LOW EMISSION VEHICLES

Low Emission Vehicles (LEVs)A low-emission vehicle is a motor vehicle that emits relatively low levels of motor vehicle emissions.Since 1990s until now LEV technologies have grown and many car manufacturers have invested in cleaner engines (“green” concept) and tested all kinds of other technologies to reduce car emissions.Three LEV technologies have emerged as potential alternatives for the internal combustion engine (ICE) : hybrid vehicle (HV), electric vehicle (EV) and fuel-cell vehicle (FCV).

Energy Sustainability

GREEN SOLUTIONS

HydrogenFCV

Hydrogen is converted to electricity with high efficiency.No tailpipe Co2 emissions and

other pollutations

HV

ICE + electric motor.Both deliver power to wheels.

Engine-generator + electric motor

ElectricityEV/PIV

Electric motor with usage of energy stored in energy storage devices (rechargeable battery)

LEVs Timeline

Period 1997

Type US EU JP Total

HV 2 2 4 8

EV (incl. PI) 3 - 8 11

FVC - 1 - 1

Total 5 4 12 20

Untill 1997 car manufacturers focused on batteries in variuos forms (EVs, HVs and PIs). Car manufacturers experimented with LEV technologies, particularly «exoploring batteries».

From 1997, when LEVs were brought to the market, to 2010, many car manufacturers were investing in different LEVs technologies and launched in total 320 different LEV models.LEV activity increased over time due to policy interventions that have affcted firms innovation by linking policy interventions with car manufacturers’ LEV engagement.

Untill 1997•EXPLORING

BATTERIES

1998-2005•RISE OF

HYDROGEN

2006-2015•REVIVAL OF

ELECTRIC

Period 1998 2005

Type US EU JP Total

HV 29 9 33 71

EV (incl. PI) 3 1 6 10

FVC 18 9 24 51

Total 50 19 63 132

From 1998 to 2005, EV development almost halted and car manufacturers focused on FCVs and HVs. In this phase it shows that HVs had a solid share and it compted with FCVs for the dominant LEV design position.HVs were making their way into the mass market.

Period 2006 2010

Type US EU JP Total

HV 15 22 39 76

EV (incl. PI) 24 22 25 71

FVC 6 5 10 21

Total 45 49 74 168

From 2006 to 2010, the LEV trajectory backs to EVs. The financial crisis reduced battery prices due to increasing production capacity, and urban interest in pollution-free alternatives triggered a new search for alternative technologies reflected in increasing launches of Evs and PIs.

LEV Trajectory

LEVs industry is a complex interplay between local, national and international policies and innovative firms.

Governments at different levels have contributed to the LEV trajectory by employing numerous policy instruments over time.Policy instrumentes which directly impact on LEV development are:

• Comand-control (policies based on performance standards, CAA and ZEV).

• Market-based (sales tax waivers and income tax credits).

• Volountary agreements/public-private partnerships (RD&D projects, i.e. ACEA).

LEV Trajectory

A perspective to analyse the influence of government policy on firm LEV innovation in an international context is the co-evolution framework, an interplay between different actors such as government, car manufacturers and customers (SOCIAL-TECNICAL REGIME).

SOCIAL-TECNICAL REGIME

GOVERNMENT

NEW REGULATIONS

RADICAL CHANGES

CAR MANUFACTURERS

RADICAL CHANGES

BREAKTHROUGH

CUSTOMERS SHIFT IN PREFERENCE

Bergek and Berggren said “Instruments implemented in one country can, of course, stimulate innovation in other countries, especially when supply-chains are international”. This affermation implemtents an international perspective on policy impact because car firms operate internationally and are exposed to a variety of government policies at different levels.

LEV trajectory, besides by technological developments, was shaped by the international co-evelution between policies in different geographical areas at different policy levels and car manufacturers’ innovation strategies.

Three mechanisms that have influenced the International LEV trajectory

LEV trajectory has been influenced and shaped by three diverse mechanisms:

• International policy diffusion: government policies impact on other government choices and attitude (vertical vs horizontal policy diffusion).

Vertical policy diffusion• Top-down

diffusion (Kyoto Protocol 1997)

• Bottom-up diffusion

Horizonal policy diffusionPolicies are diffused across for two main motives: • They may presents a

competitive threat.• They may solve a

problem in a successful way

• International operations of firms (firms being operativ n home and host markets, are affected by several policies and they are at the same time influential on LEV trajectory ).

car manufacturers markets are internationally intertwined.

Three mechanisms that have influenced the International LEV trajectory

3) Match between policy regulatory requirments and firm capabilities (it could demand radical or incremental technology: i.e. unreached radical innovation are reused as know-how for «toned-down» incremental technologies).

INTERNATIONALMULTI-LEVEL

FRAMEWORK

These three mechanisms explain how several local technological trajecories may shape an international trajecotory.

ABOUT TESLA MOTORSTesla Motors designs and sells high performance, super efficient electric cars. Tesla Motors cars join style, acceleration, and handling with advanced (Tesla Motors, Mission). Tesla Motors has brought the best of the automotive and technology worlds together to permanently bury the image of an electric car as a step backwards in performance, efficiency, or design.Tesla Motor’s key technology is the 100% electric powertrain. (Tesla Motors, Vision).

2003- Founded.

2006

- Prototypes

of the Roadster

introduced to the public.

2007- Two

batches of 100

Roadster sell.

2008- Opened the first

retail store in Los

Angeles.

2009- Unveleid the Model

S.

2010- IPO

launched: Toyota

purchases 2.9m

shares and Panasonic purchases

1.4m shares.

- Announce

d partnershi

p to develop

powertrain system

with Toyota RAV4

2011- Stopped

taking Roadster orders.

- Unveleid Model X.

2012-

Commecial deliveries

of the Models S

begin.- Began building

Supercharger

stations.

2013- Musk

promises US to be covered

with Superchar

ger stations.- First partial recall.- Time

Magazine’s Best 25 inventions of 2012.

2014Gigafactor

y announce

ment:- 200th Tesla

Charging Station

opened (2 months later, 300th

opened).- Musk

announces anyone can use

their patent in

good faith.- Model X will enter

production.

2015- 400th Tesla

charging station: 1st solar powered charging station.

- Model 3 announce

ment.

HISTORY: KEY EVENTS

Electric Vehicle Industry Overview

Electric vehicle (EV) industry is still in the introduction stage in product life cycle, and its dominant design its still dormant.

The world’s best-selling EV is the Nissan Leaf, a modest little passenger vehicle, with over 165,000 units sold by March of this year since its release in late 2010. The Mitsubishi Outlander PHEV and the Tesla Model S are the second and third best-selling EVs today.

Total global sales of EVs/PHEVs amounted to 320,000 units in 2014, an 80 percent rate of growth and on pace to easily exceed 500,000 in 2015.

Market share % 2014

TESLA BUSINESS MODEL INNOVATIONEV manufacturing companies have long taken numerous endeavors to promote EV in the niche markets by providing innovative business models.

A business model describes how a firm creates and delivers value to consumers or the means and methods employed to earn the profits expected from its plans/investiments.

WHATTO WHOM

HOW

Tesla DISRUPTIVE INNOVATION SOLUTIONS represent a clear INNOVATE BUSINESS MODEL DESIGN focusing on technology advantages

Effects on market:- New customers attraction.- Existing customers encouragement.

VALUABLE MARKET OFFERING

COMPETITIVE ADVANTAGE IN THE LONG RUN

Tesla business model innovation involves a pratical reconsideration of five main aspects:

•Value proposition (products/services to fulfill customers’ needs)

•Customer interface (market segment)

•Infrastructure management (distribution channel)

•Financial aspects (revenue model – type of payment)

•Value configurationFinal stage (resulting stage)

VALUECHAIN

It develops in three key dimensions:INNOVATION

VEHICLE

BATTERY

INFRASTRUCTURE SYSTEM

EV VALUE CHAINEmphasizing on:-BATTERY (battery cell manufacturing and battery packing).-VEHICLE (EV design, assembling and sales).-INFRASTRUCTURE ENABLING GRID CONNECTION.

INNOVATION TOWARDS VEHICLESVehicle:• High Performance• Increased connectivity between users and environment• High-end niche market to mass market EV• New multichannel model, vertical integration on selling• Ownership-as-usual

ROADSTERFancy

looking sport car

MODEL SPremium family car

MODEL XSuv

TESLA 3Mass

market family car

INTO MARKET PROTOTYPES

INNOVATION TOWARDS BATTERIES AND INFRASTRUCTURE SYSTEM

Battery:• High range: innovative battery pack technology• User control on battery system• Sold with the vehicle• Relationship with Panasonic

Infrastructure system:• Fast charging• Ambitious expansion plan• Always connected with supercharging stations• Different charging technology: free use of patent (open

source)• Free entrance for Tesla customers

GIGAFACTORY PROJECTTesla, in cooperation with Panasonic and other strategies partners, will autonomously produce its battery through:• Economy of scale (less cost)• Innovate manufacturing• Reduction of waste• Simple optimization by locating manufacturing

process under one roof

By 2017 Tesla expects to begin cell production

TOTAL VERTICAL INTEGRATIONHIGH VOLUME OF EV SALES

Tesla main challenge is to trigger sustainable transportation worldwide

Energy Storage for a Sustainable HomePowerwall is a home battery that charges using electricity generated from solar panels, or when utility rates are low, and powers your home in the evening. Automated, compact and simple to install, Powerwall enables you to maximise self-consumption of solar power generation.

POWERWALL: TESLA HOME BATTERY

Solar Powered Day and NightThe average home uses more electricity in the morning and evening than during the day when solar energy is plentiful. Without a home battery, excess solar energy is often sold to the power company and purchased back in the evening. This mismatch adds demand on power plants and increases carbon emissions. Powerwall bridges this gap between renewable energy supply and demand by making your home's solar energy available to you when you need it.Two advantages: Reduce Your Electricity Bill and Energy Security.

EV Value Configuration• New value Consideration with greater integration:From a value chain’ perspective, Tesla’ resulting value configuration involves an high level of vertical integration

CONVENTIONAL AUTOMOBILE VALUE CHAIN• Supplier components• Core components• OEM assembling• Energy utilities

Tesla INTEGRATED VALUE CONFIGURATION from:

Battery packing

EV design

Retail distribuition

Emphasized supercharger network

In the future, Tesla will also integrate battery cell manufacturing (Nevada Giga factory).

INTEGRATION STRATEGY should reduce:- Coordinate costs between

manufacturer and suppliers.- Risk derving from lack of

supporting infrastrucure.- Risk deriving from market

uncertainty ( > high investments).

TESLA STRENTGH Top-down and flexible product strategy:Tesla Motors product strategy concerns entering high-end market and moving then to wall-market consumer segment.Tesla demostrates a high level of innovation adaption jointly a strategic flexibility in pursuing radical business models (learning by doing attitude).• Strong commitment to range anxiety reduction:

Tesla seriously commits to solve the range anxiety problem, pointing its attention to:

Large capacity battery pack

High performance supercharger station

HIGH PERFOMANCE IN VALUE PROPOSITION OF BUSINESS MODEL

• Integration of it:Tesla integrates information technology in many aspects of its business model, by involving, for istance, IT in both online and retail outletd distribution channels.GOALS: - To increase user-environment connectivity

- To increae the add-on-value of vehicle and after sell sevices