Tesla Inc. History

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Tesla Inc began in 2003 with a few brilliant engineers who wanted to eliminate the trade-offs to drive electric. Before Tesla, electric cars were slow and needed frequent recharging. These engineers believed ”you can’t have your cake and eat it too.” (Sergio, 2006). They developed the fastest car with zero emissions. They named the company Tesla after Nikola Tesla who developed the alternating current induction motor which later was the basis for the industrial revolution. (Saphir, 2016). Tesla was created by combining brand spanking new technologies using the ion lithium battery developed by AC Propulsion, a hobbyist company, who developed the tzero. That battery spawned a breakthrough in high speed and zero emissions cars.

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Martin Eberhard, a successful innovator, got divorced and wanted a fast sports car. Early on, Malcolm Smith, a product designer, who later became vice president, went for a test drive in the tzero with Eberhard. Eberhard said to Smith, “Try and touch the dashboard” (Baer, 2014,). Eberhard floored the car, and it leapt from 0 to 60 in 2.28 seconds. He was surprisingly thrown back into his seat and never touched the dashboard. The vision statement focuses on directional growth. Tesla wanted to build a multinational company that makes electric vehicles. The Mission is to “to accelerate the world’s transition to sustainable energy,” by making the electric cars affordable and desirable in the mass market. Elon Musk hand-picked the smartest employees. Another strength comes from the type of management. The team had vast experience with start-up companies. The CEO, Elon Musk, started SpaceX and PayPal. JB Straubel started Volacom.

These start-ups all involve advanced technologies in new inventions. Tesla has excellent brand recognition. Consumer Reports claims that Tesla is comparable to other top auto brands in quality, design, value, and safety. US News listed the model S as the #1 of all large luxury cars made. As well as having excellent brand recognition, the company has strong sales growth. In just four years, sales went from 204.24 million to 4.05 billion. For the customer, the strength of the dealerships is in offering a unique shopping experience. The staff educates the customer about the technology of the electric car and helps them design the vehicle of their choice. Unfortunately, Tesla has a higher debt than many of its competitors. Becoming a mass producer of electric cars is an expensive revolution in transportation. For example, the two essential elements for the ion-lithium battery are cobalt and nickel and not limitless metals. A lot of the earth’s nickel is not of good enough quality for the electric battery (Shilling,2017). Tesla has solved its recharging infrastructure problem.

Tesla needs to get the charge time down and to increase the availability of electricity. Tesla is expanding production by selling model 3 at half the price of the original (Saphir, 2016). This sedan is reasonably priced, and it is big enough to transport a family. More consumers are willing to invest in this sedan. Tesla created a global market for their cars. As of 2016, Tesla sold more cars internationally particularly in Asia and North-Western Europe. The States and the Federal government offer financial incentives to people who buy electric cars. This incentive boosts the numbers of customers for Tesla. Another opportunity for Tesla is to keep improving their technology. For example, Tesla has developed an autopilot program. By merging with other sustainable energy companies, like SolarCity, Tesla expands their control over the market. The threats that Tesla is facing aren’t any different from any other established companies’ vulnerabilities. The price of raw materials, such as steel, aluminum, or lithium could increase. These certainly would cost Tesla, more to make the car which would affect the price to go up. Tesla Inc began in 2003 with a few brilliant engineers who wanted to eliminate the trade-offs to drive electric. Before Tesla, electric cars were slow and needed frequent recharging. These engineers believed ”you can’ have your cake and eat it too.” (Sergio, 2006).

They developed the fastest car with zero emissions. They named the company Tesla after Nikola Tesla who developed the alternating current induction motor which later was the basis for the industrial revolution. (Saphir, 2016). Tesla was created by combining brand spanking new technologies using the ion lithium battery developed by AC Propulsion, a hobbyist company, who developed the tzero. That battery spawned a breakthrough in high speed and zero emissions cars. Martin Eberhard, a successful innovator, got divorced and wanted a fast sports car. Early on, Malcolm Smith, a product designer, who later became vice president, went for a test drive in the tzero with Eberhard. Eberhard said to Smith, “Try and touch the dashboard” (Baer, 2014,). Eberhard floored the car, and it leapt from 0 to 60 in 2.28 seconds. He was surprisingly thrown back into his seat and never touched the dashboard. The vision statement focuses on directional growth. Tesla wanted to build a multinational company that makes electric vehicles.

The Mission is to “to accelerate the world’s transition to sustainable energy,” by making the electric cars affordable and desirable in the mass market. Elon Musk hand-picked the smartest employees. Another strength comes from the type of management. The team had vast experience with start-up companies. The CEO, Elon Musk, started SpaceX and PayPal. JB Straubel started Volacom. These start-ups all involve advanced technologies in new inventions. Tesla has excellent brand recognition. Consumer Reports claims that Tesla is comparable to other top auto brands in quality, design, value, and safety. US News listed the model S as the #1 of all large luxury cars made. As well as having excellent brand recognition, the company has strong sales growth. In just four years, sales went from 204.24 million to 4.05 billion. For the customer, the strength of the dealerships is in offering a unique shopping experience. The staff educates the customer about the technology of the electric car and helps them design the vehicle of their choice. Unfortunately, Tesla has a higher debt than many of its competitors.

Becoming a mass producer of electric cars is an expensive revolution in transportation. For example, the two essential elements for the ion-lithium battery are cobalt and nickel and not limitless metals. A lot of the earth’s nickel is not of good enough quality for the electric battery (Shilling,2017). Tesla has solved its recharging infrastructure problem. Tesla needs to get the charge time down and to increase the availability of electricity. Tesla is expanding production by selling model 3 at half the price of the original (Saphir, 2016). This sedan is reasonably priced, and it is big enough to transport a family. More consumers are willing to invest in this sedan. Tesla created a global market for their cars. As of 2016, Tesla sold more cars internationally particularly in Asia and North-Western Europe. The States and the Federal government offer financial incentives to people who buy electric cars. This incentive boosts the numbers of customers for Tesla. Another opportunity for Tesla is to keep improving their technology. For example, Tesla has developed an autopilot program. By merging with other sustainable energy companies, like SolarCity, Tesla expands their control over the market. The threats that Tesla is facing aren’t any different from any other established companies’ vulnerabilities. The price of raw materials, such as steel, aluminum, or lithium could increase. These certainly would cost Tesla, more to make the car which would affect the price to go up.

References

  1. O’Kane, S. (2018, March 10). Tesla’s toughest competition ever was on display in Geneva. Retrieved from https://www.theverge.com/2018/3/10/17096608/tesla-jaguar-porsche-audi-evs-geneva-motor-show-2018
  2. https://www.theverge.com/2018/3/10/17096608/tesla-jaguar-porsche-audi-evs-geneva-motor-show-2018 https://www.businessinsider.com/teslas-financial-problems-and-recovery-2013-2
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