Tesla’s strategy by Elon Musk

Tesla’s strategy by Elon Musk

Tesla’s strategy by Elon Musk is to unveil electric vehicles within a short time. Elon Musk has an obsession with introducing model 3 of the electric cars to the general population by 2020. Musk put close to 120 hours every week to come up with a favorable solution on electric vehicles. Some of the problems for problems associated with the innovation led to the company running into losses causing the company close to four billion dollars. Some of the main issues are Musk’s affection of the innovation, inadequate hiring and empowering immobility, and debt concerns. For example, the company was on the verge of bankruptcy and running out of cash due to Musk’s obsession with the innovation of electric vehicles. In this regard, the CEO publicly addressed in his tweeter account that it was his mistake to have a personal toll on the production of electric cars. He is hence leading to turmoil by the end of 2018.

Elon Musk had a vision of taking the company to the next level. He wanted the company to produce the first electric vehicles in the automobile industry. His idea was to improve on electric cars that accelerate to sixty miles per hour in sixty seconds. In this prospect, model 3 was his prototype vision for the company. For future prosperity, there is a recommendation that the company should consider achieving the desired results. These recommendations involve hiring and empowering other chief operators, Musk must be transparent on things that matter, facilitation on mobility, and turn profitable in any project. For example, to avoid turmoil and conflict among investors, Musk should be transparent to his investors on the progress of every project in the company. Additionally, hiring more labor force makes it easier to come up with new ideas on various projects.

The case difficulty cube, in this case, involves a relatively hard task that initiates the provision of EVs. In this regard, there are various dimensions in the company that is employed by Elon Musk in pursuance of achieving the desired results. These dimensions are analytical, conceptual, and presentable. This narrative stems out from a broader perspective because the Musk concept is of great importance to the company. Still, he does not present his works and findings to other co-owners of the company hence claiming that it is his mistake for the failure 0of EVs. The degree of the case difficulty, in this case, is 1-3 across all the dimensions named above. In this case, case difficulty helps one to focus on learning the challenges encountered. Some of the learning processes in the case difficulty include individual preparation, group discussion, and broader group discussion. These learning efforts depict the character that Musk should have adopted to achieve the required results — for example, involving other groups on such a project by hiring more personnel compared to spending lots of hours weekly and meeting a dead end.

The characteristics of Tesla Model 3 involve acceleration from zero to sixty miles per hour in sixty seconds, and seventy-five kilowatt with a battery range of close to two hundred and twenty-two. This analogy shows that the car has a long-range battery that would encourage longer and faster journeys. On the other hand, the model became Volk Wagen’s rival in the sense that the CEO of Volk Wagen, claiming that the car is too small. Also, he knows that Tesla is a competitive company in the world and that it should be taken seriously. The reason as to why VW sees the model as a threat is because they also had a similar model known as ID.3. This model was unveiled in Frankfurt, Germany, and was never disclosed in the US. Dies believes that Model 3 by Tesla is a replica of ID.3 and fears that the features are almost the same hence the rivalry. In this prospect, it is perceived that the Volkswagen group has increased its focus on electric cars over the past years, and they would like to be superior over its competitor, Tesla.

The reason as to why Tesla recorded massive losses in 2018 was because of the changing faces of mobility. This narrative includes aspects such as people moving into cities and becoming careless, an increase in autonomous driving, urban bike rentals, car hire, and car-sharing services, and electric scooter sharing services. These aspects facilitated the losses encountered by Tesla in 2018. For instance, car-sharing and hiring in the cities through the provision of services from companies such as Uber, Zipcar, and Lyft. Also, other people believed that being carless in the cities is quite more comfortable since one can quickly cycle to work hence making it cheaper for various individuals.

Additionally, the shift to electric vehicles also facilitated losses in the company. In this case, a lot of funds were used to achieve this vision. The mistake that the company made through this transition is to invest heavily in innovating hybrid cars and trucks. This attribute involved injecting eleven billion dollars on twenty-four hybrid cars and sixteen EVs.

Countries such as America, Germany, Russia, China, and Japan are the most significant consumers of cars in the world. In 2016, the United States recorded two hundred and seventy billion dollars of revenue from passenger cars. During this period, the market momentum concerning volume and value had slowed down. On the other hand, Americans buy big cars, mostly SUVs and pickups. America sol By 2016, over seven million big vehicles were sold in America. The average price of these cars is thirty-five thousand dollars. The market share of the US is nearly 46 %. General Motors led by 17.9%, followed by Ford 14.7%. Toyota, on the other hand, resulted in other countries, while the US contributes 13.5% of the volume manufactured by Tesla. During the 2008 great recession, the manufacturing companies and the market share was below 33%. General Motors and Chrysler were bankrupt by 2009. This narrative was brought by the branding companies who started prioritizing other things. The government came into rescue and deliberated general motors hence increasing profitability in two years.

These companies survived the shift due to branding loyalties from other companies. In this regard, eighty percent of brands such as Toyota and Lexus traded cars with other companies while buying other new EVs in the process. Additionally, replacement with other brands such as Benz, Jaguar, BMW, and Porsche was quite lower than the expected results hence facilitating the shift to EVs. Besides, OEM refers to Original Equipment Manufacturer, whereby other company vehicles can purchase original damaged vehicle parts from other companies. In most cases, they are branded in car dealerships and are affordable. New entrants, on the other hand, involve automation of various vehicles in most companies. New entrants include new technology and electric parts at large. Therefore, it is imperative to note that traditional OEMs are brought out by startup companies such as Tesla and other technology companies such as Google, while new entrants involve investing in EVs, mobility services, and autonomous driving.

Some of the barriers in entering the new auto industry include developing dealer networks, the capital requirement in developing new cars, initiating manufacturing companies, and creating brand loyalty. Concerning capital requirements in developing new vehicles, five percent of the United States revenue would be involved in this initiative. Branding services would also be a barrier to the Tesla industry because companies such as Toyota used to have an estimated value of forty-five billion dollars. The aspects mentioned above would influence the new automotive industry in Tesla industries. Moreover, in the contemporary world today, close to elven thousand company sells automotive parts, including tires and batteries. In this context, there are three tire suppliers. Tier one suppliers have technical capabilities to integrate climate control appliances and smoke detectors in vehicles. Mostly these companies are non-automotive companies such as Robert Bosch. Tire one suppliers, in this case, are investing in the new OEM and new EVs. Tier two, on the other hand, supplied tier one with raw materials such as bumpers, cables, wires, and interior trim. While level three companies sold raw materials such as rubber and steel to tier two, one, and OEMs, this analogy shows that tier one is investing in new technologies at large.

Companies such as Ford purchased close to 80% of the products from these companies hence increasing revenues to automotive suppliers. Close to thirty thousand regular combustion parts were sold during this period, as a third of this number involved EVs. For instance, a proper engine used in regular a vehicle consists of more parts compared to an electrical one. In this regard, an internal combustion engine has close to ten gears, while an electrical engine has only one gear. This narrative shows that the shift to electric vehicles would reduce revenue and income to automotive suppliers. However, tier-one suppliers investing in new technologies were reaping profits from fuel industries since they were supplying fuel-free parts to Tesla and other companies at large. Tier one suppliers will record eleven percent profit by 2030.

Seventy-five percent of individuals in the US commuted to work by car. One hundred and thirteen million individuals in the US are registered car passengers, as ninety-five percent of these cars are in parking in most homes. According to studies, ninety percent of twenty to twenty-four years individuals had a driving license in 1983. This narrative had dropped by fifteen percent in 2014, recording at least seventy seven percent of the youth had a driving license in the US. Due to the fast-growing industry, it is perceived that by 2020, millennials would contribute to forty percent of cars purchased in the US. Most of these young individuals are passionate and enthusiastic about car ownership since they believe that autonomous personal transportation is better than public means hence viewing car ownership as a personal affection towards cars. In most cases, the internet and social media have influenced the rampant purchase of vehicles by these young folks in the US. Some of the aspects they look into before buying the cars involve fuel efficiency and friendly, mobile integration, Bluetooth, navigation systems, MP3 player, and satellite radios.

People today buy their cars online, and car dealers have suffered over online car-shopping services. This narrative shows that this is the new trend since most individuals do no go to open stores to purchase cars. On the other hand, dealers make profits in servicing cars and selling car parts. In this regard, car dealer shops have reduced since 2007, registering only eighteen thousand dealer shops from twenty-two thousand. Additionally, profits are expected to decrease due to the introduction of EVs in automobile companies because EVs do not require many parts and frequent services. The new trend affects car dealers on a broader perspective to the extent that their shops have no EV parts. The main benefit that owners of EV experience are economic viability. In this prospect, individuals experience less service time, and car parts are also affordable and cheap to most people.

Automakers are negatively adapting to the change in mobility. The shift to EVs has raised concerns as people today to prefer being a carless, cycle to work, or use car-sharing and hiring services in cities. These attributes have influenced automakers as they term themselves as software fueled experience providers. Autonomous vehicles, in this case, involve self-driving cars. Most individuals in the US are enthusiastic about the initiative, while some believe that it will take another decade for this initiative to come to light. People still do not trust self-driving cars as they perceive the narrative to be too soon. Companies such as Tesla had this analogy in mind and that by 2020, there would be autonomous cars. These vehicles have equipped laser technologies and LiDAR that use radio and light waves to transmit information on a vehicle’s environment. Waymo, Tesla, and Uber are the companies that pioneered this initiative, and the desired results achieved by each company was terrible. Most of the test results led to driverless cars crushing.

The concept of these self-driving cars is to abolish human error and destruction on the roads that cause accidents across the globe. Also, this analogy was to reduce the massive ownership of personal cars in the US. The objectives were quite clear and that with autonomous vehicles, prioritization of private cars for short and long journeys would be reversed. Only six percent of individuals in big and wealthy cities have adopted this narrative hence facilitating long term transportation journeys. The advantages associated with autonomous cars are safer roads. Therefore, the recommendation appropriate for this initiative is that these companies should prioritize on testing these self-driven vehicles so that constant errors such as crushes should not be encountered in the future. Besides, the proper acquisition of technological appliances can help facilitate this initiative at large.

For customers to switch to electric vehicles, some reasons would influence this narrative. These reasons include various resources in EVs; these resources include stolen vehicle locator, emergency assistance, crash notifications, human-machine interface, and driver’s assistance systems. This analogy depicts the connectivity in EVs, and that software engines are more applicable compared to hardware engines. The incorporation of this software in EVs would give customers an easy time while operating their cars. Additionally, companies such as Toyota are prioritizing these car packages to achieve safety connect in these electric vehicles. Some of the attributes delivered by Toyota involve crash notification, stolen vehicle locator through incorporating GPS software, and emergency assistance, especially when one experiences an accident. These attributes, such as vehicle locator spell, will reduce theft as an individual can locate a stolen, thus making customers shift from regular combustion cars to electric vehicles.

Connectivity in a car is a perfect reflection of the connected car. Therefore, it consists assess to sensors and the internet that receive and send signals and information to other surrounding vehicles. Most individuals perceive that connected cars are less expensive and that its revenue would increase by 2022. People will own such vehicles in the future due to their prices and size. On the other hand, mobility as a service concept involves consumers purchasing the movement when and how it is needed. In this regard, individuals would prefer buying the required miles to the vehicles used to cover the miles. In this regard, consumers’ perception of purchasing cars is shifting at a high rate and that people would rather pay for the service mobility than own the vehicles offering the services. This narrative is set to implicate the future perception of car ownership in a manner likely to suggest that cities would embrace mobility as service while individuals living in rural areas would own private cars hence increasing connectivity.

Car delears in the automobile industries and automakers always expect to introduce new model cars to car buyers every year. However, individuals nowadays prefer car-sharing and scooter models, terming them as cheap, affordable, and available. Tesla, who are big players in the automobile environment, initiated traditional luxury cars and vehicles into the contemporary world that saw their revenue market share skyrocket in the business. Other companies in the environment try to copy the same narrative, but most of them failed due to technical glitches. In the case that other companies failed to meet Tesla’s standards, car prices manufactured by Tesla increased hence making the most individual prefer the mobility service model in the US. With an increase in technology, more innovations have come to light as companies manufacture luxury cars hence increasing car ownership to those in the rural parts of America.

There are various options available to those individuals who would rather not drive cars in contemporary society. These options include car-sharing and hiring services, electric scooter sharing, urban bike rentals, and the belief of being careless. These individuals tend to embrace mobility as assistance rather than car purchasing. For instance, most people in big cities prefer car hiring and sharing while going to work, and companies such as Uber and Zipcar have provided these services. Besides, people who want to exercise while going to work also rent urban bikes and cycle to work since they believe that cars are just luxury materials. These people who cycle to work also believe that using bikes is efficient, especially when there is traffic in the city. When the majority of the individuals in the US start embracing this culture, then the automobile industry would be irrelevant. People will stop purchasing cars hence reducing the countries and automobile industry revenue.

The implication of the above analogy in the context would also reduce employment rates in industries such as Toyota and Tesla, reduced the productivity of vehicle parts as dealers would focus on other favorable parts to the population, change in market share, and reduced capacity in investments. For example, big players in the contemporary world today invest heavily in car manufacturing, deals, and markets because their returns are profitable. With an increase in other options of transportation and an increase in those who do not prefer driving would reduce the investment’s profits, thus reduction in revenue across the globe. Moreover, employment rates in the companies mentioned above would reduce making workers jobless. With the increase in the manipulation of market share, especially in Chinese industries, the future market share of the automobile industry would reduce. The market share decreases since people will stop buying cars in the society hence reducing tax revenues across the globe and affecting the economy of the United States.

It is imperative to note that innovation through the use of technology has influenced the initiative mentioned above. Through technology, electric vehicles are produced in the world today. Most companies have the idea that EVs will change the world for the future, and Tesla Company is not an exception. As described earlier in the context, the CEO of Tesla Elon Musk tries very hard to achieve this dream in making the desired. He spends a lot of time figuring out how to go about this initiative. He claims that human beings are underrated and that it is his mistakes that have led to the collapse of the enterprise. Some of the attributes that led to the destruction of this narrative involved inadequate funds and personnel, among other issues. Tesla lost close to four billion dollars in this project, and most co-owners were furious about Musk’s actions leading to fallouts and disparities. However, Tesla is known for its more significant projects. As described earlier, it is responsible for the provision of luxury cars in the modern world today and that the company has made a fortune over this initiative. Some of the recommendations that would secure Tesla’s future concerning EVs include proper funding, hiring more personnel, and facilitation on mobility.

Consequently, companies such as Volkswagen, Toyota, and Chrysler have played an essential role in meeting the needs of consumers. Toyota is widely used in other countries, and the United States is the sole provider of Toyota cars in the world. These companies, on the other hand, have influenced the manufacturing of more affordable and available electric vehicles and car parts in the environment. As described earlier, those involved in supplying tiers and batteries have also made a fortune in the world today. For example, Tier one companies that have invested in new technologies will experience a massive increase in revenue of seven percent by 2030.

Additionally, there is a change in the face of mobility, as described above. People today prefer using other car-sharing and hiring services, urban bike rentals, among different modes of transportation in the cities. This attribute has affected the automobile industry since people do not buy cars hence reducing revenues across the globe.