The Tesla Motors company is one of the pioneer developers of cars running on electric power. Incorporated in 2003, it became the leading producer of electric cars in the world, yet it does not present much competition to other companies. The demand for green energy in the society is still small, and this makes the company develop unique strategies for surviving in the automotive industry.
Marketing Strategy
Target Market
Tesla cars cannot be considered as affordable to most people. Nor it is a family choice vehicle, either as a first car or another family vehicle. Tesla Motors mainly targets the customer group of working adults who have been working from few years to several decades. This is the group which possesses the largest income and is willing to spend it on a more expensive car. The target customer group is broken down into three subgroups. Firstly, the company targets people who are concerned with the current ecological state of the planet. The greenhouse effect raises severe debates in the society, and responsible citizens are searching for the ways they could improve their impact on nature. The second target audience is people who wish to buy a luxury car, but do not have enough finances to do it. Tesla Motors offers such vehicle affordable to customers who have a stable job but who have not achieved any high positions yet. Finally, the Tesla cars combine comfort with unique technology. It may be a benefit for customers who are interested in the technical side of a vehicle, making it their priority for purchasing. Thus, these customers make up the third target group of Tesla Motors.
Product
As it was mentioned above, the Tesla cars are unique since they run on electricity. Currently, the company offers two model lines, including Model S and Model Z. Apart from the green technology, the Model S cars have several other features. Mainly, it is the focus on safety. The cars have the lowered center of gravity, steel railing on the sides, and the increased amount of the safety air bags ( Model S par. 4). The vehicle also has a touchscreen as a navigation tool. The Model Z has the similar approach to safety. This model is bigger, having seven seats and being suitable for companies. The vehicle is positioned as a sports car, and the design is corresponding, offering the so-called falcon wings and corpus elements designed for better aerodynamics. Tesla Motors company also plan to produce the Model 3 vehicles in the next few years, which would be more affordable.
Price
The prices on the Tesla cars cannot be considered as low. The planned Model 3, which would be the companys cheapest option, would be offered for about $35,000. The existing two models come at the starting price of more than $50,000 and $75,000 respectively. These numbers prove that Tesla vehicles belong to the luxury segment of the car market.
Place
In the case of Tesla Motors, the place element would include the selling points and other platforms, where the company communicates with potential customers. Firstly, it is the official website of Tesla Motors. People may use it not only to review the vehicles features but to order them as well. The website has the option to choose a country and order a vehicle when a customer can define the overall car modification and decide on the payment options, whether it is a lease, loan, or cash. Secondly, Tesla Motors also has its own stores and service centers, which mainly play the role of only presenting the cars to customers, while they still would need to make an online order.
Promotion
Tesla Motors has several approaches to their promotional campaign. The primary source of information reaching customers is short video commercials and clips. Customers can view them directly on the companys website or the other resources like Youtube. The focus of these videos is to show stories of Tesla cars owners, to which customers could relate themselves. People featured in the videos usually talk about their experience with Tesla vehicles. The company also implements the ideas of the viral content, supposing that their target audience would receive the information through the social media. Apart from videos, Tesla Motors uses its stores and service centers for promotion as well.
Industry analysis
Competition and Development
The primary competitors of the Tesla Motors cannot be identified within the same technology principle. There is no such company which is as well-known for its green energy cars as Tesla. This way, the main competitors are all the rest of the car making corporations. For instance, in the USA those are Ford and Chrysler corporations. The competition is solely among the green technologies and the gasoline running cars.
As more and more people become concerned about the ecological issues, the need for green technologies grows each year. Moreover, the government is also interested in these technologies, especially in California, as they respond to the climate change threat (Baker 1). Thus, there is a potential for the companys further growth through customers and the governmental support. Besides, since it is the most well-known company that makes vehicles running on electricity, its market share in this particular industry is covering almost every position.
Economic Outlook
Nowadays, American car production companies suffer from competition imposed by the Asian automobile industry. Japan and China have the cheaper labor force, so the final product price is lower than the price of Western products. Thus, Asian cars are more appealing to the major part of Americans. The event of mass import of Japanese and Chinese cars in the past century has led to the Chrysler corporation experience the desperate economic situation, and the city of Detroit, which used to be a home to several automobile factories, has become bankrupt.
The current GDP review of the USA shows that the automotive industry, more specifically the motor vehicle production sums up to almost 700 billion dollars (Lyndaker et al. 13). This industry nowadays has a high potential for solving the unemployment issue. As more and more people and businesses wish to end the manufacture processes outsourcing, new jobs may be created in this sector. Of course, such industry requires the newest technologies, which can be extremely expensive. However, with the Teslas case, the government along with several privately owned companies are interested in the corporations development, so the financing should not be a problem.
Conclusion
Tesla Motors company offers a product, which is supported by the developing demand from the society on green technologies, thus creating an opportunity for the further growth. As government and society start to recognize the importance of ecology, Tesla corporation has growing chances for success in the future. Nevertheless, there is a chance that the company will stay as a choice for luxury options instead of affordable vehicles.
Lyndaker, Amanda, Edward Morgan and Jeannine Aversa. Gross Domestic Product by Industry: Second Quarter 2016 Annual Update: 2013 through First Quarter 2016. US Bureau of Economic Analysis, 2016, Web.
Tesla is among the leaders within the scope of the high-tech industry and involves a plethora of employees around the globe. Such a position implies the necessity of an appropriate HRD strategy that is a foundation for a companys coherent and consistent business processes. Hence, the HRD strategy for Tesla is a relevant theme to develop. Below, after exploring the firms position in the industry and its business industry, the HRD program will be suggested. It will focus on three interrelated dimensions training and development, organizational development, and career development, appealing to the foundations of McLagans human resource wheel. Then, an approach for evaluating the program Kirkpatricks four-level taxonomy will be proposed as well.
Teslas Industry Position
In economics and business, the situation is characterized by the emergence of new industries around intellectualized production. There is a significant expansion of the sphere of the non-intermediary economy, primarily transport, information, and financial services. The leaders of new markets understand this situation and build their businesses in accordance with the new realities. An illustrative example is Tesla Motors, which is now the undisputed leader in the electric car market. By the decision of the founder and head of the company, Elon Musk, the company made all its patents public and publicly available (Thomas & Maine, 2019). Musk is confident that he is already so far ahead of competitors in the new market in the engineering excellence of the solution that the disclosure of intellectual property is safe for the company. Moreover, it can help the development of other players within the norms set by Tesla Motors.
It is noteworthy that today the main potential competitors for Tesla are rather an information technology-oriented companies such as Apple and Google. Modern electric vehicles are more a product of IT than the result of the development of automotive technology. The Tesla Model S electric car that revolutionized is a constantly updated computer on wheels connected to the global network (Chen et al., 2019). One can be absolutely sure that further struggle in this market will unfold around software and intelligent transport systems.
Tesla uses vertical integration, directed both toward suppliers and towards end consumers. Forward-going vertical integration is manifested in the fact that the companys cars are sold only through the companys website, with the exception of some US states, where sale through intermediaries is mandatory. In all other regions where Tesla operates, the services of intermediaries for the sale of cars are not used. This allows one to significantly reduce the cost of personnel wages and have full control over the price level since the factor of creating value by intermediaries between the company and the consumer disappears. It should be noted that salons still exist, but they perform only the functions of a service center and showroom (Thomas & Maine, 2019). The second option for using Teslas direct integration is implemented through the creation of its own large network of car charging stations (superchargers). Such charging stations allow one to charge a car with a battery capacity of 100 kW/h. in about 1.5 hours (Chen et al., 2019). This is many times faster than conventional charging stations; moreover, superchargers can only be used by Tesla owners.
Tesla is focusing more on reverse vertical integration as this strategy opens up more opportunities. One of the companys strategic goals is to reduce the cost of cars because, despite the fact that electric vehicles are becoming more popular and demand is increasing exponentially, cars are still significantly more expensive than their conventional counterparts. For example, the company now manufactures batteries in venture manufacturing with Panasonic, which significantly reduces the cost of the battery. However, to achieve better results, the company is taking steps to develop battery technologies that will cost less than they do now and be of much higher quality.
In general, the use of the vertical integration mechanism in Teslas activities can be seen in the following. In 2015, the company took over Riviera tool LLC, which specializes in the production of complex stamping tools for mass production (Chen et al., 2019). As a result, conditions were created for significant cost savings on production tools and an increase in the companys profits. In 2016, Tesla acquired the German manufacturer of automated mass production systems, Grohmann Engineering (Thomas & Maine, 2019). This was done in order to provide Teslas automated future with the necessary technologies and reduce the cost of production.
Further, in 2017, the company acquired the private company Perbix, which specializes in the production of robots and mass-produced tools. Through these actions, the company went deeper into solving the problem of reducing the cost of production. This transaction paved the way for the development of the technological potential of the organization. In 2019, Tesla acquired the Canadian company Hibar systems, which makes various tools for different stages of development and production of lithium-ion batteries (Chen et al., 2019). This deal confirmed the companys intention to move further into independent production of batteries, reduce production costs and move away from the venture partnership with Panasonic. Again, in 2019, Tesla bought a promising American start-up, Deepscale, specializing in software for self-driving driving systems (Chen et al., 2019). This is another direction of integration that allows one to get new technologies and potentially improve the competitive position of the organization.
It should be noted that the chosen strategy ensured the strengthening of Teslas strategic position. The results after 2015 became especially noticeable (Chen et al., 2019). Tesla remains the leader in terms of the price factor, which determines the companys potential to change the price situation in the industry as a whole in modern conditions. This factor and others discussed above allow considering Tesla as a driver for the development of the electric vehicle market. In strengthening this role, successful human resource development strategies are essential as well.
Organizational Development
Given the discussed industry and business strategy of Tesla, it will be rational to found its HRD program on an innovative approach. For example, the company may appeal to the digital management system of an organization. The latter is a set of interrelated elements united by a digital platform, with the help of which the organization and implementation of activities are carried out using modern digital technologies (Elg et al., 2019). The implementation of the control object in the digital economy assumes the presence of a digital twin that allows one to digitize the main business processes and virtualize them using augmented reality technologies.
Management processes are digitalized through the introduction of semi-automatic systems for the implementation of basic management functions, such as organization, planning, analysis, and control. The digitalization of management decisions consists of the formation of possible scenarios for the development of the organization on a digital platform. The calculation of indicators for each scenario is carried out according to the principle what will happen if& . Managers see various scenarios online and choose the most appropriate one.
The use of artificial intelligence in digital management will make it possible to digitalize most of the functions, leaving managers only with creative work recruiting employees, developing motivation systems, team building, and leadership. The digital platform will be able to independently develop and evaluate solutions by analyzing goals, processes, and risks (Elg et al., 2019). Managers will only need to approve the most efficient and effective development scenario.
The interaction of employees in the company using electronic document management, online project management systems, and modern means of communication involves the construction of a digital organizational management structure. The implementation of a digital organizational structure of management is possible with the help of modern online platforms.
The digital strategy of an organization is the main strategy for its development, implemented on the basis of modern digital technologies. It involves the digitalization of goals and activities aimed at achieving them. Achieving the set goals may become impossible due to risks that arise within the organization and in the operating environment (Elg et al., 2019). Digital transformation generates new risks, the work which requires the construction of a digital risk management system based on intelligent predictive analytics. Thus, all elements of the management system can be digitized, i.e., a digital organization management system can be built on the basis of a digital platform, which is the core of the functioning of the organization management system.
A digital platform is an integrated information system that ensures the digitalization of the relationship of all its participants. It aims to reduce transaction costs and modernize business models. The development system of an organization on a digital platform can be represented as follows. Initially, the control object is digitized, and its digital twin is formed. Further, the digitalization of the subject of management is carried out (Elg et al., 2019). The subject and object of management interact on a single digital platform, where information is generated for the owners and managers of the organization. Moreover, they can receive information, not from each other but online from mobile devices. The situation when managers give false information to owners about the state of affairs in the organization is excluded.
A digital risk management system and a system for monitoring the implementation of a digital strategy are being added to the digital platform. It provides the necessary information to the digital control panels of the employees of the organization. Each employee can see the goals, indicators, and tasks to be completed, as well as the deadlines and the target result.
Career Development
The core idea of career development processes for Tesla is to arrange its employees careers in such a way that the very method of advancement ensures the optimal use of motivational mechanisms and weakens the effect of restraining factors. The long-run plan for the development of careers as a significant system of interconnected actions involves the tasks of the effective use of all types of resources (Wehmeyer et al., 2019). There is also maximum adaptation to the conditions of the business environment, and the flexibility of the individual.
The launching stage within the scope of career development is the formulation of a career mission. The latter is an expression of the individuals vision of the content and meaning of a career, its main goal. The identification of employees strengths and weaknesses will be considered the starting point of the process. This provides a basis for defining the mission and goals and also contributes to the development of a strategy for the career process.
The next task of planning is the identification and analysis of the workplace. This is the identification of a position or workplace, the requirements of which most fully meet the career potential of this particular individual. To resolve this problem, it is necessary to break down the available positions (for which the employee actually or potentially applies) into segments or groups united by certain common characteristics. This can be the basis for making decisions about future direction and career growth.
The next task of strategic career planning is to determine the correspondence between the profile of the workplace and the employees career potential. The last stage is the realization of the strategic plan (Wehmeyer et al., 2019). Thus, having formulated a strategic plan and developed tactical steps, it is necessary to periodically analyze it and make the necessary adjustments. The essence of the entire strategic plan process is career rethinking. The purpose of this is to look at a career in perspective, i.e., as a process, and not in retrospect, as a result.
Training & Development
For Tesla, the first strategic direction in terms of training and development is proposed to be coaching. The latter is recognized as the most versatile and effective way to manage personnel in order to maximize its effectiveness. Using coaching, the staff achieves the intended goals more efficiently and quickly. One of the significant goals of coaching is the formation of a team that should be aimed at organizational success. Coaching serves as a foundation for the training and development of employees in order to form a unified team (Milner et al., 2020). Team coaching helps to activate the potential of the team, get out of a temporary unsatisfactory state, and achieve a stable situation.
Next, Tesla should focus on building and managing project teams. Formed groups need to be developed to the command level and then managed, which entails certain costs. For now, team-building practices are being actively advanced in innovative design. Thanks to the emergence of new software products and their use in management, the technology of mobile project teams are being introduced (Milner et al., 2020). The very possibility of meaningful team-building contributes to the effective construction of not only professional but also interpersonal relationships. The introduction of mobile project teams into practice seriously and for a long time actualizes the importance of understanding between project participants, making it a necessary condition for success.
A new direction in team building is the creation of virtual teams, which is also relevant for Tesla, especially in the context of the digital development of an organization. They are created with the active emergence of new information technologies that have a positive impact on the socio-economic activities of companies. It can be noted that such organizational forms are very promising due to their obvious advantages (Milner et al., 2020). The main advantages include the unification of the intellectual efforts of specialists who are remote from each other and the reduction in time spent due to the possibility of constant work on the project.
Programs Evaluation
There are many significant tools for evaluating contemporary HRD practices. For instance, in the case of Tesla, it would be reasonable to use the Kirkpatrick model to assess the proposed HRD strategy (McGuire, 2014). This model can be considered as a framework for defining the four stages of training assessment. First, it is the employees reactions and thoughts regarding the program. Second, it is their resulting knowledge and skills obtained from this program. Third, it is their behavioral shifts and advancement after utilizing the mentioned skills in the framework of the job. Fourth, it is the outcomes or implications of the employees performance on the company.
The first category of criterion is the reaction, which assesses whether Teslas employees will consider the program interesting, beneficial, and applicable to their work. An after-program survey that will ask the participants to rate their experiences will be the instrument to evaluate this level. It should be emphasized that focusing on the trainee rather than the trainer will be an important part of the Level 1 examination (Ardent Learning, 2020). While it is normal for facilitators to rely on the learning results, Kirkpatricks taxonomy prefers survey questions based on the learners thoughts.
Level 2 assesses each employees learning by determining if they have acquired the desired information, abilities, attitude, confidence, and dedication to the course. Learning may be assessed in a variety of ways, both formally and informally, and should be examined before and after learning to verify correctness and understanding (Ardent Learning, 2020). Exams and interview-style evaluations are examples of assessment methods here. In order to eliminate discrepancies, a specified, unambiguous scoring method must be developed ahead of time.
Level 3 of the Kirkpatrick taxonomy will assess whether employees will be actually influenced by the program and are putting what they have learned into practice. Analyzing behavioral changes allows one to determine not only whether the competencies were learned but also if they are logistically feasible to employ in the job. It should also be noted that examining frequently reveals problems in the workplace (Ardent Learning, 2020). A dearth of behavioral shifts may not indicate that the program will be inadequate but rather that the companys present processes and culture are not conducive to the intended changes.
The fourth level is devoted to determining actual outcomes. This stage will give the opportunity to compare learning to Teslas business objectives or KPIs that will be set in place before the program. A greater rate of return, fewer work-related accidents, and a better volume of sales will be crucial indicators to consider for the organization (McGuire, 2014). The suggested tool is used to establish an executable measuring strategy that clearly defines goals, measures outcomes, as well as identifies areas of significant influence. Data analysis at each level helps companies to examine the link between every stage to properly appreciate learning outcomes, as well as to adapt strategies and alter course during the process.
Conclusion
To conclude, the HRD strategy for Tesla was developed through the prism of three dimensions career development, training and development, and organizational development. The approach that is suggested for the company is related to the innovative strategy of HRD. Particularly, it was proposed to advance organizational processes by the digitalization of management processes, to consider career development as a coherent process with specific stages, and to appeal to modern practices of coaching and team-building. Then, Kirkpatricks model was utilized in order to define the way in which the mentioned program will be assessed.
Chen, Y., Chowdhury, S. D., & Donadam C. (2019). Mirroring hypothesis and integrality: Evidence from Tesla Motors. Journal of Engineering and Technology Management, 54(1), 4155.
Elg, M., Birch-Jensen, A., Gremyr, I., Martin, J., & Melin, U. (2019). Digitalisation and quality management: problems and prospects. Production Planning & Control, 32(12), 9901003.
McGuire, D. (2014). Human resource development. Sage Publications.
Milner, J., Milner, T., & McCarthy, G. (2020). A coaching culture definition: An industry-based perspective from managers as coaches. The Journal of Applied Behavioral Science, 56(2), 237254.
Thomas, V. J., & Maine, E. (2019). Market entry strategies for electric vehicle start-ups in the automotive industry Lessons from Tesla Motors. Journal of Cleaner Production, 235(1), 653663.
Wehmeyer, M. L., Nota, L., Soresi, S., Shogren, K. A., Morningstar, M. E., Ferrari, L., Sgaramella, T. M., & DiMaggio, I. (2019). A crisis in career development: Life designing and implications for transition. Career Development and Transition for Exceptional Individuals, 42(3), 179187.
For this weeks assignment, the stock prices of Tesla are reviewed using Yahoos Finance service. Tesla is a United States-based company that works in the industry of electric car manufacturing construction and is one of the companies owned by Elon Musk. Tesla is a great company, both because it entered a challenging sector of auto manufacturing and because of its CEO. Musk has other successful projects, such as SpaceX, which partners with NASA and has built and launched several successful rockets that use new technology, allowing these rockets to return to earth. From a business perspective, Tesla is a risky investment because the company is unique to the industry that has a set of established players ( Tesla, Inc., n.d.). However, based on the stock prices, which are showing a steady increase over the past year, Tesla is worth investing in since, in the long-term, the company can generate a substantial profit for the stockholders. This paper will analyze Teslas stock prices over the past year using visual methods and descriptive statistics and will explain how the analysis was conducted.
High Daily Stock Prices
Figure 1. Scatterplot of Teslas highest daily stock prices (created by the author).
The data of Teslas daily stock prices within the last year was obtained from Yahoo Finances website ( Tesla, Inc. (TSLA), n.d.). The results of figure 1 show a positive relationship between the high daily stock prices and time. This implies a steady progressive increase in high daily stock prices and A positive effect on the companys liquidity.
Low Daily Stock Prices
Figure 2. Scatterplot of Teslas low daily stock prices (created by the author).
The outcomes in figure 2 also depict a moderately negative relationship between the low daily stock prices and time. The 20 percent deviation from the high stock prices implies that Tesla has a peak trading range for investors. This result also suggests a positive effect on the companys liquidity.
Histogram of Adjusted Closing Stock Price
Figure 3. Histogram for the adjusted closing stock price (created by the author).
The x-axis shows the ranges of the adjusted closing stock prices and the y-axis shows the number of occurrences of prices falling within the ranges of The adjusted closing stock prices. The histogram is almost bell shaped which means the data points are evenly distributed in the ranges of the daily adjusted closing price. Considering the symmetric distribution of the data, the mean and the median are approximately equal to each other which indicates predictable daily closing stock prices for Tesla.
Histogram of Stock Trade Volume
Figure 4. Volume histogram (created by the author).
The x-axis shows the ranges of volume and the y-axis shows the number of occurrences of stock volumes falling within the range. The histogram is strongly skewed to the right implying mean is higher than the median. With the majority of the data points falling within the lower range of stock, volume represents unequal distribution and challenges to estimate the daily stock volume for Tesla.
Conclusion
Overall, the graphical representations of Teslas stock history represent the companys needs to react to its upcoming competitors and provide more unique product and service. The stock trends show gradual decrease in stock prices and we are seeing slight recovery of the stock price in the last quarter. The results depict a steady business growth and fully recovered investor confidence. While remaining optimistic, a long-term strategy that will grow revenue in the coming years and establish public confidence is still developing. However, investment in Tesla is a long shot since due diligence has to be assessed the current stock price against projected profitability forecasts. From the analysis of Tesla, it is worth to invest in the company, since the stock prices are favorable; therefore, an investor does not need to consider investing in stock of other companies.
Reference
Seigel. (2019). Trading volume: What it reveals about the market. Web.
At the end of 2003, IBM offered to sell its PC Department (PCD) to Lenovo; Lenovo agreed and purchased it in 2004 (Liu, 2007, pp. 574-575). In this paper, we are going to discuss this decision from the perspective of acquiring sustainable competitive advantage by Lenovo.
It is stressed that in 2003-2004, Lenovo was a much smaller business than IBM, and purchasing its PCD was a risky step; however, Lenovo wished to grow and expand internationally, and a fast way to do this was through a merger (Liu, 2007, pp. 574-575). So, Lenovo decided to buy the PCD and take a number of steps to minimize risks, such as providing more promotion chances for PCDs existing employees than IMB did, and share top management positions between Chinese and American employees equally so as to not lose talents who wouldnt otherwise work for Chinese businesses; provide salary bonuses related to performance for workers; etc. (Liu, 2007).
According to Barney (1991), sustained competitive advantage is acquired when a value creating strategy that is being used by the company is not used by rivals and cannot be duplicated by them (p. 102). Therefore, it is possible to state that Lenovo acquired a sustained competitive advantage in China when it purchased IBM PCD, because the latter not only had access to the international market but also a large number of distribution channels. In addition, Lenovo partially inherited the IBMs brand name. These advantages were major, and they could not have been duplicated by other Chinese PC firms, so it is possible to call them sustained.
To sum up, even though buying IBM PCD was a risky step for Lenovo, they successfully managed the involved risks, and acquired sustained competitive advantage by inheriting IBMs brand name and its international distribution channels.
Tesla Motors is a leading American company that produces and sells electric vehicles, as well as battery products. In this paper, we will discuss some of the challenges that the company currently faces, and offer possible recommendations to overcome them.
Tesla is faced by a number of challenges. First, they are currently building a plant that would enable them to produce a number of lithium-ion cells that is enough to power 500,000 electrical vehicles, but Tesla is unable to produce so many cars (The Economist, 2014). Noteworthy, other electrical vehicle manufacturers use a different type of batteries for their cars, so they are unlikely to buy the lithium-ion battery packs.
Second, Tesla is planning to produce lithium-ion storage batteries for storing the surplus electricity produced by rooftop solar panels (The Economist, 2015). This can partially solve the problem posed by the first challenge, but the new storage batteries may become a financially poor choice for those households which do not yet have rooftop solar panels. Tesla is expecting some losses, but is hoping them to be temporary; their prognosis is that the problem should resolve as the prices of electricity change (The Economist, 2015).
Third, Tesla has the problem of the range anxiety in its Chinese customers (Ho, 2015). Here, Tesla faces a first-mover disadvantage (Lieberman & Montgomery, 1988), because long-range traveling by electric vehicles requires charging stations, and there is a lack of them in China. Tesla is trying to collaborate with the Chinese government that is planning to open more charging stations, but it is uncertain at what pace this will be happening (Ho, 2015).
It is our opinion that Tesla is not responding well to the described challenges. The plant appears likely to have downtime after having been built; it is uncertain whether the electricity price changes favorably for Tesla; and a trip by a Tesla vehicle in China shows it is better to use the train (Ho, 2015).
We could recommend to have the plant produce batteries for other industries as well, and to sponsor the members of home-charging networks in China. As for the problem with volumes of sales of storage batteries, perhaps it might be possible to collaborate with manufacturers of rooftop solar panels to make the storage batteries more popular.
References
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Ho, A. (2015). Teslas most excellent adventure, China edition: The electric carmaker has high hopes in China. But anxiety about availability of power hurts sales. Web.
Lieberman, M. B., & Montgomery, D. B. (1988). First-mover advantages. Strategic Management Journal, 9, 41-58.
Liu, C. Z. (2007). Lenovo: An example of globalization of Chinese enterprises. Journal of International Business Studies, 38(1), 573-577.
Nowadays, individual transport plays a pivotal role in the lives of many people, enabling them to be highly mobile, which is often necessary for their professional activities. Therefore, creating new ways of transportation may be highly prospective. The current paper proposes a project for building a flying car by Tesla, Inc., a famous USA-based international corporation. The reasons for such a proposal, as well as the details of the project, are discussed.
Chosen Organisation
Tesla, Inc. is a U.S. transnational company that produces electric vehicles, solar panels, and battery products (primarily lithium-ion batteries). Having been founded in 2003 primarily as a manufacturer of electric cars, the organization successfully entered the market and became a luxury brand in electric vehicle production (Stringham, Miller, & Clark, 2015). Nowadays, cars are produced in the company’s factory in Fremont, CA, and transported to a variety of destinations all over the world; also, additional factories are being built in the United States and the Netherlands (“About Tesla,” n.d.).
As for batteries, a “gigafactory” is currently being created; the purpose of this factory is to enable Tesla, Inc. to manufacture a considerable amount of lithium-ion batteries which could be utilized to provide power for electric vehicles (up to 500,000 cars per annum) and other battery-powered devices (N.V., 2014). On the whole, the company is known for its desire to bring innovation while complying with the principles of environmental sustainability.
Project Scope Statement
The project which will be offered in this paper proposes to engage in a process aimed at the creation of a flying car. Therefore, it is clear that the specific objective of this project is to develop a vehicle that could be utilized to serve as a personal transportation device, and would be similar in its functions to a car, but would also be capable of flying at sufficient height (a height that would be enough to fly over buildings in a city at a safe height) and moving with an adequate speed (that is, with a speed which would be comparable with that of non-flying cars) while being airborne.
The proposed goal is measurable (if a personal aerial vehicle is created that can successfully perform the described functions, and would comply with safety requirements similar to those of the non-flying automobiles). It is also attainable and realistic, which can be confirmed by the fact that a large number of researchers have already engaged in projects aimed at designing and creation of such or similar transportation devices (Islam, Liu, & El Saddik, 2014; Kim, Hwang, & Kim, 2013; Sams, Gurunathan, Selvan, & Kumar, 2012).
Also, it should be stressed that military operations and emergency services, in some cases, already utilize flying devices (such as drones) for intelligence, information gathering, incident management, and so on (Abrahamsen, 2015; Byun et al., 2014; Korpela, Danko, & Oh, 2012). The timeliness of such a project is conditioned by the fact that the technological development appears to have reached a level at which the creation of such cars might be possible and feasible (Islam, Liu, & El Saddik, 2015; Saeed, Gratton, & Mares, 2011).
The proposed project might create a considerable competitive advantage for Tesla if the car is created before other developers make it. This would allow Tesla to sell a unique product in the market, for which a high demand would be likely, providing Tesla with a considerable and long-lasting competitive advantage (Narla, 2013; Saeed et al., 2011).
Reasons for Innovative Solution
This solution was chosen for Tesla, Inc. due to its high potential and numerous benefits. For instance, the merits of the flying vehicle for the business include the potentially high attractiveness of such a product to a certain group of consumers, including the consumers of luxury vehicles, who are already the target market for Tesla (N.V., 2014); the uniqueness of this type of product; the considerable degree of convenience and comfort it can provide for the customer; and so on.
Besides, it might be possible to state that there exist a large number of factors that may increase the likelihood of success of the company when it comes to the creation of a flying vehicle. For instance, the success factors of an aerial car include the fact that these may be patented, thus making Tesla the only manufacturer of this type of product and permitting it to gain a long-lasting competitive advantage over its rivals, creating a completely new niche in the market and thus forming the basis for long-term success.
Type of Innovation
The proposed project of developing and creating a flying personal vehicle requires Tesla to engage in activities connected to the implementation of innovation. The invention and construction of such a vehicle would require significant investments in Research and Development; also, it would be necessary for Tesla not only to design the construction of such a vehicle and create the principles on which it would work but also to engage in extensive testing activities to make sure that the innovative product is safe and reliable.
On the whole, it should be noted that the development and creation of the proposed product need the implementation of a radical type of innovation because it requires Tesla to design and develop a completely new product which has never been created before, and might be difficult to realize not just in technology but also in conceptual terms. Nevertheless, success in developing such a product might bring Tesla considerable profits (Saeed et al., 2011).
Strategic Steps
It might be possible to propose to plan the creation of a flying car for 7 years starting from January 2018 and finishing in January 2025; at the point of finish, the company should have in its possession a production facility which will be capable of building a sufficient amount of flying vehicles. The total investment required for this plan would be approximately equal to 4.5 billion USD.
The first stage of the creation of the flying car will require significant investment in Research and Development. The company of Tesla will have to hire several developers and engineers and direct their efforts at the conceptual development of the idea of flying car; the conceptual development will have to be accompanied by a constant technical assessment of the proposed models and ideas, and continuous evaluation of their further viability. This phase will last for an estimated period of 18 months (1.5 years).
The second stage of the creation of the proposed product will involve building and testing the prototypes of the models that were offered by the engineers and identified as the most viable ones. This phase will last for an estimated period of 24 months (2 years), and at its end, Tesla should have a finished and well-tested model of an aerial car that can be put on production.
The third stage will involve the creation of facilities required for the mass-production of the flying vehicle. This stage may be the most costly and lengthy of all. It will last for an estimated period of 42 months (3.5 years), and at its end, Tesla will have a full-fledged facility for creating such cars working at its full capacity. It might be possible that parts of the factory will start producing flying cars earlier, though, but not at full capacity.
Also, it should be pointed out that during stages 2 and 3, Tesla will have to work with legal authorities to develop safety standards for the flying cars. It will also be necessary to create legislation regulating the use of personal aerial vehicles.
SWOT Analysis
The strengths of the proposed projects are that it will allow for the creation of an innovative device that will be unmatched by any other product available in the market, permitting Tesla to gain a long-lasting competitive advantage over its rivals and diversifying the range of the products that the company offers (Saeed et al., 2011).
The weaknesses of this project include its high risk resulting from the need to implement a radical innovation and to create a whole new technology product that is equal to nothing which exists in the world nowadays.
The opportunities of this project include the fact that none of the currently existing car manufacturing companies have created a flying vehicle yet, so Tesla will be a pioneer capable of creating a completely new niche in the market (Saeed et al., 2011).
The threats to this project include the risk that rival companies might start working on a similar project in parallel to Tesla, and might succeed earlier, in which case the Tesla’s product will be deprived of its uniqueness.
Challenges and Risk Mitigation
While implementing the proposed project in life, Tesla might face several challenges about various aspects of the flying car designing and creation. On the whole, it is possible that the proposed models of cars may not be reliable and safe enough, which would prevent the organization from engaging in their production. Also, testing the offered models might prove difficult due to the absence of manufacturing facilities which may be required for their creation.
To mitigate the possible risks, it might be recommended to pay greater attention to the aspects of the safety and reliability of the developed models. It may also be needed to outsource the creation of parts of models to be tested from other companies to utilize their capacities instead of spending additional money on the creation of production facilities for building untested prototypes.
Conclusion
On the whole, it should be stressed that, despite the large effort needed for realizing the project of a flying car, Tesla ought to be able to successfully develop and create such a device. This will allow Tesla to deliver a completely innovative product to the market, creating a completely new niche, diversifying the enterprise’s products, and ensuring a long-term competitive advantage over its rivals.
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The transport sector has become the focus of attention among policymakers because it contributes to a great amount of environmentally destructive greenhouse gas emissions and also consumes a large portion of a country’s petroleum expenditure.
Because of this, most governments around the world are considering shifting to electric vehicles as alternative means of transportation. The motivation comes in the form of tax exemptions, government subsidies, or consumer price incentives. In the United Kingdom, they focused on enhancing technology-neutral measures like stern vehicle GHG emission standards, while in China the government has instituted a number of programs to entice consumers to purchase what they call NEVs or new-energy vehicles (Mangram 294).
Electric cars can help reduce CO2 emissions and improve air quality, but these are difficult to introduce in the market since they are a threat to the gas-powered auto industry; that is why some states have difficulty promoting development of electric cars. Tesla CEO Elon Musk (qtd. in Stringham, Miller and Clark 86) argues that new entrants trigger innovation and barriers in the auto industry could be overcome.
Tesla has been in the forefront of providing the world with luxury electric vehicles and has encountered various challenges in its entry in a very-stiff competitive car industry. But the automobile industry is quite immune to the threat of new entry and starting competitors like Tesla. According to Michael Porter, barriers to entry may include economies of scale, learning curves, factors in distribution, and other financing problems.
Economies of scale have tremendously grown after World War II due to automation and mergers and acquisition (M&As). In the nineteenth century, there were six leading car manufacturers – General Motors, Ford, Chrysler (plus AMC/Jeep), Honda, Nissan, and Toyota – but the same is still true these days in the age of globalization and high technology (Stringham, Miller and Clark 85). Tesla is still a young competitor against a 150-year-old internal combustion engine (ICE) car industry (Mangram 289).
This paper attempts to analyze the success (or failure) of Tesla cars in its entry in the competitive car industry and how the driving public, both in the United Kingdom and China, has accepted it as a necessary means of transportation.
Literature Review
Technology Innovation
Much of the progress of science has been motivated by deep interest in change. This interest is not abstract but with deep practical value. If changes are seen, people take aims to study so that they may be understood. If changes are understandable, they may probably be foreseen. Research in economics and management has been dealing with thoughts of social, industrial, and technical change at successively finer levels of resolution, seeking first to understand, and then to shape the circumstances and activities that bring about wide ranging changes.
One of the key features throughout this dissertation is the impact of change in society, particularly in the car industry. This will provide explanations on theories of technology transitions, management of niches, and various learning as part of a product development process. The literature on transformational product which came to dominate the technology or design paradigm made the reasonable assumption that the best-performing design will capture the largest share of the market (Peterson 7).
Early car designers had little constraint in terms of infrastructure or institutions to guide their choice of technology. Vehicles powered by internal combustion engines (ICEs), steam engines, and electric motors were all produced in roughly similar numbers, with clear advantages and disadvantages. Battery electric vehicles (BEVs) were the perfect city car, but lacked range. ICE vehicles had greater range but required dangerous hand-crank to start. Steam vehicles had the best performance at low speeds but took up to 45 minutes for the boiler to reach operating temperature (Hidrue 31).
There are various technical alternatives under the EV sector that include Battery Electric Vehicles, Fuel Cell Vehicles, Hybrid Electric Vehicles, Plug-in Hybrid Electric Vehicles, and much more. The electric vehicles industry is already a mature industry. It is global in scope but it provides examples of pronounced differences between regions in terms of market age, size, tastes, and landscape conditions.
The industry is undeniably in the midst of technology regime transition, a transformation that many would say is long overdue (Peterson 35). Moreover, the car industry is also under immense pressure from regulatory requirements for efficiency and emissions, economic changes due to global uncertainty in the price of gas, and changes in market structure because of the entry of the China market, which introduced both new producers and consumers and is undergoing its own shifts because of massive urbanization (Peterson 34).
It is a great advantage for the EV sector that the petrochemical industry has experienced decades of increasing price volatility and supply uncertainty. Negative criticisms for the automotive industry include GHG-producing manufacturing processes, CO2 emissions, pollution of the environment, which are all associated with global warming, added with increasing global attention.
In the midst of this backdrop, Tesla enters the scene with much optimism. Tesla produced its first Roadster for $110,000 from 2008 to 2012, but it is hoping to provide its customers low-cost EVs. CEO and Board Chairman Elon Musk indicated that their goal was to “drive the world’s transition to electric mobility by bringing a full range of increasingly affordable electric cars to market” (qtd. in Stringham, Miller and Clark 86). Musk further stated that within 12 years after its first production, Tesla has created one of the top-selling full-sized luxury cars in the U.S. and a market capitalization greater than Fiat Chrysler and half of Ford or General Motors.
Tesla’s Competitive Advantage
With more than 3,000 full-time employees and more than 30 stores globally and counting, Tesla leads in introducing battery electronic vehicles (BEVs). Tesla has also conducted a distinct marketing strategy where customers can buy cars online, very different from the traditional way of selling cars which is through dealership. Elon Musk is hopeful that Tesla will be able to address EV needs of the demanding sector at a very reasonable cost.
Tesla’s introductory prices for their Roadster and Model S have been reduced to $35,000 base price for every EV (Levin, Zhang and Mohan 4). This is commendable, considering that a conventional lithium-ion that can power an EV can cost as much as $15,000 (Mangram 292). Tesla advances from the traditional ways in terms of how it retails its flagship product in a number of ways. It distributes the Model S under the luxury Tesla brand via direct-to-customer online sales, rather than negotiated, retail price just like how Apple sells iPhone. Tesla’s business model is revolutionary compared to how the other industry rivals like Chrysler, Ford and General Motors market their product.
Tesla has been relatively successful with the battery technology. Lithium-ion batteries can cost to as much as 50% of the cost of the vehicle. Ramsey (qtd. in Mangram 292) indicates that the cost of a lithium-ion for a single vehicle can cost approximately $15,000. Thus, the battery cost is a major factor of the BEV price. The U.S. Department of Energy has aimed for the BEV battery cost reduction by as much as 70%, and believed it has been attained.
Tesla sales are supported by factory-owned stores and galleries staffed by “Tesla product specialists” who provide information on the product to interested customers. Rather than a destination unto themselves, many of these outlets are located in high-traffic locations such as metro area shopping malls. Also, Tesla operates factory-owned service centers that typically support customers in much the same way as traditional dealerships. In addition to service and maintenance and warranty and repair services, centers double as a showroom staffed by Tesla product specialists available to offer test drives for a limited selection of on-hand vehicles (Sringham, Miller and Clark 87).
Tesla also has deployed and currently operates a proprietary national network of Tesla-branded “Supercharger” stations (Cahill 30). These high-powered stations can deliver 170 miles of range in as little as 30 minutes, or more than twice as fast as the industry standards. The company also offers adapters that allow its customers to tap into the national infrastructure of roughly 10,000 industry standard chargers (Cahill 30).
Tesla introduced a strategy by making alliances with some of the giants in the industry, which allowed it to pull through with expertise and infrastructure of other firms, instead of continuously innovating; nevertheless, its engineers recognize that innovation is needed to make them highly competitive. The engineering firm Lotus helped in enhancing Tesla’s products. Tesla also purchased a plant once used by General Motors and Toyota and transformed this into an effective, high-tech factory. Tesla has created an infrastructure to deal with distribution, service, and charging centers and motivated other car manufacturers to enter the sector (Stringham, Miller and Clark 87).
Lotus Engineering helped in boosting Tesla’s goal and objectives as the former assisted in design analysis and supply chain. Lotus also helped Tesla with design, engineering, and technology and also acted the role of product assembler of Roadster. The collaborative effort led to the design of the chassis. The Roadster is a state-of-the-art EV which accelerates immediately to 60 miles in just 3.6 seconds and can reach up to 130 mph.
Development of their first product cost more and took longer than they anticipated. In the first four years, Tesla produced 2,500 Roadsters and it made Tesla move toward their next stage, refining the technology and making it more affordable for the ordinary customer. A larger-scale production for Model S was the next move and partnerships with Daimler, Panasonic, and Toyota. The automaker Daimler provided $50 million and Tesla’s role was to provide the drivetrains for the former’s speed cars. In 2010, Toyota invested $50 million and Tesla also bought Toyota’s Fremont, California plant for $42 million (Stringham, Miller and Clark 93).
The Tesla Innovation
Tesla’s latest model, the P90D, reaches a smashing speed of 60 miles per hour in just 2.6 seconds. This is only surpassed by the Porsche, Lamborghini, Ferrari, which are really expensive for the ordinary car enthusiast nowadays. Michael Barnard argues that the Tesla P90D is much quicker than the internal combustion engine (ICE) vehicles, and this can also be true for other Tesla models. He further points out that Tesla is quicker than the others in reaching the 155 mph (Barnard par. 4). Barnard considers this faster.
Electric motors are much better than gas engines in many ways. In addition to environmental advantages, Tesla’s electric motors have the capacity to create a maximum torque “at zero rotations per minute,” which means it can continue producing an equal amount of torque on all rotation levels. This is contrast to the capacity of the ICEs, which have very low torque from start to end but only have high torque at its center curve (Barnard par. 5).
Another advantage of electric motors is the inherent characteristic of electrons to get fast to the electric motor than gas to the piston. Electrons’ movement in a wire is almost automatic as they go directly to drive the electric motor, whereas in the ICE process the fuel passes through several stages, i.e. from the fuel pump to the injector, then drive the piston to generate torque (Barnard 6). This creates time even for just a fraction of seconds.
The model P90D is driven by two electric motors, generating speed for the two sets of wheels – the front and the rear wheels, unlike the ICE which only has one motor. ICEs may be fast but Teslas are quick. In addition, Teslas have very high horsepower output, pumping out 762 to keep the car moving forward even as air resistance is growing. Erberhard and Tarpenning (qtd. in Mangaram 293) posit that horsepower for BEVs is immediately available and can reach up to 3,500 rpms.
ICEs have limited horsepower within short rotation per minute (rpm) and must increase revolutions to reach a peak (Mangaram 292). Luxury sedans can reach a horsepower of 650, which is lower than BEVs’ capacity (Barnard 7). Regarding efficiency, BEVs are six times more efficient and do not produce CO2 emissions. In terms of mechanical properties, BEVs are much simpler, with fewer parts, and needs no transmission (Mangram 292).
Customer Behavior
As a firm is penetrating a sector and updating its products, it has to focus on customer behavior and see what they really want. Blank and Dorf (qtd. in Stringham, Miller and Clark 89) indicated that entrepreneurs should continually get out of the building to talk with customers and identify their needs. This is a matter of need or want because the need is constantly answered, but what is addressed is the customer’s want. As Musk (qtd. in Stringham, Miller and Clark 89) states, “Put yourself in the shoes of the consumer and say why would you buy it as a consumer?” This is the philosophy that has kept Tesla successful in penetrating a competitive industry.
CEO Musk explains that the manager must be humble enough that he/she does not know everything, and must admit mistakes for the sake of the customer. A common practice in Silicon Valley is for firms to test out ideas for product features and potentially improve them using iterative design. This is what Tesla has been following (Stringham, Miller and Clark 90). Blank and Dorf (qtd. in Stringham, Miller and Clark) have recommended scientific product development and breaking ideas into hypothesis, testing hypotheses, and learning along the way.
Tesla has always been an innovator, especially in transforming ideas into product; this is what carmakers should be. Tesla’s battery breakthrough of having a single charge and the car capable of a range of 300 miles could propel a high market share for the firm (Mangram 291).
Battery Electric Vehicles (BEVs) Success Factors
Figure 1. Battery Electric Vehicles market drivers.
Electric vehicles will attain a competitive position in the market based on these market drivers: 1) technological improvements, particularly in the battery technology and car performance; 2) infrastructure developments, with a focus on recharging stations; 3) public relations improvement and policy; and 4) economic factor, such as price of electricity and gas (Mangaram 291). The figure above explains it further.
One great example is how Tesla’s Roadster model was created. The company asked car designers to draw their own concept of an electric car, or what an EV car should look like. They evaluated the different sketches. Higher green sticky notes were placed on the best they selected. They then chose Barney Hatt, who became the best designer they asked to submit his next proposal (Stringham, Miller and Clark 90).
Tesla in the United Kingdom
The UK government has given full support for the proliferation of electric vehicles in the country. It is already in the fourth generation; meaning, electric vehicles are as old as ICEs (internal combustion engine vehicles). Electric vehicles are attached to high-technology and computerized system to make the car run as fast as it could (Mom 45).
Tesla started with very little capital and a low-volume product, the Roadster. Without many products to boast of and with little capital, success could only be attained through timing. Tesla co-founder Martin Eberhard (qtd. in Stringham, Millier and Clark 92) indicated that their goal was to bring the Roadster “to the market quickly and efficiently,” which was done with the help of partner firms.
Tesla stresses that its culture is to “move fast” and have more innovations and create a direct feedback loop to stimulate development. The company labored hard, gave out what it could to provide what the public wanted. Quickly bringing their first cars to market helped Tesla show to consumers and investors that relatively high-performance electric cars are possible (Mangram 292).
Tesla’s Debut in China
When Tesla’s “Model S” was introduced in China in 2014, there was still some policy controversy within government circles and the consuming public over how to deal with economic sustainability, i.e. economic growth coupled with environmental protection. However, there was a growing sentiment over penchant for luxury items by a sector of the Chinese market, which allowed Tesla to penetrate and promote its low-emission vehicles. Tesla first sold 1,000 cars of Model S for its first two months of operations in the world’s largest consumer (Marro, Liu and Yan par. 1).
EV manufacturers in China have many challenges to meet, including government policies and a changing infrastructure, and taxes. However, the government has promoted the use of electric vehicles in some government offices and the private sector. The number of EVs in China’s roads has still to increase because this is very limited. In January 2014, Tesla announced a drop in the China market (Marro, Liu and Yan par. 2).
In China, electric vehicles are termed NEVs (new-energy vehicles) but have been a rather old concept among Chinese policymakers. Since 2001, NEV enhancement has been part of China’s Five-Year Plan to support the growth of the use of EVs, including pilot areas in Shanghai and Shenzhen. This gained momentum and crucial growth in 2010 when NEVs were typified as strategic emerging industry, giving manufacturers the chance to acquire investment subsidies.
BY 2012, the government announced the program, “Notice on Energy Conservation and New Energy Vehicle Industry Development (2012-2020),” giving an impetus for the manufacture and marketing of no less than 500,000 electric and hybrid cars by 2015. Government people even prompted that this had to increase by 2 million in 2020 (Marro, Liu and Yan par. 3).
Challenges are ongoing as the expected half a million NEVs was not met. In 2013, only 17,624 NEVs were produced, which is just 0.1 percent of the total car sales. The target number of NEVs to be produced in 2015 has remained unresolved, in stark contrast to the U.S. manufacture of EVs which reached 96,000 units in the same period (Marro, Liu and Yan par. 4).
China has also initiated significant steps in shoring up charging stations to boost consumer demand for NEVs. In May 2014, the country’s State Grid initiated plans to privatize the country’s distributed power grid and EV charging equipment market in order to promote the construction rate of charging stations. Beijing, Shanghai, Shenzhen and Guangzhou made their own moves by constructing NEV-related infrastructure and other power-distribution centers. The National Government also announced that government agencies purchasing vehicles should include at least 30 percent battery-powered, hybrid or non-polluting vehicles (Marro, Liu and Yan par. 9).
Methodology
Selling EVs to the international market is crucial to Tesla’s advancement. Tesla’s performance in China, a large and emerging market, is still to be seen. Government policy towards EVs also influences consumer behavior in their buying decision. China has different environmental laws that may hamper the entry of EVs into this large market.
This dissertation attempts to compare consumer behavior and decision making towards EVs particularly Tesla between UK and China consumers. In doing this, this Researcher applied qualitative research using social media. Eleven participants from China were foreign students in the UK and another 15 participants were British nationals, all contacted through social media. All questionnaires were coursed through social media by way of Skype.
Quality studies have to be conducted with the use of the qualitative approach and in this case, we used open-ended questions to allow the participants to express their views on the particular issue about Tesla’s electric vehicles. The qualitative approach addresses the limitations of quantitative research which has many variables. Qualitative research relies on alternative constructs that exactly repeat the expectations of the qualitative paradigm but can be trusted because it has dependability and credibility. In a qualitative study, the researcher can explain the contexts in which the research occurs (Mukhopadhyay and Gupta 85).
The Questionnaire
There were only 10 questions forwarded to the participants through Skype. The participants were UK and Chinese students interviewed online.
These are the questions.
Are you aware of the presence of Tesla cars in China/UK?
Have you driven an electric vehicle? What are the advantages and disadvantages of electric vehicles?
How long have you known and how is this patronized in your country?
What are the challenges for Tesla vehicles and for the entire EV industry in China/UK?
What are the factors that motivate Chinese/UK consumers to prefer EVs than internal combustion engine vehicles?
What is the behavior of the Chinese/UK consumer toward Tesla EVs?
Are you aware of government programs to promote purchase of EVs in China/UK? What are these programs and policies?
Is there encouragement for EV production in China/UK coming from the private sector? Please explain.
Can you suggest measures for the development of battery electric vehicles in China/UK?
What is the future of electric vehicles in your country?
Analysis
Consumer behavior is influenced by many factors, such as the business environment, the regulatory factors, branding, and many other environmental factors.
When asked of their penchant for electric vehicles, both types of participants had different responses because they have different motivations.
Most participants agreed in saying that a hindrance to the sector’s growth in China and the UK is the high cost and the expensive base price, including the battery cost, and influences customer decision-making and demand. However, most Chinese consumers have prioritized energy conservation and environmental protection in purchase of products, including cars. It is almost similar with the UK situation, albeit in the UK context electric vehicles are more available and cheap than in China.
There is also the lack of charging stations in China. China’s State Grid Corporation, which controls the country’s power system, had built only about 400 charging stations. In the same year, the U.S. had more than 20,000 charging stations. This makes EV manufacture and use unattractive to the China market. In the UK, there are more charging stations available for the EV consumers.
One participant who had a particular knowledge about NEV sales indicated that in 2013 and 2014, NEV sales had a higher increase of more than 300 percent and NEVs had become more attractive to Chinese consumers. Another participant added that there has also been an introduction of national policies promoting and subsidizing the production and sale of NEVs. One of these policies involved four central ministries which provided plans for NEV use and release of RMB 35,000 – 60,000 ($5,656-$9,696) for citizens who purchased NEVs. The participant added that national subsidy will continue up to 2020, but will be reduced each year.
Another method of encouraging use of NEVs by the Chinese consumers, according to another Chinese participant, was by way of tax exemptions and removal of fees. For example, in September 2014 the government removed the ten percent purchase tax on locally made NEVs, and this has to continue up to 2017. Other local governments like Shanghai have ventured on providing free licensing plates for new Tesla vehicles, which has been considered a significant incentive due to the cost of Shanghai license plates that amount to about $74,000 (equivalent to $11,959). Other local governments have made their own initiatives by offering tax incentives which can run to as much as RMB 60,000 (equivalent to $9,696), or a subsidy of RMB 120,000 ($19,395) for every purchase of NEV.
NEVs as a means of transportation in government agencies is now prioritized in China because of its sustainable development programs. One participant argued that this was one of the efforts of the new government of President Xi Jinping in dealing with environmental issues due primarily to China’s economic growth. President Xi is opposed to the policies of the previous administration which opted for rapid economic growth, while Xi prioritized quality GDP growth.
Participants from the UK revealed that electric vehicles have a bright future as many British are environmentally friendly and would like to drive in energy-saving vehicles but effective vehicles. Purchase of Tesla cars can be done online. In contrast to China, Tesla cars are readily available for everyone and easy to purchase. Tesla’s showroom is provided online, just like how Apple sells iPhones.
Conclusion
Tesla’s overall strategy is ambitious and may be unsurpassed as it enters the established industry. By 2020, the company will build a unique Gigafactory to surpass current world production of lithium-ion battery cells of 500,000. Battery cells limit electric vehicle manufacturing but management hopes that Tesla will be the frontrunner in introducing low-cost lithium-ions to the public. Diversifying is a major challenge of global corporations in this age of globalization.
But Tesla, according to analysts, will be able to increase profitability in electric vehicle (EV) production, and counter the barrier to entry in the car industry by increasing production of battery packs and powertrain components (Levin, Zhang and Mohan 3).
Tesla still has a long way to go as the electric vehicle for the future. It has made strides in China and the United Kingdom but more challenges are to be encountered along the way. In the online surveys conducted, British and Chinese consumers have been supportive of Tesla cars.
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It is of paramount importance to note that Elon Musk is considered to be not only a talented executive, however, one of the most famous people in the sphere of innovations. The majority of people associate his name with the world’s popular company Tesla Motors. This corporation is believed to be one of the most modern and innovative. A lot of experts state that electric vehicles are the future and Tesla Motors fosters transition to a better and technological world. The primary purpose of the paper is to provide an analysis of the article written in Bloomberg by Dana Hull Elon Musk is Squaring Off Against China for the Future of Tesla.
The article was written on the 23d of June 2016 and presents relevant information regarding complications of Tesla Motors and the way Elon Musk solves some problems (Hull, 2016). The mission and goal of Tesla Motors are to foster the transition from fuel cars to electric vehicles and to provide people with the ability to follow innovations and technologies. One of the fundamental issues of electric vehicles is that they should be charged to drive.
Although there are a lot of charging stations, it is worth noting that the process of charging is considered to be a problem. The company aims to make better batteries that will drive the electric car longer. One of the possible solutions that Elon Musk offers is the solar batteries. They will significantly facilitate the process of charging and the person will be able to drive the car longer. As it was stated in the article, Elon Musk aims to buy SolarCity, where he is one of the chairmen, to be able to implement solar panels on the roof of the vehicles.
Although the charging process is a kind of problem and Elon Musk is focused on the improvement of electric vehicles manufactured by Tesla Motors, it is worth pointing out that another problem that the company is currently facing is considered to be the increase in production and world expansion program.
Tesla Motors has ambitious goals and aims to accomplish them. Thus, according to the information presented in the article, Elon Musk aims to produce 500,000 electric vehicles a year (Hull, 2016). The problem that derives from this desire is a lack of materials. The company needs to find more suppliers and change the production process to decrease the price of the vehicle.
In conclusion, it should be noted that modern society is orientated on technologies and innovations. The companies who want to satisfy not only the current market needs but also future ones have all the chances to succeed on the market (Hull, 2016). Tesla Motors is an example of such a company. Even though the corporation is currently facing some difficulties, it should be stressed that challenges are the guiding power of progress and these difficulties are likely to bring Tesla Motors to greater success and popularity.
Innovations do not always beneficially influence the way society lives. The fundamental problem of innovations is the fact that new technologic devices are likely to have some issues because of the lack of testing and the unpredictable nature of the device. The companies who pioneer innovations usually face not only the popularity and success of the market but also, some issues that they need to solve with the product. Tesla Motors is not an exception.
Although there are a lot of people who support the product and note that it is a product of the future, it should be stressed that unpredictable situations prove that technologies like a human being can make a mistake. The primary purpose of the paper is to provide an analysis of the article regarding Joshua Brown, the first victim of Tesla Autopilot.
The title of the article is Joshua Brown, Who Died in Self-Driving Accident, Tested Limits of His Tesla was published in New York Times on the 1st of July, 2006 by Rachel Abrams and Annalyn Kurtz. The authors of the article discuss an accident that had happened recently with a supporter of innovations and technologies, Joshua Brown, who used the Autopilot regime of Tesla and was killed in a car crash.
It is worth noting that Joshua Brown was a fan of Tesla Motors and posted several videos of how he drives electric vehicles. When Elon Musk, the CEO of Tesla Motors, replied to his post, Mr. Brown was the happiest person. He told his friends that he was amazed. After a couple of weeks, this man died in the accident. All the relatives were shocked. The authors of the article note that Mr. Brown became the first victim of innovations, the person who dies because of Autopilot.
The authors of the article are sure that the desires of Tesla Motors to test untested and manufacture unbelievable were shared by Joshua Brown because he was an innovator and aimed to keep pace with technologies. Tesla Model S with Autopilot is considered to be a technological breakthrough. It should be noted that Joshua Brown recorded how this vehicle successfully made maneuvers. However, the accident with Mr. Brown proved that technologies could also make a mistake just like a human being.
The article is related to innovations and marketing. Such accidents are the price of progress. It is significantly important to highlight that progress is impossible without challenges and difficulties.
In conclusion, it should be pointed out that innovations are not always advantageous. Tesla Motors changes the world and influences the way people view vehicles. Joshua Brown was a victim of innovations. However, one should keep in mind that it is impossible to create something new and forecast all the consequences.
Tesla Motors is the leading company that is associated with progress and innovations. Nevertheless, they cannot make it impossible and provide customers with the same level of security and confidence as ordinary cars. Innovations are not checked by the time, and it is the fundamental problem. Tesla Motors should continue the development and improvement of its electric vehicles because they are future.
The transnational corporation under analyzes is Tesla Motors Inc. This company belongs to the industry of automotive production.
As a matter of fact, the corporation started the business with the production of innovative electric sports cars. However, the company decided not to focus on one specific sector, and the global strategies of the company involve the production of cars that will satisfy all the segments of the modern market. Elon Musk, the founder of the company, once stated that one of his primary goals is to “help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution” (Williams, 2015). The company aims to be environmentally friendly as they realize that the automotive industry is the segment that can influence ecology in a significant way either positively or negatively.
The batteries that are landfill safe and are not toxic were designed to make a step towards nature. Furthermore, the company offers a positive energy solution, Solar City panel, for people who care about the environment. It is worth highlighting that nowadays, Tesla Motors Inc. is the only corporation that produces zero-emission sports vehicles. The global strategies of the corporation involve innovation of technologies and providing people with the ability to be environmentally friendly using outstanding cars. The premium product can be compared to the ones produced by Apple. Belonging originally to the premium class, the product became more affordable then. The objective of the corporation is to provide customers from different social segments with an opportunity to be an owner of the care developed by Tesla Motors.
The article A review of trends in the global automotive manufacturing industry and implications for developing countries written by Michael Gastrow is focused on the evaluation of modern globalized trends in the automotive industry (Gastrow, 2011). The author states that global production and providing people from different countries with an opportunity to buy the product is considered to be one of the dominant trends in the industry. It should be noted that Tesla Motors follows this principle. The modern automotive market is experiencing changing of vision not only in terms of production but consumption as well. The industry shifts its vision from the Western world to the Eastern, and it affects the functioning of every company represented on the market (Gastrow, 2011).
The giants of the automotive industry have already placed their factories in developing countries. Economic crises affected the automotive industry and consequently led to the re-location of the plants. However, Tesla Motors have their factories only in the United States and Europe (About Tesla, n. d.). Nevertheless, the company discovers the Asian market as well. Another global trend is considered to be global distribution, and Tesla Motors follow it as they realize the importance of attracting new customers from different countries. Gastrow highlights that innovations are one of the most significant aspects of global trends. The corporation reflects this principle and is commonly compared to the most innovative company, Apple (Williams, 2015). In addition, according to Gastrow, companies focus on fuel-efficient cars that will be more environmentally friendly. Tesla Motors have already made impressive progress in the invention of the product that will not affect the environment negatively.
In conclusion, it should be pointed out that Tesla Motors meets globalization trends, however, it does not implement each of them into the working process. Globalized products, innovations, global distribution, and environmentally friendly products are the major strategies of the corporation and global trends as well. However, the company has not located the plants on the territory of developing countries yet.
Gastrow, M. (2012). A review of trends in the global automotive manufacturing industry and implications for developing countries. African Journal of Business Management, 6(19), 5895-5905.
Williams, E. (2015). Green giants: How smart companies turn sustainability into billion-dollar businesses. New York, NY: Amacom.
Science and technology play a critical role in transforming society, particularly in the transport and communications sectors. Approximately two-hundred years ago, the rate at which changes in technology and science were experienced in the western societies was alarming because it was so intense.
The development of the wind power, the emergence of water, and animal power were some of the scientific and technological developments that shocked the humanity. The steam engine quickly supplemented and replaced wind, water and animal power, which actually redefined human history.
The invention of steam engine contributed to other developments, among them being the establishment of factories, which contributed to industrial revolution (Stockbridge, 1912). Technologies related to the rail made it easier to transport goods and services from one place to the other quickly over long distances. Later on, the invention of the telegraph and the telephone enable people to communicate over long distances, particularly across continents.
Electrical science and technologies surrounding it superseded the diffuse blaze of candles, which reinstated the application of kerosene and gaslights without human intervention. In the 20th century, there were major developments in science and technology that reshaped human relations and interactions in society. In the 21st century, science and technology are depended upon meaning that they define the success of an individual in society.
This article reviews the works of Nikola Tesla on the turbine, which were combined in a book titled Tesla’s engine: A New dimension for power. The article looks at the synopsis of the book before proceeding to offer a critical analysis.
The works of Nikola Tesla on the turbine engine redefined human history in many ways, as would be seen later in the review section. His writings influenced many scientists to come up with various forms of technologies that redefined humanity. In fact, current technologies on the turbine depend mostly on the views of Tesla.
Synopsis
In 1913, Nikola Tesla presented a bladeless centripetal flow, which was later patented meaning that no one could employ the technology without the consent of the inventor. Tesla’s engine is always termed bladeless because it utilizes the periphery layer upshot as compared to other turbines that make use of fluid.
The fluid is applied on the blades to propel the machine. Tesla described the Tesla turbine engine in a number of ways. One of the depictions is that the Tesla turbine device contains pieces of pliable disks, with nozzles that supply gas to the brim of the disk. Through glueyness and adhesion, the gases find their way into the disk. The gases twirl to the centre exhaust as the gas dawdles and inserts more power to the disks.
The rotor is expected to be powerful since it does not have protrusions (Hayes, 1994). In the introduction, the author observes that Tesla will always be remembered for his contributions in the fields of electricity and the radio. Again, Tesla was interested in the field of flight whereby he considered himself a man who would probably fly one day.
However, his mission could not be possible because aircraft using Tesla’s engine would be dangerous and unpredictable because the machine would not have adequate power. His major attention was on revamping the combustion engine in order to make the world a safer place for all people to live through reduction of carbon emission.
In his writing, he observed that the turbine engine that he had just discovered could be operated as a condensation fluid turbine at will, which made it efficient. He was of the view that the turbine could not be constructed further to make it move hence making it very convenient. His invention could perhaps benefit the owners of various factories because the turbine engine could not demand additional installations.
Many organizations tend to keep off from new technologies because of the additional costs associated with them. Tesla’s engine would not demand new installations meaning that factory owners would simply generate profits without necessarily incurring additional costs. Apart from offering a solution to the problem of carbon emission, the turbine would be utilized successfully to condense plants that operate with high vacuum (Hayes, 1994).
Due to the high expansion ratio, the exhaust concoction would be at comparatively low temperatures, which would be appropriate for permission to the condenser. Improved fuel has to be utilized and exceptional siphoning services offered, but the financial outcomes achieved would entirely rationalize the augmented expenditure.
Every plate and washer are fixed and are entered on a folder threaded at the ends and furnished with nuts and lapels for sketching the chunky end plates jointly. If considered necessary, the lapels may perhaps be just compelled onto it and the ends disturbed (Hayes, 1994).
This erection allows free extension and tightening of every plate separately under the shifting pressure of heat and centrifugal power and has some other rewards, which are of great realistic instant. A well-built dynamic plate quarter and subsequently more power are obtained for a given thickness, which enhances effectiveness.
Deformation is practically gotten rid of and lesser side clearances might be utilized, which results to reduced seepage and abrasion losses. The rotor is enhanced for forceful balancing. Abrasion resistance opposes worrying effects thereby guaranteeing quieter operation (Hayes, 1994). Due to this and for the reason that the discs are inflexibly fixed, it is cosseted against breakages, which might perhaps be caused by pulsation or extreme pace.
The Tesla turbine has the attribute of being a fitting usually working with a combination of steam and products of incineration in which the exhaust high temperature is utilized to offer steam, which is delivered to the turbine. It offers a control device overriding the delivery of such stated steam so that the forces and temperatures can be attuned to the most favourable working conditions (Manning, & Miller, 2002).
Tesla engine has two major properties that make it unique. One major characteristic is that it is capable of moving with vapour. Moreover, it has a disc variety modified to work with liquefied substances at high temperatures. An efficient Tesla engine requires a secure arrangement of the disks.
For instance, a steam-powered variety ought to retain 0.4 mm. The disks ought to be greatly soft to reduce surface and shave losses (Hayes, 1994). Disks should also be highly slim to stop haul and uproar at disk ends. Regrettably, stopping disks from deforming and disfiguring was the main problem in Tesla’s point in time.
It is believed that this incapability to stop the disks from deforming contributed to the industrial malfunction of the turbines for the reason that metallurgical knowledge at the time was not capable of creating disks of adequate eminence and stringency. If a comparable system of disks and covering with an in volute figure are utilized, the piece of equipment could be employed as a siphon. In this arrangement, a motor is attached to the beam.
The solution would penetrate in close proximity to the centre, because of the power of the disks, and then it would exist at the margin. The Tesla engines never utilize abrasion in the conservative nous. Specifically, it keeps away from it and utilizes adhesion (the Coandă effect) and gumminess in its place. It uses the border layer effect on the disc cutting edges (Hayes, 1994).
Soft rotor disks were initially anticipated, but these presented unfortunate preliminary torque. Tesla afterwards publicized pliable rotor disks with minuscule washers crossing the disks. He did this by establishing a sub-diameter for a remarkable enrichment in an introductory torque without necessarily upsetting the good organization of the machine (Hayes, 1994).
Review of the Book
Tesla’s exclusive rights assert that the machine was planned for the utilization of liquefied substances, as motive instrument different from the appliance of the same for the impulsion or compression of solutions (although the piece of equipment can be utilized for those reasons also).
By 2006, the Tesla turbine engine had not witnessed extensive industrial utilization since its contraption. The Tesla siphon, on the other hand, has been commercially accessible since 1982 and is employed to siphon liquefied substances that are rasping, glutinous, shear responsive, include solids, or are otherwise complicated to manage with other siphons. Tesla himself never secured a great indenture for manufacturing.
The major negative aspect in his time, as stated earlier, was the meagre information regarding equipment description and behaviours of components at far above the ground temperatures. The excellent metallurgy of the day never stopped the turbine disks from moving and deforming insufficiently during the manufacturing process.
In the modern society, numerous small-scale tests in the field have been carried out using Tesla turbines, which utilizes compacted air, steam as its energy resource (the steam being produced with temperature from petroleum incineration from a motor turbocharger or from solar emission).
From the experiments, the question of discs deformation has been moderately resolved through the utilization of new resources including carbon filaments (Miller, & Fink, 1999). Both PNGinc and global engine and Power, LLC make use of carbon thread discs in their Tesla engine plans. This proves that Tesla turbine technology is influencing society positively. Moreover, Tesla’s technology on turbine engine is effective since it can be replicated in other studies using similar methods and conditions.
An anticipated modern appliance for the piece of equipment is a waste pump, which is utilized in the industrial units and mills whereby standard vane-variety turbine siphons are characteristically jammed. Exploitation of the Tesla engine as a multiple-disk middle blood tap has resulted to assured outcome.
Biomedical manufacturing investigation on such appliances has been persistent n in the modern society. In 2010, a government grant was presented for a wind turbine based on the Tesla invention. This shows that Tesla’s technology regarding the turbine engine is appreciated in the modern society. A pump designed based on the ideas of Tesla on the turbine engine won Oil Cleanup Prize meaning that the technology is of value in the modern society since it is competing favourably (Miller, & Sidhu, 1993).
Even though Tesla’s technology has various advantages and strengths, it also has a number of drawbacks. Any technology will always have its own strengths and weaknesses. During Tesla’s time, the effectiveness of conservative turbines was stumpy since the aerodynamic hypothesis demanded an efficient innovative discovery.
This never existed at the time. Moreover, the materials available for construction were of low values meaning that they could not construct high quality blades. This placed rigorous limits on operational pace and heat. The effectiveness of a conservative turbine is linked to the pressure distinction between the ingestion and the exhaust. To realize a superior pressure distinction, an extremely sizzling liquefied substance such as superheated vapour is utilized.
In this regard, it is eminent that the accessibility of superior temperature equipment permits advanced efficiencies. If the turbine utilizes a gas that is in solution form at room temperature, a condenser could be utilized after the combustion to augment the pressure distinction. Tesla’s invention failed to deal with the key problems of the bladed turbine. It faces other drawbacks including shear losses and stream limits.
A number of Tesla turbine’s strengths lie in comparatively stumpy stream rate appliances. The disks ought to be as slim as possible at the ends so as not to initiate instability, as the solution exist the disks. This results calls for the augmentation of the number of disks as the stream speed augments.
The greatest competence is achieved in this structure when the inter-disk spacing estimates the width of the periphery coating. Because the borderline coating width is reliant on thickness and external force, the assertion that a distinct invention could be utilized resourcefully for a multiplicity of petroleum products and liquefied substances is erroneous.
References
Hayes, J. A. (1994). Tesla’s engine: A new dimension for power. Milwaukee, Wis: Tesla Engine Builders Association.
Manning, K., & Miller, G. (2002). “Flow through an outlet cannula of a rotary ventricular assist device”. Artificial Organs, 26(8): 714–723.
Miller, G., & Fink, R. (1999). Analysis of optimal design configurations for a multiple disk centrifugal blood pump. Artificial Organs, 23(6), 559–565.
Miller, G., & Sidhu, A. (1993). Evaluation of a multiple disk centrifugal pump as an artificial ventricle. Artificial Organs, 17(7), 590–592.
Stockbridge, F. (1912). The Tesla Turbine: A Machine As Big As a Derby Hat That Generates 110 Horsepower. The World’s Work: A History of Our Time, 16(1), 543–548
