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TESLA MOTORS

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by

Jerry Yarik

on 25 August 2013

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Transcript of TESLA MOTORS

International Expansion
Team Grey Goose
Bus 4208
8/14/13

Challenges to Internationalization
2005
2013
2009
2003
2005-2007
Musk personally invests $7 million in Tesla's Series B capital investment round totaling $13 million
Tesla signs production contract with Lotus to produce "gliders" (complete cars minus electric powertrain)
2003-2004
2012-2013
Deliveries of Model-S begin in June 2012
$62,400 base price for 60 kWh battery including the $7,500 Federal Tax Credit
Q1 of 2013 first profitable quarter
12,700 units sold as of June 2013
Tesla announces supercharging network expansion
Musk co-leads Series C capital investment round of $40 million (included investment from Sergey Brin and Larry Page from Google)
Martin Eberhand fired for underestimating the production cost of the Model-S
2008-2009
Tesla’s Roadster released; first highway capable battery electric vehicle (BEV) sports car
Musk purposely targets the Roadster to early-adopters while also limiting production to just 2600 so that Tesla could improve upon its technology and eventually develop a more affordable electric car
Receives $465 million federal loan issued through the Advanced Technology Vehicle Manufacturing Loan Program(ATVM)
Moved corporate headquarters and powertrain developement facility to Palo Alto
2010-2011
Purchase NUMMI plant in Fremont
Model-S "Whitestar" prototype revealed
Patented powertrain incorporated into the redesign of the 2010 Roadster Sport
Granted $465 million loan from the Department of Energy (January 2010)
Toyota invests $50 million, form partnership to develop electric vehicles, parts, and production systems
June IPO raised $226 million
Elon Musk, JB Straubel, Marting Eberhard and Marc Tarpening Incorporate Tesla Motors in San Carlos (2003)
Tesla's stock is up about 275% year to date. Expectations are very high.
International store openings
Sales in Europe
June 2013-beginning of deliveries in Europe
Tesla is adding stores in London, Brussels and Amsterdam
Service centers will also spring up in Amsterdam, Brussels, Frankfurt, Vienna and Hamburg
Sales in Asia
History
2007
Tesla has received hundreds of orders for its new Model S sedan in Hong Kong
Doubles the number of electric cars in the city
Tesla has already received about 300 orders for the new Model S sedan several quarters before deliveries begin
Tesla is getting ready to take on the world's largest auto market: China, which CEO Elon Musk has described as a "wild card" in the company's future
Customization for international markets
Supercharge networks not developed in international markets
Customer value influenced by the hi tech environment in Silicon Valley
Elon Musk funds majority of Series A round of funding, named Chairman of the Board of Directors (2004)
Competitive Advantages

Powertrain used in Toyota & Mercedes EV's
State-of-the-art manufacturing facility in Fremont capable of handling long term growth
No legacy investments in the internal combustion engine
Visionary leader- Elon Musk is not investing in Tesla for its ROI

Map of European Stores & Service Centers
Agenda
Intro/Timeline
Competitive Advantages
Video
European & Asian Market Outlook
Challenges to Internationalization
Conclusion/Recommendations
The issue of underproduction is enhanced by necessary customization in international markets:
Right hand drive for countries as Japan/UK
Modifying the back seat for additional comfort in China ( many of targeted customers there do not drive, they have chauffeurs)
Managing the 5-10% reduction range in the battery when operated in -20°C temperatures
Until now Tesla superchargers along key routes in California and between Washington, D.C., New York, and Boston
Most probable efforts in the near future will be spent on developing USA network, to leverage the existing network -> “buffer period” from international sales till international expansion of supercharge network -> negative effect on cars usage internationally
Manufacturing in accordance with EU/Asia standards
Price/value ratio can be influenced by different culture perspectives could negatively impact market valuation
Any negative impact is critical to the company’s ability to raise new financing that would support its projected development plans
Model S is in all new vehicle
“Some suppliers thought we wouldn’t be around… so they didn’t tool up for the production we actually experienced”-Elon Musk
Conclusion/Recommendations
Limited experience with high volume manufacturing , just recently reached full production of Model S (2012);


Planned introduction of new manufacturing and techniques and unique design features, not widely adopted in the automotive industry to date (aluminum spot welding systems, 17 inch display screen, newly designed retractable exterior door handles and a panoramic roof) posing unique manufacturing challenges.
Inability to sustain current level of production
Europe
&
Asia/Australia

International Expansion
Investor confidence in Tesla is at an all-time high
Build an additional mega-factory to accommodate growing global demand
Expand supercharger network in Europe & Asia
Form more partnerships with legacy automakers to use Tesla's powertrain
Europe
&
Asia/Australia
Full transcript