Tesla’s Self-Driven Electric Cars

Powered by Over-the-Air (OTA)

Technology

Ghanesh Kulkarni

ISM 6026

April 18th, 2016

1

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$2.7 B

$35 B

0

5

10

15

20

25

30

35

40

2015 2022

Recall Cost

Sage, A. (2015, September 29). Big Auto look to tech companies to fix cars over the air. Retrieved 03/28/2016 from

http://www.reuters.com/article/us-autos-wireless-idUSKCN0RT0BV20150929

Fig. 1: Estimated Car Recalls by 2022

3Preview

The Context

The Technology

Competitive Environment

The Economics

Organizational Implementation

4The Context

32,000 Road Fatalities

US

$1.3 Trillion

Global

$5.6 Trillion

Fig. 2: Accidents Cause Damage to the Society

Fig. 3: Autonomous cars will contribute to Economy

5The Context

IT Influence on

Automotive Industry

Tesla’s Founders

Fig. 4: Tesla pioneering automotive innovations

Fig. 5: They founded Tesla Motors in 2003

6The Technology

Fig. 6: Over-the-Air Connectivity Fig. 7: Updates pushed via Network

Fig. 8: Car’s Internal

System Architecture

7The Technology

Fig. 9: Auto-pilot Features

Fig. 10: Tesla’s Phone App

8Competitive Environment

Fig. 11: Tesla’s Competitors

V/S

Tech Competitors Traditional Automakers

9Competitive Environment

Strength

1. Environment Friendly Image

2. Integrated IT Platform

3. Brand Positioning as Innovative

and Technology Company

4. Direct to Customer Business

Model

5. Supercharging Stations

6. Business Partners and Investors

Weakness

1. Delays in Production

2. Limited Product Line

3. Lack of Experience in

Automotive Industry

Opportunities

1. Increased Production from

Gigafactory

2. Increased Environmental

Awareness

3. First Movers Advantage

Threats

1. Experienced Industry Leaders

2. Regulatory Restriction could

discourage Auto-Pilot R&D

Efforts

10The Economics

2015 Gross Revenue: $4.05 Billion

2015 Net Income: $923.50 Million (35% increase from 2014)

30% Profit Margin

Investing $5 Billion on construction of Gigafactory

Actively Increasing Network of Supercharging Stations

Focused on building a pool of Talented Automotive

Professionals

Major Highlights from Annual Report Submitted to

Security and Exchange Commission (SEC), 2016

SEC.gov. (2016, February 2). Form 10-K - Annual report. Retrieved 04/01/2016 from

http://www.sec.gov/Archives/edgar/data/1318605/000156459016013195/0001564590-16-013195-index.htm

11The Economics

Impact on Cost V/S Value Addition

Manufacturing Cost per Vehicle $62,000

Autopilot Activation Charge $3,000

80% Owners paid Activation Fees in 2015

Fig. 13: Best CaseFig. 12: 5 year Projections

12The Economics

Fig. 15: Most Likely Case

Fig. 14: Worst Case (23% less than best case)

13Organizational Implementation

Fig. 16: Critical Risks

14Organizational Implementation

Fig. 18: Critical Success Factors

2-3

Years

Fig. 17: Estimated Time Line 2 to 3 Years

15

Owning a Non-Autonomous Car in Fifteen Years

from Now Will be Like Still Owning a Horse

– Elon Musk

Thank You!!

?

16

References17

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