Tesla Flashcards
]\main challenge
focus remains primarily on EV growth and profitability
broad sustainability goals seen as high risk and distracting
vertically integrated model poses challenges in scaling up production
need to constantly innovate
competitive pressure in the EV market and production bottleneck
economic
rising gas prices and inflation make EV more appealing
tax credits and other financial incentives support EV
inflation and high interest rates
historic cash crunch of 2007 that increased financial vulnerability and the 2008 financial crisis
high ev costs limit accessibility
political
ice phase out mandates
supportive global regulations for sustainability and EV transition
concerns about raw material sourcing
ice vehicle bands by 2035 in Europe
sociocultural
rising consumer demand for environmental respomsbiloty
shifts reinforce EV adoption and regulatory support
growing urban populations and several public transports may affect
rising concerns over RM sourcing for batteries
technological
leading in ev battery tech and FSD capaolties
innovating battery tech
over the air updates and FSD efforts
autonomous driving
global
USA; industry is growing steadily, driven by demand and favourable prices
europe: Volkswagen leads in total EV sales, signalling tightened competition
‘china: teslas 40% production cost reduction through fully owned subsidiaries pressures competitors to lower costs
EV industry ; industry size
based on 2022
US; 10% of new care slaes
china: 20% are ev
europe: 12%–> tesla is the market leader
Tesla has a 65% market share
china is the largest car market and hard to drive with ice vehicles
EV industry: growth
us ev sales grew 5 times from 2019-2022
Evs are growing ion Europe from 12% from 2019-2022
there is growth
ev industry trends
gvt support
sustainability trends
growing accessibility of EVS
more competition
porter analysis
new entrants: high entry barriers lke capital and innovation, teslas scale, infratrsutcre and brand loyalty deter new entrants
rivalry: intensyfing from ford and volkwasgon, Tesla also has early mover advantage and brand loyalty , high exit barriers
buyers: increased ev options enhance buyer power, teslas brand loyalty tech edge and swtchig costs reduce it
subs: ICE and HYBRID alternatives threat decreases due to growing regulatory pressure
suppliers: teslas vertical integration reduces dependency, reliance oon scarce raw materials gives supplies power
opportunties
rapodulygrowing EV market
advancements in battery tech
renewable energy and product opportunity
solar city–> expanding into residential and commercial clean energy
launch of affordable ev
china is the largest car market globally
ice vehicles –> more affordable cars
threats
compititon, dependency on raw materials, regulatory vulnerability
economic risks from inflation and high interest rates
having to follow Californias emission policies
strengths
innovate leadership and tech –> self driving, manufacturing, battery, the unboxing production process
vertical integration and manufacturing capabilities
- does in house so reduces costs, faster to innovate and in control of tech
- build own factories, produce own semiconductors, control and monitoring over components
- follow up services are cowardly integrated –> offer repairs
- vehicle manufacturing –> high volume
- also used for the cybertruck by designing the controllers
economies of scale and synergy
- they have large factories
- high volume global production (global. networks of giga factories)
- vehicles and energy solutions–> supercharger network, energy, comprehensive solutions
strong brand and market positio
- brand recognized
- dominant market position
- global presence
- consumer loyalty
0 customers are awaiting the new cybertrcik and put down their name on a waiting list
- clear defined plans
- multiple touch points
- covid
additional strengths
clean tech energy company
software enhancements
data collection
disctinctibe vehicles
streamlined customization and production
weaknesses
- production and operational challemnges
- scaling issues (production hell), couldn’t meet the high demand , having issues with the model 3
- cost and complexity with being vertical integrated
- quality control–> related below average and hard to balance grwth with customer staisfcati - market and financial risks
- product portfolio concentration –> model 3/y is 96% of sales
l- imited offering for lower income consumers - leadership and strategic risks
- dependency on Elon musk
- issues with leadershop
- neg attention like from the SEC lawsuit with twitter
supply chain management
joint venture –> leads to further innovation with battery, cost and space efficient its with Panasonic
monitoring suppliers inventory levels–> can anticipate shortages and crisis which helped them during covid
insourcing critical compiennts–> reduces reliance
closed loop replying
- reduces waste
- costs reduced
they dont outsource their parts
COST EFFICIENT AND STABLE PRODUCTION
operations
1/ vertical intergation–> manufacturing, battery production and software development
2. giga factory–> allows total control over construction and design, global network, integrated production , large scale ,manufacturing
- master plans
ECONOMIES OF SCALE AND CPNTROL
distribution
- foward integrated distribution channel 9direct to consumer sales model online)
- limited customization options allows for mass production ***
global network of gigafactories to ensure efficient delivery
STRONG BRAND CONSUMER RELATIONSHIPS
marketing and sales
- minimal marketing
- brand rep
- high profile product unveilings
- streamlined customization - cross selling
- energy generation, store and trasnport
- ecosystem
direct sales –> fowardly integrated using a direct to consumer sales so can control Custer experience and collect data , mobile service , insurance
- can order vehicles from the website and only provides minimal customization
control the customer experience, collect data
follow up services
- poweerback /pwoerll tech
- supercharging stations
- OTA updates
- mobi;e service
- insurance
- direct to consumer model –> can monitor consumers and respond to changes
IMPROVED AND TAILORED CUSTOMER EXPERIENCE
ota, mobile service, insurance
financen
strategic investments made over time to improve ca[pacity
pure order model act as interest free loans
strong market valuation
Tesla is pibloicy owned as it has an IPO
musk made massive investments
sales 81 billion
CONSTANT INNOVATION AND FLEXIXBLE SUPPLY CHAIN
R AND D
TESLA IS COMMITED TO sustainability (power wall)
reduce manuacterimg costs (next generation platform, 468- battery cell)
creates different products like new cars, self driving
information tech management
data driven iterations –> can monitor production and sales, streamlining deicison making
In house software and IT
OTA system allows a seamless customer experience
- super large touch screens, vehicle control software, autopilot
DIFFERENTIATON AND EFFICIENT MANUFACTERING
Human Resources management
innovate and strategic CEO
strategic employee distribution (129000 employees with 65000 in manufacturing )
talented Wirkforc, innvoation
teslas consyrctuon team works fast and does the best practices
core competencies
- vertical integration and control over value chain
- in house r and d
- follow up services –>
- vertical integration and control over value chain (core comoeneticties )
- vertical integration of production
- control over entire production costs
- reduces costs, faster innovation
- batteries are vertically integrated with ten help of Panasonic at the giga factory
- bertially integrated for vehicle making - global manufacturing
- economies of scale
- reduced shipping cost - advanced supply chain management
- strategic partnership with Panasonic
- insource critical components - follow up servioces
- forward integration of sales and services
0 super chargers, services and insurance
in house r and d (core comp)
- fast innovation
- culture of development and risk taking
- adapt and stay ahead - battery tech
- in house battery r and d (4680 battery cell) - in house software r and d
- autonomous driivng
- OTA sotfware enhancements - leadership and strategy
- vision and innovation
competitive advnaage
- difereination focused avdantave
- premium prices
- innovative
- vertical integration
- brand image - core differeintaors
- r and d
- follow ip
- brand [ower
- vertical integration - sustaimable compeitive position
- differienaton
- solid leader position
- rivals struggle to replicate
business level strategy
differeinaton
- sets itself apart In both the automative and clean energy markets by:
- innovate
- unique Tesla features
- strong brand roegnition
- first mover avdnatges
- differeisifed in different markets
some elements of focused cost leadership
focus is on making products more affordable for their high class
not cheap but less expensive for their wealthy customer
consistent scaling
corporate level strategy
horizontal: automative business brings in 77 bullion (95%)
energy generation and storage business brings in 4 billion
- growth with both
has two business units
1) automative (77 bilion)
2) energy generation and storage (4 billion)
growth
- are also vertically integrated so can reduce costs, improve quality and increase speed of innobatopm
- also forward vertically integrated through their sales model so can control the customer experience
- supercharger network–> vertically integrated bc they design it
- insurance–> bc all the vehicles are connected, can use this data (synergy)
- mobile service–> people will help with your car, forward vertical integration
acqusition and joint venture
acquired Tesla motors , solar city
joint venture with Panasonic
synergies
uses similiar lithium ion batteries for both EV and energy storage products (economies of scope)
the powerwall stores energy captured on the roof for later use –> consumers then use the powerwall and its creates and ecosystem
- trying to create an ecosystem with its insurance and mobile service and supercharger network
achieve multipoint competition through horizontal diversification
achieves synergies between its 2 core businesses
acquisitions
purchased twitter and then took over the company: absorption
solar city: Tesla could morph from an Ev company into an integrated clean tech company
teslas master plan 1
build a sports car, use that m0ney to build an affordable car and then build an even more affordable one, also create a zero emission electric power
model s came from the roadster, then introduced the model 3 then model y
to achieve the last step, acquired solar city
model s
four door family sedan
more of a market appeal
named the motor trend car of the year
what did model 3 and help- y Tesla do
break into the mass market
teslas master plan 2
create solar roofs, expand ev product lines to address all segments, develop a self driving capability
, enable your var to make money for you when you arent using it
multipoint competition
compete with uber by turning the car into an income generating asset
master plan 3
wanted to eliminate fossil fuels without sacrificing economic growth , a long term plan
1. repower thee xisiitng grid with renewable energy
2. switch to ev
3. switch to heat pumps
4/ electrifying high temperature heat delivery
5. feeling shops and iarplimes with sustainable energy
alliances
strategic alliance with Panasonic which allowed tesla to secure a consistent supply of high quality batteries, reduce costs and collaborate on battery tech avdnacemmts with the mdustry leader
pros of vertical integration
can ensure quality, make decisions fast, maintain a lean and efficient production system
horizontal
automative and energy business
but also have other services and products like the supercharger network (can charge the Tesla), mobile service (trained technicians perform maintenance at the customers proffered location ), insurance
highest possible volume with a small number of vehicles ,
5 vehicles on three dif platforms –> share an automative platform so synergies and economies of scope which reduces costs, share components, parts and tech
competition
rivian –> issues with scaling up production
lucid group –> luxury ev , has issues with scaling up production
BYD company–> china , produces batteries
gm, ford motor, stellantis –> introducing evs
physical resources
have the giga factories that are also vertically integrated
decentralized energy
consumers arent dependent on a company
happened bc they offered the powerwall
consumers can store their own energy
cna create an ecosystem with their solar panels
teslas value chain
combines upstream r and d, battery and electric vehicle manufcterng, downstream battery software, chop and FSD with a dense network of suoerchargnf stations
Dunstable physicalainable
closed loop system, for batteries
will help reduce waste and further lower production costs
