Question

Case Assignment: Tesla Motors

Tesla Motors was founded with innovation in mind. Launched in 2003 by a group of engineers in Silicon Valley who wanted to prove that electric cars could replace gasoline-powered automobiles, Tesla’s mission is to accelerate the world’s transition to sustainable energy.

The Tesla Roadster was launched in 2008 and can travel 245 miles per charge of its lithium ion battery. There are now more than 2,400 Roadsters being driven in more than 30 countries. The Roadster was followed by the Tesla Model S in 2012. The Model S can travel 265 miles per charge and has room for seven passengers with 64 cubic feet of storage. The Model S was named Motor Trend’s 2013 Car of the Year and achieved a 5-star safety rating from the U.S. National Highway Traffic Safety Administration.

Next came the Model X, which Tesla began delivering in 2015, and the new Model 3 will begin production in mid-2017 with estimated delivery for new reservations at mid-2018 or later. Model 3 is Tesla’s most affordable model to date, starting at $35,000. It has seating for five adults and can travel 215 miles per charge.

Improvements to battery life and safety features weren’t the only upgrades Tesla had quietly been putting together. They created a roar in the automobile industry when they announced in October 2016 that, moving forward, all vehicles produced in Tesla factories would have the hardware needed for full self-driving capabilities at a safety level higher than that of a human driver. Model S and Model X vehicles with the new hardware are already in production, and the hardware will be included on the new Model 3 when it goes into production.

This hardware includes eight surround cameras providing 360-degree visibility around the car up to 250 meters of range; two updated ultrasonic sensors; forward-facing radar that can see through heavy rain, fog, dust, and even the car ahead; and a new onboard computer with more than 40 times the computing power of previous generations.

Tesla’s move was unprecedented compared to that of other car companies, but not as much for them. While Tesla will be creating cars with the hardware needed for self-driving capabilities, they do not have the software finished yet. They will update the software in the cars produced now using over-the-air software updates. This is a method that Tesla already employs to enhance performance and fix security bugs; it allows them to continually improve cars even after they are on the road and to stay ahead of automakers who do not operate under this model.

Tesla still has to complete millions of miles of real-world testing before the software can be implemented. They will run the software in the background while a professional drives the car and then compare what the computer would have done with what the person did do. The goal is for self-driving cars to be even better than humans at avoiding crashes.

Tesla must also achieve regulatory approvals of full self-driving cars before they can legally drive on public roadways. So it is still unclear when customers (even those currently purchasing models featuring the new hardware) will be able to experience fully autonomous driving.

MULTIPLE CHOICE

1. New products are important because they do all of the following EXCEPT:

a. sustain growth

b. increase revenues and profits

c. extend resources

d. replace obsolete items

ANS:

2. The Tesla Model 3 is what category of new product?

a. improvement/revision to existing product

b. new-to-the-world product

c. new product line

d. repositioned product

e. lower-priced product

ANS:

3. New product ideas can come from all of the following sources EXCEPT:

a. employees

b. customers

c. distributors

d. competitors

e. New product ideas can come from all of these.

ANS:

4. The addition of the self-driving hardware to Tesla cars in considered a(n) __________.

a. diffusion

b. experiment

c. commercialization

d. innovation

ANS:

5. Which of the following characteristics will NOT have an impact on decisions for early adopters of the Tesla Model 3?

a. compatibility

b. observability

c. complexity

d. relative advantage

ANS:

Answer 1

1) C

New models are required because they do all except extending resources. Tesla has continuously upgraded its model from Tesla Roadster to Tesla Model X which helped it to create stir in the automobile industry. This helped the company to sustain growth and increase its base of profits and performance while the consumers benefit by new and modern technology by replacing obsolete items.

2) e

Tesla Model 3 can be categorised under reduced price product as it is the most affordable product starting from $35000 amongst other range of products. Since it is just an affordable range and the upgrades to hardware and software are available for other products as well it cannot be categorised as new to world or new to firm or either as repositioned product.

3) e

New product ideas can come from all the sources. Customers needs , distributors contact with customers, employees innovative approach, competitors new product all could give an idea of new product

4) d

The addition of self driven car hardware in Tesla ic considered innovation as initially there were number of startups working in this area but very few succeded in reaching out to the masses at a huge level before Tesla.

5)b

Observability is the extent to which users can observe the benefits of innovation. Since there are already reservations for the new model and people have had some idea of self driven cars in the previous updates of older models of Tesla the other factors such as compatibility, complexity and relative advantage would play a key role in adoption of new model.