Case Study on

TESLA

Submitted by:
(Your Name)
Submitted to:

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INDEX
Acknowledgment

Introduction

 History of Electric Vehicles

 Founding of Tesla Motors
 Objective of the Case Study

Product Innovation and Research & Development

 Battery Technology
 Vehicle Models and Advancements
 Over-the-Air Updates
 Gigafactories and Production Innovations

Market Penetration and Positioning in the EV Industry

 Initial Market Strategy

 Direct Sales Model
 Supercharger Network Expansion
 Global Market Expansion (China, Europe, etc.)

Risk Management and Scaling Procedure

 Production Challenges and Solutions

 Supply Chain Management
 Regulatory and Legal Considerations

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Brand Position as a Sustainable Company

 Mission and Environmental Commitments

 Renewable Energy Integration (Solar Panels, Powerwall)
 Sustainable Manufacturing and Recycling Initiatives

Business Model of Tesla

 Vertical Integration Strategy

 Clean Energy Diversification

Tesla’s SWOT Analysis

 Strengths
 Weaknesses
 Opportunities
 Threats

Conclusion

 Key Takeaways
 Tesla’s Future Prospects

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ACKNOWLEDGEMENT
We take this opportunity to express our sincere gratitude and appreciation to all those who
contributed to the successful completion of this case study on Apple Inc. This assignment has
been an enlightening and enriching experience, allowing us to delve deep into the business
strategies, technological advancements, and market dynamics of one of the most influential
companies in the world.
First and foremost, we extend our heartfelt thanks to our esteemed Assistant professor, for her
invaluable guidance, support, and encouragement throughout this project. Her insightful lectures
and constructive feedback have been instrumental in shaping our understanding of business case
studies and strategic management. Without her mentorship and motivation, this study would not
have been possible.
We are also immensely grateful to our institution for providing us with an academic environment
that fosters learning, research, and critical thinking. The extensive resources available to us,
including access to books, journals, and online databases, have greatly aided us in compiling
relevant information and analyzing Apple Inc.'s business model effectively.
Additionally, we acknowledge the efforts of our teammates, for their dedication, hard work, and
cooperation in completing this assignment. Each member of our team has put in significant effort
to research, analyze, and compile the necessary data, ensuring that this study is comprehensive
and well-structured. The collaboration and synergy among us have made this project not only a
learning experience but also an enjoyable journey.
Furthermore, we appreciate the contributions of various authors, researchers, and industry
analysts whose works have provided us with valuable insights into Apple Inc.'s operations,
leadership, and market impact. Their research and findings have played a crucial role in
strengthening the credibility of our analysis.
Lastly, we extend our gratitude to our friends and family members for their constant support and
encouragement, which has helped us stay motivated throughout the completion of this
assignment.
With sincere appreciation, we submit this case study, hoping that it meets the expectations set
forth by our professor and institution. We are confident that the knowledge and skills gained
through this research will be of immense value in our academic and professional pursuits.

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INTRODUCTION
In the human history, physical mobility forms an inseparable part of life. In that, the inventions
of the wheel and the automobile have been considered as most significant ones which contributed
to human development. The first electric car, using storage battery and motors had come on the
roads in 1830s, and being not a user friendly invention, disappeared from the scene once the
Internal Combustion Engine (ICE) burning fossil fuels was created in the 1880s. For the next
hundred years, the world did not look back and the automobile researchers virtually had
banished the electric automobiles. The reason was the entrenched oil exploration, refining
industry as well as the manufacturers of the ICE. Efforts if any, of exploring electric prime
movers for cars were from existing fossil fuel car makers and hardly any exclusive effort was
made in that direction. In 2003, Tesla Motors was founded by Eberhard, Trepanning and Elon
Musk, all three were technology geeks who had high level of mutual respect and Elon Musk was
the business founder of two earlier start-ups including PayPal and he became the core investor
for the venture. Elon Musk named the company on one of the greatest inventors of the late 19th
and early 20th century- Nikola Tesla, who invented the alternating current and the induction
motor. They licenced some technology inventions from AC Propulsion Laboratories, where JB
Traubel, an inventor had a stake and decided to base their electric car on the Lotus Elise
platform originating from the UK.[12] Since the founding, Tesla Motors has become synonymous
with high performance, economical electric cars and till now has released 3 successful car models
in the market at the US. The company has expanded its operations, is sourcing its parts and
components from several nations across the world. Tesla Motors as a business venture is a unique
proposition in terms of its product, its leadership, its organizational structure and the business
ethos. This case study endeavours to explore the nature of competitive advantage Tesla Motors
has over other automakers and its growth strategy. The study will be incomplete if the Tesla
leadership is not a part because it is the dreams and the enormous efforts in planning and
execution of the leadership which has made Tesla what it is today.

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OBJECTIVES OF THE CASE STUDY
• The objectives of this case study is to examine the following:
• Competitive advantage of Tesla Motors
• External and Internal analysis of the company
• Functional strategies which made the company unique
• Excellence through leadership, which separates Tesla Motors from others

In this case study, the author wishes to highlight that the business model, business strategy and
the analysis thereof are incomplete without the study of the technology and innovation backbone
spawned by the founders. Specifically, the time, effort and money spent at Tesla on marketing,
advertising and promotions are a miniscule part of that spent on innovation, achieving
technology leadership. Hence, the case study focuses on the thrust area for future growth on
which the competitive advantage of the firm is being constructed.

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PRODUCT INNOVATION AND R&D
Tesla Inc. has emerged as a pioneer in the electric vehicle (EV) industry, primarily due to its
relentless focus on innovation and cutting-edge research and development (R&D). Unlike
traditional automakers, Tesla integrates hardware and software advancements to deliver state-of-
the-art vehicles. The company’s commitment to R&D has led to significant technological
breakthroughs, particularly in battery technology, autonomous driving, and energy efficiency.

One of Tesla's most notable innovations is its high-performance lithium-ion battery packs.
Through consistent improvements, Tesla has extended the range of its EVs, addressing a primary
concern among potential consumers: range anxiety. The introduction of the 4680 battery cells,
which offer higher energy density and cost efficiency, underscores Tesla's commitment to
technological advancement. Additionally, Tesla’s R&D efforts have been instrumental in
reducing production costs, making EVs more accessible to the mass market.

Tesla's vehicle line-up showcases its ability to push the boundaries of innovation. The Model S,
introduced in 2012, was a game-changer, offering an extended range of over 300 miles on a single
charge, unprecedented acceleration, and a minimalist, software-driven interior. The introduction
of the Model X, Model 3, and Model Y further cemented Tesla’s dominance, offering consumers a
mix of luxury, affordability, and sustainability. Moreover, Tesla has ventured into new segments
with vehicles like the Cybertruck and the Tesla Semi, which aim to disrupt the pickup truck and
freight transport markets, respectively.

Tesla's innovations extend beyond hardware. The company introduced over-the-air (OTA)
software updates, allowing real-time improvements in vehicle performance, safety, and features.
Tesla's Autopilot and Full Self-Driving (FSD) capabilities continue to evolve, positioning the
company at the forefront of autonomous vehicle technology.

Additionally, Tesla has built Gigafactory’s worldwide to scale up battery production and meet
the increasing demand for EVs. These massive production facilities improve efficiency and
significantly lower battery costs, enabling Tesla to maintain its competitive edge in the EV
industry.

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MARKET PENETRATION AND
POSITIONING IN THE EV INDUSTRY
Tesla’s approach to market penetration has been strategic, transitioning from a niche luxury EV
manufacturer to a mainstream automotive powerhouse. Initially, Tesla targeted the high-end
market with the Roadster and Model S, attracting affluent consumers who valued performance
and sustainability. Once it established brand credibility, Tesla expanded into the mass market
with the Model 3, a more affordable EV that became one of the best-selling electric cars globally.

Tesla disrupted the traditional automotive sales model by adopting a direct-to-consumer

approach. Unlike conventional automakers that rely on third-party dealerships, Tesla operates
company-owned showrooms and online sales platforms. This direct sales model enables Tesla to
maintain control over pricing, customer experience, and service quality. The company also
leverages digital marketing and a strong online presence, reducing dependency on traditional
advertising channels.

A key component of Tesla's market penetration strategy is its extensive Supercharger network.
By addressing the infrastructure challenge, Tesla has enhanced the convenience of EV
ownership, reducing barriers for potential buyers. The company has aggressively expanded its
charging network worldwide, making long-distance travel feasible for EV owners.

Tesla's global expansion has been a crucial factor in its market dominance. China, the largest EV
market, has been a major focus, with Tesla establishing a Gigafactory in Shanghai to cater to
local demand. Europe has also witnessed strong Tesla sales, particularly in Norway, the
Netherlands, and Germany, where government incentives for EV adoption are prominent.

The regulatory environment has further bolstered Tesla's market position. Tesla has benefited
from government incentives, tax credits, and emission regulations that favor EV adoption. The
company has also profited from selling regulatory credits to traditional automakers struggling to
meet emission standards, providing an additional revenue stream.

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RISK MANAGEMENT AND SCALING
PROCEDURE
Tesla faces numerous risks, including supply chain disruptions, regulatory changes, competitive
pressures, and production challenges. To mitigate these risks, Tesla has adopted a vertically
integrated business model, producing key components in-house, including battery cells, electric
drivetrains, and software. This approach reduces dependency on third-party suppliers and
enhances quality control.

Scaling production has been one of Tesla's most significant challenges. The company faced
production bottlenecks during the ramp-up of the Model 3, often referred to as "production
hell." Tesla overcame these challenges by streamlining manufacturing processes, investing in
automation, and optimizing Gigafactory operations. The company has continually improved
production efficiency, enabling it to meet growing demand while maintaining profitability.

Tesla's supply chain management is crucial for mitigating risks associated with raw material
shortages, particularly for lithium, cobalt, and nickel. The company has secured long-term
supply agreements and is investing in battery recycling initiatives to reduce reliance on newly
mined materials.

Regulatory and legal risks also pose challenges for Tesla. Governments worldwide are
implementing stricter safety and environmental regulations, and Tesla must ensure compliance
to avoid fines or operational restrictions. The company has proactively worked with regulators
to advance autonomous vehicle policies, safety standards, and emission norms.

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BRAND POSITION AS A SUSTAINABLE
COMPANY
Tesla has successfully positioned itself as a sustainability-driven company, aligning its mission
with global efforts to combat climate change. The company's mission statement, "to accelerate
the world's transition to sustainable energy," reflects its commitment to reducing carbon
emissions through clean energy solutions.

Beyond electric vehicles, Tesla has expanded into the renewable energy sector with products
such as solar panels, solar roofs, and the Powerwall. These energy solutions enable homeowners
and businesses to reduce their dependence on fossil fuels, further promoting sustainability.

Tesla's Gigafactories are designed to operate with minimal environmental impact, incorporating
renewable energy sources such as solar and wind power. The company has also focused on
sustainable material sourcing, ensuring ethical mining practices for critical battery components.
Tesla's battery recycling initiatives aim to create a closed-loop system, reducing waste and
environmental harm.

The sustainability narrative has strengthened Tesla's brand appeal, attracting environmentally
conscious consumers and investors. The rise of Environmental, Social, and Governance (ESG)
investing has further benefited Tesla, as institutional investors prioritize companies with strong
sustainability credentials.

Despite criticism regarding labor practices and energy-intensive production processes, Tesla
continues to enhance its sustainability initiatives, reinforcing its position as a leader in the green
technology revolution.

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BUSINESS MODEL OF TESLA
The Business Model Canvas, developed by Alex Osterwalder and Yves Pigneur, provides a
comprehensive framework for understanding how a company operates across various
dimensions such as key partners, key activities, and value proposition, as depicted in Annexure:
1(a). Tesla’s business model deviates from the conventional approach by vertically integrating
processes throughout the value chain, from sourcing materials to final delivery, notably
excluding dealerships from vehicle sales.

In addition to manufacturing electric cars, Tesla has diversified into scalable clean energy
generation and storage products, as outlined in their corporate profile. The Tesla Gigafactory,
operational since 2016 in Nevada, USA, is a prime example. This facility focuses on large-scale
production of lithium-ion batteries for electric vehicles, with the aim of achieving cost efficiencies
through in-house manufacturing while also stimulating local economic growth by creating job
opportunities.

Tesla’s strategic focus on building an ecosystem centred around sustainable energy is evident. By
vertically integrating processes, Tesla aims to reduce its dependence on external suppliers while
furthering its commitment to sustainable energy solutions.

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TESLA’s SWOT ANALYSIS
Tesla’s Strengths
Tesla stands out in several key areas:
1. Energy Efficiency: Tesla leads the market not only in sales volume but also in its
commitment to renewable energy sources such as solar power.

2. Partnerships: The company collaborates with major energy firms, expanding its efforts in
renewable energy.

3. Top Employer: Recognized by Forbes as one of the best employers in 2019, Tesla boasts a
diverse corporate culture that appeals to young professionals.

4. Leadership: With its exceptional growth and dominance in electric vehicle (EV) sales,
Tesla emerged as the most valuable automotive company in 2020.

5. Innovation: Tesla’s significant investments in research and development drive the

creation of new technologies and ensure superior design and comfort, enhancing its
appeal to consumers.

6. Brand: Tesla established itself as the foremost electric vehicle manufacturer in a market
with limited competition at its inception. The company enjoys a strong reputation for
both developing clean energy solutions and delivering profitable products, fostering trust
among consumers.

Tesla’s Weaknesses
Tesla faces several challenges:
1. Manufacturing Constraints: Tesla operates with a smaller manufacturing footprint
compared to traditional automakers, leading to production limitations and distribution
delays.

2. Limited Global Presence: While experiencing growth, Tesla’s primary market remains
the United States, with over 70% of its revenue generated there. Expansion efforts face
challenges in establishing a strong presence worldwide.

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 3. Premium Brand Positioning: As a premium brand in the clean energy sector, Tesla
targets a niche market segment due to its high-priced products, limiting its customer base.

4. Financial Concerns: Tesla’s high operational costs contribute to cash burn, posing a
threat to its profitability and investor confidence.

5. Dependency on Elon Musk: The prominent role of CEO Elon Musk has become
synonymous with Tesla’s brand, raising concerns about succession planning and the
company’s long-term stability.

Tesla’s Opportunities
Tesla has opportunities in several key areas:
1. Global Expansion: While the United States and China currently drive the majority of
Tesla’s sales, there is significant potential for expansion into other markets, particularly
in Asia, including China and India.

2. Autopilot Technology: Tesla’s autonomous driving technology, known as Autopilot, has

garnered widespread attention for its safety and convenience. Continued development
and improvement of this technology present opportunities for further market penetration
and adoption.

3. Sustainability Trend: With increasing awareness and concern about environmental

issues, there is a growing demand for sustainable products. Tesla’s focus on sustainability
aligns well with this trend, offering opportunities for continued growth in market share.

4. Battery Production: Tesla’s efforts to vertically integrate battery production by

manufacturing its battery cells in-house offer opportunities to reduce production costs
and create new job opportunities while ensuring a consistent and reliable supply of
batteries for its vehicles.

Tesla’s Threats
Tesla faces several challenges:

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1. Competition: Established automotive companies, with centuries of experience, are rapidly
investing in electric car technology, potentially offering more affordable products that
could challenge Tesla’s market dominance.

2. New Technologies: The automotive industry is evolving rapidly with innovative

technologies and alternative energy sources, which may increase Tesla’s operational costs
and reduce profit margins as it strives to stay at the forefront of innovation.

3. Regulatory Uncertainty: The lack of adequate regulations for autonomous vehicles poses
a risk to Tesla’s future plans, particularly regarding its development of self-driving
technology.

4. Long-term Sustainability: Clean energy companies require robust long-term

sustainability strategies, and Tesla’s limited infrastructure may not be sufficient to
support its ambitious goals in the long run.

5. Elon Musk’s Image: While Musk is widely regarded as a visionary, his controversial
behaviour and erratic public statements have sometimes tarnished Tesla’s reputation and
raised concerns among investors and the public alike.

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CONCLUSION
Tesla's success in the EV industry is a result of its relentless pursuit of innovation, strategic
market penetration, risk management, and strong sustainability positioning. The company's
ability to disrupt the automotive industry and expand into clean energy solutions has set it apart
from competitors. While challenges remain, Tesla's adaptability and forward-thinking approach
ensure its continued dominance in the evolving landscape of sustainable transportation and
energy.

While Tesla didn’t pioneer the electric car, it significantly revitalised the market by introducing
vehicles with distinctive designs, durable batteries, and an extensive technological infrastructure
for support and maintenance. Moreover, Tesla adopted a unique business model by directly
selling to consumers, bypassing traditional middlemen. Consequently, Tesla has emerged as one
of the most successful players in the automotive industry today. With Elon Musk and his team at
the helm, the company continues to explore innovative transportation methods, solidifying its
position as an industry leader.

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