Tesla Company Disrupting the Auto Industry

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Comparison between Conventional and Electric-powered Automobiles

An internal combustion engine is a heat engine that allows the combustion of a fuel with an oxidizer in a combustion chamber; an integral section for the fluid flow. The air is the main oxidizer within the compartment, and a combination of high pressure and temperature produced during combustion exerts the necessary force on the engine. Alongside the common diesel or gasoline, the convectional automobile industry uses renewable or rather alternative fuels such as natural gas, biodiesel, propane, and ethanol. On the other hand, an electric-powered vehicle (EV) uses one or more traction or electric motors for thrust (Gelmanova et al., 2018). EV can be powered via a collection of electricity originating from self-contained systems having solar panels, batteries, an electric generator, or fuel cells.

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Electric vehicles are cleaner and more environmentally friendly compared to gas vehicles. Electrified transport is greener, paving the way for a sustainable future because it results in reduced pollution levels. The technology of smart charging allows EVs to be aligned with renewable energy since recharging makes it cleaner than gas. EVs produce fewer emissions during their lifetime compared to gas-powered vehicles (Gelmanova et al., 2018). However, the procedures for producing lithium-ion generate harmful emissions and waste. Such similarity to the production process of gas makes it important to promote improvements in both types of vehicles to eliminate environmental pollution and transform all of them into eco-friendly power sources. The two types of vehicles have high speed, and they can navigate through all terrains.

EVs are faster than fuel cars, and they have more vigor for everyday usage.

Electric motors are simpler to operate compared to internal combustion engines. EVs can be considered to have full torque; the required force to drive the car forward and gain momentum. On the contrary, gas engines take a longer time to start and build momentum (Karki et al., 2020). In some traditional gas vehicles, power has to be circulated via other moving parts such as a gearbox hence reducing torque magnitude.

Impacts of Patents

Tesla was faced with several challenges in sharing its patents at the initial stage. However, the drawbacks eventually helped the company to widen the products and market. For instance, Tesla’s electric motor technology advanced together with its various patents associated with design refinements such as liquid-cooled rotor. The advancement in supercharges technology developed as a result of development in the patent architecture of car battery packs, sophisticated high voltage wires, and the computer system managing the charging process. Tesla Company had formed 64 patents associated with the charging system and at the beginning of the year 2018, Tesla had 480 supercharge locations in the United States and 698 stations in other regions (Grant & Mohan, 2019). The critical technical merits of the electrical motors of Tesla are related to the general integration of the electric powertrain and the management software system.

To the company’s 2012 annual report, the success of Tesla was related to its ability to protect its core invention and intellectual property. The technological accomplishment relied on a combination of several patents and trade secrets such as third-party non-disclosure mutual agreements, trademarks, copyright laws, intellectual property accredited licenses, and contractual rights. The patent combination protected the proprietary rights based on the company’s technology. Tesla did not initiate patent lawsuits against any organization or individual who wanted the use its technology in good faith.

The company was formed to accelerate the advancement of sustainable transport in terms of environmental safety and cost. For instance, if a company clears the path to develop advanced electric automobiles but implements intellectual property law inhibiting others from using the technology, the firm will be contrary to its goal. Professor Ulrich’s comment stated how Tesla did not inhibit others from using its technology (Grant, & Mohan, 2019). The strengths of Tesla were in the know-how domain by combining existing technologies to optimize automobile performance, add-on characteristics, design, and user experience.

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Strategy of Tesla

Tesla’s strategy entailed the following:

  • Develop a sports car
  • Use the accumulated money to develop an affordable automobile
  • Utilize the funds to establish a more affordable vehicle than the previous ones
  • Provide zero-emission by using electric-powered engines
  • Maintain copyright

Technology helped Tesla to implement its phase one strategy of building a ‘sports car’, and it was launched in 2007. The second master plan of developing an ‘affordable car’ started in 2013 by introducing Model S vehicles. Another phase of developing cheaper vehicles than before was realized using technology to build Model 3 in 2017. The provision of zero-emission using electric-powered engines involved the use of Solar City via solar power infrastructure installation. Solar City was merged with Tesla in 2016 as part of an initiative toward sustainable growth. Innovation played a significant role in enabling Tesla to integrate solar energy into its system (Grant & Mohan, 2019). The company also expanded by covering major sections of terrestrial transport by introducing heavy-duty trailers and comprehensive autonomous driving.

The effect of its strategic plan on Tesla was evident in the organization’s stock exchange market value. The company’s exemplary performance using innovation to attain its strategy enabled Tesla to build four different car models. Apart from EVs built by Tesla, technology helped Tesla to engage in other two different businesses, including:

  • Energy Storage – Tesla had a Power wall of 7kWh battery pack which was used in home electrical appliances. In 2016, the technology-enabled the company to supersede the previous level up to 13.5 kWh Power wall 2. The company’s power storage batteries are essential for bridging asymmetries in the supply and demand of power from wind and solar generation.
  • Solar Energy – Solar City Company installed solar energy in the residential section and commercial property. However, Tesla developed its Solar Roof made from photovoltaic glass tiles for roofing generating Gigafactory 2 within Buffalo in New York.

Generally, Tesla integrated the existing automotive, sophisticated electric motor, together with battery technology using innovations.

Sustainability of Tesla’s Competitive Advantage

The assurance which promoted Tesla’s valuation and performance were evident in its remarkable results recorded in the past. The performance accelerated transport sustainability by availing compelling massive electric automobiles. The company’s CEO Musk wished to establish the firm as the leading automobile company in the world from the strategies. Tesla embraced the transition of producing sustainable and clean energy enabling the company to have a competitive advantage over other similar organizations (Grant & Mohan, 2019). Apart from reducing perils and investment necessities by outsourcing other firms, Tesla was the leading vertically integrated car supplier globally. The competitive sustainability advantage helped Tesla to keep close monitoring over the trademarked technology. Tesla revealed its patent range to its rivals without any legal lawsuit. The management team’s perspective, allowing others to use the company’s technology, needs to be reconsidered. Other companies might misuse the ideas and produce low-quality automobiles. The management should reinforce laws against the misappropriation of Tesla’s innovation.

References

Gelmanova, Z., Zhabalova, G., Sivyakova, G., Lelikova, O., Onishchenko, O., Smailova, A., & Kamarova, S. (2018). Electric cars: Advantages and disadvantages. Journal of Physics: Conference Series, 1015(5), 1-5. Web.

Grant, R. M., & Mohan, N. (2019). Cases to accompany contemporary strategy analysis. John Wiley & Sons.

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Karki, A., Phuyal, S., Tuladhar, D., Basnet, S., & Shrestha, B. (2020). Status of pure electric vehicle power train technology and future prospects. Applied System Innovation, 3(3), 1-28. Web.

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