tesla leadership case study

A critical analysis of Elon Musk’s leadership in Tesla motors

• Published: 14 May 2021
• Volume 11 , pages 213–222, ( 2021 )

Cite this article

• Md. Rahat Khan   ORCID: orcid.org/0000-0002-9197-0365 1  

22k Accesses

7 Citations

Explore all metrics

This present study applies qualitative research method to evaluate the entrepreneurial roles and leadership styles of Elon Musk in Tesla motors. The study places its focus on the general review of Elon Musk’s leadership and attempts to match the leadership traits with some traditional leadership approaches widely recognized in leadership theory. The study employs a structured observation technique assimilating numerous secondary sources with a view to analyzing Musk’s leadership traits in Tesla motor. The results unfold Musk’s leadership attributes and shows that they match more or less with all the traditional leadership approaches but the servant leadership approach. Additionally, the outcomes also demonstrate a new character (entrepreneurial leader) in Musk’s leadership. Finally, the study offers some recommends for Elon Musk to follow, such as the champion/corporate intrapreneur and the servant leadership approaches so that they add practical values in his leading trait. This study will be a guideline for the new entrepreneur and will provide some distinctive ways of improvement in existing entrepreneurship as well as for management literature.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

Authoritarian leadership styles and performance: a systematic literature review and research agenda

Elia Pizzolitto, Ida Verna & Michelina Venditti

Unethical Leadership: Review, Synthesis and Directions for Future Research

Sharfa Hassan, Puneet Kaur, … Amandeep Dhir

Servant Leadership: a Systematic Literature Review and Network Analysis

Alice Canavesi & Eliana Minelli

Abbreviations

United States Securities and Exchange Commission

United States dollar

initial public offering

Chief Executive Officer

transformational leadership

Bennett, N., & Lemoine, G. J. (2014). What a difference a word makes: Understanding threats to performance in a VUCA world. Business Horizons, 57 (3), 311–317.

Article   Google Scholar  

Biography.com, (2018). Elon Musk biography. Retrieved from: https://www.biography.com/people/elon-musk-20837159 .

Blake, R. R., & Mouton, J. S., (1964). The new managerial grid: Strategic new insights into a proven system for increasing organization productivity and individual effectiveness, plus a revealing examination of how your managerial style can affect your mental and physical health. Gulf Pub. Co.

Blazek, K. (2016). The transformational leadership style of Elon Musk . Retrieved from: https://www.truscore.com/360-feedback-resources/leadership-style-of-elon-musk/ .

Bloomberg (2018). Elon Musk and Tesla will be radically different after today. Here’s why? Retrieved from: http://fortune.com/2018/12/28/elon-musk-tesla-different/ .

Brown, T. (2009). Designers: Think big . TEDGlobal July 2009.

Burns, J. M. (1978). Leadership New York. NY : Harper and Row Publishers.

Clandinin, D. J., & Connelly, F. M. (2000). Narrative inquiry: Experience and story in qualitative research.

Cohen, A. (1992). Antecedents of organizational commitment across occupational groups: A meta-analysis. Journal of Organizational Behavior, 13 (6), 539–558.

Conger, J. A., & Kanungo, R. N. (1988). The empowerment process: Integrating theory and practice. Academy of Management Review, 13 (3), 471–482.

Dijk, V. M., Davidson, G. & Mecozzi, V. (2017). What is creative leadership? Retrieved from: https://www.thnk.org/insights/what-is-creative-leadership/ .

Dirks, K. T., & Ferrin, D. L. (2002). Trust in leadership: Meta-analytic findings and implications for research and practice. Journal of Applied Psychology, 87 (4), 611.

Doheny, M., Nagali, V., & Weig, F. (2012). Agile operations for volatile times. The McKinsey Quarterly, 3 , 126–131.

Google Scholar  

Dudovskiy, J. (2018). Tesla leadership: Increasing stakeholder concern with one-man show by Elon Musk. Retrieved from: https://research-methodology.net/tesla-leadership-increasing-stakeholder-concern-with-one-man-show-by-elon-musk/ .

Enderwick, B. W. (2018). What Elon Musk gets wrong about leadership. Retrieved from: https://medium.com/s/story/what-elon-musk-gets-wrong-about-leadership-b97794a0e330 .

Galek, C. (2018). Elon Musk’s management style proves it pays to be a leader, and not simply a boss. Retrieved from: https://www.inc.com/candice-galek/elon-musks-management-style-proves-it-pays-to-be-a-leader-not-simply-a-boss.html .

Goldring, E., & Greenfield, W. (2002). Understanding the evolving concept of leadership to education: Roles, expectations, and dilemmas. Yearbook of the National Society for the Study of Education, 101 (1), 1–19.

Goleman, D. (1998). Working with emotional intelligence and emotional intelligence.

Greenleaf, R. K. (1977). Servant leadership: A journey into the nature of legitimate power and greatness . New York, NY: Paulist Press.

Gromov, R. (2017). Elon behind Iron-man’s mask: Analysing leadership style of Elon Musk. Retrieved from: https://www.linkedin.com/pulse/elon-behind-iron-mans-mask-analysing-leadership-style-roman-gromov/ .

Heikka, J., & Waniganayake, M. (2011). Pedagogical leadership from a distributed perspective within the context of early childhood education. International Journal of Leadership in Education, 14 (4), 499–512.

Horney, N., Pasmore, B., & O’Shea, T. (2010). Leadership agility: A business imperative for a VUCA world. Human Resource Planning, 33 (4), 34.

Kabanoff, B., & Rossiter, J. R. (1994). Recent developments in applied creativity. International Review of Industrial and Organizational Psychology, 9 , 283–283.

Katz, R. L. (2009). Skills of an effective administrator . Harvard Business Review Press.

Khan, M. R. (2019). Samson H. Chowdhury: A true entrepreneurial leader for Square Group. EuroMed Journal of Management, 3 (2), 80–88.

Kotter, J. P. (1996). Leading change Harvard Business School Press. Boston , MA.

Krishnan, V. R. (2004). Impact of transformational leadership on followers’ influence strategies. Leadership and Organization Development Journal, 25 (1), 58–72.

Lahtinen, J. (2017). What is pedagogical leadership? Retrieved from: http://learningscoop.fi/what-is-pedagogical-leadership/ .

Lekach, S. (2018). Elon Musk sued by SEC for Tesla privatization tweet. Retrieved from: https://mashable.com/article/elon-musk-sec-tweet-lawsuit/#wi_OOwnTfiqT .

Lewin, K. (1947). Group decision and social change. Readings in social psychology, 3 (1), 197–211.

Malhotra, N. K. & Dash, S. (2016). Marketing research: An applied orientation. Pearson,.

Mann, C. J. (2003). Observational research methods. Research design II: Cohort, cross sectional, and case-control studies. Emergency Medicine Journal, 20 (1), 54–60.

Matouesek, M. (2019). Former Tesla employees reveal what it’s like to work with Elon Musk . Retrieved from, https://www.businessinsider.com/ex-tesla-employees-reveal-what-its-like-work-elon-musk-2019-9

Mintzberg, H. (1970). Structured observation as a method to study managerial work. Journal of Management Studies, 7 (1), 87–104.

Mulhall, A. (2003). In the field: Notes on observation in qualitative research. Journal of Advanced Nursing, 41 (3), 306–313.

Muoio, D. (2017). ELON MUSK: Tesla factory injuries 'break my heart'. Retrieved from https://www.businessinsider.com/elon-musk-tesla-factory-injuries-email-2017-6

Peri, C. (2014). 10 things to hate about sleep loss. Retrieved from: https://www.webmd.com/sleep-disorders/features/10-results-sleep-loss#1 .

Pollard, C. W. (1996). The soul of the firm, HarperBusiness and Zondervan Publishing House, Grand Rapids, MI.

Quirke, B. (1996). Communicating corporate change . London: McGraw Hill.

Robbins, S. P. & Judge, T. A. (2013). Organizational behavior.

Rost, J. C. (1993). Leadership development in the new millennium. Journal of Leadership Studies, 1 (1), 91–110.

Schweiger, D. M., & Denisi, A. S. (1991). Communication with employees following a merger: A longitudinal field experiment. Academy of Management Journal, 34 (1), 110–135.

Shapiro, D. L., & Kirkman, B. L. (1999). Employees’ reaction to the change to work teams: The influence of “anticipatory” injustice. Journal of Organizational Change Management, 12 (1), 51–67.

Simic, I. (1998). Transformational leadership - the key to successful management of transformational organizational changes. Facta Universitatis Series: Economics And Organization, 1 (6), 49–55.

Snyder, C. B. (2018). Elon Musk and path-goal theory, Retrieved from: http://sites.psu.edu/leadership/2018/02/18/elon-musk-and-path-goal-theory/ .

Spears, L. (1995). Servant-leadership and the Greenleaf legacy. In: Spears, L. (Ed.), Reflections on leadership: how Robert K. Greenleaf’s theory of servant-leadership influenced today’s top management thinkers . John Wiley & Sons, Inc., New York, NY, pp. 1–14.

Spears, L. (1996). Reflections on Robert K. Greenleaf and servant-leadership. Leadership & organization development journal .

Spreitzer, G. M. (1995). Psychological empowerment in the workplace: Dimensions, measurement, and validation. Academy of Management Journal, 38 (5), 1442–1465.

St. Thomas University (2018). What is charismatic leadership? Leading through personal conviction. Retrieved from: https://online.stu.edu/articles/education/what-is-charismatic-leadership.aspx .

Steward, J. B. (2018). A Question for Tesla’s Board: What Was Elon Musk’s Mental State? Retrieved from https://www.nytimes.com/2018/08/15/business/elon-musk-tesla-board.html .

Strathmann, D. (2016). Multicultural leadership defined by leadership development experts. Retieved from: http://crestcomleadership.com/2016/10/06/multicultural-leadership-defined-by-leadership-development-experts/ .

Synergos., (2017). Bridging leadership. Retrieved from: https://www.synergos.org/bridging-leadership .

Thomas, K. W., & Velthouse, B. A. (1990). Cognitive elements of empowerment: An “interpretive” model of intrinsic task motivation. Academy of Management Review, 15 (4), 666–681.

Thompson, A. A. & Strickland, A. J. (2003). Strategic management: Concepts and cases. The Managerial Process of Crafting and Executing Strategy . tata Mc Graw. New Delhi. p34.

Walshe, C., Ewing, G., & Griffiths, J. (2012). Using observation as a data collection method to help understand patient and professional roles and actions in palliative care settings. Palliative Medicine, 26 (8), 1048–1054.

Williams, J. (2018). Lesson 6: Contingency and path theories. Pennsylvania State University, PSYCH 485: Leadership in work settings. Retrieved from: https://psu.instructure.com/courses/1923777/modules/items/23736221 .

Wimmer, K., Stiles, J., & Abrams, B. (2001). The observational research handbook: Understanding how consumers live with your products. Journal of Advertising Research, 41 (1), 91–91.

Zellars, K.L. & Tepper, B.J. (2003). Beyond social exchange: New directions for organizational citizenship behavior theory and research. In Research in personnel and human resources management (pp. 395–424). Emerald Group Publishing Limited.

Download references

Acknowledgements

I first acknowledge Allah’s kindness, who has given me strength and wisdom for learning. Then, I acknowledge my parents’ and wife’s full support of my work and finally the anonymous reviewers who have helped me to outline the paper to a publishable shape.

Availability of data and materials

Data of that research has been collected from secondary sources, journal articles, newspaper, magazines, blogs, etc.

Author information

Authors and affiliations.

Department of Business Administration, City University, Khagan, Birulia, Savar, Dhaka, 1216, Bangladesh

Md. Rahat Khan

You can also search for this author in PubMed   Google Scholar

Contributions

The author prepared the full article based on the secondary data.

Corresponding author

Correspondence to Md. Rahat Khan .

Ethics declarations

Ethics approval and consent to participate.

Not applicable.

Competing interests

The authors declare no competing interests.

Rights and permissions

Reprints and permissions

About this article

Khan, M.R. A critical analysis of Elon Musk’s leadership in Tesla motors. J Glob Entrepr Res 11 , 213–222 (2021). https://doi.org/10.1007/s40497-021-00284-z

Download citation

Received : 08 December 2019

Accepted : 28 February 2021

Published : 14 May 2021

Issue Date : December 2021

DOI : https://doi.org/10.1007/s40497-021-00284-z

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Tesla motors
• Entrepreneur
• Find a journal
• Publish with us
• Track your research

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

How Tesla Sets Itself Apart

• Lou Shipley

It’s ushering in the age of the software car.

Tesla and its flamboyant, and sometimes erratic , innovator Elon Musk have turned the more than a century old industry upside down in a mere 16 years. T raditional automakers are ill prepared to compete in today’s software-centered world. Unlike nimble Tesla, they are big, bureaucratic, slow to respond to customers, dependent on providing customer financing for unit sales growth, and culturally different from a software company. Tesla’s speed in innovation in the market for high-end vehicles is more like a Google or an Amazon than an automaker. And its soaring market valuation is a clear sign to all automakers that they’ll need to develop more innovative, Tesla-like business models in order to survive.

Tesla’s recent breakout market performance is proving some of its  skeptics  wrong. By mid-January, Tesla’s market capitalization had reached $107 billion, and it surged past the giant German automaker Volkswagen to become the world’s second most valuable auto company behind Toyota. Tesla’s valuation now  exceeds that of Ford and GM combined. The Wall Street doubters may be in shock, but I’m not. Full disclosure, I own two Teslas and I own stock in the company. But it’s my experience as a three-time software company CEO that makes it increasingly clear to me that the company’s innovative business model represents an existential threat to the auto industry as a whole.How so?“Software is eating the world,” Marc Andreessen, co-founder and general partner of venture capital firm Andreessen Horowitz, wrote in a memorable 2011 essay. And software is a big part of Tesla’s advantage.

• Lou Shipley is a Senior Lecturer in Entrepreneurial Management at Harvard Business School. He serves on the boards of six early-stage technology companies.

Partner Center

About Stanford GSB

• The Leadership
• Dean’s Updates
• School News & History
• Commencement
• Business, Government & Society
• Centers & Institutes
• Center for Entrepreneurial Studies
• Center for Social Innovation
• Stanford Seed

About the Experience

• Learning at Stanford GSB
• Experiential Learning
• Guest Speakers
• Entrepreneurship
• Social Innovation
• Communication
• Life at Stanford GSB
• Collaborative Environment
• Activities & Organizations
• Student Services
• Housing Options
• International Students

Full-Time Degree Programs

• Why Stanford MBA
• Academic Experience
• Financial Aid
• Why Stanford MSx
• Research Fellows Program
• See All Programs

Non-Degree & Certificate Programs

• Executive Education
• Stanford Executive Program
• Programs for Organizations
• The Difference
• Online Programs
• Stanford LEAD
• Stanford Innovation and Entrepreneurship Certificate
• Seed Transformation Program
• Aspire Program
• Seed Spark Program
• Faculty Profiles
• Academic Areas
• Awards & Honors
• Conferences

Faculty Research

• Publications
• Working Papers
• Case Studies

Research Hub

• Research Labs & Initiatives
• Business Library
• Data, Analytics & Research Computing
• Behavioral Lab

Research Labs

• Cities, Housing & Society Lab
• Golub Capital Social Impact Lab

Research Initiatives

• Corporate Governance Research Initiative
• Corporations and Society Initiative
• Policy and Innovation Initiative
• Rapid Decarbonization Initiative
• Stanford Latino Entrepreneurship Initiative
• Value Chain Innovation Initiative
• Venture Capital Initiative
• Career & Success
• Climate & Sustainability
• Corporate Governance
• Culture & Society
• Finance & Investing
• Government & Politics
• Leadership & Management
• Markets & Trade
• Operations & Logistics
• Opportunity & Access
• Organizational Behavior
• Political Economy
• Social Impact
• Technology & AI
• Opinion & Analysis
• Email Newsletter

Welcome, Alumni

• Communities
• Digital Communities & Tools
• Regional Chapters
• Women’s Programs
• Identity Chapters
• Find Your Reunion
• Career Resources
• Job Search Resources
• Career & Life Transitions
• Programs & Services
• Career Video Library
• Alumni Education
• Research Resources
• Volunteering
• Alumni News
• Class Notes
• Alumni Voices
• Contact Alumni Relations
• Upcoming Events

Admission Events & Information Sessions

• MBA Program
• MSx Program
• PhD Program
• Alumni Events
• All Other Events
• Operations, Information & Technology
• Classical Liberalism
• The Eddie Lunch
• Accounting Summer Camp
• Videos, Code & Data
• California Econometrics Conference
• California Quantitative Marketing PhD Conference
• California School Conference
• China India Insights Conference
• Homo economicus, Evolving
• Political Economics (2023–24)
• Scaling Geologic Storage of CO2 (2023–24)
• A Resilient Pacific: Building Connections, Envisioning Solutions
• Adaptation and Innovation
• Changing Climate
• Civil Society
• Climate Impact Summit
• Climate Science
• Corporate Carbon Disclosures
• Earth’s Seafloor
• Environmental Justice
• Operations and Information Technology
• Organizations
• Sustainability Reporting and Control
• Taking the Pulse of the Planet
• Urban Infrastructure
• Watershed Restoration
• Junior Faculty Workshop on Financial Regulation and Banking
• Ken Singleton Celebration
• Quantitative Marketing PhD Alumni Conference
• Presentations
• Theory and Inference in Accounting Research
• Stanford Closer Look Series
• Quick Guides
• Core Concepts
• Journal Articles
• Glossary of Terms
• Faculty & Staff
• Researchers & Students
• Research Approach
• Charitable Giving
• Financial Health
• Government Services
• Workers & Careers
• Short Course
• Adaptive & Iterative Experimentation
• Incentive Design
• Social Sciences & Behavioral Nudges
• Bandit Experiment Application
• Conferences & Events
• Get Involved
• Reading Materials
• Teaching & Curriculum
• Energy Entrepreneurship
• Faculty & Affiliates
• SOLE Report
• Responsible Supply Chains
• Current Study Usage
• Pre-Registration Information
• Participate in a Study

Tesla: Business & Operating Model Evolution

Learning objective.

• See the Current DEI Report
• Supporting Data
• Research & Insights
• Share Your Thoughts
• Search Fund Primer
• Affiliated Faculty
• Faculty Advisors
• Louis W. Foster Resource Center
• Defining Social Innovation
• Impact Compass
• Global Health Innovation Insights
• Faculty Affiliates
• Student Awards & Certificates
• Changemakers
• Dean Jonathan Levin
• Dean Garth Saloner
• Dean Robert Joss
• Dean Michael Spence
• Dean Robert Jaedicke
• Dean Rene McPherson
• Dean Arjay Miller
• Dean Ernest Arbuckle
• Dean Jacob Hugh Jackson
• Dean Willard Hotchkiss
• Faculty in Memoriam
• Stanford GSB Firsts
• Certificate & Award Recipients
• Dean’s Remarks
• Keynote Address
• Teaching Approach
• Analysis and Measurement of Impact
• The Corporate Entrepreneur: Startup in a Grown-Up Enterprise
• Data-Driven Impact
• Designing Experiments for Impact
• Digital Business Transformation
• The Founder’s Right Hand
• Marketing for Measurable Change
• Product Management
• Public Policy Lab: Financial Challenges Facing US Cities
• Public Policy Lab: Homelessness in California
• Lab Features
• Curricular Integration
• View From The Top
• Formation of New Ventures
• Managing Growing Enterprises
• Startup Garage
• Explore Beyond the Classroom
• Stanford Venture Studio
• Summer Program
• Workshops & Events
• The Five Lenses of Entrepreneurship
• Leadership Labs
• Executive Challenge
• Arbuckle Leadership Fellows Program
• Selection Process
• Training Schedule
• Time Commitment
• Learning Expectations
• Post-Training Opportunities
• Who Should Apply
• Introductory T-Groups
• Leadership for Society Program
• Certificate
• 2023 Awardees
• 2022 Awardees
• 2021 Awardees
• 2020 Awardees
• 2019 Awardees
• 2018 Awardees
• Social Management Immersion Fund
• Stanford Impact Founder Fellowships and Prizes
• Stanford Impact Leader Prizes
• Social Entrepreneurship
• Stanford GSB Impact Fund
• Economic Development
• Energy & Environment
• Stanford GSB Residences
• Environmental Leadership
• Stanford GSB Artwork
• A Closer Look
• California & the Bay Area
• Voices of Stanford GSB
• Business & Beneficial Technology
• Business & Sustainability
• Business & Free Markets
• Business, Government, and Society Forum
• Second Year
• Global Experiences
• JD/MBA Joint Degree
• MA Education/MBA Joint Degree
• MD/MBA Dual Degree
• MPP/MBA Joint Degree
• MS Computer Science/MBA Joint Degree
• MS Electrical Engineering/MBA Joint Degree
• MS Environment and Resources (E-IPER)/MBA Joint Degree
• Academic Calendar
• Clubs & Activities
• LGBTQ+ Students
• Military Veterans
• Minorities & People of Color
• Partners & Families
• Students with Disabilities
• Student Support
• Residential Life
• Student Voices
• MBA Alumni Voices
• A Week in the Life
• Career Support
• Employment Outcomes
• Cost of Attendance
• Knight-Hennessy Scholars Program
• Yellow Ribbon Program
• BOLD Fellows Fund
• Application Process
• Loan Forgiveness
• Contact the Financial Aid Office
• Evaluation Criteria
• GMAT & GRE
• English Language Proficiency
• Personal Information, Activities & Awards
• Professional Experience
• Letters of Recommendation
• Optional Short Answer Questions
• Application Fee
• Reapplication
• Deferred Enrollment
• Joint & Dual Degrees
• Entering Class Profile
• Event Schedule
• Ambassadors
• New & Noteworthy
• Ask a Question
• See Why Stanford MSx
• Is MSx Right for You?
• MSx Stories
• Leadership Development
• Career Advancement
• Career Change
• How You Will Learn
• Admission Events
• Personal Information
• Information for Recommenders
• GMAT, GRE & EA
• English Proficiency Tests
• After You’re Admitted
• Daycare, Schools & Camps
• U.S. Citizens and Permanent Residents
• Requirements
• Requirements: Behavioral
• Requirements: Quantitative
• Requirements: Macro
• Requirements: Micro
• Annual Evaluations
• Field Examination
• Research Activities
• Research Papers
• Dissertation
• Oral Examination
• Current Students
• Education & CV
• International Applicants
• Statement of Purpose
• Reapplicants
• Application Fee Waiver
• Deadline & Decisions
• Job Market Candidates
• Academic Placements
• Stay in Touch
• Faculty Mentors
• Current Fellows
• Standard Track
• Fellowship & Benefits
• Group Enrollment
• Program Formats
• Developing a Program
• Diversity & Inclusion
• Strategic Transformation
• Program Experience
• Contact Client Services
• Campus Experience
• Live Online Experience
• Silicon Valley & Bay Area
• Digital Credentials
• Faculty Spotlights
• Participant Spotlights
• Eligibility
• International Participants
• Stanford Ignite
• Frequently Asked Questions
• Founding Donors
• Location Information
• Participant Profile
• Network Membership
• Program Impact
• Collaborators
• Entrepreneur Profiles
• Company Spotlights
• Seed Transformation Network
• Responsibilities
• Current Coaches
• How to Apply
• Meet the Consultants
• Meet the Interns
• Intern Profiles
• Collaborate
• Research Library
• News & Insights
• Program Contacts
• Databases & Datasets
• Research Guides
• Consultations
• Research Workshops
• Career Research
• Research Data Services
• Course Reserves
• Course Research Guides
• Material Loan Periods
• Fines & Other Charges
• Document Delivery
• Interlibrary Loan
• Equipment Checkout
• Print & Scan
• MBA & MSx Students
• PhD Students
• Other Stanford Students
• Faculty Assistants
• Research Assistants
• Stanford GSB Alumni
• Telling Our Story
• Staff Directory
• Site Registration
• Alumni Directory
• Alumni Email
• Privacy Settings & My Profile
• Success Stories
• The Story of Circles
• Support Women’s Circles
• Stanford Women on Boards Initiative
• Alumnae Spotlights
• Insights & Research
• Industry & Professional
• Entrepreneurial Commitment Group
• Recent Alumni
• Half-Century Club
• Fall Reunions
• Spring Reunions
• MBA 25th Reunion
• Half-Century Club Reunion
• Faculty Lectures
• Ernest C. Arbuckle Award
• Alison Elliott Exceptional Achievement Award
• ENCORE Award
• Excellence in Leadership Award
• John W. Gardner Volunteer Leadership Award
• Robert K. Jaedicke Faculty Award
• Jack McDonald Military Service Appreciation Award
• Jerry I. Porras Latino Leadership Award
• Tapestry Award
• Student & Alumni Events
• Executive Recruiters
• Interviewing
• Land the Perfect Job with LinkedIn
• Negotiating
• Elevator Pitch
• Email Best Practices
• Resumes & Cover Letters
• Self-Assessment
• Whitney Birdwell Ball
• Margaret Brooks
• Bryn Panee Burkhart
• Margaret Chan
• Ricki Frankel
• Peter Gandolfo
• Cindy W. Greig
• Natalie Guillen
• Carly Janson
• Sloan Klein
• Sherri Appel Lassila
• Stuart Meyer
• Tanisha Parrish
• Virginia Roberson
• Philippe Taieb
• Michael Takagawa
• Terra Winston
• Johanna Wise
• Debbie Wolter
• Rebecca Zucker
• Complimentary Coaching
• Changing Careers
• Work-Life Integration
• Career Breaks
• Flexible Work
• Encore Careers
• D&B Hoovers
• Data Axle (ReferenceUSA)
• EBSCO Business Source
• Firsthand (Vault)
• Global Newsstream
• Market Share Reporter
• ProQuest One Business
• Student Clubs
• Entrepreneurial Students
• Stanford GSB Trust
• Alumni Community
• How to Volunteer
• Springboard Sessions
• Consulting Projects
• 2020 – 2029
• 2010 – 2019
• 2000 – 2009
• 1990 – 1999
• 1980 – 1989
• 1970 – 1979
• 1960 – 1969
• 1950 – 1959
• 1940 – 1949
• Service Areas
• ACT History
• ACT Awards Celebration
• ACT Governance Structure
• Building Leadership for ACT
• Individual Leadership Positions
• Leadership Role Overview
• Purpose of the ACT Management Board
• Contact ACT
• Business & Nonprofit Communities
• Reunion Volunteers
• Ways to Give
• Fiscal Year Report
• Business School Fund Leadership Council
• Planned Giving Options
• Planned Giving Benefits
• Planned Gifts and Reunions
• Legacy Partners
• Giving News & Stories
• Giving Deadlines
• Development Staff
• Submit Class Notes
• Class Secretaries
• Board of Directors
• Health Care
• Sustainability
• Class Takeaways
• All Else Equal: Making Better Decisions
• If/Then: Business, Leadership, Society
• Grit & Growth
• Think Fast, Talk Smart
• Spring 2022
• Spring 2021
• Autumn 2020
• Summer 2020
• Winter 2020
• In the Media
• For Journalists
• DCI Fellows
• Other Auditors
• Academic Calendar & Deadlines
• Course Materials
• Entrepreneurial Resources
• Campus Drive Grove
• Campus Drive Lawn
• CEMEX Auditorium
• King Community Court
• Seawell Family Boardroom
• Stanford GSB Bowl
• Stanford Investors Common
• Town Square
• Vidalakis Courtyard
• Vidalakis Dining Hall
• Catering Services
• Policies & Guidelines
• Reservations
• Contact Faculty Recruiting
• Lecturer Positions
• Postdoctoral Positions
• Accommodations
• CMC-Managed Interviews
• Recruiter-Managed Interviews
• Virtual Interviews
• Campus & Virtual
• Search for Candidates
• Think Globally
• Recruiting Calendar
• Recruiting Policies
• Full-Time Employment
• Summer Employment
• Entrepreneurial Summer Program
• Global Management Immersion Experience
• Social-Purpose Summer Internships
• Process Overview
• Project Types
• Client Eligibility Criteria
• Client Screening
• ACT Leadership
• Social Innovation & Nonprofit Management Resources
• Develop Your Organization’s Talent
• Centers & Initiatives
• Student Fellowships

Brought to you by:

Elon Musk: Saving the Fate of Tesla

By: Arpita Agnihotri, Saurabh Bhattacharya

In 2018, Tesla Inc. was one of the highest-valued automobile companies in the United States-despite never reporting profits. Although Elon Musk, the founder and chief executive officer of Tesla Inc.,…

• Length: 11 page(s)
• Publication Date: Mar 29, 2019
• Discipline: Organizational Behavior
• Product #: W19114-PDF-ENG

What's included:

• Teaching Note
• Educator Copy

$4.95 per student

degree granting course

$8.95 per student

non-degree granting course

Get access to this material, plus much more with a free Educator Account:

• Access to world-famous HBS cases
• Up to 60% off materials for your students
• Resources for teaching online
• Tips and reviews from other Educators

Already registered? Sign in

• Student Registration
• Non-Academic Registration
• Included Materials

In 2018, Tesla Inc. was one of the highest-valued automobile companies in the United States-despite never reporting profits. Although Elon Musk, the founder and chief executive officer of Tesla Inc., was appreciated for his vision, learning capabilities, active presence on social media, and dedication, he was also criticized for his leadership style and controversial tweets regarding the privatization of the company. Analysts and short sellers believed Musk's narrative ability had caused Tesla Inc. to become overvalued and suspected that the company was actually on the verge of bankruptcy. Did Musk's leadership do more harm than good? Would he be able to save Tesla Inc.?

Arpita Agnihotri is affiliated with Pennsylvania State University - Harrisburg. Saurabh Bhattacharya is affiliated with Newcastle University.

Learning Objectives

The case deals with leadership issues and how shareholders shape these issues. It discusses how an individual manages knowledge from multiple streams of business. The case also discusses how leaders sometimes suffer from being active on social media. Finally, the case examines whether privatization can help a fast-growing company survive. After completing the case, students will be able to do the following: Understand individuals' learning capabilities across multiple streams. Critically analyze leadership traits and how they affect business. Understand the role of a leader and the belief of investors in a leader's competency with regard to the market valuation of a firm. Understand the pros and cons of the privatization of a listed firm. Critically analyze the social media activities of a CEO.

Mar 29, 2019

Discipline:

Organizational Behavior

Geographies:

United States

Ivey Publishing

W19114-PDF-ENG

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

Customer Logins

Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.

• S&P Dow Jones Indices
• S&P Global Market Intelligence
• S&P Global Mobility
• S&P Global Commodity Insights
• S&P Global Ratings
• S&P Global Sustainable1
• Agencies & Media
• Energy & Infrastructure
• Financial Companies
• Insurance Companies
• Logistic Companies
• National Sales Companies & Dealers
• Tech Companies
• Vehicle Demand
• Vehicle Production
• Sustainable Mobility
• Marketing Activation
• Sales Optimization
• Industry Performance
• automotiveMastermind
• Parts Demand & Fitment
• Owner Notification
• Vehicle Identification
• Research & Analysis
• Electric Vehicle Trends
• The Future of Mobility
• In Person Events
• Webinar Replays
• All Experts
• Automotive Aftermarket (Worldview)
• Automotive Catalyst for Insight
• Automotive MarketInsight
• Automotive Planning Solutions
• Automotive Vehicle Performance and Compliance Monitor (VPaC)
• Automotive Vehicle Technical Intelligence Platform (VTIP)

Tesla Motors: A case study in disruptive innovation

Senior Director, Cost Benchmarking Services, IHS Markit

Tesla Motors broke the mold. Then reinvented it. Not only did Tesla Chief Executive and Chief Product Architect Elon Musk demonstrate that convention could be defied, he did it in an industry with 100-year-old traditions, norms, and processes. Of course, the auto industry has innovated in the past, but Tesla, which was founded in 2003, has pushed the envelope beyond what most automakers thought possible. The company's Silicon Valley-style "techpreneurship" enabled it to move faster, work more efficiently, and create groundbreaking new ideas around sustainable mobility and automotive technology.

After all, this is Musk's modus operandi. In 1998, he disrupted e-commerce by creating a widely deployable and secure payment platform called PayPal. And in 2002, he launched SpaceX, a company that designs, manufactures, and launches rockets and spacecraft. The company's goal is to enable people to live on other planets. Musk, himself, wants to "die on Mars" and wholeheartedly believes it will be possible.

He is also a lightning rod in the debate around mass transit with an idea some critics refer to as vaporware. Dubbed Hyperloop, Musk's idea is to create a high-speed transportation system that is immune to weather, impossible to crash, uses little energy and recaptures most of what it uses, and travels twice the speed of today's commercial aircraft. He believes the concept could move people from Los Angeles to San Francisco in just 35 minutes. Oddly, he has no interest in making the Hyperloop a reality but, rather, is putting his ideas out there for others to take and improve the human experience.

With Tesla, Musk is focused on disrupting mobility. As of mid-June 2014, the company has released all of its patent holdings, claiming that open-source innovation is more powerful than anything one company could do individually. While IP lawyers cringed, Wall Street applauded, sending Tesla's stock price up 14% to $231 a share. This radical approach to innovation runs deep, as evidenced in the technology and design approach of the company's flagship Model S, its $69,900 luxury car.

In August 2014, the IHS Technology Teardown Team purchased a used 2013 Model S and took it apart to see what made it tick. The team dismantled 12 systems and cataloged every part within each system. The teardown included both the electronics systems inside the car's interior and the drivetrain (see sidebar "What's inside the Model S?").

Technical differences

The teardown confirmed that the Tesla Model S is unlike anything else on the road. A massive plot of real estate in the center stack is dedicated to a 17-inch touch screen infotainment system, which became—since its production launch in 2011—an instant industry benchmark for automotive display integration. There is room left for only two physical buttons on the console—one for the hazard lights and one for the glove compartment release (see sidebar below).

The technical specifications are impressive. The 17-inch screen is a Chi Mei Optoelectronics display with 1920 x 1200 WVGA resolution that includes a projected capacitive touch screen—the same technology employed in many smartphones and tablets. The system runs on a Linux-based operating system, offers Garmin navigation with Google Earth overlays, and computes at speeds still besting most other systems available today with its NVIDIA Tegra 3 processor combined with 2 GB of DDR3 SDRAM.

The system includes an embedded 3G modem from Sierra Wireless that runs broadband data off AT&T's network. It can receive software updates over the air and controls all of the functions of infotainment, audio, navigation, Bluetooth phone, HVAC, and even vehicle settings like windows, door locks, sunroof, trunk release, traction control, headlights, steering, and suspension settings.

In addition, a 12.3-inch fully digital instrument cluster sits directly in front of the driver with its own NVIDIA Tegra 2 processor, which it uses to handle the diverse array of graphics, content, and redundant outputs for the driver. About the only "familiar" driver components are the steering wheel, pedals, and transmission shifter—the latter actually borrowed from the Mercedes-Benz parts bin.

Manufacturing differences

The system is clearly in a class of its own. However, with all of these high-end specifications, how can Tesla sell this as a standard feature in every Model S? More disruption.

The company chose to change up the supply chain and borrow from the electronic manufacturing services (EMS) model of production that is standard practice in the consumer electronics industry. In this respect, Tesla is closer to being a technology company than a traditional automobile maker. Much like how Apple designs the iPhone and then employs Foxconn to build it, Tesla contracted with a leading EMS provider to build its center infotainment system, instrument cluster, and several other systems in the Model S. This model required Tesla to internalize much of the hardware and software development, as well as the systems integration work. Given that Tesla has hired its engineers from all over Silicon Valley and beyond, this was not a problem.

The Silicon Valley culture and the EMS approach to manufacturing were a clear advantage for Tesla at one time but no longer make it unique. The EMS model is expanding in the automotive industry, and the likes of Compal, Flextronics, Foxconn, and Jabil are working with brands including Chrysler, Daimler, Ford, General Motors (GM), Jaguar, and Volkswagen.

However, the transition to the EMS model can be problematic. Ford outsourced the entire infotainment architecture for the development and deployment of MyFord Touch in 2011 to an EMS provider. The initial system had technical software problems that required Ford to issue several software upgrades. This cost tens of millions of dollars, contributed to a poor customer experience, and caused perception problems for Ford, from which the company has only recently recovered.

Development differences

In the last decade, virtually every automaker has relocated portions of vehicle and vehicle technology development to new R&D facilities in the San Francisco-to-San Jose tech corridor. In fact, some early innovators predate Tesla: BMW, Daimler, and Volkswagen set up shop in the Valley in the mid-1990s, and Honda opened its first office in 2003, the same year Tesla was founded.

The reasons for doing so now go beyond manufacturing. Automotive OEMs are co-locating with the likes of Apple, Cisco, Facebook, Google, HP, Intel, NVIDIA, and Oracle to help speed the pace of innovation. This involves accelerating the pace of hardware, software, services, and applications development but also rethinking the process of design.

The development speed of a typical mobile device is often six months or less. Compare that with the design-to-production timing for a new vehicle of approximately four years and it's no wonder car-buying consumers have been underwhelmed by standard in-vehicle electronics. Even today, consumers can find navigation and infotainment systems designed in 2008 for sale in model-year (MY) 2014 vehicles. To give an idea of how ancient that is in "tech-years," BlackBerry held more than 50% market share among smartphone users in 2008. Remember BlackBerry?

Tesla has had a competitive advantage over auto industry rivals in design innovation since day one. Located in arguably the center of the world for technological innovation, Tesla was able not only to construct its vision of mobility in Silicon Valley, but also recruit its employees from many of the leading technology companies to design and build the car there as well. All other OEMs grasping for automotive technology leadership had to learn the culture of Silicon Valley, figure out how to adapt to it, and dissolve the century-old "way of doing things." Tesla was born into it.

Service differences

With Tesla's technology come some very important services. Perhaps at the top of the list is the convenience of over-the-air (OTA) software updates for vehicle recalls, which Tesla has made free and standard for Model S owners. This functionality has, in turn, created plenty of positive press for the company.

It all starts with the connection. The 3G connection in the Tesla infotainment system is already providing this solution via relatively old wireless technology. Since the modular and flexible hardware architecture of its infotainment system allows for mid-cycle technology enhancements, IHS expects Tesla will soon debut true 4G LTE connectivity in its vehicles. The added bandwidth will further enhance the OTA update service, as well as the rest of the services the Model S offers.

IHS forecasts a 60% global penetration rate on embedded cellular connections in cars by 2022, with 4G LTE bandwidth comprising roughly 60% of that market. GM and Audi have actually beaten Tesla to market on this specification as both OEMs already have 4G LTE cars on the road now.

One central purpose of this mass-market vehicle broadband adoption is to accommodate FOTA (firmware over the air) and SOTA (software over the air). Tesla has already deployed this function in part because it allows the company to provide vehicle service without needing to charge (or possibly pay) for service bay labor.

Consider Tesla's recall of the Model S for overheating charger plugs in January 2014. The day the recall notice came out, Tesla had all 29,222 Model S vehicles updated wirelessly and running the new safer version of the software. Ironically, around the same time, GM had a similar fire-related safety recall issued that also required a software update. Despite all of its vehicles having standard OnStar telematics, owners were required to take their cars into a dealership for the software update, costing GM a warranty labor expense on all 370,000 recall service appointments.

While far from a sure thing, nanotechnology offers significant business opportunities for companies willing and able to take the long view. One avenue is to identify a sizable opportunity in an existing market where a nanotech product can displace an existing inferior solution, e.g., a coating for an automobile that keeps itself clean, clears mist from side mirrors, or self-repairs scratches in the automotive paint.

Volume aside, Tesla paid much less on a per-vehicle basis than GM, simply by providing a software update procedure that has been on personal computers for more than two decades and mobile phones since before the BlackBerry.

IHS sees the OTA software trend continuing strongly. With vehicles like the new Mercedes-Benz S-Class claimed to have over 65 million lines of code—10 times that of the Boeing 767 Dreamliner—the automotive industry stands at a crossroads. Software recalls are about to become a major problem, one that will be expensive if this type of technology is not broadly deployed.

As of February 2014, over 530 software-related recalls had been reported since 1994 (see figure below). Among these, 75, or 14%, were issued for MY 2007 alone, with over 2.4 million vehicles affected. Numerous questions arise from the variation in volume by model year—not the least of which is, why have recalls for MY 2007 been so numerous? There are likely several reasons for this spike:

MY 2007 had the last large-sales volume before the economic recession plunged US car purchases from approximately 16 million to 10 million in 2010.

Many new electronics systems were added in MY 2007 for infotainment, advanced driver assistance systems, and core auto control systems, which increased the amount of software in the typical car.

MY 2007 involved recalls of 75 vehicles, the most of any model year. Many automotive OEMs had multiple model recalls with software updates. Toyota had especially high recall rates that included software updates.

It is in this context that IHS expects FOTA and SOTA to be enabled in over 22 million vehicles sold worldwide in 2020 alone, growing from approximately 200,000 vehicles in 2015. Major deployment will begin in 2017. In the meantime, Tesla will continue to leverage its first-to-market status with FOTA and SOTA to help lower overall costs to the end user and improve unit margins on each additional Model S sold.

Powertrain differences

The heart of Tesla's Model S is its electric propulsion system, which includes a battery, motor, drive inverter, and gearbox. The battery is a microprocessor-controlled lithium-ion unit available in two sizes; spending more buys more range and more power. The induction motor is a three-phase, four-pole AC unit with copper rotor. The drive inverter has variable-frequency drive and regenerative braking system, while the gearbox is a single-speed fixed gear with a 9.73:1 reduction ratio. The battery of each Model S is charged with a high-current power inlet, and each vehicle comes with a single 10kW charger and mobile connector with adapters for 110-volt and 240-volt outlets as well as a public charging station adapter.

This powertrain package allows Tesla to deliver a longer driving range than any other EV maker—about 200 miles versus just under 100—plus acceleration and driving performance similar to or better than a traditional gasoline-powered vehicle. While several automakers offer EV powertrains—Nissan's Leaf and Chevrolet's Volt, for example—none matches Tesla's commitment to EV development. And as a clean slate company, Tesla has had the advantage of developing an entirely new powertrain and supply chain without the hindrance of existing dealerships, physical plants, or inventory.

Other EV products use lithium-ion batteries, but in lower kWh and using fewer, but larger, battery cells. For example, the Nissan Leaf uses a 24kWh battery, with 192 cells and EPA-estimated range of 84 miles. The Model S' 85kWh battery has more than 7,100 cells, allowing it to move greater weight faster and with longer range.

To address range anxiety, Tesla has made a significant investment developing charging stations in the US (112 to date, according to the Tesla website), Europe (63), and Asia (17). These supercharger stations can swap out the battery in less time than it takes to fill a tank of gas. Owners must come back and swap again for their original battery. Nonetheless, this helps alleviate drivers' worries about becoming stranded on long trips.

Tesla is working to drive battery costs down in anticipation of the launch of its mass-market, $35,000 Model 3 EV sedan, which is slated to debut in 2017. To that end, the company recently announced a new $5 billion "gigafactory" battery plant in Nevada in partnership with Panasonic. It will reportedly handle all elements of battery cell production, from raw material to battery pack, rather than only battery pack assembly. And Tesla intends to sell its OEM batteries for non-automotive applications, which will enable it to increase production volume and reduce unit cost.

What does the future hold?

• Created a fun-to-drive electric roadster. Check.
• Leveraged the lessons to scale-up to a full-luxury sedan. Check.
• Disrupted the luxury car market and, according to IHS Automotive data, attracted "conquest" buyers from the likes of BMW, Mercedes, and Lexus, not to mention Toyota and other volume brands. Check.
• Diverged from entrenched supply chains to develop technology in-house and lowered per-unit development costs for an industry-leading infotainment platform. Check.
• Addressed a software-related vehicle safety recall in one day for almost 30,000 cars. Check
• Created a company destined to influence the industry as a whole and did so while pleasing Wall Street. Check.

Tesla has established benchmarks for infotainment system hardware, software flexibility, and manufacturing supply chain. The company innovated powertrain design, which has proven both robust and viable for everyday use. And it has received plenty of accolades for aesthetic design from the automotive media. The result is that "made in Silicon Valley" is no longer roundly dismissed as an option for an automotive OEM.

So what's next for Tesla? How does it maintain its leadership in technology development? Has it created a sustainable competitive advantage? Can it deliver on promises of a new luxury crossover with the Model X and a new high-volume EV competitor with the Model 3? Will Tesla be able to steal market share from not only luxury marques, but also from higher-volume brands?

Going forward, Tesla faces five distinct challenges:

Consumer demand. Perhaps the most significant is consumer acceptance of electric vehicles. In the first eight months of 2014, EVs accounted for only 0.7% of the 11.2 million light-vehicle sales in the US. Even Renault-Nissan CEO Carlos Ghosn, a staunch supporter of EVs, last year acknowledged Renault-Nissan would miss its original 2016 target of selling 1.5 million EVs by four to five years.

Dealerships and service. Today, Tesla's direct-sales model is illegal in most US states. As Tesla attempts to go mainstream, it will need the legal restrictions lifted or be forced to adjust its model. Further, as vehicles age and the numbers sold increase, there will be maintenance issues that cannot be handled by OTA software updates. Tesla will need to build out an after-sales service network that is robust enough to handle the demand.

Marketing. To date, demand for the Model S exceeds supply. But as the company targets the mass market with the Model 3 and aims for 500,000 units sold in 2020, it will need to beef up its marketing. Tesla's Apple Genius-bar-inspired dealership model has worked for the affluent early adopters, but can it be scaled up to meet its sales targets?

According to IHS registration data, 51.8% of all Tesla buyers have annual household incomes over $150,000. By comparison, the percentage of Chevrolet Malibu buyers with a household income higher than $150,000 is only 6.5%. Tesla will need to create a marketing strategy that targets economy-car consumers, who are notably different than those who buy the $80,000 to $100,000 Model S.

Production Boosting output will likely mean growing pains for Tesla as it transitions to a high-volume production model. How the company manages the transition will determine Tesla's near-term future. Of course, many automakers have had difficulties ramping up new plants or launches and yet overcome the challenges in the longer term. While growing pains are to be expected, there is no reason to believe Tesla does not have the capacity to become a volume manufacturer.

Innovation. Tesla has already made a name for itself around technology adoption and innovation. But it will be challenged, as all first movers are, to maintain that lead and continue to push the boundaries with future products. Assuming the gigafactory and its supply chain allow Tesla to make a mass-market offering and keep its infotainment stack as an industry benchmark, the company's next move will be automated driving. Musk has already stated that Tesla will "hit the market" by 2017 with a partially self-driving vehicle. With many other OEMs targeting this time frame as well, Tesla might not be as disruptive in automated driving as it has been in infotainment design and sustainable mobility

But then again, it might surprise the market and break loose another game-changing product or technology before the rest of the automotive industry is ready—because that's how Silicon Valley works.

Tesla's user-experience focus sets it apart

We live in an era of smartphone ubiquity. So we are routinely disappointed when we get into our cars and are forced to make do with resistive touch screens (if we are lucky) or LEDs and vacuum fluorescent displays controlled by dials and buttons (if we are not). Tesla understands the importance of smartphone ubiquity to modern life, so it's no accident the transition is seamless when one climbs into a Model S

That is not the case with the majority of comparably priced vehicles from other auto manufacturers. Indeed, many of the recent automotive infotainment systems that the IHS Teardown Team has analyzed feature relatively small displays (typically 7-inch diagonal size or less) and low resolution (typically 800 x 480 WVGA or less).

Then there's the touch technology. Many of the touch screens IHS tears down in automotive head units are using resistive technology. Combine these legacy technologies with often underpowered processing chips and proprietary software and you often end up with a user experience that is unfamiliar, not intuitive, and has a lot of "latency" issues (meaning it's slow).

At the center of the dashboard in the 2013 Model S is the Tesla Premium Media Control Unit, which blows away all of the head units we have seen in specs, not to mention sheer size. The 17-inch diagonal display with touch screen makes for a very large assembly when removed from the dash. Inside the unit are many subassemblies, which are all modular, giving Tesla numerous design options for future models.

Several of the printed circuit board (PCB) assemblies, including the main assembly, feature Tesla Motors logos and copyrights, meaning that they are all designed and controlled by Tesla. In and of itself, this is unusual, as we find that most automotive OEMs entrust and outsource the bulk of their head unit designs to third parties such as Harman

Automotive, Panasonic, Alpine, Denso, Pioneer, and others. Tesla is thus designing and controlling the bill of materials down to the component level. This is closer to Apple's design-and-build model than it is to other automakers.

Such an approach affords Tesla leverage in the supply chain, more direct control over the finished product, and ultimately more control over the user experience. It also gives Tesla a potential performance and technology edge that others might find difficult to quickly emulate, as so much of the design is done in-house at Tesla rather than by the head unit suppliers.

Many other PCB assemblies are modular and come from third parties, such as the processing PCB, which is a turnkey solution from NVIDIA, and the air interface module, which is from Sierra Wireless.

All told, there are 10 PCB assemblies in Tesla's media control unit. The modularity of this design is not unusual for automotive electronic systems and allows Tesla many options. If Tesla wants to upgrade the processing power or change the air interface module, it may be possible to achieve this more easily and with less redesign than if all of the functions were integrated into fewer PCB assemblies. In this sense, modularity of design, rather than aggressive integration, has always been an automotive electronic standard. Not only does modularity give automotive designers many upgrade options, it improves reparability.

The center console of the Tesla Model S is dominated by a 17-inch touch screen infotainment system, which is an industry benchmark for automotive display integration.

What's inside the Model S?

In August 2014, IHS bought a second-hand 2013 Tesla Model S. The Los Angeles-based IHS Technology Teardown Team set to work pulling it apart to examine all primary systems inside the car. The team has cataloged every component and developed a detailed bill of materials for each system that includes the technical specifications, cost, and manufacturers of the components. In addition, the team estimated the labor and manufacturing cost of each system.

The 12 systems analyzed by the IHS Teardown Team comprised the following:

• Premium Media Control Unit
• Instrument Cluster
• EV Inlet Assembly
• High-Voltage Junction Box
• Battery Charger
• Thermal Controller
• Liftgate Left Hand Taillight
• Power Liftgate Module
• Body Control Unit
• Sunroof Control Unit
• Passive Safety Restraints Control Module

Mark Boyadjis, Senior Analyst, Infotainment and Human-machine Interface, IHS Automotive Andrew Rassweiler, Senior Director, Teardown Services, IHS Technology Stephanie Brinley, Senior Analyst, Americas, IHS Automotive Posted 7 October 2014

Keep yourself updated with the latest news of automotive and mobility industry featured on our Mobility News and Assets Community page to stay ahead of your competition.

BriefCASE: Climate politics - France's carbon footprint incentive stirs debate on global EV supply chains

Fuel for Thought: The Road to Transformation - Charting the course for the future of trucking

March 2024 US auto sales reflect uneasy progress