Saurabh Singh
Tesla, Inc. is an American electric vehicle and clean energy company based in Austin, Texas.Founded in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors, the company’s name is a tribute to inventor and electrical engineer Nikola Tesla.Elon Musk became the largest shareholder of the company and its chairman. He has served as CEO since 2008. According to Musk, the purpose of Tesla is to help expedite the move to sustainable transport and energy, obtained through electric vehicles and solar power.
Tesla designs and manufactures electric cars, 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 nearly US$1 trillion. The company had the most worldwide sales of battery electric vehicles and plug-in electric vehicles, capturing 23% of the battery-electric (purely electric) market and 16% of the plug-in market (which includes plug-in hybrids) in 2020. Through its subsidiary Tesla Energy, the company develops and is a major installer of photovoltaic systems in the United States. Tesla Energy is also one of the largest global suppliers of Battery Energy Storage Systems, with 3.99 gigawatt-hours (GWh) installed in 2021.
• Tesla’s business model is different from that of most automobile manufacturing companies because it owns the entire supply chain from manufacturing to distribution. This strategy is driven by the ultimate goal of lowering manufacturing costs and costs of goods sold, thereby assuring the business’ sustainability. Under the leadership of Musk, Tesla entered the market with the sporty Roadster. When it introduced its Model S sedan in June 2012, it stopped producing the Roadster. Tesla began delivering its first SUV, the Model X, in September 2015. The first Model 3 deliveries kicked off in July 2017 as Tesla’s entry into the category of affordable cars. In 2020, its base model started at $36,200. It is worth noting that Tesla’s supply chain management strategy focuses on a long-term growth strategy involving production, inventory management, and distribution.
• Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers. By owning the sales channel, Tesla believes it can gain an advantage in the speed of its product development. More importantly, it creates a better customer buying experience. Unlike car dealerships, Tesla showrooms have no potential conflicts of interest. Customers deal only with Tesla-employed sales and service staff. Including the showrooms, Service Plus centers (a combination of retail and service center), and service facilities, Tesla has 438 locations around the world as of the end of 2021. Tesla has also made use of Internet sales—consumers can customize and purchase a Tesla online.
• Tesla also produces a fully electric Semi Truck. The truck boasts an energy consumption of less than 2kWh per mile. The company claims it can go 400 miles on a 30-minute charge now, and it’s working on stretching that to more than 600 miles in the future. UPS was among the companies that put in pre-orders for the truck, introduced in 2019. Tesla’s latest model is a supercharged version of the original Roadster, which the company claims is the “quickest car in the world,” capable of going 0-60 in 1.9 seconds. Deliveries of the new Roadster are expected in 2023, with a base price of $200,000.
• The part of Tesla’s mission is “to accelerate the advent of sustainable transport.” To that end, Tesla sells powertrain systems and components to other auto manufacturers. In April 2015, it introduced a line of home batteries, called the Powerwall, that serve as energy storage systems in homes or businesses. They are meant to connect with a solar energy system and can be used as backup power when power is interrupted or peak demand is high. Tesla also sells solar panels and full solar roofing, which is a roof made up of solar panels that still looks like a roof.
• Tesla has created its own network of “supercharger stations” where drivers can charge their Tesla vehicles in about 30 minutes for free. The purpose, of course, is to speed up the rate of adoption of electric cars by making it cheaper and easier to keep them running. In 2012, Tesla began building a network of 480-volt fast-charging Supercharger stations. As of November 2020, Tesla operates over 20,000 Superchargers in over 2,100 stations worldwide. The Supercharger is a proprietary direct current (DC) technology that provides up to 250 kilowatts (kW) of power. All Tesla cars except the first generation Roadster come standard with hardware to charge at Superchargers. The navigation software in Tesla cars can recommend the fastest route for long-distance travel, incorporating charging stops.
• Tesla generally allows its competitors to license its technology, stating that it wants to help its competitors accelerate the world’s use of sustainable energy. Licensing agreements include provisions whereby the recipient agrees not to file patent suits against Tesla, or to copy its designs directly. Tesla retains control of its other intellectual property, such as trademarks and trade secrets to prevent direct copying of its technology.
• Tesla’s nonconventional supply chain management strategy to cut operation costs and successfully deliver a reliable and affordable product rests on a short term goal of product acceptance and a long term strategy for growth and profitability. In 2006, Musk asserted that “The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model”.
• In June 2021, became the first electric car to sell 1 million units globally. Tesla’s global sales were 936,222 cars in 2021, an 87% increase over the previous year, and cumulative sales totaled 2.3 million cars at the end of 2021. In October 2021, Tesla’s market capitalization reached $1 trillion, the sixth company to do so in U.S. history.
• Tesla did not invent the electric car or even the luxury electric car. But Tesla did invent a successful business model for bringing compelling electric cars to the market. Part of the strategy was building a network of charging stations to solve one of the greatest obstacles facing the adoption of electric vehicles: refueling on long trips. Tesla’s unique business model, which includes keeping control over sales and service, is one reason its stock has soared since its initial public offering.
• Amidst what appears to be an ongoing stalemate between Tesla and India, reports have recently emerged suggesting that the country is willing to consider the EV maker’s request for import tax cuts. That is, at least, if Tesla would be open to purchasing $500 million worth of domestic auto components from India.Despite the challenges that Tesla has faced so far in its attempt to enter India, the EV maker has made some considerable progress over the past year. Over 2021, the company received homologation certificates for seven of its car models, and Supercharger stalls have also been shipped to the country.
