billion with people-
only pods, or $10 billion for the larger pods capable
of holding people and cars. Musk claimed his Hyper-
loop alternative would be four times as fast as Cali-
fornia’s proposed $70 billion high-speed train, with
ticket costs being “much cheaper” than a plane ride.
While pods would be equipped with an emergency
brake for safety reasons, Musk said the safe distance
between the pods would be about 5 miles, so you
could have about 70 pods between Los Angeles and
San Francisco that departed every 30 seconds. Musk
stated that riding on the Hyperloop would be quite
pleasant. “It would have less lateral acceleration—
which is what tends to make people feel motion
sick—than a subway ride, as the pod banks against
the tube like an airplane,” he says. “Unlike an air-
plane, it is not subject to turbulence, so there are
no sudden movements. It would feel supersmooth.”
Musk envisioned the Hyperloop as an ideal way to
link cities less than 1,000 miles apart that had high
amounts of traffic between them (like Los Angeles
and San Francisco, New York and Washington, and
New York and Boston). Travel between cities less
than 1,000 miles apart via a Hyperloop system would
be quicker than flying because of the time it took to
board and unboard airline passengers and the time it
took for planes to take off and land at busy airports.
Musk believed the costs of Hyperloop transportation
for routes over 1,000 miles would prove prohibitive,
not to mention the visual and logistical problems that
would accrue from having Hyperloop tubes criss-
16. crossing the country. Musk announced that he would
not form a company to build Hyperloop systems;
tho20598_case17_C245-C273.indd 249 10/25/14 11:04 AM
Final PDF to printer
C-250 PART 2 Cases in Crafting and Executing Strategy
for an additional 89 million shares, 78 million shares
of which were subject to Tesla Motors’ achieving
specified increases in market capitalization and 10
designated performance milestones by 2023.24
Recent Financial Performance
and Financing Activities
Exhibits 1 and 2 present recent financial statement
data for Tesla Motors.
In May 2013, Tesla raised over $1 billion by
issuing 4.5 million shares of common stock at a price
of $92.24 per share and $660 million of 1.5 percent
convertible senior notes. Elon Musk personally pur-
chased 1.08 million of these shares at the public
offering price, boosting his investment in Tesla by
another $100 million. Tesla used about $450 million
of the offering proceeds to fully pay off its 2009 loan
from the U.S. Department of Energy, including an
$11 million fee for early payment.
Tesla ended 2013 with $848.9 million in cash
and cash equivalents and current restricted cash, an
17. increase of $52.5 million from the end of the third
quarter. Executive management expected that the
current level of liquidity, coupled with projected
future cash flows from operating activities, was likely
to provide adequate liquidity based on current plans.
However, if market conditions proved favorable,
management said it would evaluate the merits of
opportunistically pursuing actions to further boost
the company’s cash balances and overall liquidity.
Tesla had capital expenditures of $264 million
in 2013, aimed chiefly at expanding its factory pro-
duction capabilities and opening additional sales
galleries, service centers, and Supercharger stations.
Capital expenditures of $650 million to $850 million
were planned for 2014.
TESLA’S STRATEGY TO
BECOME THE WORLD’S
BIGGEST AND MOST HIGHLY
REGARDED PRODUCER OF
ELECTRIC VEHICLES
Elon Musk’s vision for Tesla Motors was to utilize
the company’s proprietary batteries and powertrain
technology to put millions more electric cars on the
the San Francisco Bay area on Tuesday and Wednes-
day.21 On Friday he split his time between both
companies—Tesla Design had offices in the same
office park in a southern Los Angeles suburb as
SpaceX; Musk’s personal residence was about 18
miles away in a northern Los Angeles suburb.
However, Musk got mixed marks on his man-
agement style. He was praised for his grand vision
of what his companies could become and his ability
18. to shape the culture of his startup companies but was
criticized for being hard to work with, partly because
of his impatience for action and results, his intensity
and sometimes hands-on micromanagement of certain
operational and product design issues, and the fre-
quency with which he overruled others and imposed
his wishes when big decisions had to be made. In
2000, while on vacation, he was forced out as CEO at
PayPal after seven months.22 Several lawsuits had been
filed against him by disgruntled former colleagues and
employees. A number of articles had made mention of
assorted minor annoyances and criticisms of the ways
he did things and his frequently prickly manner when
responding to probing or unpleasant questions from
reporters. But virtually no one had disparaged his
brilliant intellect, inventive aptitude, and exceptional
entrepreneurial abilities. In 2014, it was hard to dis-
pute that Musk—at the age of 43—had already made
a name for himself in two ways:23
• He had envisioned the transformative possibili-
ties of the Internet, a migration from fossil fuels
to sustainable energy, and the expansion of life
beyond Earth.
• His companies (Tesla, SpaceX, and SolarCity)
had put him in position to personally affect the
path the world would take in migrating from fos-
sil fuels to sustainable energy and in expanding
life beyond Earth. Musk won the 2010 Automo-
tive Executive of the Year Innovator Award for
expediting the development of electric vehicles
throughout the global automotive industry. For-
tune magazine named Elon Musk its 2013 Busi-
nessperson of the Year.
19. In 2014 Elon Musk’s base salary as Tesla’s CEO
was $33,280, an amount required by California’s
minimum wage law; however, he was accepting only
$1 in salary. Musk controlled over 33 million shares
of common stock in Tesla Motors (worth some $8.3
billion in March 2014) and had been granted options
tho20598_case17_C245-C273.indd 250 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-251
Fiscal Year Ending December 31
2013 2012 2011 2010
Income statement data
Revenues:
Sales of vehicles, options and accessories,
vehicle service, and regulatory credits $ 1,952,684 $
354,344 $ 101,748 $ 75,459
Sales of powertrain components, battery packs,
and drive units to other vehicle manufacturers 45,102 31,355
46,860 21,619
Development of powertrain components and
systems for other vehicle manufacturers 15,710
27,557 55,674 19,666
20. Total revenues 2,013,496 413,256 204,242 116,744
Cost of revenues:
Vehicle sales and sales of powertrain components
and related systems to other manufacturers 1,543,878 371,658
115,482 79,982
Development of powertrain systems and
components for other vehicle manufacturers 13,356
11,531 27,165 6,031
Total cost of revenues 1,557,234 383,189 142,647 86,013
Gross pro! t (loss) 456,262 30,067 61,595 30,731
Operating expenses:
Research and development 231,976 273,978 208,981 92,996
Selling, general, and administrative 285,569 150,372
104,102 84,573
Total operating expenses 517,545 424,350 313,083 177,569
Loss from operations (961,283) (394,283) (251,488) (146,838)
Interest income 189 288 255 258
Interest expense (32,934) (254) (43) (992)
Other income (expense), net 22,602 (1,828) (2,646) (6,583)
Loss before income taxes (71,426) (396,077) (253,922)
(154,155)
21. Provision for income taxes 2,588 136 489
173
Net loss $ (74,014) $ (396,213) $(254,411) $
(154,328)
Net loss per share of common stock, basic and
diluted $(0.62) $(3.69) $(2.53) $(3.04)
Weighted-average shares used in computing net
loss per share of common stock, basic and diluted 119,421,414
107,349,188 100,388,815 50,718,302
Balance sheet data
Cash and cash equivalents $ 845,889 $ 201,890 $
255,266 $ 99,558
Inventory 340,355 268,504 50,082 45,182
Total current assets 1,265,939 524,768 372,838 235,886
Property, plant, and equipment, net 738,494 552,229 298,414
114,636
Total assets 2,416,930 1,114,190 713,448 386,082
Total current liabilities 675,160 539,108 191,339 85,565
Long-term debt, less current portion — 401,495 268,335 71,828
Total stockholders’ equity 667,121 124,700 224,045 207,048
EXHIBIT 1 Consolidated Statement of Operations, Tesla
Motors, 2010–2013
(in thousands, except share and per share data)
22. (Continued )
tho20598_case17_C245-C273.indd 251 10/25/14 11:04 AM
Final PDF to printer
C-252 PART 2 Cases in Crafting and Executing Strategy
The Tesla Roadster Following Tesla’s initial
funding in 2004, Musk took an active role within
the company. Although he was not involved in day-
to-day business operations, he did exert strong influ-
ence in the design of the company’s first model,
the Tesla Roadster, a two-seat convertible that
could accelerate from zero to 60 miles per hour in
as little as 3.7 seconds, had a maximum speed of
about 120 miles per hour, could travel about 245
miles on a single charge, and had a base price of
$109,000 (€84,000). Musk insisted from the begin-
ning that the Roadster have a lightweight, high-
strength carbon fiber body, and he influenced the
design of components of the Roadster ranging from
the power electronics module to the headlamps and
other styling features.26 Prototypes of the Roadster
were introduced to the public in July 2006, and the
first “Signature One Hundred” set of fully equipped
Roadsters sold out in less than three weeks; the
second hundred sold out by October 2007. General
production began on March 17, 2008. New mod-
els of the Roadster were introduced in July 2009
(including the Roadster Sport, with a base price of
$128,500, equivalent to €112,000) and in July 2010.
Sales of Roadster models to countries in Europe and
23. Asia began in 2010. From 2008 through 2012, Tesla
sold more than 2,450 Roadsters in 31 countries.27
Tesla Roadsters sold in 2006–2007 had a warranty
of three years or 36,000 miles; beginning with
sales of the 2008 Roadster, the warranty period was
road and dramatically curtail global dependence on
petroleum-based transportation. The company’s over-
riding strategic objective was “to drive the world’s
transition to electric mobility by bringing a full
range of increasingly affordable electric cars to mar-
ket.”25 At its core, the company’s strategy was aimed
squarely at disrupting the world automotive industry
in ways that were sweeping and revolutionary. If Tes-
la’s strategy proved to be as successful as Elon Musk
believed it would be, industry observers expected
that the competitive positions and market standing of
Tesla and its automotive rivals would likely be vastly
different in 2025 than they were in 2014.
Product Line Strategy
So far, Tesla had introduced two models—the Tesla
Roadster and the Model S, but two new models were
rapidly advancing through the pipeline. It was the
company’s strategic intent to broaden its customer
base by offering not only a bigger model variety
but also by introducing substantially cheaper mod-
els. Because the lithium-ion battery pack in Tesla
vehicles reputedly cost upward of $25,000 and was
far and away the biggest cost component, the speed
with which the company could profitably introduce
new vehicles with prices of $35,000 to $50,000
depended largely on how fast and how far it was able
to drive down the costs of its battery pack via greater
scale economies in battery production and cost-sav-
24. ing advances in battery technology.
Source: Company 10-K reports for years 2011–2013.
Fiscal Year Ending December 31
2013 2012 2011 2010
Cash ! ow data
Cash ! ows from operating activities $257,994 $(266,081)
$(128,034) ($127,817)
Proceeds from issuance of common stock in public
offerings 360,000 221,496 172,410 188,842
Purchases of property and equipment excluding
capital leases (264,224) (239,228) (184,226) (40,203)
Net cash used in investing activities (249,417) (206,930)
(162,258) (180,297)
Net cash provided by " nancing activities 635,422 419,635
446,000 338,045
EXHIBIT 1 (Continued)
tho20598_case17_C245-C273.indd 252 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-253
25. Q1, 2013 Q2, 2013 Q3, 2013 Q4, 2013 Q1, 2014
Revenues (GAAP) $561,792 $405,139 $431,346 $615,219
$620,542
Model S revenues deferred due to lease
accounting — 146,812 171,229 146,125 92,506
Revenues (non-GAAP) 561,792 551,951 602,575 761,344
713,048
Gross pro! t (loss) (GAAP) 96,320 100,483 102,868 156,590
155,128
Model S gross pro! t deferred due to lease
accounting — 19,349 28,732 29,796 21,384
Stock-based compensation expense 1,563 1,063
3,017 3,455 3,106
Gross pro! t (loss) (non-GAAP) 97,856 120,895 134,617
189,641 179,618
Research and development expenses (GAAP) 54,859 52,312
56,351 68,454 81,544
Stock-based compensation expense (7,644) (8,565) (8,707)
(10,578) (13,545)
Research and development expenses
(non-GAAP) 47,215 43,747 47,644 57,876 67,999
Selling, general, and administrative expenses
(GAAP) 47,045 59,963 77,071 101,489 117,551
Stock-based compensation expense (5,688) (9,631) (9,715)
26. (14,056) (20,387)
Selling, general and administrative expenses
(non-GAAP) 41,357 50,332 67,356 87,443 97,164
Net loss (GAAP) (11,248) (30,502) (38,496) (16,264) (49,800)
Stock-based compensation expense 14,868 19,259 21,439
28,089 37,038
Change in fair value of warrant liability (10,692) — — — —
Non-cash interest expense related to
convertible notes — 1,791 4,260 4,299 8,393
Early extinguishment of DOE loans — 16,386 — — —
Model S gross pro! t deferred due to lease
accounting — 19,349 28,732 29,796 21,384
Net income (loss) (non-GAAP) $ 15,424 $ 26,283 $
15,935 $ 45,920 $ 17,015
Net income (loss) per common share, basic
(GAAP) $0.10 $(0.26) $(0.32) $(0.32) $(0.40)
Net income (loss) per common share, basic
(non-GAAP) 0.13 0.22 0.13 0.37 0.14
Shares (in 000s) used in per share calculation,
basic (GAAP and non-GAAP) 114,712 118,194 121,862 122,802
123,473
Net loss per share, diluted (GAAP) $0.00 $(0.23) $(0.28)
$(0.12) $(0.36)
27. Net income (loss) per share, diluted (non-GAAP) 0.12 0.20 0.12
0.33 0.12
Shares (in 000s) used in per share calculation,
diluted (non-GAAP) 124,265 130,503 137,131 137,784 140,221
Special note on GAAP vs. non-GAAP treatments: Under
generally accepted accounting principles (GAAP), revenues and
costs of leased
vehicles must be recorded and apportioned across the life of the
lease; with non-GAAP lease accounting, all revenues and costs
of a
leased vehicle are recorded at the time the lease is ! nalized.
Under GAAP, stock compensation must be expensed and
allocated to the
associated cost category; non-GAAP excludes stock
compensation as a cost because it is a non-cash item. Many
companies, including
Tesla Motors, believe non-GAAP treatments are useful in
understanding company operations and actual cash " ows. In
Tesla’s case, the
non-GAAP treatments exclude such non-cash items as stock-
based compensation, the change in fair value related to Tesla’s
warrant
liability, and non-cash interest expense related to Tesla’s 1.5
percent convertible senior notes, as well as one-time expenses
associated
with the early repayment of the 2010 loan Tesla received from
the Department of Energy.
Source: Tesla Motors’ Letters to Shareholders, ! rst through
fourth quarters 2013 and ! rst quarter 2014.
EXHIBIT 2 Tesla’s Financial Performance by Quarter, GAAP
vs. Non-GAAP,
Quarter 1, 2013, through Quarter 1, 2014
28. tho20598_case17_C245-C273.indd 253 10/25/14 11:04 AM
Final PDF to printer
C-254 PART 2 Cases in Crafting and Executing Strategy
ports, and numerous other features that were standard
in most luxury vehicles. Tesla had designed the Model
S to give buyers the option of having a third row with
two rear-facing child seats, thus providing seating for
five adults and two children. Buyers had a choice of
two battery-pack options and a “Performance Plus”
model with a high-performance powertrain. Exhibit
3 provides comparative data on the three Model S
battery packs. Tesla executives believed the Model
S offered a compelling combination of functionality,
convenience, and styling without compromising per-
formance and energy efficiency. With the battery pack
in the floor of the vehicle and the motor and gearbox
extended to four years or 50,000 miles. Tesla Road-
ster customers could purchase an extended warranty
to cover an additional three years or 36,000 miles.
Sales of Roadster models ended in December 2012
so that the company could concentrate exclusively
on producing and marketing the Model S.
The Model S Tesla Motors began shipments of
its second vehicle, the Model S sedan, in June. The
Model S was a fully electric, four-door, five-passenger
luxury sedan with an all-glass panoramic roof, no
tailpipe and zero emissions, a high-definition backup
camera, keyless entry, xenon headlights, dual USB
29. 60-kWh Lithium-Ion
Battery Pack
85-kWH Lithium-Ion
Battery Pack
85-kWH Lithium-Ion
Performance Battery
Pack
Estimated range at 55 mph 230 miles 300 miles 300 miles
EPA-certi! ed range 208 miles 265 miles 265 miles
0 to 60 mph 5.9 seconds 5.4 seconds 4.2 seconds
Top speed 120 mph 125 mph 130 mph
Peak motor power 302 horsepower 362 horsepower 416
horsepower
Powertrain Rear-wheel drive, with a
liquid-cooled powertrain
that includes the battery,
electric motor, drive
inverter, and gearbox
Electronic stability control
and traction control Standard Standard Standard
Base price $69,900 $81,200 $94,900
Vehicle warranty 4 years or 50,000 miles,
whichever comes ! rst;
owners could buy an
30. extended warranty covering
an additional 4 years or
50,000 miles
4 years or 50,000 miles,
whichever comes ! rst;
owners could buy an
extended warranty covering
an additional 4 years or
50,000 miles
4 years or 50,000 miles,
whichever comes ! rst;
owners could buy an
extended warranty covering
an additional 4 years or
50,000 miles
Battery warranty 8 years, 125,000 miles 8 years, unlimited
miles 8 years, unlimited miles
Tesla Supercharger Optional ($2,000) Standard Standard
Supercharging capability:
Standard 110-volt
wall outlet
Complete recharge
overnight
Complete recharge
overnight
Complete recharge
overnight
31. 240-volt outlet with a
single onboard charger 29 miles of range per hour 29 miles of
range per hour 29 miles of range per hour
240-volt outlet with twin
onboard chargers 58 miles of range per hour 58 miles of range
per hour 58 miles of range per hour
Tesla
Supercharger-enabled
50% in 20 minutes
80% in 40 minutes
100% in 75 minutes
50% in 20 minutes
80% in 40 minutes
100% in 75 minutes
50% in 20 minutes
80% in 40 minutes
100% in 75 minutes
EXHIBIT 3 Features, Performance, and Pricing of Tesla’s Three
Model S Offerings
tho20598_case17_C245-C273.indd 254 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-255
32. in line with the rear axle, the Tesla Model S pro-
vided best-in-class storage space of 63.4 cubic feet,
including storage inside the cabin (58.1 cubic feet)
and under the hood (5.3 cubic feet). This compared
quite favorably with the 14.0-cubic-foot trunk capac-
ity of BMW’s large 7-series sedan, the 16.3-cubic-
foot capacity of a Mercedes S-class sedan, and the
18.0 cubic-foot trunk capacity of the large Lexus
460 sedan. The battery-charging port in the Model S,
located in the driver’s side taillight, opened with the
press of a button; the charging port accepted charges
from both 110-volt and 240-volt outlets, as well as
Supercharging devices. The Model S was designed to
allow a fast battery swap when driving long distances;
at any of Tesla’s hundreds of Supercharging stations,
drivers could exchange their car’s battery pack for a
fully charged one in less than half the time it took to
refill a gas tank.
In the second quarter of 2013, Tesla announced
several new options for the Model S, including a
60-kWh Lithium-Ion
Battery Pack
85-kWH Lithium-Ion
Battery Pack
85-kWH Lithium-Ion
Performance Battery
Pack
Instrument cluster 17-inch high-resolution
touchscreen display with
integrated controls for
media (radio, Bluetooth,
33. and USB audio devices),
navigation, Internet
communications,
cabin comfort, energy
consumption, and other
vehicle data
17-inch high-resolution
touchscreen display with
integrated controls for
media (radio, Bluetooth,
and USB audio devices),
navigation, Internet
communications,
cabin comfort, energy
consumption, and other
vehicle data
17-inch high-resolution
touchscreen display with
integrated controls for
media (radio, Bluetooth,
and USB audio devices),
navigation, Internet
communications,
cabin comfort, energy
consumption, and other
vehicle data
Rear-facing, fold-down
seating for 2 children under
age 10
Optional
($2,500)
34. Optional
($2,500)
Optional
($2,500)
Airbags 8 8 8
Body structure State-of-the-art aluminum-
intensive design that was
strong, rigid, and light;
high-strength boron steel
was used in key areas to
enhance occupant safety
State-of-the art aluminum-
intensive design that was
strong, rigid, and light;
high-strength boron steel
was used in key areas to
enhance occupant safety
State-of-the art aluminum-
intensive design that was
strong, rigid, and light;
high-strength boron steel
was used in key areas to
enhance occupant safety
Overall length 196.0" 196.0" 196.0"
Overall width
(mirrors extended)
86.2" 86.2" 86.2"
35. Height 56.5" 56.5" 56.5"
Ground clearance 6" 6" 6"
Sources: Information at www.teslamotors.com, February 27,
2014; pricing data is based on information at
www.edmunds.com, November 20,
2013.
subzero weather package, parking sensors, upgraded
leather interior, several new wheel options, and a
yacht-style floor center console. Xenon headlights
and a high-definition backup camera were made
standard equipment on all Model S cars.
Customers who purchased any of the three Model
S versions were eligible for a federal tax credit of
$7,500; a number of states also offered rebates on elec-
tric vehicle purchases, with states like California and
New York offering rebates as high as $7,500. Custom-
ers who leased a Model S were not entitled to rebates.
The Model S was the most-awarded car of 2013,
including Motor Trend’s 2013 Car of the Year award
and Automobile magazine’s 2013 Car of the Year
award. The National Highway Traffic Safety Admin-
istration (NHTSA) in 2013 awarded the Tesla Model
S a 5-star safety rating, both overall and in every
subcategory (a score achieved by approximately
1 percent of all cars tested by the NHTSA); how-
ever, the Model S achieved an overall Vehicle Safety
tho20598_case17_C245-C273.indd 255 10/25/14 11:04 AM
Final PDF to printer
36. C-256 PART 2 Cases in Crafting and Executing Strategy
Score of 5.4 stars, the highest of any vehicle ever
tested. Of all vehicles tested, including every major
make and model approved for sale in the United
States, the Model S set a new record for the lowest
likelihood of injury to occupants in front, side, rear,
and rollover accidents.28 Consumer Reports gave the
Model S a score of 99 out of 100 points, saying it
was “better than anything we’ve ever tested.”
The Forthcoming Model X Crossover SUV
Tesla was adapting the platform architecture of the
Model S to develop its Model X crossover—about
60 percent of the Model S platform was to be shared
with the Model X, greatly reducing the development
costs for the Model X. The Model X was designed to
seat 7 adults and fill the niche between the roominess
of a minivan and the style of an SUV, while having
high-performance features such as a dual-motor all-
wheel-drive system and a driving range of 214- to
267 miles per charge. A prototype of the Model X
was released in February 2012; it had “falcon-wing
doors” that provided easy access to the third-row
seats and resembled a sedan more than an SUV.
Initial production of the Model X was expected to
begin in late 2014, with production volume increas-
ing to approximately 300 vehicles per week by mid-
2015. The Tesla Model X crossover was expected to
cost slightly more than the Model S.
The Forthcoming Mass Market Tesla Model
37. 3 Vehicle Tesla had also announced its intent to
introduce a third-generation electric vehicle (named
the Model 3) in 2017 that would be sold at a lower
price point—perhaps as low as $35,000 if sufficient
cost-reductions could be achieved. Plans called for
it to be produced at Tesla’s assembly plant in Fre-
mont, California, and, in the case of units delivered
to customers in Europe, to undergo final assembly at
Tesla’s plant in Tilburg, Netherlands. During 2014,
Tesla intended to continue to make progress on the
design work and styling of the Model 3 vehicle.
Technology and Product
Development Strategy
Since its founding, Tesla had spent over $900 million
on research and development (R&D) activities to
design, develop, test, and refine the components and
systems needed to produce top-quality electric vehi-
cles and, further, to design and develop prototypes
of the Tesla Roadster, the Model S, and the forth-
coming Model X and Gen III vehicles (see Exhibit 1
for R&D spending during 2010–2013). In the fourth
quarter of 2013, the company increased its R&D
spending by about 25 percent in order to accelerate
product development efforts on Model S and Model
X enhancements.
By 2014, top executives believed that the com-
pany had developed core competencies in powertrain
and vehicle engineering and that the company’s core
intellectual property was contained in its electric
powertrain technology—the battery pack, power
electronics, induction motor, gearbox, and control
38. software that enabled these key components to oper-
ate as a system. As of year-end 2013, Tesla had been
issued 203 patents and had more than 280 pending
patent applications domestically and internationally
in a broad range of areas.
Tesla personnel had designed a compact, modu-
lar powertrain system with far fewer moving parts
than the powertrains of traditional gasoline-powered
vehicles, a feature that enabled Tesla to implement
powertrain enhancements and improvements as fast
as they could be identified, designed, and tested.
Tesla had incorporated its latest powertrain technol-
ogy into the Model S and also into the powertrain
components that it built and sold to other makers
of electric vehicles; plus, it was planning to use
much of this technology in its forthcoming electric
vehicles.
Battery Pack Over the years, Tesla had tested
hundreds of battery cells of different chemistries and
performance features. It had an internal battery-cell
testing lab and had assembled an extensive perfor-
mance database of the many available lithium-ion
cell vendors and chemistry types. Based on this
evaluation, it had elected to use “18650 form-factor”
lithium-ion battery cells, chiefly because a battery
pack containing 18650 cells offered two to three times
the driving range of the lithium-ion cells used by other
makers of electric vehicles—see Exhibit 4. Moreover,
Tesla had been able to obtain large quantities of the
18650 lithium-ion cells for its battery pack (each
pack had about 7,000 of the 18650 cells) at attractive
prices because global lithium-ion battery manufac-
turers were suffering from a huge capacity glut, hav-
ing overbuilt production capacity in anticipation of
39. fast-growing buyer demand for electric vehicles that
so far had failed to materialize.
tho20598_case17_C245-C273.indd 256 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-257
reduction in range when operated in temperatures at
or below –20°C. The battery charge deterioration for
Model S battery packs was expected to be less than
that for the Roadster.
Power Electronics The power electronics in
Tesla’s powertrain system had two primary func-
tions: the control of torque generation in the motor
while driving and the control of energy delivery back
into the battery pack while charging. The first func-
tion was accomplished through the drive inverter,
which was directly responsible for the performance,
energy-use efficiency, and overall driving experience
of the vehicle. The second function, charging the bat-
tery pack, was accomplished by the vehicle’s charger,
which converted alternating current (usually from
a wall outlet or other electricity source) into direct
current that could be accepted by the battery. Most
Model S owners ordered vehicles equipped with twin
chargers in order to cut the charging time in half.
Owners could use any available source of power to
charge their vehicle. A standard 12-amp/110-volt wall
outlet could charge the battery pack to full capac-
ity in about 42 hours for vehicles equipped with
40. a single charger, or 21 hours with a twin charger.
Tesla recommended that owners install at least a
24-amp/240-volt outlet in their garage or carport (the
same voltage used by many electric ovens and clothes
dryers), which permitted charging at the rate of 34
miles of range per hour of charging time on vehicles
equipped with a twin charger. But Tesla strongly
recommended the installation of a more powerful
40-amp/240-volt outlet that charged at the rate of
58 miles of range per hour of charge if the Model S
was equipped with twin chargers. Model S vehicles
came standard with three adapters: a 12-amp/110-
volt adapter, a 40-amp/240-volt adapter, and a J1772
public charging station adapter; other adapters could
be purchased online.
Induction Motors Tesla had developed custom-
designed three-phase alternating-current induction
motors for its powertrain system. Company person-
nel had incorporated several important innovations,
including a proprietary fabricated copper rotor and
more optimized winding patterns that allowed for
both the use of more copper wire and easy manufac-
ture. The outcomes were higher power and greater
efficiency (because of reduced resistance and lower
energy losses).
Management believed that the company’s accu-
mulated experience and expertise had produced a
core competence in battery-pack design and safety,
putting Tesla in position to capitalize on the sub-
stantial battery-cell investments and advancements
being made globally by battery-cell manufacturers
and to benefit from ongoing improvements in the
energy storage capacity, longevity, power delivery,
and costs per kilowatt-hour (kWh) of the battery
41. packs used in its current and forthcoming models.
Tesla’s battery-pack design gave it the ability to
change battery-cell chemistries and vendors while
retaining the company’s existing investments in
software, electronics, testing, and other powertrain
components. The long-term plan was to incorporate
whichever battery-cell chemistries delivered the best
combination of performance and value to the buyers
of Tesla vehicles.
The driving range of Tesla’s vehicles on a single
charge declined over the life of the battery on the
basis of a customer’s use of the vehicle and the fre-
quency with which the customer charged the battery.
Tesla estimated that the Tesla Roadster battery pack
would retain approximately 60 to 65 percent of its
ability to hold its initial charge after approximately
100,000 miles or seven years, which would result in
a decrease to the vehicle’s initial range. In addition,
based on internal testing, the company estimated
that the Tesla Roadster would have a 5 to 10 percent
Vehicle
Miles per
Charge (based
on EPA 5-cycle
test)
Tesla Model S (85-kWh battery pack) 265 miles
Tesla Model S (60-kWh battery pack) 208
Nissan LEAF 84
42. Honda Fit EV 82
Chevrolet Spark 82
Ford Focus EV 76
Mitsubishi 1-MiEV 62
Source: Tesla Motors Investor Presentation, September 14,
2013,
www.teslamotors.com (accessed December 1, 2013).
EXHIBIT 4 Comparative Miles per
Charge of Select Electric
Vehicles, 2013
tho20598_case17_C245-C273.indd 257 10/25/14 11:04 AM
Final PDF to printer
C-258 PART 2 Cases in Crafting and Executing Strategy
ventilation system for its vehicles to operate without
the energy generated from an internal combustion
engine and to integrate with its own battery-powered
thermal management system. In addition, the low-
voltage electric system, which powered such features
as the radio, power windows, and heated seats, had to
be designed specifically for use in an electric vehicle.
Tesla had developed expertise in integrating these
components with the high-voltage power source in
the Model S and in designing components that sig-
nificantly reduced their load on the vehicle’s battery
pack, thus maximizing the available driving range.
43. Tesla personnel had accumulated considerable
expertise in lightweight materials, since an electric
vehicle’s driving range was heavily impacted by
the vehicle’s weight and mass. The Tesla Roadster
had been built with an in-house-designed carbon
fiber body to provide a good balance of strength
and mass. The Model S was being built with a light-
weight aluminum body and a chassis that incorpo-
rated a variety of materials and production methods
to help optimize vehicle weight, strength, safety, and
performance. In addition, top management believed
that the company’s design and engineering team had
core competencies in computer-aided design and
crash test simulations; this expertise was expected to
reduce the product development time of new models.
In December 2013, Tesla hired a former Apple
executive as senior director of manufacturing tech-
nology to be in charge of the company’s efforts to
make design advances in battery, powertrain, and
vehicle technologies.
Manufacturing Strategy
Tesla contracted with Lotus Cars, Ltd., to produce
Tesla Roadster “gliders” (a complete vehicle minus
the electric powertrain) at a Lotus factory in Hethel,
England. The Tesla gliders were then shipped to a
Tesla facility in Menlo Park, California, where the bat-
tery pack, induction motors, and other powertrain com-
ponents were installed as part of the final assembly
process. The production of Roadster gliders ceased
in January 2012.
In May 2010, Tesla purchased the major portion
44. of a recently closed automobile plant in Fremont, Cali-
fornia, for $42 million; months later, Tesla purchased
some of the plant’s equipment for $17 million. The
facility—formerly a General Motors (GM) manu-
facturing plant (1960–1982) and then operated as a
joint venture between GM and Toyota (1984–2010)
Gearbox Tesla R&D personnel had also designed
custom, single-speed gearboxes for the Tesla Road-
ster and Model S. These gearboxes combined low
mass with high efficiency and could match both
the speed and torque capabilities of the alternating-
current induction motors. Compared to gasoline-
powered vehicles, the elimination of gear changes
enhanced the rapid acceleration characteristics of
Tesla’s vehicles. The gearbox for the Model S was
being manufactured in-house.
Control Software The battery pack and the
performance and safety systems of Tesla vehicles
required the use of numerous microprocessors and
sophisticated software. For example, computer-driven
software monitored the charge state of each of the
cells of the battery pack and managed all of the safety
systems. The flow of electricity between the bat-
tery pack and the motor had to be tightly controlled
in order to deliver the performance and behavior
expected in the vehicle. There were software algo-
rithms that enabled the vehicle to mimic the “creep”
feeling that drivers expected from an internal com-
bustion engine vehicle without having to apply pres-
sure on the accelerator. Other algorithms controlled
traction, vehicle stability, and the sustained accelera-
tion and regenerative braking of the vehicle. Drivers
used the vehicle’s information systems to optimize
performance and charging modes and times. In addi-
45. tion to developing the vehicle control software, Tesla
had developed software for the infotainment system
of the Model S. Many of the software programs had
been developed and written by Tesla personnel.
Tesla routinely enhanced the performance of
its Model S vehicles by sending wireless software
updates to the microprocessors on board each Model
S it had sold.
Vehicle Design and Engineering
Tesla had devoted considerable effort to creating
significant in-house capabilities related to design-
ing and engineering portions of its vehicles, and it
had become knowledgeable about the design and
engineering of the parts, components, and systems
that it purchased from suppliers. Tesla personnel had
designed and engineered the body, chassis, and inte-
rior of the Model S and were working on the designs
and engineering of the same components for the
Model X and Gen III. As a matter of necessity, Tesla
was forced to redesign the heating, cooling, and
tho20598_case17_C245-C273.indd 258 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-259
Tesla’s manufacturing strategy was to source a
number of parts and components from outside suppli-
ers but to design, develop, and manufacture in-house
46. the key components for which it had consider-
able intellectual property and core competencies
(namely, lithium-ion battery packs, electric motors,
gearboxes, and other powertrain components) and
to perform all assembly-related activities itself.
In early 2014, the Tesla Factory contained several
production-related activities, including the manufac-
turing of battery packs and other powertrain compo-
nents, a hydraulic press line that stamped aluminum
into paint-ready body panels, robotic body assembly,
paint operations, final vehicle assembly, and end-
of-line quality testing. Activities were under way to
ramp annual production volume of the Model S up
from about 21,500 vehicles in 2013 to over 40,000
vehicles in 2014.
Initially, production costs for the Model S were
high due to an assortment of startup costs at the
Tesla Factory, manufacturing inefficiencies associ-
ated with inexperience and low-volume production,
higher prices for component parts during the first sev-
eral months of production runs, and higher logistics
costs associated with the immaturity of Tesla’s supply
chain. However, as Tesla engineers redesigned vari-
ous elements of the Model S for greater ease of manu-
facturing, supply chain improvements were instituted,
and production volumes approached 600 vehicles per
week in 2013, manufacturing efficiency rose, the costs
of some parts decreased, and overall production costs
per vehicle trended downward. Management expected
that further cost-saving initiatives being undertaken
by both Tesla and its suppliers, together with further
boosts in production volume, would result in still
lower production costs per vehicle at least until mid-
2014. Elon Musk expected that continued execution
of the company’s road map for reducing production
47. costs would enable Tesla to achieve a gross margin of
28 percent in the fourth quarter of 2014.
Supply Chain Strategy The Model S contained
over 2,000 parts and components that Tesla was sourc-
ing globally from over 300 direct suppliers, the major-
ity of which were currently single-source suppliers. It
was the company’s practice to obtain the needed parts
and components from multiple sources whenever
feasible, and Tesla management expected to secure
alternate sources of supply for most single-sourced
components within a year or two. However, qualifying
to showcase Toyota’s famed production system and
produce Toyota Corolla and Tacoma vehicles—was
closed in 2010 when GM pulled out of the joint ven-
ture and Toyota elected to cease its production of
several thousand vehicles per week and permanently
lay off about 4,700 workers. Tesla executives viewed
the facility as one of the largest, most advanced, and
cleanest automotive production plants in the world,
and the space inside the 5.5-million-square-foot
main building was deemed sufficient for Tesla to pro-
duce about 500,000 vehicles annually (approximately
1 percent of the total worldwide car production), thus
giving Tesla plenty of room to grow its output of elec-
tric vehicles. Elon Musk felt the Fremont plant was
superior to two other Southern California sites being
considered because Fremont’s location in the north-
ern section of Silicon Valley facilitated hiring tal-
ented engineers already residing nearby and because
the short distance between Fremont and Tesla’s
Palo Alto headquarters ensured “a tight feedback
loop between vehicle engineering, manufacturing,
and other divisions within the company.”29 Tesla
officially took possession of the 350-acre site in
48. October 2010, renamed it the Tesla Factory, and
launched efforts to get a portion of the massive facil-
ity ready to begin manufacturing components and
assembling the Model S in 2012. The first retail
delivery of the Model S took place during a special
event held at the Tesla Factory on June 22, 2012.
In December 2012, Tesla opened a new
60,000-square-foot facility in Tilburg, Netherlands,
about 50 miles from the port of Rotterdam, to serve as
the final assembly and distribution point for all Model
S vehicles sold in Europe and Scandinavia. The facil-
ity, called the Tilburg Assembly Plant, received nearly
complete Model S units shipped from the Tesla Fac-
tory, performed certain final-assembly activities, con-
ducted final vehicle testing, and handled the delivery
to customers throughout the European market. It also
functioned as Tesla’s European service and parts head-
quarters. Tilburg’s central location and its excellent
rail and highway network to all major markets on the
European continent allowed Tesla to distribute to any-
where across the continent in about 12 hours. By fall
2013, the Tilburg operation had been expanded to over
200,000 square feet—including facilities for technical
training, parts remanufacturing, and collision repair
activities for Tesla’s European operations—and was
receiving about 200 Model S vehicles weekly for final
assembly, testing, and customer delivery.
tho20598_case17_C245-C273.indd 259 10/25/14 11:04 AM
Final PDF to printer
C-260 PART 2 Cases in Crafting and Executing Strategy
49. 3. The opportunity to capture the sales and service rev-
enues of traditional automobile dealerships. When
Tesla buyers purchased a vehicle at a Tesla-owned
sales gallery, Tesla captured the full retail sales
price, roughly 10 percent greater than the whole-
sale price realized by vehicle manufacturers sell-
ing through franchised dealers. And, by operating
its own service centers, it captured service revenues
not available to vehicle manufacturers that relied
upon their franchised dealers to provide needed
maintenance and repairs. Furthermore, Tesla man-
agement believed that company-owned service
centers avoided the conflict of interest between
vehicle manufacturers and their franchised dealers
in which the sale of warranty parts and repairs by a
dealer were a key source of revenue and profit for
the dealer but warranty-related costs were typically
a substantial expense for the vehicle manufacturer.
Tesla Sales Galleries and Showrooms Cur-
rently, all of Tesla’s sales galleries and showrooms
were in or near major metropolitan areas; some were
in prominent regional shopping malls, and others
were on highly visible sites along busy thorough-
fares. Most sales locations had only several vehicles
in stock. While some customers purchased their vehi-
cles from the available inventory, most preferred to
order a custom-equipped car in their preferred color.
Tesla was aggressively expanding its network
of sales galleries and service centers to broaden its
geographic presence and to provide better mainte-
nance and repair service in areas with a high concen-
tration of Model S customers. In 2013, Tesla began
50. combining its sales and service activities at a single
location (rather than having separate locations, as
had been the case earlier); experience indicated that
combination sales and service locations were more
cost-efficient and facilitated faster expansion of
the company’s retail footprint. At the end of 2013,
Tesla had 116 sales and service locations around
the world, and it planned to open approximately
85 to 90 more stores, galleries, and service centers in
2014, including 30 combination sales–service cen-
ter facilities in Europe. Tesla’s strategy was to have
sufficient service locations to ensure that after-sale
services were available to owners when and where
needed.
However, there was a lurking problem with Tes-
la’s strategy of bypassing distribution through fran-
chised Tesla dealers and selling directly to consumers.
alternate suppliers for certain highly customized
components—or producing them internally—was
thought to be both time-consuming and costly, per-
haps even requiring modifications to a vehicle’s
design. Tesla had developed close relationships with
the suppliers of lithium-ion battery cells and certain
other key system parts, but it did not maintain long-
term agreements with many of its suppliers.
Distribution Strategy: A Company-
Owned and Operated Network of
Retail Stores and Service Centers
Tesla sold its vehicles directly to buyers and also pro-
vided them with after-sale service through a network
51. of company-owned sales galleries and service cen-
ters. This contrasted sharply with the strategy of rival
motor vehicle manufacturers, all of which sold vehi-
cles and replacement parts at wholesale prices to their
networks of franchised dealerships that in turn han-
dled retail sales, maintenance and service, and war-
ranty repairs. Management believed that integrating
forward into the business of traditional automobile
dealers and operating the company’s own retail sales
and service network had three important advantages:
1. The ability to create and control Tesla’s own
version of a compelling customer buying experi-
ence, one that was differentiated from the buying
experience consumers had with sales and service
locations of franchised automobile dealers. Hav-
ing customers deal directly with Tesla-employed
sales and service personnel enabled Tesla to (a)
engage and inform potential customers about
electric vehicles in general and the advantages of
owning a Tesla in particular and (b) build a more
personal relationship with customers and, hope-
fully, instill a lasting and favorable impression of
Tesla Motors, its mission, and the caliber and per-
formance of its vehicles.
2. The ability to achieve greater operating econo-
mies in performing sales and service activities.
Management believed that a company-operated
sales and service network offered substantial
opportunities to better control inventory costs
of both vehicles and replacement parts, man-
age warranty service and pricing, maintain and
52. strengthen the Tesla brand, and obtain rapid cus-
tomer feedback.
tho20598_case17_C245-C273.indd 260 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-261
In New York state, legislation was pending in April
2014 that would require all automakers to sell their
vehicles only through registered third-party dealers.
So far, automobile dealers and statewide dealer
associations in Texas, Arizona, and Colorado (in
addition to New Jersey) had succeeded in gaining
enforcement of existing legislation banning direct
sales to consumers and effectively blocking Tesla
from taking orders for the Model S at Tesla show-
rooms in their states. Battles were pending in several
other states—Massachusetts, Virginia, North Caro-
lina, Minnesota, Maryland, and Georgia.
As of early 2014, it seemed very unlikely that
Tesla would back away from its strategy and business
model without first trying to sway public opinion in
its favor and test whether the courts would uphold
the monopoly that franchised dealers had been able
to create for themselves. A Tesla spokesperson told
an Automotive News reporter in September 2013 that
dealerships around the country “object to the fact
that we’re trying to educate our consumers directly,
sell them cars directly and service their vehicles
53. directly because this runs entirely counter to the
virtual monopoly they have in most states.”30 Tesla
had also asserted it was not violating state franchis-
ing laws because it did not have any franchises. In
the opinion of a senior editor at Edmunds.com, the
real fear of automobile dealers was not Tesla but
rather that other automakers would follow in Tesla’s
footsteps.31
Tesla Service Centers Tesla’s strategy was to
have sufficient service locations to ensure that after-
sale services were available to owners when and
where needed. The company had over 70 service
locations as of February 2014, and was rapidly add-
ing new locations to serve Tesla owners in a widen-
ing number of geographic locations.
Tesla Roadster owners could upload data from
their vehicle and send them to a service center on
a memory card; Model S owners had an on-board
system that could communicate directly with a
service center, allowing service technicians to
diagnose and remedy many problems before ever
looking at the vehicle. When maintenance or ser-
vice was required, a customer could schedule ser-
vice by contacting a Tesla service center. Some
service locations offered valet service, whereby
the owner’s car was picked up, replaced with a
very well-equipped Model S loaner car, and then
Going back many years, franchised automobile
dealers in the United States had feared that automo-
tive manufacturers might one day decide to integrate
forward into selling and servicing the vehicles they
produced. To foreclose any attempts by manufactur-
ers to compete directly against their franchised deal-
54. ers, automobile dealers in every state had formed
statewide franchised-dealer associations to lobby
for legislation blocking motor vehicle manufactur-
ers from becoming retailers of new and used cars
and from providing maintenance and repair services
to vehicle owners. Legislation either forbidding or
severely restricting the ability of automakers to sell
vehicles directly to the public had been passed in 48
states; these laws had been in effect for many years,
and franchised-dealer associations were diligent in
pushing for strict enforcement of the laws. As sales
of the Model S rose briskly in 2013 and Tesla con-
tinued opening more sales galleries and service cen-
ters, both franchised dealers and statewide dealer
associations became increasingly anxious about
“the Tesla problem” and what actions might need
to be taken. Dealers and dealer trade associations
in a number of states were openly vocal about their
concerns and actively began lobbying state legisla-
tures to consider either enforcement actions against
Tesla or amendments to existing legislation that
would bring a halt to Tesla’s efforts to sell vehicles
at company-owned showrooms.
In mid-December 2013, a group of Ohio car
dealers filed a lawsuit against Tesla, the Ohio Bureau
of Motor Vehicles, and the Ohio Department of Pub-
lic Safety in a Franklin County court, alleging viola-
tions of Ohio law in granting Tesla a license to sell
new cars and asking for an injunction to immedi-
ately rescind Tesla’s license and prevent the Bureau
of Motor Vehicles from issuing additional licenses
to Tesla for other new locations. However, a settle-
ment was reached in March 2014 that allowed Tesla
to own and operate a maximum of three sales galler-
ies in Ohio as long as it produced only all-electric
55. cars and was not acquired by another company.
In March 2014, the New Jersey Motor Vehicle
Commission announced that it would enforce New
Jersey’s state law forbidding automotive manufac-
turers from selling cars directly to consumers—at
the time, Tesla had two showrooms in New Jersey.
A controversy ensued, with some New Jersey law-
makers introducing legislation that would exempt
Tesla and other electric car makers from the rule.
tho20598_case17_C245-C273.indd 261 10/25/14 11:04 AM
Final PDF to printer
C-262 PART 2 Cases in Crafting and Executing Strategy
for vehicles equipped with a 60-kWh battery pack.
As of fall 2013, nearly one-third of all Model S cars
had been Supercharged at least once.
Initially, Tesla had installed 90-kWh fast-
charging equipment at its charging stations that
could replenish 50 percent of the battery pack in as
little as 30 minutes. But in May 2013 the company
began rolling out 120-kWh Superchargers, which were
33 percent faster and could replenish half a charge in
just 20 minutes (3 hours’ driving time), 80 percent
in 40 minutes, and 100 percent in 75 minutes, for
free. And it had begun a program of expanding the
size of some locations to enable charging of 10 to
12 Model S vehicles simultaneously. The company
had plans to upgrade to even faster 135-kWh Super-
chargers in Germany in 2014. As of February 19,
56. 2014, Tesla had 90 Supercharger stations open in
North America and Europe; close to 270 stations
were expected to be operational in North America,
Europe, and China by year-end 2014. By the end of
2014, Tesla expected that its Supercharging station
network in Europe would enable Model S owners
to travel almost everywhere in Europe using only
Supercharging stations. Exhibit 5 shows Tesla’s
planned network of Supercharger stations in the
United States by year-end 2015.
Tesla executives expected that the company’s
planned Supercharger network would relieve much
of the “range anxiety” associated with driving on a
long-distance trip. However, even with many Super-
charger locations strategically positioned along
major travel routes, it was likely that Tesla own-
ers traveling to more remote locations would still
be inconvenienced by having to deviate from the
shortest direct route and detour to the closest Super-
charger station for needed recharging. The degree to
which range anxiety and “detour frustration” might
prompt future vehicle shoppers to steer away from
buying a Tesla was a risk that Tesla had to prove it
could hurdle.
Battery-Swap Service—An Even Faster
Battery Replenishment Option The design
of the Model S permitted the entire battery pack to
be lowered from the bottom of the vehicle chassis
and swapped out within a span of five minutes or
less. In 2013 Tesla began offering Model S owners
the option of pulling into a Supercharging station
and paying a fee to exchange their vehicle’s partially
discharged battery pack for a fully charged battery
57. returned when the service was completed—there
was no additional charge for valet service. Owners
could also opt to have service performed at their
home, office, or other remote location by a Tesla
Ranger mobile technician who had the capability
to perform a variety of services that did not require
a vehicle lift. Tesla Rangers could perform most
warranty repairs, but the cost of their visit was not
covered under the new vehicle limited warranty.
Ranger service pricing was based on a per-visit,
per-vehicle basis. Ranger service was not immedi-
ately available in all areas in early 2014.
Prepaid Maintenance Program Tesla offered
a prepaid maintenance program to Model S buyers
that included plans covering maintenance for four
years or up to 50,000 miles and an additional four
years or up to an additional 50,000 miles. The new
vehicle limited warranty covered the Model S bat-
tery for a period of eight years or 125,000 miles
(or in some instances unlimited miles). These plans
covered annual inspections and the replacement of
wear and tear on parts, excluding tires and the bat-
tery, with either a fixed fee per visit for Tesla Ranger
service or unlimited Tesla Ranger visits for a higher
initial purchase price. For owners with vehicles
not covered by new vehicle limited warranties or
extended-service plans, the fees for Tesla Ranger
service were higher.
Tesla’s Supercharger Network: Providing
Recharging Services to Owners on Long-
Distance Trips A major component of Tesla’s
58. strategy to build rapidly growing long-term demand
for its vehicles was to make battery recharging while
driving long distances convenient and worry-free for
all Tesla vehicle owners. Tesla’s solution to provid-
ing owners with ample and convenient recharging
opportunities was to establish an extensive geo-
graphic network of recharging stations. Supercharg-
ers were strategically placed along major highways
connecting city centers, usually at locations with
such nearby amenities as roadside diners, cafés, and
shopping centers that enabled owners to have a brief
rest stop or get a quick meal during the recharging
process—about 90 percent of Model S buyers opted
to have their vehicle equipped with Supercharging
capability when they ordered their vehicle. Access to
the Supercharger network was free of charge to own-
ers of Model S vehicles with the 85-kWh battery-pack
options or could be purchased as an up-front option
tho20598_case17_C245-C273.indd 262 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-263
and/or improving the company’s current and future
vehicles.
As the first company to commercially produce
a federally-compliant, fully electric vehicle that
achieved market-leading range on a single charge,
Tesla had been able to generate significant media cov-
erage of the company and its vehicles. Management
59. expected this would continue to be the case for some
time to come. So far, the extensive media coverage,
glowing praise from both new Model S owners and
admiring car enthusiasts (which effectively enlarged
Tesla’s sales force at zero cost), and the decisions
of many green-minded affluent individuals to help
lead the movement away from gasoline-powered
vehicles had combined to drive good traffic flows at
Tesla’s sales galleries and create a backlog of orders
for the Model S. As a consequence, going into 2014,
the company had achieved a growing volume of
sales without traditional advertising and at relatively
low marketing costs. Nonetheless, Tesla did make
pack. This meant that when Model S owners pulled
into a Tesla Supercharger station, they only had to
answer one question: Do you prefer faster (battery-
pack swap) or free (charging)?
Marketing Strategy
In 2014, Tesla’s principal marketing goals and func-
tions were to:
• Generate demand for the company’s vehicles and
drive sales leads to personnel in Tesla’s show-
rooms and sales galleries.
• Build long-term brand awareness and manage the
company’s image and reputation.
• Manage the existing customer base to create
brand loyalty and generate customer referrals.
• Obtain feedback from the owners of Tesla vehi-
cles and make sure their experiences and sugges-
60. tions for improvement were communicated to
Tesla personnel engaged in designing, developing,
EXHIBIT 5 Tesla’s Planned Network of Supercharger
Locations in the United
States, Year-End 2015
Source: www.teslamotors.com (accessed February 27, 2014).
tho20598_case17_C245-C273.indd 263 11/6/14 3:18 PM
Final PDF to printer
C-264 PART 2 Cases in Crafting and Executing Strategy
36 to 39 months after delivery for a guaranteed
50 percent of the base vehicle selling price and
43 percent of the price of any vehicle options.
Tesla management believed that its guaranteed
repurchase price would be as high as or higher
than the top resale value of any comparably-
equipped three-year-old premium luxury sedan
(Mercedes, BMW, Audi, Jaguar, or Lexus), but
in the event the guaranteed buyback value turned
out to be less than the top resale value of any of the
comparable vehicles, Elon Musk personally guar-
anteed to pay the difference to owners choosing to
sell a three-year-old vehicle back to Tesla. Tesla’s
analysis indicated that the benchmarked premium
luxury sedans (Mercedes, BMW, Audi, Jaguar,
and Lexus) tended to retain on average about
43 percent of their original value after three years.
During the fourth quarter of 2013, approximately
61. 48 percent of Model S buyers in North America
financed their purchase using the innovative buy-
back guarantee program, an increase from 44 percent
in the third quarter and 31 percent in the second
quarter.32
Tesla’s offer to buy back Model S cars from cus-
tomers using its lease-buyback financing option had
the potential to provide Tesla with another profitable
revenue stream—selling used Tesla vehicles at prices
above the buyback price. According to one analyst,
“Buying back three-year-old cars at a set price means
Tesla to a great extent can control the secondary mar-
ket for Model S and other cars it brings out. The com-
pany’s going to be the main buyer and get a chance
to earn a second gross profit on the same car.”33 The
analyst estimated that sales of used Model S vehicles
in 2016 could mean an added $350 million to $370
million in revenues for Tesla in 2016 and perhaps an
added $40 million in annual gross profit.
Even though Tesla received full up-front pay-
ment for the vehicles sold under the resale guarantee
financing program, generally accepted accounting
principles (GAAP) required Tesla to treat transactions
under the resale guarantee program as leased vehicles
and to spread the recognition of revenue and cost over
the contractual term of the resale-value guarantee
(36 to 39 months). If a Model S owner decided not
to sell his or her vehicle back to Tesla by the end of
the resale-value guarantee term, any deferred revenue
and the vehicle’s undepreciated book value were then
recognized as revenues from automotive sales and as
a cost of automotive sales, respectively.
use of pay-per-click advertisements on websites and
62. mobile applications relevant to its target clientele.
It also displayed and demonstrated its vehicles at
such widely attended public events as the Detroit,
Los Angeles, and Frankfurt auto shows and at a few
small private events attended by people who were
likely to be intrigued by its vehicles.
Tesla’s Innovative Resale Guarantee
Program for New Vehicle Purchases
During the second quarter of 2013, Tesla instituted
its first big internal marketing and sales promotion
campaign to spur demand for its Model S vehicles
and give owners complete peace of mind about the
long-term value of the product. In partnership with
Wells Fargo Bank and U.S. Bank, Model S custom-
ers were offered unique financing terms that com-
bined the best elements of ownership and leasing.
The financing program had three important features:
1. U.S. Bank and Wells Fargo provided 10 percent–
down financing and loan terms of up to 72 months
to Model S buyers with approved credit. The inter-
est rate on the loans varied according to current
credit market conditions, but in the second half
of 2013 the rates were in the 3.3 to 3.5 percent
range.
2. Depending on the total cost of the Model S vehicle
being purchased, Model S buyers could recoup
most or all of the 10 percent down payment via
federal and state tax credits. All Model S buyers
were eligible for a federal tax credit of $7,500,
and six states (California, Colorado, Georgia,
Illinois, Utah, and West Virginia) offered their
63. residents tax credits ranging from $600 to $7,500
on electric vehicle purchases. New Jersey, Wash-
ington, and the District of Columbia also had no
sales tax on electric vehicle purchases. Tax credits
were not available to persons who leased an elec-
tric vehicle. Further, under the financing arrange-
ments with U.S. Bank and Wells Fargo, Model
S buyers could opt not to pay some or all of the
10 percent down payment in cash and, instead,
give the two banks the right to collect the owner’s
$7,500 federal electric car tax-credit incentive
(plus any state credits) and apply the tax-credit
money toward the down payment.
3. Model S customers were given the option of selling
their vehicle back to Tesla within a window of
tho20598_case17_C245-C273.indd 264 10/25/14 11:04 AM
Final PDF to printer
CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-265
such a lofty stock price, attributed the company’s
improving financial performance to the revenues
earned from the sales of regulatory credits. Without
these revenues, their argument went, Tesla’s bottom
line would look significantly worse in 2012 and espe-
cially in 2013. While Tesla planned to pursue opportu-
nities to sell regulatory credits earned from future sales
of its vehicles, the company repeatedly asserted in its
10-K and 10-Q reports to the Securities and Exchange
Commission that it was not relying on these sales to be
64. a significant contributor to the company’s gross mar-
gin and that the long-term viability and profitability of
Tesla’s business model was not predicated on revenues
from the sale of regulatory credits.
Strategic Partnerships
Going into 2014, Tesla had entered into long-term
strategic partnerships with Panasonic Corp., Daim-
ler AG (the parent of Mercedes-Benz), and Toyota
Motor Corp.
The Panasonic Partnership In 2010, Tesla
began collaborating with Panasonic on the devel-
opment of next-generation battery cells for electric
vehicles that were based on the 18650 form-factor
and nickel-based lithium-ion chemistry. In November
2010, Tesla sold 1,418,573 shares of its common
stock to an entity affiliated with Panasonic at a price
of $21.15, producing $30 million in new investor
capital. In October 2011, Tesla and Panasonic final-
ized an agreement whereby Panasonic would sup-
ply Tesla with sufficient battery cells to build more
than 80,000 vehicles over the next four years. In
October 2013, Tesla and Panasonic agreed to extend
the supply agreement though the end of 2017, with
Tesla agreeing to purchase a minimum of 1.8 billion
lithium-ion battery cells and Panasonic agreeing to
provide Tesla with preferential prices.
In the last quarter of 2013, Tesla’s sales volume
was not constrained in any way by slack buyer demand
for the Model S but rather was constrained by diffi-
culties in ramping up production due to Panasonic’s
inability to deliver sufficient battery cells. Panasonic
and Tesla were working in close collaboration to alle-
65. viate the tight supply conditions for battery cells.
The Daimler Partnership Shortly after Daimler
purchased an ownership stake in Tesla for $50 mil-
lion in 2009, the two companies began working out
an arrangement whereby Tesla would provide certain
research and development services for a battery pack
The resale guarantee program exposed Tesla to
the risk that the vehicles’ resale value could be lower
than its estimates and also to the risk that the vol-
ume of vehicles sold back to Tesla at the guaranteed
resale price might be higher than the company’s esti-
mates. GAAP required such risks to be accounted
for on Tesla’s financial statements by establishing a
reserves account (a contingent liability in the current
liabilities section of the balance sheet) deemed suf-
ficient to cover these risks.
Tesla’s website contained a section where pro-
spective buyers could calculate the out-of-pocket
cost to own a Model S when considering the savings
from using electricity instead of gasoline, deprecia-
tion benefits, and other factors. In many instances,
these calculations resulted in a net monthly cost
under $800 per month.
Sales of Regulatory Credits to
Other Automotive Manufacturers
Because Tesla’s electric vehicles had no tailpipe emis-
sions of greenhouse gases or other pollutants, Tesla
earned zero emission vehicle (ZEV) and greenhouse
gas (GHG) credits on each vehicle sold in the United
States. Moreover, it also earned corporate average
66. fuel economy (CAFE) credits on its sales of vehicles
because of their high equivalent-miles-per-gallon rat-
ings. All three of these types of regulatory credits had
significant market value because the manufacturers
of traditional gasoline-powered vehicles were subject
to assorted emission and mileage requirements set by
the U.S. Environmental Protection Agency (EPA) and
by certain state agencies charged with protecting the
environment within their borders; automotive manu-
facturers whose vehicle sales did not meet prevailing
emission and mileage requirements were allowed to
achieve compliance by purchasing credits earned by
other automotive manufacturers. Tesla had entered into
contracts for the sale of ZEV and GHG credits with
several automotive manufacturers, and it also routinely
sold its CAFE credits. Tesla’s sales of ZEV, GHG, and
CAFE credits produced revenues of $2.8 million in
2010, $2.7 million in 2011, $40.5 million in 2012, and
$194.5 million in 2013—the proceeds were included
on Tesla’s income statement as part of the item labeled
“Sales of vehicles, options and accessories, vehicle ser-
vice, and regulatory credits” (see Exhibit 1).
Wall Street analysts, many of whom were openly
skeptical of whether Tesla’s profit prospects justified
tho20598_case17_C245-C273.indd 265 10/25/14 11:04 AM
Final PDF to printer
C-266 PART 2 Cases in Crafting and Executing Strategy
associated software). In July 2011, Tesla contracted
with Toyota to supply an electric powertrain sys-
67. tem for the RAV4 model. All of the development
services for the RAV4 electric vehicle were com-
pleted in the first quarter of 2012, and Tesla began
producing and delivering RAV4 powertrain systems
to Toyota in the first half of 2012. Tesla was also
providing Toyota with certain services related to
the supply of the RAV4 electric powertrain system.
Powertrain production for the RAV4 and the provi-
sion of associated services were expected to con-
tinue through 2014. During 2013, Tesla recorded
revenues of $45.1 million from powertrain system
sales to Toyota.
Tesla performed its electric powertrain compo-
nent and systems activities principally at a company
facility in Palo Alto. This facility, which also served
as Tesla’s corporate headquarters, housed the com-
pany’s research and development services, including
cell and component testing and prototyping, as well
as the manufacturing of powertrain components for
sales to Daimler and Toyota.
Tesla’s Strategic Partnership to Build a New
Gigafactory to Produce Battery Packs On
February 26, 2014, Tesla announced that it and
unnamed partners (one of which was expected to
be Panasonic) would invest $4 billion to $5 billion
through 2020 in a “gigafactory” capable of producing
enough lithium-ion batteries to make battery packs
for 500,000 vehicles (plus stationary storage appli-
cations for solar-powered generating facilities)—
the planned output of the battery factory by 2020
exceeded the total global production of lithium bat-
teries in 2013. Tesla said its direct investment in
the project would be $2 billion. Tesla indicated that
68. the new gigafactory would reduce the company’s
battery-pack cost by more than 30 percent—to
around $200 per kilowatt-hour by some estimates
(from the current estimated level of about $300 per
kilowatt-hour). The schedule called for facility construc-
tion in 2014–2015, equipment installation in 2016, and
initial production in 2017. The plant was expected to
be built on a 500- to 1,000-acre site, employ about
6,500 workers, have about 10 million square feet of
space on two levels, and be powered by wind and
solar generating facilities located nearby. Evaluation
of finalist plant sites in five states (Nevada, Arizona,
New Mexico, California, and Texas) began immedi-
ately and was still under way in mid-2014.
and charger to Daimler for its Smart Fortwo electric
vehicle. When this development work was completed
at the end of 2009, Tesla began supplying battery
packs and chargers for the Smart Fortwo vehicle—
some 2,100 battery packs and chargers were sold
to Daimler through December 2011. In early 2010,
Daimler engaged Tesla to assist with the development
and production of a battery pack and charger for a
pilot fleet of Mercedes A-Class electric vehicles to be
introduced in Europe during 2011. When the devel-
opment work was completed in October 2010, Tesla
began shipping production parts in February 2010;
through December 2011, Tesla sold Daimler over
500 battery packs and chargers for Mercedes A-Class
electric vehicles. In early 2010, Tesla also completed
the development and sale of modular battery packs
for electric delivery vans for Freightliner, an affiliate
of Daimler; Freightliner tested the use of these elec-
tric vans with a limited number of customers.
During the fourth quarter of 2011, Daimler
69. engaged Tesla to assist with the development of a
full electric powertrain for a Mercedes B-Class
electric vehicle; in 2012, formal arrangements were
established for Daimler to pay Tesla for the success-
ful completion of certain at-risk development mile-
stones and the delivery of prototype samples. During
2013, Tesla completed various milestones, delivered
prototype samples, and recognized $15.7 million in
development services revenues.
The Toyota Partnership In May 2010, Tesla
and Toyota announced their intention to cooperate
on the development of electric vehicles and to have
Tesla receive Toyota’s support with sourcing parts
and production and engineering expertise for the
Model S. In July 2010, Tesla and Toyota entered
into an early-phase agreement to develop an elec-
tric powertrain system for Toyota’s popular compact
RAV4 sports utility vehicle and to provide prototype
samples. Also in July 2010, Tesla sold 2,941,176
shares of its common stock to Toyota at its IPO price
of $17 per share, which provided Tesla with new
investor capital of $50 million.
Tesla began developing and delivering elec-
tric powertrains for the RAV4 for Toyota’s evalua-
tion in September 2010, and the following month
Tesla entered into a $60.1 million contract services
agreement with Toyota for the development of a vali-
dated RAV4 powertrain system (including a battery
pack, charging system, inverter, motor, gearbox, and
tho20598_case17_C245-C273.indd 266 10/25/14 11:04 AM
Final PDF to printer
70. CASE 17 Tesla Motors’ Strategy to Revolutionize the Global
Automotive Industry C-267
cases, wreck debris penetrated the quarter-inch-thick
aluminum case housing the battery pack and punc-
tured a number of the lithium-ion battery cells—one
characteristic of all lithium-ion battery cells is that a
puncture of the cell wall causes the materials inside
the cell to ignite. A battery fire results as spiking
internal temperatures from the ignited cells cause
other cells to ignite; such fires, while not violent, are
difficult to extinguish, allowing the fire to spread to
other combustible parts of the vehicle.
Because the sharp rise in Model S sales during
2013 had greatly raised Tesla’s public profile, all three
battery fire incidents received national and interna-
tional media coverage—a video of the first vehicle
fire was posted on YouTube and quickly went viral.
According to eyewitness reports, a modest fire began
from the initially punctured cells; then when these
flames caused the thermal temperatures of adjacent
cells to spike, they exploded into flames and sparked
temperature increases that caused another series of
cells to explode, producing a rather spectacular fire.
Firemen at the scene had trouble completely extin-
guishing the fire because it kept reigniting as addi-
tional battery cells exploded. The media headlines and
accompanying stories (some of which contained pic-
tures from the YouTube video) immediately brought
the safety of Tesla’s high-energy-density lithium-ion
battery pack into question. In the ensuing days and
weeks, there was considerable debate and uncertainty
surrounding the answers to two questions:
71. 1. Did the use of 18650 lithium-ion cells make Tesla
vehicles more prone to battery fires and thus less
safe than originally thought?
2. How life threatening was Tesla’s decision to use
18650 lithium-ion batteries in the Model S bat-
tery back?
As both journalists and concerned investors
researched the characteristics and safety profiles
of various types of lithium-ion batteries, it quickly
became apparent that there were two risks associated
with the 18650 form-factor battery cells in the Model
S battery pack that combined to produce a less desir-
able safety profile in comparison to the safety profiles
of the low-energy-density lithium-ion cells used in the
battery packs of the electric vehicles made by all other
automotive manufacturers.34 One risk concerned the
fact that the fires arising from punctured cells were
significantly more intense in high-energy-density cells
than in low-energy-density cells—due to the different
Shortly after its gigafactory announcement, Tesla
announced that it had sold $920 million of convert-
ible senior notes due 2019 carrying an interest rate of
0.25 percent and $1.38 billion in convertible senior
notes due 2021 carrying an interest rate of 1.25 per-
cent. The senior notes due 2019 were convertible into
cash, shares of Tesla’s common stock, or a combination
thereof, at Tesla’s election. The senior notes due 2021
were convertible into cash and, if applicable, shares
of Tesla’s common stock (subject to Tesla’s right to
deliver cash in lieu of shares of common stock). Both
bonds had an equity conversion premium of 42.5 per-
cent above the last reported sale price of Tesla’s com-