Tesla Case Study Paper

1793 Words 8 Pages
While Tesla designs, manufactures, sells and services their own vehicles they recognize that due to the company being one smallest auto manufacturers in the world that they needed strategic partnerships to stay in business. The first partnership that Tesla entered into was being with Daimler in 2010. For a 10% stake in Tesla, Daimler got Tesla’s lithium-ion battery packs into 1,000 of its electric smart cars. With the infusion of capital from Daimler, Tesla could continue with their research and development and stay in business. The investment also enables the two companies to work together further on the battery systems and electric drive systems. In 2011, Toyota acquired a 3% stake in Tesla and in return Tesla agreed to collaborate …show more content…
Tesla CEO Elon Musk (2016) has said that to meet the aggressive production goals, Tesla would be dropping suppliers who could not meet the lead time goals. This makes lead time the most important part of any Supplier Contract that Tesla currently enters into. Musk (2016) also went on to say that Tesla will be moving a lot of their outsourced components in house, in order to reduce risk throughout their supply chain. This can be expensive, but if Tesla does choose to move more production in house, it would mean less suppliers. Less suppliers would mean that there would be less suppliers, and consequently less supply contracts. This could reduce some of the supply chain management tasks within Tesla, but it remains to be seen if they will make this …show more content…
As Tesla grows, and becomes more available to the public at large, due to a future supporting infrastructure and more affordable models, Tesla may want to consider employing a decentralized model at that point in order to meet the potentially vast and varied demand for its vehicles. The current model that Tesla is using may be unable to meet the demand of its future consumers due to its current lack of scalability. For example, there are current talks that Tesla is gearing up to make a model for the “masses”, “Model 3”, that will be more affordable and available to traditional consumer by 2018 (Belvedere, 2016, para. 2). Also, with the move of making the Model 3, Tesla has plans to eventually supplant the current status quo of driving with our own two hands in cars that use gas and give out emissions with Tesla’s vehicles that feature auto-pilot and no emissions driven by the “masses” (Robinson, 2016, para. 2). In order to make that dream a reality, Tesla may have to change its current centralized distribution model to a decentralized model, since such a model would offer more scalability and would coincide more with a mass production type of

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