Tesla motors is an American company that was incorporated on 1st July 2003, with the sole purpose of designing, developing, manufacturing, and selling of electric vehicles as well as advanced electric vehicle Powertrain components. The company was founded by two people who were entrepreneurs, namely Martin Eberhard and Marc Tarpening and was named Nikola Tesla. At its inception, the CEO was Eberhard and the chief financial officer was Tarpening (Encyclopedia Britannica, 2008). To keep the company on good track, it had to borrow funds from various sources, including PayPal, who financed the company with more than $30 million towards the venture. As a result, the PayPal cofounder (Elon Musk), was named the chairman, and continued serving in 2004. The goal of the company was to commercialize its electric vehicles. Tesla motors released its first car, which was completely electric controlled and named it Roadster. The company undertook an initial test on Roadstar for charge adaptability and travelled for 394km on a single charge (Berdichevsky, Kelty, Straubel &Toomre, 2006). The distance covered was exceptional for an electric car production. The additional tests done on the first electric car indicated that that fuel (electricity) consumption of the vehicle was comparable with that of gasoline sports vehicles. The car was also able to accelerate from speed zero to 96km/h in less than 4 seconds and was able to attain a top speed of 200 kilometers per hour. The vehicle, which was made of carbon fiber, produced no tailpipe emissions since it had no internal combustion engine. The rate of its electric consumption compared with 57km/ltr gasoline usage. Lithium batteries were used to power the vehicle, and could be recharged from any standard outlet. Its initial selling price was put at $109,000, thus making it a luxury commodity.
In 2007, Eberhard resigned as the company’s CEO and joined the advisory board. He left the company’s management in 2008, though he retained the shareholding of the company (Peretz & associates, 2009). Tarpenning, the vice president of the electrical engineering, was responsible for the development of the electronic and software programs left in 2008, leaving Musk who took the mantle as the new CEO.
The production of Roadstar was halted in 2012, so that the company could concentrate on a new model, the Model S Sedan. This model was highly praised because of its performance and design. The model had 3 battery options, making it capable of making between 235 and 300 miles upon a single recharge. The model was also superior in that it could accelerate to a speed of 0 to 96 within 4 seconds and attain a top speed of 209 Km/h. This model had the batteries underneath that enabled it to be easily handled and a balanced center of gravity. This was unlike the Roadstar model which had the batteries at the front of the car.
At the start of the year 2012, the company built stations that were called superchargers in the US and Europe, and were designed to charge batteries faster with no added costs. These stations were later to be named Tesla stations and could replace the model S battery pack. The company intended to introduce the model X series in the year 2015, which is expected to have superior performance and capability. Model 3 was previously called model E; it is expected to roll out in 2017 with an enhanced capability of attaining a top speed of 320 KM/h.
The mission and objectives of the company today are the same as those that existed at the inception of the company. That mission was to accelerate the initiation of sustainable transportation through the introduction of electric cars to the mass market and to undertake this call soonest possible. If the company started the intended mass production, it could have fulfilled the mandate of its mission; as a new company, however, this entailed starting from the basics. It therefore required considerable time to be able to meet its mission requirements. In its mission, the company aimed at proving that electric vehicles could indeed be an awesome experience. As Musk indicated, the company was also in pursuance of a greener environment by trying to introduce vehicles that emitted no gases.
Tesla Company has a set corporate goal that helps the company in achieving its mission objectives. One of the strategies is to design a product that can compete with other products that have been technologically made in the same industry. At the same time, the company aims at segmenting the market so that it can only target the high end market that is luxurious and highly priced. Another business strategy in place at the company is that of “thought leaders”, where the prices of the initial production are high, but there are expectations for subsequent models upon acceptance to be low priced as a result of mass production and economies of scale. Another successful strategy in place at the company is that of selling its products in company-owned warehouses, selling Powertrain to other interested automakers as well as acting as a catalyst and an example to other makers of the automobile industry.
Another strategy that the company has employed is that of personal and direct personal selling. The company has stores and galleries that are located in various shopping malls across the US. Precisely, the company has twenty two malls that are distributed across the states and in Washington. These stores allow the customers to be able to test the vehicles at these stores, view them, as well as inquire about various questions from the attendants. Despite this fact, clients are not allowed to purchase the vehicles from the company but must purchase them from the company from the company’s website.
The headquarters of the company is located at Palo Alto in California. The company has assets and facilities in over 50 destinations globally. In the US, the facilities are located in various places and specializes in a variety of services including the Gigafactory manufacturing plant, Power train development facilities, battery factory, and the Tulsa factory, among other facilitates. In Canada, there is the interactive showroom. In Europe, stores have been opened and there are approximately 24 galleries. In Asia and Australia, there exist showrooms for the company’s product.
Tesla Company has partnered with various companies in an attempt to source for raw materials and other vehicle manufacturing parts. One of the companies that Tesla has partnered with is Daimler. The company (Daimler) cooperates with Telsa in a deal that would see the company coordinate in battery making. The deal entailed Tesla putting electric lithium ion batteries in the initial 1000 vehicles that Daimler would manufacture. As a result of the partnership, the vice president of Daimler was given a seat on the company’s BOD.
Toyota is another company that has partnered with tesla in a move to make electric cars. The two companies’ CEOs joined and made a deal, where Toyota was to buy a $42 million share in Tesla. They were to jointly develop a Toyota RAV4 sports utility vehicle with a possible extension to Lexus RXSUV the partnership does exists till today, though it is expected that the production of the RAV series will cease production by the yearend.
Panasonic is another company that Tesla partnered with in 2007. In the deal, Panasonic was to manufacture and deliver cylindrical lithium ion cells that were to be used in the assembling of batteries at the factory for the electric vehicles. The investment was valued at $1billion distributed in three years. The company has also partnered with Mercedes Company in the building of a power train parts for the A B and E class.
In China, the company partnered with China Unicom in the building of charging stations. At the same time, an agreement between China’s real estate developers – the Yantai Holding and Soho China Ltd – applied to allow Tesla set up charging points across the land. Other companies that have partnered with Tesla include Freightliner electric fan, smart Fortwo, as well as other suppliers who contributed to the supply of materials and components including Wells Fargo, Omnivision among others.
A lot of lawsuits have been brought against the company. Amongst these, the company has been able to win some, compromise some, and lose some. In 2008, Magna international sued the company for services that it claimed had been rendered but were never paid. In this, Tesla had hired the company to design a two speed transmission for its first car. The other case that the company was involved in was in 2008, where the company sued Fisker Automotive for allegations of stolen design ideas of the hybrid as well as the electric cars. The case went against Tesla, who decides not to pursue the matter further.
The founders of the company had dispute in 2009 where Eberhand had sued the Musk and Tesla for a breach of contract, slander, and libel. This matter was however sorted as an out of court agreement. In the case of Top Gear, the company sued a British television show named Top Gear. It showed one of the company’s vehicle (Roadstar) being driven on a test track at TopGear, only to break down and being pushed to a garage. The company therefore sued for malice and libel, and lost the case. Tesla also wanted to break a contractual agreement with Ecotricity for charging locations along the UKs highways. However, an injunction was issued to that effect.
In Massachusetts, Tesla won a case where the automobile dealers association and other two dealers wanted to block the company from direct selling. A claim brought by a Franklin Physician on a car that was not starting, led to the company compensating the accuser nearly $127000. Others include the businessman’s claiming, china trademark rights,
Tesla’s Product Issues
The company has had various product issues. These include fires and crashes as well as product recalls.
In 2009, the company noticed that some of the Roadsters that were manufactured prior to April 2009 had some problems. The company therefore had to recall them as they opposed the problem of losing control of the vehicle. At the same time, in 2010, 439 Roadsters risked causing fire. This problem occurred on the 12V auxiliary cable that came from the redundant backup system.
Fire has also been reported from the company’s vehicles. On 2013, October, a model S caught fire when it hit the metal debris in Kent, Washington. Another fire was reported in 2013 on October 18th, when a high speed vehicle hit veered of the roundabout and hit a tree through a wall. The same year, in November, a Tesla model S caught fire in interstate 234 in Tennessee. This was after it struck a towing lorry on the roadway, thus causing damage to the underneath of the vehicle thus causing the fire. The company indicated that it would conduct its own investigation into the matter after which it reported that it would increase the current warranty to cover even fire damage.
Berdichevsky, G., Kelty, K., Straubel, J. B., &Toomre, E. (2006). The tesla roadster battery system. Tesla Motors Inc.
Encyclopaedia Britannica, inc. (2008). Britannica book of the year 2008. Chicago: Encyclopædia Britannica.http://books.google.co.ke/books?id=QbCbAAAAQBAJ&pg=PA79&lpg=PA79&dq=In+2007,+Eberhard+resigned+as+the+company%E2%80%99s+CEO+and+joined+the+advisory+board.&source=bl&ots=tmkj-qupaK&sig=DcA48sSIIy0s3lje4kZjcCjMAYE&hl=en&sa=X&ei=LEp0VOT5BpSBuwS89ILIAg&redir_esc=y#v=onepage&q=In%202007%2C%20Eberhard%20resigned%20as%20the%20company%E2%80%99s%20CEO%20and%20joined%20the%20advisory%20board.&f=false
Peretz and associates. (2009). Tesla’s Founder Sues Tesla’s CEO (June 11, 2009). Retrieved on 23-11-2014 from: http://www.peretzlaw.com/press/teslas-founder-sues—wired/