Introduction
Tesla, Inc. was founded in 2003 by the engineers Martin Eberhard and Marc Tarpenning in San Carlos, California. It was originally called Tesla Motors, a name the company changed in 2017. Elon Musk came on board in 2004 and they collaborated after trying to commercialize the T-Zero prototype electric sports car created by AC Propulsion. Tesla aimed to “accelerate the world’s transition to electric mobility with a full range of increasingly affordable electric cars.” In 2008, Tesla released its first electric car, the Roadster. The company was named after the 19th-century inventor Nikola Tesla, best known for discovering the properties of rotating electromagnetic fields. Tesla is historically noted for his significant contributions to electrical engineering and sciences, and in recent decades has become a pop culture icon among engineers.
Early years
From 2004 to 2008, Tesla grew substantially and developed its first automobile, The Roadster. The company opened its manufacturing plant in Fremont, CA, a 5.3 million square-feet factory that was previously owned by Toyota and General Motors. The factory is known as Nummi, which includes two paint facilities and 1.5 miles of assembly lines.
The company nearly folded in 2008 during the financial crisis.
According to Bloomberg the company “almost collapsed”, under delays and cost overruns. Tesla announced it would cut about 24% of its staff. It began to struggle to raise the $100 million to fund its Model S. At the time Elon Musk put his last $35 million into the company. In 2009 Tesla was able to secure $465 million in low-interest loans from the government. It came from a $25 billion auto loan program approved by the government during the financial crisis.
Finally in 2010, Tesla filed for a $100 million IPO and became the first car company to go public since 1956. The company had priced its IPO at $17 per share but opened at $19 per share, and closed at $23.89 per share The Roadster was retired in 2012 as Tesla shifted focus to its Model S. Consumer Reports gave Tesla’s Model S a 99 out of 100. This is the highest score of any cars tested. It said the car was “truly remarkable” despite its price and range limitations. In 2016 Tesla announced its plans for the Model 3 sedan, its first car aimed at a mass market. Today Tesla employs over 5,800 employees worldwide.
HOW DID TESLA MAKE ITS WAY TO SUCCESS?
Tesla has a business model that is different from that of most automobile manufacturing companies, stemming from the fact that it owns the entire supply chain from manufacturing to distribution. The goal behind this strategy is to lower the manufacturing costs and costs of goods sold, hence assuring the business’ sustainability along with vision to empower its product development. Tesla, as part of its secret to success, continues to focus on creating electric cars and making electric vehicle (EV) powertrain systems and components. Aiming towards accelerating the advent of sustainable transport, Tesla sells powertrain systems and components to other auto manufacturers as well. For instance, in April 2015, it introduced a line of home batteries, called the Powerwall, that serve as energy storage systems in homes or businesses. Along with this, Tesla allows its competitors to license its technology, stating that it wants to help its competitors accelerate the world’s use of sustainable energy, but it retains control of its intellectual property, such as trademarks and trade secrets to prevent direct copying of its technology.
Tesla has formulated a nonconventional supply chain management strategy to cut operation costs and successfully deliver a reliable and affordable product with a short term goal of product acceptance and a long term strategy for growth and profitability.
Way Forward:
As more and more established companies enter the EV sector, Tesla focuses on expanding its customer base. Even though the competition is fierce, Tesla’s total market value keeps increasing.
Tesla’s continuous success in 2022 comes from expanding to other countries, including China, and planning a global launch in coming years. Tesla’s success has been phenomenal, but the electric car market is growing at a rapid rate, evident from the analysis that by 2030, one in three cars sold will be electric ones. With companies like Mercedes Benz and BMW already having thrown their hats in the ring, the company has the tenacity and grit to succeed even amongst the growing competition.
