Introduction

Historical Background:
The company Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning.
They both were Silicon Valley engineers who wanted to show the world that electric
vehicles have the potential to replace gasoline vehicles and that electric vehicles
are better than gasoline vehicles. The idea of Tesla was presented in front of Elon
Musk in 2001 as he was famous for his success regarding startups. The other co-
founders of Tesla include JB Straubel and Ian Wright. Elon Musk led the first round of
funding for Tesla and became a part of the board of directors (Wu, 2019).

The company invested four years, from 2004 to 2008, to build its first car, the
“Roadster,” as shown in Figure 1. In Fremont, California, the business opened a 5.3
million square foot factory that was once occupied by General Motors and Toyota. In
2008, Elon Musk became the company’s CEO and took complete control of product
design in his hands (Wu, 2019).

Figure 1: The Roadster, the First automotive of Tesla.

Organization’s Products:
Tesla was established to design electric vehicles that are equally efficient as
gasoline automobiles and less reliant on fossil fuels. Tesla launched its first product
in 2008, known as the Roadster. After that, the company introduced different
products like Sedan (Model S), Model X, and Model 3. Tesla has also followed the
market trend and need and introduced the SUV known as Model Y. Tesla’s cyber
trucks also caught the customers’ attention and played an important role in making
the Tesla famous among truck enthusiasts.

Tesla has acquired various companies, including SolarCity Corp, Maxwell

Technologies Inc, Grohmann Engineering GmbH, Perbix Machine Co, and Hibar
Systems Ltd. The vision behind acquiring all these companies is to help Tesla in
various fields, including energy and battery production, automated and fast
manufacturing, increased production, etc. (Johnston, 2020).

Organization’s Size and Statistics

Tesla has become the number one EV manufacturer globally and is growing
continuously. The company has six manufacturing facilities, out of which four are
operational, and the remaining two are under construction. Tesla crossed its closest
competitor SAIC-GM-Wuling, and became the most famous EV company. The sales
of Tesla are far greater than any of its competitors, as shown in Figure 2 (Dean,
2022).
Figure 2: Tesla’s worldwide sales.
Tesla’s revenue is continuously growing every year, with a significant increase in
percentage as compared to every previous year. The company generated a revenue
of 31.54 billion dollars in 2020. The increase in Tesla’s revenue can be seen in
Figure 3 (Dean, 2022).

Figure 3: Tesla’s annual revenue.

Tesla’s car demand and production are continuously increasing, and they have
increased their production 5.06 times between 2017 and 2020, as shown in Figure
4. This impressive growth shows a promising future for Tesla (Dean, 2022).

Figure 4: Tesla’s Vehicle production.

Technological Challenges
Tesla has become one of the biggest car companies, crossing all its components.
But the company faces a number of challenges with increasing demand.

Manufacturing Limitations
The demand for Tesla is increasing worldwide, and they need to suddenly increase
the manufacturing capacity, which is not an easy job. They have to add more
stations in an assembly line and speed up their production capacity along with the
demands; otherwise, their competitors can use the delay to steal away the
consumers of Tesla with similar or better technology. The company needs to
increase its production factories across the globe to deliver its products to the
market at the right time (Gardner, 2016).

Lack of skilled employees

The company has to increase its production units to meet the increasing demands
and hire new skilled employees to extract the right output from the assembly plant.
Moreover, if the production plants are needed to be installed in different countries
worldwide, it will be more difficult to find the right candidates for the job. The
company also needs a skilful administration who can plan according to the market
trend and approve the designs accordingly. Tesla needs to hire good brains and a
labour face, which is a big challenge for the company.

Limited Service centres and retail network

The company’s major consumer is located in the USA; hence, most of its retail
network and service centres are in big states of America. Moreover, many states are
against Tesla’s aim to sell to the customer directly, so they have not opened their
franchises there. As a result, many consumers are reluctant to buy Tesla as they
have to put a lot of effort into buying it and have to cover a long distance to the
service centre when maintenance is required. Tesla needs to overcome this
challenge and develop a method to make Tesla’s product and services more
accessible to the people. Moreover, they have to think of some methods to
approach international customers.

Opportunities by Digital Transformation Objectives

The company’s challenges allow it to think out of the box and develop new
techniques and methods to overcome them. These challenges are opportunities to
improve and to change for good. Digital transformation is a good solution for all the
challenges discussed above, and the objectives of digital transformation support the
company in mitigating the challenges. The few objectives that allow Tesla motors to
overcome the challenges mentioned above are given below:

Business process improvement

It is one of the key objectives behind any company’s digital transformation. Tesla
motors are currently using the internet to connect with all of its cars, and this level
of digitalization allows them to monitor and update their cars with time (Goodwell,
2021). But they have to integrate digital transformation in their production plants as
it will allow them to evaluate themselves and help them speed up the processes
and increase their offerings. Hence, this objective will help Tesla to increase the
production units according to consumer demands (Malik, 2022).

The company can use a digital transformation that will help them modify its selling
methodology to reach customers more efficiently. The digital tools are already
helping Tesla to monitor the car conditions. They can further extend it to provide
timely maintenance to the customers.
Improve employee performance and collaboration:
The company is facing a lack of skilled employees who have good performance and
can adapt to the business model quickly. Digital transformation allows the company
to increase collaboration, which helps the employees to learn fastly, and the
productivity of the employees will increase. Moreover, digital transformation aids in
reducing administrative pressure and let employees focus on more important tasks,
such as business strategies according to the condition (Malik, 2022).

Digital Business Agility

Hyperawareness:
Tesla is a company that relies on the data gathered through the environment and
car sensors. The company is providing major assistance and online tools to the
customers with the assistance of the data. The state of being hyperaware gives
Tesla an advantage over its competitors and allows the company to provide better
personalization and excellent customer experience to the users of their product.
Hyperawareness is contributing a huge role in the company’s growth. It allows the
company to take decisions with calculated risks and promises a specific return on
investment against every decision based on the data. The digital tools that are
being used by Tesla are given below:

Tesla’s Design Studio:

The company has given an online tool on its website that allows the customer to
design their dream car, paint it and choose the interior of their own choice. This
activity helps the company to understand the design demands of the customer. It
allows them to assess the customers’ favourite colors, interior specifications and
design features, and they can use this data to design their upcoming models
accordingly (Garg, 2018).

Big Data Analytics:

The company needs to take constant feedback from the customer if they want to be
fully aware of the condition and understand the consumer needs. Big data analytics
help the company to do so as big data analytics analyses the messages and
comments of the customers in an online form and allows the company to
understand the common demands and issues faced by the customers (Singh, 2021).

NLP to gain Insights:

Natural language processing is a field that helps companies analyze consumers’
comments and remarks through any online form and social media. Tesla has not
focused on social media analyses with the help of natural language processing to
get the information that can help the company gain consumers’ attention (Regkas,
2020).

Informed Decision making:

Informed decision-making is necessary for the present condition and is one of the
major objectives behind any company’s digital transformation. Technology is
changing very fastly worldwide, and the competitors of Tesla are trying to introduce
and integrate new technologies to get an edge over the company. In such a
condition, you must understand the customers’ demands and make decisions
accordingly. Tesla is also using informed decision-making to automate their cars.

Autonomous Driving:
Tesla is currently using the data gathered through the car’s sensors and the
environment to assist consumers in driving. The company uses data and machine
learning algorithms to detect other vehicles, driver alertness, pedestrians, traffic
lights, etc. Informed decision-making in such cases allows the company to provide
remote assistance to the customers and allows the company to alert them about
the car’s condition (Singh, 2021).

Social Media Analysis:

Social media analysis allows the company to understand the customers’ demands.
Moreover, it allows the company to analyze the areas in which they are lagging
compared to its competitors. Since Tesla is uncomfortable outsourcing and getting
the services from outside. Thus, they need AI tools that help in social media analysis
and develop the tools that can help them separate the required data, arrange it and
extract meaningful information and give suggestions according to the data (Regkas,
2020).
Fast Decision-Making:
Digital transformation has sped up the procedure in every industry, and customers
are also expected to get the technology and their required products at the right
time. Fast decision-making can only be done by robotic process automation and
digital tools. The robotic processes used by Tesla allow them to speed up their
production and take fast decisions according to the consumers’ demand.

RPA and Alien Dreadnought:

The company’s biggest problem is production speed, and robotic process
automation allows the company to make fast decisions. The Alien Dreadnought is
an RPA assembly line, as shown in Figure 5, that will help Tesla to develop all the
cars with the help of the robots. The Alien Dreadnought is not a complete success
yet, but the company can develop it properly to overcome the production challenge
(Debord, 2016).

Figure 5: Robots at Tesla’s California factory assemble a chassis.

The Role of Digital Collaboration Tools

Digital collaboration tools are important during a company’s digital transformation.
The trend of working is changing, and we need digital tools to help employees
increase their collaboration. The company must arrange tools to assist the
employees in working remotely. Such tools allow multiple employees to work on the
same project from different places and create an innovative environment that
increases the company’s productivity.

Tesla is already facing challenges related to production speed, and they need to
enhance the collaboration among the employees to work with greater force and less
hindrance. The digital collaboration tools can allow the company to integrate all the
manufacturing plants of the company. It can help them keep track of the orders and
the production capacity at different plants, which can allow the company to develop
a better strategy that allows the production units to collaborate according to the
demand and supply.

The generic digital collaboration tools necessary for any company include data-
sharing tools, video conferencing and discussion panels. It contributes to enhanced
communication and resolves accessibility problems, which plays an important role
in building collaborative and innovative cultures (Needle, 2022).

Collaborative Tools:
Google Workspace:
Google workspace is the best example of a collaborative digital tool as it is a
complete package. Google workspace allows you to share files so anyone with
access can edit, read and download the document without any hassle. Google
workspace handles security concerns and allows you to contact each other through
emails and google meet. Tesla can also use this workspace as an inspiration to
develop its digital tools (Needle, 2022).

Microsoft Workspace:
Microsoft also provides a similar type of workspace as discussed above and a similar
kind of tool to share workspace and contact each other. Microsoft allows you to
keep track of your progress, increasing employee productivity. These tools are
necessary for the growth of Tesla as they will allow the employees to learn from
each other and adapt to new technologies with the help of each other (Needle,
2022).

Digital Leadership
Digital Transformation is a complex process; digital business agility can be brought
only when the digital transformation is done under the right leadership. Digital
leadership is essential as a digital leader has entrepreneurship skills and can use
new techniques, take risks, enjoy challenges and overcome with a greater vision.
Digital leadership should be in the hands of someone who can gradually transform
the situation so that all the employees can blend in according to the changing
conditions (Katanic, 2021). The digital leader needs a supportive environment
allowing employees to learn the changing methodologies. Digital leadership should
have the following traits:

Leverage Technology:
Tesla is a company which is highly reliant on technology, and the one driving the
company through digital transformation must have the sense to make the right
choice of technology. A digital leader should be able to choose the right technology
and know how to use it for maximum productivity (Hinds, 2020).

Encourages Collaboration:
Tesla needs new employees, and production plants as Tesla’s product demands are
growing fast. The challenge of training the employees cannot be managed without
introducing a collaborative culture in the company. Hence, Tesla needs a leader
who can enhance teamwork and endorse collaboration in the organization (Hinds,
2020).

Drives Innovation:
The innovation allows the company to remain one step ahead of its competitors.
Digitalization should be led by someone who knows how to introduce an innovative
culture and makes sure that everyone in the team thinks outside of the box and
bring new solutions to the table (Hinds, 2020).

Manage Risks:
Digital transformation can cause a great risk, and some risks become a hurdle in
digital transformation. A digital leader must overcome this situation, know how to
manage uncertainties, and bring the company out of it (Hinds, 2020).