From LEV vehicles to underline the principal main aspects of Tesla motors. Business model innovation provided by Tesla motors through three mechanism: 1) Innovation towards vehicles. 2) Innovation towards batteries. 3) Innovation towards infrastructures. This presentation will give you information about the Technology development in the industry car (LEV vehicles) and the business model innovation of Tesla, studying its important value configuration.

1. LOW EMISSION
VEHICLES

2. 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
Hydrogen
FCV
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
Electricity
EV/PIV
Electric motor with usage of
energy stored in energy storage
devices (rechargeable battery)

3. 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

4. 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.

5. 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).

6. 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.

7. 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.
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
diffusion
Policies 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.

8. 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).
INTERNATIONAL
MULTI-LEVEL
FRAMEWORK
These three mechanisms
explain how several local
technological trajecories
may shape an
international trajecotory.

10. Tesla 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).

11. 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.
- Announced partnership 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 Supercharger
stations.
- First partial recall.
- Time Magazine’s Best 25
inventions of 2012.
2014
Gigafactory announcement:
- 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 announcement.
HISTORY: KEY EVENTS

12. 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

13. EV 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.
WHAT
TO 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

14. 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)
VALUE
CHAIN
It develops in three key dimensions:
INNOVATION
VEHICLE
BATTERY
INFRASTRUCTURE
SYSTEM
EV VALUE CHAIN
Emphasizing on:
-BATTERY (battery cell manufacturing
and battery packing).
-VEHICLE (EV design, assembling and
sales).
-INFRASTRUCTURE ENABLING GRID
CONNECTION.

15. Vehicle:
• 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
ROADSTER
Fancy looking
sport car
MODEL S
Premium
family car
MODEL X
Suv
TESLA 3
Mass market
family car
INTO MARKET PROTOTYPES

16. 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

17. Tesla, 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
INTEGRATION
HIGH VOLUME OF EV SALES
Tesla main challenge is to trigger
sustainable transportation
worldwide

18. Energy Storage for a Sustainable Home
Powerwall 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 Night
The 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.

19. • 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).

20.  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