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Tesla distruptive innovation

This work come from a group work of Luiss MBA PT 2014/16 edition. It is the analysis of a case of distriptive innovation.

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Tesla distruptive innovation

  1. 1. Tesla Motors as example of disruptive innovation (mobility)
  2. 2. The context • Tesla motors tries to innovate inside an industry with 100-years old traditions, norms and processes • He based his head quarter inside the Silicon Valley • The founder is Elon Musk which founded also (Paypal , SpaceX) • On mid-June 2014, the company has released all of its patent holdings, claiming that open-source innovation is more powerful than anything one company could do individually.
  3. 3. Technical differences • The car core is the center 17-inch touch screen infotainment system which became an industrial benchmark. • The technical specifications are impressive ( the state of art of technology) • The system runs a Linux-based operating system • It include a 3G modem. It can receive software updates by OTA. • In addition, a 12.3-inch fully digital instrument cluster sits directly in front of the driver with its own NVIDIA Tegra 2 processor
  4. 4. Manufacturing difference • How can Tesla sell this as a standard feature in every Model S? • The company chose to change up the supply chain and borrow from the electronic manufacturing services (EMS) model of production that is standard practice in the consumer electronics industry • Tesla is closer to being a technology company than a traditional automobile maker • This model required Tesla to internalize much of the hardware and software development, as well as the systems integration work • The Silicon Valley culture and the EMS approach to manufacturing were a clear advantage for Tesla at one time but no longer make it unique
  5. 5. • The possibility to update software and firmware by OTA • Consider Tesla’s recall of the Model S for overheating charger plugs in January 2014. The day the recall notice came out, Tesla had all 29,222 Model S vehicles updated wirelessly and running the new safer version of the software. • Traditional automaker with the same problems have to take their car into a dealership for a software update. • Since some years to biggest cost problem could became the software recalls while now is the volume. Service differences
  6. 6. Powertrain difference • Electric motor • The fuel is a microprocessor-controlled lithium battery • Each vehicle comes with a single 10kW charger and mobile connector with adapters for 110-volt and 240-volt outlets as well as a public charging station adapter. • Tesla has made a significant investment developing charging stations in the US (112 to date, according to the Tesla website), Europe (63), and Asia (17) • Tesla is working to drive battery costs down in anticipation of the launch of its mass-market, $35,000 Model 3 EV sedan, which is slated to debut in 2017