TESLA'S COMPILED SECRET FORMULA PESTEL ANALYSIS

TESLA'S COMPILED SECRET FORMULA

1. Tesla`s Secret Formula Section 1 Group 2

2. PESTEL Analysis P Politics E Economy S Social T Technology E Environment L Legal New global trade agreements Govt. incentives for electrical incentives Political stability in majority of markets Rising popularity of low-carbon lifestyles Increasing preference for renewable energy Improving wealth distribution in developing markets Expanding environmental programs Rising standards on waste disposal Renewable energy costs were declining Battery costs were declining Economic stability issues High rate of technological iteration Rise in automation in business Increasing popularity of online mobile systems Expanding international patent protection Energy consumption regulations Dealership sales regulation in the United States PESTEL Analysis

3. PORTER’S 6 FORCES ANALYSIS Cost of brand development is exorbitant (Weak Force) There is a high cost involved in doing business (Weak force) High Economies of scale (Low force) Threat of New Entrants There is a moderate availability of substitutes (Moderate force) The volume of products purchased per customer is small (Weak Force) Low switching costs (Strong Force) Bargaining power of Tesla’s Customers Pushing towards integration with the suppliers (Moderate force) Number of suppliers are moderate (Moderate Force) The supply level is moderate (Moderate force) Bargaining power of Tesla’s Suppliers Small number of competitors are few (Weak Force) Large amount of aggression from the few competitors (Strong Force) Switching cost is low (Strong Force) Competitive Rivalry Switching cost is low (Strong Force) There is a moderate availability of substitutes (Moderate force) The performance of substitutes is only moderate in comparison (Moderate force) Threat of Substitutes Communities (Highest Priority) Customers Employees Investors/Shareholders Government Stakeholders PORTER’S 6 FORCES ANALYSIS

4. PROJECT STATEMENT AND SCOPE Increasing the existing manufacturing capacity of Tesla and decreasing the bottleneck in the process with enhanced automation Problem Statement Investing in Industrial IOT and Cloud computing to increase the existing manufacturing capacity of Tesla by 2025 Scope

5. Start Raw Material Supplier End Forge Foundry Polymer Moulding Engine Body Shop Painting Final Assembly Transmission Parts Hardeware & Soft Trim Component Facility Battery Design L 1 Diagram : manufacturing

6. AS-IS MODEL L 2 DIAGRAM : ASSEMBLY LINE Chassis Assembly Transmission Assembly Engine Assembly Gear Box Assembly Radiator Assembly Wind Shield Assembly Main Body Assembly Seats Assembly Inspection Assembly Finishing Assembly Doors Assembly Wipers Assembly Start Stop Electrical Assembly Finished Car

7. Cathode Manufacturing Separator Manufacturing Anode Manufacturing Copper Foil Cathode Electrode Raw Materials Separator Anode Electrode Winding Raw Steel/Aluminium Can & Cup Cell Assembly Electrolyte Manufacturing Pack Enclosure Cell Module Cell Cell Cell Module Pack Module Module Module Vehicle Assembly Battery Pack Lifetime Usage Battery Pack Recycling Aluminium Foil L 2 DIAGRAM : ASSEMBLY LINE AS-IS MODEL

8. Start Cell Inspection Cell Supplier Cell Module Battery Pack End Approve Reject Start Complete Engine and Automatic Related Assembly Chassis Assembly Car Interior and Component Assembly Finishing Assembly Inspection Assembly End L 2 DIAGRAM : BATTERY DESIGN L 2 DIAGRAM : ASSEMBLY LINE TO-BE MODEL

9. Environment Machines Delays IN Manufacturing Management Constant Shop-Floor Layout changes Changes in Supply Chain Design Complications Inexperienced in Mass Manufacturing Use of numerous Robots on one car Inability of Robots to handle Uncertain Conditions ROOT CAUSE ANALYSIS

10. Critical Success Factors Most companies underestimate distribution, but Tesla took it so seriously that it decided to own the entire distribution chain Distribution Unquestionable quality of parts used Extremely good after sales service with regular remote software updates and maintenance Quality and After Sales Service Over subscribed by investors Market willingness to support Tesla with various financing structures Dynamic non-hierarchical team and leadership Stakeholders Tesla adopted a high end disruptors’ innovation technology , difficult to imitate Cross Fertilization of ideas from various industries Technology Outperforms existing products on critical attributes on their debut, sell for a premium price rather than discount. . Premium Pricing Structure Targets most profitable customers, more discriminatory by nature and least price sensitive dominate the market for high-end electric cars hence exercise monopoly   . Target Customer Base TESLA

11. Methods adopted by TESLA for successful digital transformation 01 High leadership commitment, Engaging CDO Having the right, digital-savvy leaders in place 02 Redefining roles & responsibilities to align with the transformational goals; Better funded & approach to talent Building capabilities for the workforce of the future- 03 Cultural & Reinforcing Behavioral change like open work environment, continuous learning 04 Information accessible across the organization Communicating where it is headed, why it is changing & why it is important & Using digital channels for communication communicating frequently via traditional and digital methods 5 Empowering people to work in new ways Giving day-to-day tools a digital upgrade

12. ECOSYSTEM FACTORS Technology Cross sharing ideas and techniques from sibling companies like SpaceX. Innovative and future centric automotive. Strategy Tesla entered the market through expensive high-end cars targeted to the more financially privileged class of people. Once established and as a successful idea, it ventured into a more competitive market of lower-level priced models. So the first model was launched to get the company’s mission out in the marketplace. Resources Technology patents and Knowledge based resources. Human resources. Competitive advantage Pioneers of technology with first mover advantage. Battery manufacturing, building scale and eliminating costs. Information and idea sharing across sibling industries. Training Hiring people with complex problem solving skills instead of going for experienced employees and making them work and putting them in small teams and making them work hard from the very beginning. Business Model Automotive manufacturing and energy generation. Process Producing every component in house in a highly automated production floor and continuously working on software updates and improving the layout of the factory to be more efficient supported by a lightning fast feedback loop from the homegrown system. Partners Tesla has confirmed partnerships with Daimler and Toyota for helping them develop electric cars and other parts. It also works with Panasonic as a partner in battery and solar panel research and development. The partnership with Airbnb enabled setting up of destination chargers at certain host houses. . Skills Innovation and complex problem solving.

13. 4. Constructive use of subordinates’ idea 3. Confidence and trust in subordinates 2. Open communication 1. Shared vision/information EGALITARIAN LEADERSHIP COLLABORATIVE WORKING ENVIRONMENT TOP MANAGEMENT COMMITMENT CHANGE IN MANAGEMENT SYSTEM USE OF INFORMATION TECHNOLOGY 1. Friendly interactions 2. Confidence and Trust 3. Teamwork Performance 4. Cooperative environment 5. Recognition among employees 1. Sufficient knowledge about the BPR projects 2. Realistic expectations of the BPR results 3. Frequent communications with BPR team and users 1. New reward system 2. Performance management 3. Employee empowerment 4. Timely training and education 1. The role of IT 2. Use of Up-to-date communication technology 3. Adoption of IT BPR CRITICAL SUCCESS FACTORS

14. BPR Failure Factors Resistance to change Middle management fear of losing authority Employee’s fear of losing job Skepticism about project result Feeling uncomfortable with new working environment Tesla recruits the best in Industry, should be a problem solver Employees can work in competitive environment Instead of in small project team authority will increase As they are the first mover so skeptical about the result

15. RECOMMENDATIONS

16. Industrial IOT It creates self-healing automated systems that intelligently regain control when the downtime occurs Self-dependent systems Digital twins replicate the developing product in a digital form Digital Twins Predictive maintenance, condition monitoring Product quality control based on condition monitoring Enterprise inventory management Robots Conditions can be monitored and their efficiency can be improved The quality of Car parts , that are getting manufactured can be monitored It creates self-healing automated systems that intelligently regain control when the downtime occurs

17. Product quality control based on condition monitoring Predictive maintenance, condition monitoring

18. Cloud CLOUD COMPUTING Tesla is trying to increase its manufacturing volume this means increase in the number of plants and cloud will give a platform to share technologies and ideas MANUFACTURING IIOT needs to be enabled with cloud for proper information transfer and sharing . ASSISTANCE TO IIOT

19. Activities\Time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Trigger For BPR                               Conception                               Requirement Gathering                               Requirement Analysis                               IIoT in Plant and Equipment                               New Assembly Line                               Cloud Computing set up                               Piloting                               Implementation                               Support                               SOLUTION ROADMAP

20. Visualization

21. Thank You Tesla’s Secret Formula