Contemporary Strategy Analysis, 10th Edition

Case 12Tesla: Disrupting the Auto Industry*

Tesla's strategy was no secret: in 2006, chairman and CEO, Elon Musk, had announced:

“So, in short, the master plan is:

• Build a sports car
• Use that money to build an affordable car
• Use that money to build an even more affordable car
• While doing above, also provide zero emission electric power generation options
• Don't tell anyone.”¹

By July 2017, Tesla had implemented its master plan. Phase 1 (“Build a sports car”) was realized with the launch of its Roadster in 2007. Phase 2 (“Use that money to build an affordable car”) began in 2013 with the launch of Model S. Phase 3 (“Use that money to build an even more affordable car”) was realized with the launch of Model 3 in July 2017. Providing “zero emission electric power generation options” involved, first, establishing SolarCity, which installed solar power systems; then, merging SolarCity with Tesla in 2016. The only deviation from Musk's original plan had been the introduction of Model X—an SUV derivative of Model S—in 2015.

Tesla's “Master Plan, Part Deux,” which would take Tesla into integrating solar energy generation with storage, expanding to “cover the major forms of terrestrial transport” (including heavy‐duty trucks), fully autonomous driving, and vehicle sharing, was outlined by Elon Musk on July 20, 2016:

“So, in short, Master Plan, Part Deux is:

• Create stunning solar roofs with seamlessly integrated battery storage
• Expand the electric vehicle product line to address all ...