Tesla Inc. Company

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1 Tesla Inc. Company 415 ITM 550 Technology Mgmt & Innovation Shirisha Aleti Concordia University, St. Paul, Jacob Trippel 10/23/2023

2 Product: Tesla Model 3 Technology Evolution Model The Tesla Model 3 is currently in the growth phase of the technology evolution model (Lander et al., 2023). As the first mass-market electric vehicle produced by Tesla, the Model 3 has made significant strides in innovation, market penetration, and brand loyalty. Regarding innovation, the Model 3 has established itself as a leader in the electric vehicle market. It boasts an impressive range of over 300 miles per charge and a 0-60 mph time of just 3.2 seconds, setting a new standard for performance in electric cars (Lander et al., 2023). The Model 3 has advanced features such as Autopilot and over-the-air software updates, further solidifying its position as an innovative and technologically advanced vehicle. The ongoing product changes of the Model 3 also indicate its position in the growth phase. Tesla continuously updates and improves the Model 3, keeping up with the rapidly evolving technology in the automotive industry (Lander et al., 2023). These improvements, such as the recent introduction of the long-range battery and the Performance version, showcase Tesla's commitment to staying at the forefront of innovation. One significant factor contributing to Model 3's success in the growth phase is brand loyalty. Tesla has developed a strong following of customers passionate

3 about the brand and its mission of sustainable transportation (Lander et al., 2023). This loyal customer base has helped drive demand for the Model 3 and establish it as a leader in the electric vehicle market. The standardization of market penetration processes indicates Model 3's position in the growth phase. Tesla has steadily expanded its reach with the Model 3, increasing production and opening new sales and service centers globally. This standardized approach to market penetration has enabled Tesla to quickly gain a foothold in new markets and expand its customer base. Finally, Tesla's significant investment in research and development (R&D) is crucial in the Model 3's growth phase (Lander et al., 2023). The company's annual R&D budget has increased significantly in recent years, allowing for continuous innovation and improvement in its products, including the Model 3. Emerging phase In 2016, Tesla announced its highly anticipated Model 3 - its first mass- produced electric vehicle. The launch of this car marked a significant moment in Tesla's history, as it signaled the company's transition from a high-end niche market to a more mainstream one. The Model 3 was positioned as a more affordable option compared to Tesla's previous models - the Model S and Model X - with a starting price of $35,000.

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4 The initial phase of the Model 3's introduction to the market focused on creating brand awareness and generating demand. To reach potential consumers, Tesla utilized various marketing strategies, including social media, events, and word of mouth. The company also leveraged its loyal customer base and offered referrals and early access to reservation holders, creating a sense of exclusivity and desirability for the Model 3. One of the key selling points of the Model 3 was its innovative technology. The car featured Tesla's advanced Autopilot and regenerative braking system, setting it apart from other electric vehicles. The Model 3 also boasted a more extended-range battery, with options for 220 or 310 miles on a single charge, making it a practical choice for everyday use. This innovative technology and more extended range helped dispel common concerns about electric vehicles out of limited capacity and practices. As production of the Model 3 ramped up, Tesla faced several challenges, including delays and production issues. However, despite these challenges, the Model 3 was met with overwhelming demand, with over 500,000 reservations made within the first week of its announcement. This high demand can also be attributed to the long waiting list for Tesla's previous models, creating anticipation and excitement for the Model 3.

5 The success of the Model 3 also had a significant impact on Tesla's brand and the electric vehicle market as a whole. It signaled a shift towards sustainable transportation and a growing acceptance of electric vehicles as a viable option for everyday use. With its sleek design, advanced technology, and affordable pricing, the Model 3 became popular among early adopters and mainstream consumers. Growth phase In 2018, Tesla's Model 3 entered a crucial phase of its growth as the company ramped up production and deliveries of its highly anticipated electric car (Lander et al., 2023). This marked a significant milestone for Tesla, as it indicated the company's ability to move beyond its niche market of luxury electric vehicles and into the mainstream market. The growth phase of the Model 3 can be attributed to two main factors. The first is Tesla's determination to fulfill its commitment at the Model 3 launch event in 2016 to produce and deliver 5,000 cars per week. Despite facing numerous production challenges, Tesla achieved this goal by 2018 (Lander et al., 2023). This showed the company's perseverance and determination to overcome obstacles and deliver on its promises. The second factor contributing to the Model 3's growth phase is the growing demand for electric vehicles. As concerns about climate change and the harmful effects of traditional gasoline-powered cars continue to rise, consumers seek

6 environmentally friendly alternatives (Lander et al., 2023). Tesla's Model 3, with its sleek design, impressive range, and advanced technology, emerged as a frontrunner in the electric vehicle market and became highly sought after. Furthermore, the growth phase was also characterized by a focus on increasing market share and improving the product. Tesla continued to make ongoing product changes to meet customer demand and enhance the overall user experience. This included adding new features, such as a heated steering wheel, and upgrading the autopilot system to make it more responsive and efficient. Another critical aspect of the growth phase was Tesla's expansion into international markets. By the end of 2018, the company had started delivering the Model 3 to customers in Europe and China, further accelerating its growth trajectory (Lander et al., 2023). This expansion helped Tesla reach a broader customer base and generated positive buzz and increased demand for the Model 3 globally. In addition, Tesla also focused on building a robust infrastructure to support the growing demand for electric vehicles. The company increased the number of superchargers - its fast-charging network and partnered with other charging companies to provide more charging options for customers. This was crucial in alleviating range anxiety and making the Model 3 a more convenient and attractive option for potential customers. Mature Phase

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7 The Model 3, introduced by electric vehicle company Tesla, has undergone various phases in its product life cycle. A product's life cycle is the cycle of stages a product goes through, from its introduction to its eventual decline. This cycle is marked by different demand levels, competition, and sales (Lancelot et al., 2023). The product life cycle (PLC) model consists of four stages: introduction, growth, maturity, and decline. In this essay, we will discuss the current phase of the Model 3's product life cycle, the mature phase. The introduction phase of the Model 3 began in 2017 when Tesla first unveiled the car to the public. This was a critical stage as Tesla faced significant challenges in ramping up production and meeting the high demand for the car. The company also faced competition from established players in the electric vehicle market (Lancelot et al., 2023). However, the Model 3 was able to generate a lot of buzz, and its advanced features and competitive pricing attracted a large number of pre-orders. The second stage, growth, began in 2018, when Tesla started delivering the Model 3 to customers. The company struggled with production and delivery delays but eventually managed to ramp up production and meet its targets. This phase saw a significant increase in demand for the Model 3, as it became the bestselling electric vehicle in the world (Lancelot et al., 2023). Tesla also faced increased competition from other manufacturers who started introducing their electric cars.

8 Currently, the Model 3 is in the maturity phase. This phase is characterized by stable sales and a more balanced market. Tesla has established its position in the electric vehicle market and has become a household name in the industry (Lancelot et al., 2023). The company has been consistently delivering the Model 3 and has even been able to expand its market reach to international markets. Despite increased competition, it has also maintained its position as the top-selling electric vehicle. In this phase, the focus is on sustaining market share and profitability. Tesla has been making strategic moves to achieve this, such as introducing a more affordable version of the Model 3 and expanding its sales and service network (Lancelot et al., 2023). The company has also achieved significant cost savings and improved production efficiency, leading to increased profitability. While the introduction and growth phases focus on product development and expanding market share, the maturity phase emphasizes standardizing market penetration processes (Lancelot et al., 2023). Tesla has introduced a software leasing program for the Model 3, allowing customers to lease the car's advanced features for a monthly fee. This shows that the company is shifting its focus from product development to finding new ways to sustain its market position and profitability. Decline Phase

9 It is difficult to predict when the Model 3 will enter the decline phase as it is still a relatively new product. However, considering Tesla's constant innovation and focus on sustainability, we can assume that the Model 3 will continue to evolve and adapt to the changing market (Lancelot et al., 2023). The company's strong brand loyalty and commitment to sustainability will also significantly delay the decline phase. Furthermore, Tesla's R&D budget has increased over the years, indicating its focus on innovation and improving its products. In 2019 alone, the company spent $1.3 billion on R&D (Lancelot et al., 2023). This demonstrates Tesla's commitment to staying ahead of the competition and continuously improving its products. Assessing the firm's core competency Market Development Capability Tesla's market development capability can be attributed to its strong brand and loyal customer base. The company has successfully positioned itself as a leader in the electric vehicle market, and customers are willing to pay a premium for its products (Lancelot et al., 2023). In addition, Tesla has a direct-to-consumer sales model, which allows the company to have more control over its distribution and sales channels. Technology Development Capability

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10 Tesla, the American electric vehicle and clean energy company, has become a global leader in the automotive industry in a relatively short period. One of the key factors contributing to Tesla's success is its strong technology development capability. Since its inception in 2003, the company has focused on developing innovative technologies and has heavily invested in research and development (Alsharari, 2022). This focus on technology has not only enabled Tesla to set itself apart from its competitors. Still, it has also allowed the company to continuously improve its products and maintain its leadership position in the market. One of Tesla's core competencies is its battery technology. The company has developed advanced lithium-ion battery cells with more extended range and higher energy density than traditional batteries. This has been a game-changer for the electric vehicle industry, as it has addressed one of the major concerns of consumers - the limited range of electric vehicles (Alsharari, 2022). Tesla's batteries are also designed to have a longer lifespan, making them more cost- effective in the long run. Furthermore, Tesla's battery technology has also been adapted for use in other areas, such as the company's energy storage products for homes and businesses. In addition to battery technology, Tesla has been at the forefront of developing autonomous driving systems. The Autopilot system combines radar, cameras, and ultrasonic sensors to enable semi-autonomous driving. These systems

11 are constantly being updated and improved through over-the-air software updates, allowing Tesla vehicles to have some of the most advanced features in the market (Alsharari, 2022). Tesla's commitment to autonomous driving technology has also led to the development of its proprietary Full Self-Driving (FSD) system, which can potentially revolutionize the transportation industry in the future. Moreover, Tesla's technological advancements are not limited to its vehicles. The company has also leveraged its expertise in energy storage to develop solar panels and solar roofs for sustainable energy generation (Alsharari, 2022). These products and Tesla's energy storage systems have helped accelerate the shift towards renewable energy sources. Its strategic partnerships and acquisitions are another factor contributing to Tesla's strong technology development capability. The company has acquired several technology companies, such as Maxwell Technologies and DeepScale, to enhance further its battery and autonomous driving technology (Alsharari, 2022). Tesla also collaborates with leading research institutions and universities, allowing the company to tap into the latest technological developments. Management Development Capability Tesla's management team has been a major driving force behind the success and growth of the company. Led by CEO Elon Musk, the team has demonstrated

12 strong leadership and innovative thinking, allowing Tesla to take bold steps and break new ground in the automotive industry. One of the critical strengths of Tesla's management team is its ability to navigate through challenges and adapt to changing market conditions. Since its inception in 2003, Tesla has faced numerous obstacles, from financial struggles to production setbacks (Chowdhury et al., 2023). However, under the guidance of Musk and his team, the company has overcome these challenges and emerged as a leading player in the electric vehicle market. Moreover, Tesla's management has a clear and ambitious vision. The company's mission is to accelerate the world's transition to sustainable energy and transportation, and its management team is constantly working towards this goal (Chowdhury et al., 2023). They have a long-term strategy, which includes expanding into new markets, increasing production capacity, and continuously improving their products and technology. In addition to their strong leadership, Tesla's management values diversity and inclusivity. The company has a diverse team from various backgrounds, cultures, and industries, bringing multiple perspectives and ideas (Chowdhury et al., 2023). This diversity has been essential to the company's success, promoting creativity and innovation.

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13 Tesla's management team also has a culture of continuous learning and improvement. This is evident in their approach to research and development, where they constantly strive to push the boundaries of technology and design (Chowdhury et al., 2023). This culture has allowed Tesla to develop groundbreaking products such as the Model S, Model X, and Model 3, which have set new standards for electric vehicles. Furthermore, the management team at Tesla also has a strong focus on sustainability and environmental responsibility (Chowdhury et al., 2023). This is reflected in their decision to focus solely on producing electric vehicles and promoting clean energy solutions. Tesla has also implemented sustainable practices in its operations, such as using renewable energy sources and practicing efficient waste management. Strategy and Financing Capability : Tesla's stunning success in the automotive industry can be attributed to its unique vertical integration strategy and focus on sustainability (Lecler et al., 2022). Unlike traditional car manufacturers, Tesla has taken a different approach by owning and managing its entire supply chain, from raw material extraction to producing its electric vehicles (EVs). One of the primary advantages of vertical integration for Tesla is that it gives the company complete control over its production process. By owning and

14 managing all aspects of production, Tesla can ensure that its high-quality standards are met, and deadlines are adhered to without relying on external suppliers. This also enables the company to react quickly to unforeseen issues or changes in demand, giving it a significant competitive advantage over its rivals. Another key benefit of vertical integration for Tesla is the reduction in costs. By cutting out the intermediaries, Tesla can reduce production costs and improve its profit margins (Lecler et al., 2022). Tesla's focus on sustainability also plays a crucial role in its vertical integration strategy. The company has its own solar panel and battery production facilities, enabling it to produce clean energy to power its manufacturing operations and its EVs, reducing its carbon footprint. In addition to vertical integration, Tesla has successfully secured financing through various means (Lecler et al., 2022). The company has received significant government subsidies, which have helped it to continue investing in technology development and expanding its operations. Tesla has also utilized debt financing and equity offerings to raise funds for its growth, demonstrating its strong financial management and positioning itself for sustainable long-term growth. Tesla's focus on sustainability has also been a critical driver of its success. The company's commitment to reducing carbon emissions and accelerating the transition to sustainable transport has won the hearts of environmentally-conscious

15 consumers (Lecler et al., 2022). This has led to a loyal and growing customer base, giving Tesla a competitive advantage over traditional car manufacturers. Furthermore, the company's focus on sustainability has also contributed to its brand value and reputation (Lecler et al., 2022). Tesla's commitment to sustainability resonates with consumers and has enhanced its image as a socially responsible and environmentally conscious company. This has helped Tesla to attract top talent and partnerships, further positioning the company for continued success. Deployment of the new Technology : Based on the assessment of the technology evolution model and the firm's core competencies, here are the steps that Tesla can take to deploy the Model 3 in the market: To increase standardization of market penetration processes, Tesla can develop partnerships with other companies to improve its distribution and sales channels. This can include collaborations with charging network providers, retailers, and other companies in the electric vehicle industry. The company can expand its production and delivery capabilities to meet the increasing demand for the Model 3. This will help sustain its market share and increase profitability. Tesla should continue to invest in R&D to stay ahead of the competition and constantly improve the Model 3 (Lecler et al., 2022). This will help in maintaining its

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16 competitive advantage and attract new customers. Tesla can focus on improving the overall customer experience, including after-sales service and support. This will help in increasing brand loyalty and word-of-mouth marketing. The Model 3 has captured a larger market share, but Tesla should also consider expanding its product line to cater to different customer segments. This can include developing a more affordable model targeting a wider audience. Conclusion The Tesla Model 3 has revolutionized the electric vehicle industry with its innovative technology and superior performance. The company's use of the technology evolution model has played a crucial role in the development, deployment, and success of the Model 3 (Bauchwitz & Cummings, 2020). This model consists of various phases, including research, development, introduction, growth, maturity, and decline, which Tesla has gone through in its journey. The initial research phase involved extensive market analysis, understanding consumer needs and preferences, and predicting potential demand. This enabled Tesla to identify the gap in the market for a more affordable long-range electric vehicle, which was the foundation for the development of the Model 3 (Bauchwitz & Cummings, 2020). The company's core competency in market development allowed it to quickly build a strong brand image and a loyal customer base even before the product was introduced.

17 The technology development phase was essential in creating a technologically advanced product to set Tesla apart. The company invested heavily in research and development to design a high-performance electric motor, battery pack, and charging infrastructure. Their emphasis on continuous innovation and staying ahead of the curve has enabled them to improve the Model 3 and maintain its competitive edge constantly. The introduction phase marked the launch of the Model 3 to the market, followed by rapid growth (Gonzalez‐Escamilla et al., 2020). Tesla's management development and effective deployment strategies were crucial in this phase. The company's unique approach to direct-to-consumer sales and showroom experience allowed customers to directly interact with the product and receive personalized support. As the Model 3 gained popularity and demand increased, it entered the maturity phase. A steady market presence, a well-established customer base, and consistent sales characterize this stage. In this phase, Tesla's core competencies in strategy and management have been crucial in maintaining profitability and managing production and supply chain challenges. The decline phase is a natural part of the technology evolution model, but Tesla's focus on continuous innovation and expansion into new markets has enabled it to delay this stage (Gonzalez‐Escamilla et al., 2020). With plans to launch the Model 3 in new markets and introduce updates and upgrades, Tesla is

18 determined to stay at the forefront of the electric vehicle industry. In conclusion, the Tesla Model 3 has undergone various technological evolution phases, each of which has played a significant role in its success. By understanding the current stage and taking advantage of its core competencies, Tesla can continue to improve and deploy the product effectively in the market, ultimately contributing to the growth and expansion of the electric vehicle industry.

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19 References Alsharari, N. M. (2022). Financial reporting and analysis of tesla green technology in the United States market. Banking and Accounting Issues , 3.] Bauchwitz, B., & Cummings, M. (2020). Evaluating the reliability of Tesla model 3 driver assist functions. Duke University , 1 . Chowdhury, S., Dey, P., Joel-Edgar, S., Bhattacharya, S., Rodriguez-Espindola, O., Abadie, A., & Truong, L. (2023). Unlocking the value of artificial intelligence in human resource management through AI capability framework. Human Resource Management Review , 33 (1), 100899. Gonzalez‐Escamilla, G., Ciolac, D., De Santis, S., Radetz, A., Fleischer, V., Droby, A., ... & Groppa, S. (2020). Gray matter network reorganization in multiple sclerosis from 7‐Tesla and 3‐Tesla MRI data. Annals of clinical and translational neurology , 7 (4), 543-553. Lancelot, J., Rimal, B. P., & Dennis, E. M. (2023). Performance Evaluation of a Lane Correction Module Stress Test: A Field Test of Tesla Model 3. Future Internet , 15 (4), 138. Lander, L., Tagnon, C., Nguyen-Tien, V., Kendrick, E., Elliott, R. J., Abbott, A. P., ... & Offer, G. J. (2023). Breaking it down: A techno-economic assessment of the impact of battery pack design on disassembly costs. Applied Energy , 331 , 120437.

20 Lecler, A., Duron, L., Charlson, E., Kolseth, C., Kossler, A. L., Wintermark, M., ... & Rutt, B. (2022). Comparison between 7 Tesla and 3 Tesla MRI for characterizing orbital lesions. Diagnostic and Interventional Imaging , 103 (9), 433-439.

Tesla Inc. Company

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