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Tesla Company: Strategy

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TESLA COMPANY

Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t
need to compromise to drive electric – that electric vehicles can be better, quicker and more
fun to drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also
infinitely scalable clean energy generation and storage products. Tesla believes the faster the
world stops relying on fossil fuels and moves towards a zero-emission future, the better.
Launched in 2008, the Roadster unveiled Tesla’s cutting-edge battery technology and electric
powertrain. From there, Tesla designed the world’s first ever premium all-electric sedan from
the ground up – Model S – which has become the best car in its class in every category.
Combining safety, performance, and efficiency, Model S has reset the world’s expectations
for the car of the 21st century with the longest range of any electric vehicle, over-the-air
software updates that make it better over time, and a record 0-60 mph acceleration time of
2.28 seconds as measured by Motor Trend. In 2015, Tesla expanded its product line with
Model X, the safest, quickest and most capable sport utility vehicle in history that holds 5-
star safety ratings across every category from the National Highway Traffic Safety
Administration. Completing CEO Elon Musk’s “Secret Master Plan,” in 2016, Tesla
introduced Model 3, a low-priced, high-volume electric vehicle that began production in
2017. Soon after, Tesla unveiled the safest, most comfortable truck ever – Tesla Semi –
which is designed to save owners at least $200,000 over a million miles based on fuel costs
alone. In 2019, Tesla unveiled Model Y, a mid-size SUV, with seating for up to seven, and
Cybertruck, which will have better utility than a traditional truck and more performance than
a sports car.
Tesla vehicles are produced at its factory in Fremont, California, and Gigafactory Shanghai.
To achieve our goal of having the safest factories in the world, Tesla is taking a proactive
approach to safety, requiring production employees to participate in a multi-day training
program before ever setting foot on the factory floor. From there, Tesla continues to provide
on-the-job training and track performance daily so that improvements can be made quickly.
The result is that Tesla’s safety rate continues to improve while production ramps.
To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of
energy solutions, Powerwall, Powerpack and Solar Roof, enabling homeowners, businesses,
and utilities to manage renewable energy generation, storage, and consumption. Supporting
Tesla’s automotive and energy products is Gigafactory 1 – a facility designed to significantly
reduce battery cell costs. By bringing cell production in-house, Tesla manufactures batteries
at the volumes required to meet production goals, while creating thousands of jobs.
And this is just the beginning. With Tesla building its most affordable car yet, Tesla
continues to make products accessible and affordable to more and more people, ultimately
accelerating the advent of clean transport and clean energy production. Electric cars,
batteries, and renewable energy generation and storage already exist independently, but when
combined, they become even more powerful – that’s the future we want.

Strategy-
Tesla's business strategy is to emulate typical technological-product life cycles and initially
target affluent buyers, and then move into larger markets at lower price points.The battery and
electric drivetrain technology for each model would be developed and partially paid for through
the sales of earlier models The Roadster was low-volume and priced at US$109,000. Model S
and Model X target the broader luxury market. Model 3 and the Model Y are aimed at a higher-
volume segment This business strategy is common in the technology industry. According to a
Musk blog post, "New technology in any field takes a few versions to optimize before reaching
the mass market, and in this case it is competing with 150 years and trillions of dollars spent on
gasoline cars."
Country-specific sales
In 2019, as cars sold worldwide increased 50% from 2018, cars sold in the United States
increased only 0.33%,[96] to 192,250 cars, leading to overall revenue in the United States falling
by 15%, the first time there has been a decline in revenue in the United States since 2014. [97]
Tesla’s Model 3 was the 8th best selling car in the first quarter of 2020 in the United States. [98]
In 2010, Elon Musk predicted electric Tesla vehicles would sell well in Japan, being second only
to the United States;[99] but in 2019, only 1,378 cars were sold in Japan

Technology
As a vertically integrated manufacturer, Tesla has had to research and develop components in
multiple technology domains, including batteries, motors, sensors, artificial intelligence, and
glass.

Batteries-
Unlike other automakers, Tesla does not use individual large battery cells, but thousands of
small, cylindrical, lithium-ion commodity cells like those used in consumer electronics. Tesla uses
a version of these cells that is designed to be cheaper to manufacture and lighter than standard
cells by removing some safety features. According to Tesla, these features are redundant
because of the advanced thermal management system and an intumescent chemical in the
battery to prevent fires.[181] Panasonic is the sole supplier of the cells in the U.S., and cooperates
with Tesla in the Giga Nevada's '21–70' cells.[182] Tesla's battery cells in China are supplied by
Panasonic and CATL, and are the more traditional prismatic cells used by other automakers
Tesla has ongoing battery research and development work at Dalhousie University in Nova
Scotia, Canada, featuring lead researcher Jeff Dahn.[195][196] Tesla acquired two battery companies
in 2019: Hibar Systems and Maxwell Technologies. All three are expected to play an important
role in Tesla's battery strategy.

Motors
Tesla makes two kinds of electric motors. Their oldest currently-produced design is a three-
phase four-pole AC induction motor with a copper rotor[199] (which inspired the Tesla logo), which
is used as the rear motor in the Model S and Model X. Newer, higher-efficiency permanent
magnet motors are used in the Model 3, Model Y, the front motor of 2019-onward versions of the
Model S and X, and is expected to be used in the Semi. [200] The permanent magnet motors
increase efficiency, especially in stop-start driving

Autopilot
Tesla designed autopilot mode not meant to be an alternative to driving; it was designed with the
idea that the driver would be paying attention to the road to control the car if need be.

In April 2019, Tesla announced that all of its cars will include Autopilot (defined as just Traffic-
Aware Cruise Control and Autosteer) as a standard feature moving forward. [203][212] Full self-driving
(Navigate on Autopilot (Beta), Auto Lane Change, Autopark, Summon, Smart Summon and
future abilities) is an extra cost software option.[203]
On April 24th 2020, Tesla released a software update to its full self driving capability. With this
update, cars recognize and automatically stop at stop signs. The cars also automatically slow
down and eventually stop at traffic lights (even if they are green), and the driver indicates that it is
safe to proceed through the traffic light. [213] Tesla acknowledges that the software is still in a beta
phase and still far from being finished. [214]
Tesla is planning to release a subscription package for their self-driving software. On April 28th,
2020, a hacker revealed on Twitter that there is already code in Tesla’s app for the subscription
plan.

Glass
In November 2016, the company announced the Tesla glass technology group. The group
produced the roof glass for the Tesla Model 3 and for use in SolarCity roof tiles announced in
October 2016.[216] The roof tiles contain an embedded solar collector, and are one-third lighter
than standard roof tiles

One of the world's most innovative car maker Tesla Motors is coming to
India by 2019. Tesla's CEO Elon Musk tweeted about the expansion plans
after the company posted a profit of $311.5 million in the September
quarter. Elon Musk said, "Hopefully, partial presence in India, Africa &
South America end of next year, with broader expansion in 2020."

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