Tesla Motors

Tesla Motors, Inc.
January 1, 2015. Elon Musk, chief executive officer (CEO) of Tesla is taking it easy on this New Year’s
Day. While having his coffee, he scrolls through some recent issues of The Wall Street Journal on his iPad.
A headline from one current story jumps out at him, “Gasoline prices have declined for 88 consecutive
days, the longest streak of falling prices on record.”۱ The slide in gas prices, which began in September
2014, also happened to coincide with the slide in Tesla Motors (TSLA) stock. With increasing oil, and
therefore gas, prices, people had an incentive for purchasing electric cars. Now with gas prices dropping, the incentive to buy would start to become less of one, and the demand for the product would
probably drop. This was one of the challenges facing Musk on this New Year’s Day. In addition to having to contend with lower selling costs due to rising production, Tesla was also confronting increasing
competition and economic headwinds that were likely going to lower the demand for electric cars.
Musk is a serial entrepreneur longing to leave a legacy, and he believes that Tesla just might be the
company that will help him leave his mark. He has a large profile already and has been described as
“Henry Ford and Robert Oppenheimer in one person,” as well as “Tony Stark, the eccentric inventor
better known as Iron Man.”۲, ۳ (In fact, Musk made a cameo appearance in Iron Man 2.) But, with several pressing issues and the additional demands of running SolarCity and SpaceX, can he find a way
to make it all work?
As Musk attempts to prioritize all of the critical information that must be reviewed, he contemplates
the many obstacles in his path at Tesla Motors. Is Tesla the next great American car company? Can it
disrupt the market with electric vehicles just as Japanese and Korean car companies did in the past
with their high-quality, low-fuel-consumption combustion vehicles? What is the competition doing
to compete with Tesla, and how will Tesla need to change or adjust its strategy accordingly? Can an
electric-car company really gain a competitive advantage with a limited infrastructure? Is Tesla’s business model sustainable? Most importantly, can Tesla scale production to meet demand for the Model S
and its upcoming Model X, while also maintaining the same high quality and simultaneously driving
down costs? Should Musk consider instead selling to an established car company or partnering even
more closely with one that already has an equity stake in Tesla?
As Musk reads The Wall Street Journal article, he reaches for his cup of coffee and wonders, “What
will the next few years bring for this company, and what should I do to ensure its success?”

Professors Frank T. Rothaermel and David R. King prepared this case from public sources. We gratefully acknowledge Professor Erin Zimmer’s
contribution to an earlier version of this case, and Research Associate Michael McKay’s assistance in data collection. This case is developed for the
purpose of class discussion. It is not intended to be used for any kind of endorsement, source of data, or depiction of efcient or inefcient management. All opinions expressed, and all errors and omissions, are entirely the authors’. © by Rothaermel and King, 2015.

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Tesla Motors, Inc.

Tesla Motors, Inc.

Elon Musk: Engineer Entrepreneur Extraordinaire
In 1989, Elon Musk left his native South Africa at age 17 to avoid being conscripted into the army.
Says Musk, “I don’t have an issue with serving in the military per se, but serving in the South African
army suppressing black people just didn’t seem like a really good way to spend time.”۴ He went to
Canada and subsequently enrolled in Queen’s University in 1990. After receiving a scholarship, Musk
transferred to the University of Pennsylvania. He graduated in 1995 with bachelor’s degrees in both
economics and physics and then moved to California to pursue a PhD in applied physics and material
sciences at Stanford University.5
After only two days, Musk left graduate school to found Zip2, an online provider of content publishing software for news organizations, with his brother, Kimbal Musk. Four years later, in 1999, computer-maker Compaq acquired Zip2 for $341 million (and was in turn acquired by HP in 2002).
Not one to stand still, Elon Musk moved on to co-found PayPal, an online payment processor. In
2002, eBay acquired PayPal for $1.5 billion, netting Musk $175.5 million for his 11.7 percent share of the
company. Although it was financially lucrative, Musk still harbors resentment about this deal. He feels
that letting eBay acquire PayPal sold short the company’s potential, dooming it to a future as a niche
tool rather than a launch pad for a full-fledged, online financial institution.
Musk describes himself as an “engineer and entrepreneur who builds and operates companies to
solve environmental, social, and economic challenges.”۶ He is now leading firms on three different
fronts: electric cars, renewable energy, and space exploration. Two of his three ventures—SolarCity and
SpaceX—seem to be doing well. SolarCity’s goal is to become the Walmart of solar-panel installations,
and in 2014 it installed 34 percent of solar panels in the United States.7 SpaceX aims to send satellites
into orbit at a quarter of the current cost. Since Musk took over engineering responsibilities, he has
managed to launch rockets that reach outer space successfully. In May 2012, SpaceX’s Dragon spacecraft attached to the International Space Station, exchanged cargo payloads, and returned safely to
Earth. Until then, only governments had accomplished this technically challenging feat. More recently,
SpaceX has taken over resupply missions to the International Space Station, has begun collaborating
with NASA on a mission to Mars, and is working with Boeing to develop a market for commercial
space passengers.8
Although crowned “۲۰۰۷ Entrepreneur of the Year” by Inc. magazine, Musk feels that his personal
ambitions have not yet been fulfilled. Many in California’s venture-capital and high-tech community
view Elon Musk as someone who has good ideas and breathes life into risky ventures but then fizzles
out on them. He aims to prove them wrong. As a result, Musk’s dreams for Tesla Motors, the Californiabased designer and manufacturer of electric vehicles, are big; he wants to leave a legacy through this
company. Thus, after firing three CEOs in the last few years, Musk is now leading the company himself.

A Brief History of Tesla Motors
Tesla Motors (TSLA) was founded in 2003 in San Carlos, California, as an automobile company dedicated to developing electric vehicles. Co-founder Elon Musk was also one of the first investors, putting
up $7 million initially, and later an additional $30 million.

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Tesla Motors held a design contest for the styling of its first product: the Roadster, code-named
“Dark Star.” Lotus Cars, a British manufacturer, won the contest and jointly engineered and manufactured the new vehicle. Lotus was a natural partner for this project because of its experience and expertise in building its own line of sports and racing cars. In fact, the Tesla Roadster was modeled using the
Lotus Elise as a template. The partners designed the Roadster’s chassis using Lotus software tools and
had it was manufactured by the same Norwegian company that built the Elise.
In December 2006, Time magazine hailed the Tesla Roadster as the best invention of the year in the
transportation category. In 2007, however, it became clear that sales were not enough to sustain business; the company was bleeding money. After combing through Tesla’s financial situation, Musk found
that Tesla was losing $50,000 on each car sold. As CEO, Martin Eberhard had led investors to believe
that the manufacturing of the Roadster cost only $65,000 per car, which appeared to justify the $92,000
sticker price. In reality, Musk found that it cost Tesla $140,000 just for the parts, subassemblies, and
supplies to make each vehicle, and that the Roadster could not even be built with Tesla’s current tools.
He also discovered major safety issues with the existing design. Completely taken aback by the messy
state of affairs, Musk commented, “We should have just sent a $50,000 check to each customer and not
bothered making the car.”۹
Consequently, Musk fired Martin Eberhard and took over the engineering himself. Almost every
important system on the car, including the body, motor, power electronics, transmission, battery pack,
and HVAC, had to be redesigned, retooled, or switched to a new supplier. Such dramatic changes were
necessary to get the Roadster on the road at something close to the published performance and safety
specifications, as well as to cut costs to make the Roadster profitable.10
Tesla Motors launched a completely redesigned Roadster in 2008 at a base price of $109,000.11 By
December 31, 2009, Tesla had 514 employees and had sold 937 Roadster models in 18 countries around
the world. More than 1,200 additional people had put in deposits to reserve a Roadster, giving the company $70 million in interest-free loans. Three years later, on December 31, 2012, Tesla had sold more
than 2,450 Roadsters.12 The 2008 version of the Tesla Roadster had been discontinued and replaced
with a new model, the Tesla Roadster 2, with an improved electric powertrain performance and lower
production costs. The Roadster Sport, which accelerates from zero to 60 miles per hour in 3.7 seconds
(faster than a Porsche 911 GT), was the next vehicle added to the pipeline. By end 2012, Tesla Motors
discontinued production of the Roadster altogether.
In March 2009, Tesla introduced to the public an early prototype of the Model S family sedan. By
year-end, Tesla had received approximately 2,000 customer reservations for the car, with a minimum
down payment of $5,000 each. The prototype had turned into a premium sedan and garnered approximately 12,000 reservations by June 2012.13 Tesla manufactures the Model S in the Fremont, California,
factory that it purchased from Toyota for $42 million in May 2010.14 The car seats five adults, goes from
zero to 60 in 4.4 seconds, and has a per-charge range of over 300 miles for the high-end version. As
Musk described the electric car’s efficiency and range on Tesla’s blog, “With the 85 kWh Model S battery we set a goal of delivering a range greater than 300 miles using the 2-cycle EPA test procedure that
we used with the Roadster. This is a goal that no electric vehicle (EV) in history had ever achieved. We
are thrilled to say that we exceeded this goal.”۱۵ One University of Central Florida senior researcher
traveled more than 423 miles on a single charge in his Model S Signature model, which boasts the larger
85-kilowatt-hour battery.16

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Tesla Motors, Inc.

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Deliveries of the Model S began on June 22, 2012, and positive feedback followed. As of December
2012, there were over 20,000 reservations for the vehicle, and Tesla was producing some 500 cars a week
by the summer of 2013.17 The base price of the Model S has been $52,400 (after a $7,500 tax deduction)
since January 1, 2013.18 The automobile magazine Motor Trend gave the Model S glowing endorsements, stating, “By any measure, the Tesla Model S is a truly remarkable automobile.”۱۹
In an attempt to build on its success with the Model S, Tesla has begun work on a newly designed
seven-seat electric vehicle, the Model X, which will combine the best features of an SUV with the benefits of a minivan. Following several delays, Tesla plans to deliver the first Model X in late 2015.20 In
2014, Telsa announced that after the Model S and Model S, the next car it will produce is the Model
3.۲۱ With this new model, Tesla attempts to enter the mass market with a smaller vehicle that will cost
around $35,000 and has a range of 200 miles per battery charge. The Model is slated to go sale in 2017.
Tesla completed its IPO on June 29, 2010, the first IPO by an American automaker since Ford in
1956. On the first day of trading, Tesla’s shares closed at $23.89 and generated $226.1 million for the
company.22 Despite this, in its first annual report, Tesla reported an operating loss of $146.8 million.23
Losses continued until the first quarter of 2013, when Tesla announced its first profitable quarter in 10
years, with a GAAP profit of $11 million (see Exhibit 1). Investors responded in kind to the black ink
in Tesla’s ledger, causing a surge in the stock price, and pushing Tesla’s stock up over $280 per share
in early September 2014 before starting to slide (see Exhibit 2). A compounding problem is that Tesla
has depended on $3 billion in convertible debt to finance capital investments, and Tesla stock needs
to appreciate around 160 percent over the next six years to avoid repayment or refinancing at higher
interest rates.24

The U.S. Automotive Industry
The Big Three automakers—GM, Ford, and Chrysler—have dominated the U.S. automotive industry for decades (see Exhibit 3). GM was once the leading U.S. carmaker, with a market share of over 50
percent in 1962. By 2009, GM’s market share had eroded to less than 20 percent, while the market share
of the Big Three combined dropped below 50 percent for the first time ever.25 GM and Chrysler filed for
bankruptcy, while Ford was fighting hard to become profitable again. What had caused their decline?
In the 1990s, the Big Three shifted resources away from mid-size and compact cars to lead the “SUV
craze.” They built their business models around the assumptions that gas prices would remain low for
the foreseeable future and that Americans would continue to prefer big trucks and SUVs. For as long
as these assumptions held true, the strategy was quite profitable; pickup trucks and SUVs provided the
highest margins of any vehicle class. In fact, the Ford F-150 pickup truck remains the most-sold vehicle
in the United States of all time. For a while, the Hummer 1 (with gas mileage of 7 mpg) was one of GM’s
most profitable vehicles.
However, when SUV sales peaked in 2004 and started to decline, the Big Three were slow to detect
and adapt to the shift in customer purchase patterns. Then, in the wake of the 2008 financial crisis, U.S.
car sales hit a historic low of some 11 million vehicles, down from 18 million in 2000. While the price
of a gallon of gas rose to over $4 in the summer of 2008, up from about $2 in 2005, there was a dramatic reduction in demand for new vehicles with trucks and SUVs particularly hit hard. However, by
December 2014, gas prices had fallen to below $2 a gallon on average in the United States (see Exhibit
4) contributing to people buying trucks again.26

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GM
The Big Three found it particularly difficult to compete in this leaner financial environment due to
their higher cost structure. Unlike their foreign counterparts, U.S. companies had to cover long-term
legacy costs for employee health care and pensions. GM was particularly vulnerable in this regard. At
one point, GM paid the full cost of health insurance premiums for all of its employees and their dependents, as well as GM retirees and survivors. When U.S. health care costs rose precipitously in the latter
part of the 20th century, most of these legacy plans ended up chronically underfunded. Taking steps
such as providing retirement packages to older workers and negotiating agreements with unions to
transfer pension dues to an independent trust helped, but they fell far short of solving GM’s financial
woes.
Compounding the company’s financial situation further, GM had also made large concessions to
the United Auto Workers (UAW) union, driving up hourly wages and benefits. For example, laid-off
autoworkers could await re-employment while enjoying almost full wages at so-called job banks. GM
was caught in a classic catch-22. Given the costs of unionized labor, GM was unable to make money
on small, fuel-efficient cars without heavy government subsidies through tax incentives.27 Yet because
the UAW had a monopoly over GM’s labor force, GM could not take appropriate actions to reduce its
labor expenses, either by laying off workers or by negotiating more competitive wages. Bankruptcy
was inevitable.
The GM that reemerged 60 days after the bankruptcy filing had a significantly restructured balance
sheet and four fewer brands (Hummer, Pontiac, Saab, and Saturn). In order to “bail out” the firm, the
U.S. government provided close to $58 billion under the Troubled Asset Relief Program (TARP), making it the de facto owner of the company. In December 2012, GM announced that it was going to spend
$۵.۵ billion to buy back a large portion of its stock that was being held by the U.S. Treasury, and the
U.S. government sold the last of its shares in December 2013.28 Overall, the U.S. government lost about
$۱۰.۵ billion on its 49.5 billion dollar investment in GM.29 Meanwhile, in 2014, GM announced a record
number or automobile recalls, including ignition switches attributed to several deaths.30

CHRYSLER
In 1998, German car manufacturer Daimler paid $36 billion to acquire a troubled Chrysler
Corporation. Touted by some as a “merger of equals,” the true nature of the deal became apparent
when several senior U.S. managers either left or were fired and then replaced by Daimler managers.
Their decision to retire the Plymouth brand fueled the brewing mistrust even more.31 Theoretically, the
acquisition gave Chrysler entry into European markets, created a larger, complementary product line
(Chrysler sold SUVs, minivans, and mass-market cars, while Daimler specialized in luxury sedans and
sports cars), and provided both companies with increased market power.
However, the management cultures of the two companies clashed, and DaimlerChrysler never
achieved the anticipated synergies.32 Ultimately deciding it was better off on its own, Daimler sold 80.1
percent of Chrysler to Cerberus Capital for $7.4 billion in August 2007. Cerberus took Chrysler private
in a leveraged buyout, hoping to restructure the company away from the pressure of public financial
reporting. Unfortunately, Chrysler’s problems were too big for even Cerberus to fix, and the company
declared Chapter 11 bankruptcy on April 30, 2009.

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At this point, the federal government intervened, paying $6.6 billion to finance the company’s
restructuring into the “New Chrysler.” Of that amount, 55 percent was owned by a pension fund and
25 percent by the Italian carmaker Fiat, with the U.S. and Canadian governments holding minority
stakes.33,34 Subsequent restructuring reached an important milestone with Fiat Chrysler beginning
trading on the New York Stock Exchange on 13 October, 2014.35 Fiat provided Chrysler with a platform
for smaller, more fuel-efficient cars and access to Fiat’s global distribution network. Chrysler hoped
to realize cost savings in design, engineering, manufacturing, purchasing, and marketing, while Fiat
gained significant access to the U.S. auto market.

FORD
Ford, on the other hand, had raised $24.5 billion in capital by mortgaging almost all of its assets during the height of the financial bubble, giving it access to a large line of credit.36 This included Ford’s
trademark blue oval that it did not regain control over until May 2012.37 While supporting GM’s and
Chrysler’s requests for a government bailout, Ford did not request, nor did it receive, any government
funding. With attractive new models, such as the Ford Focus and the redesigned Ford Explorer, the
company is currently experiencing a renaissance.
In October 2012, Ford posted a $1.6 billion third-quarter profit, a consequence of the successful
implementation of its strategy of charging more for its vehicles while spending less to develop them.
According to its chief financial officer, Robert Shanks, “If you go back 5 or 10 years ago, we had very
good margins on our trucks . . . we did OK on larger SUVs . . . we didn’t do particularly well on the
large cars and we just lost massive amounts of money on the other cars.” Now, Shanks noted, Ford
makes money on its small cars as well as its large vehicles. “That is a huge change from where we
were.”۳۸ Ford has developed eco-boost technology that is improving fuel economy in its larger cars, as
well as considering a move into electric vehicles.39

FOREIGN COMPETITION
Since the first oil price shock in 1973–۱۹۷۴, foreign car manufacturers have made steady inroads into
the U.S. market. Investing more in research and development, compared with the Big Three, German,
Japanese, and Korean carmakers were perceived to offer vehicles of higher quality, more advanced
engineering, and better fuel efficiency. Because they were not burdened with health care and pension costs, the foreign companies could also make and sell their vehicles at lower prices (leading to
increased sales and/or higher margins). By November 2012, Japanese automakers Toyota and Honda
were number three and five in sales volume in the United States, respectively. Nissan (Japan), Hyundai
(Korea), and Kia (Korea) have also become strong competitors in the U.S. market.40
Japanese carmakers Toyota and Honda have long been considered the leaders in producing highquality, fuel-efficient cars. Toyota has always been Japan’s largest automaker, and in early 2009, it
overtook perennial world leader GM in both production and sales. Since then, GM and Toyota have
exchanged positions several times for the top spot in total worldwide sales. Honda is Japan’s secondlargest automaker and ranks fifth in the world, behind GM, Toyota, Volkswagen, and Ford. Due to
Voluntary Export Restraints (VERs) enacted by the Reagan administration in 1981, Japanese companies
have invested heavily in U.S. production facilities. Japanese plants are typically non-unionized and

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are located in the southern United States, where the costs of living are lower, away from their northern
domestic competitors. Along with philanthropy, lobbying efforts, and sharing technology, establishing U.S. production facilities was a significant step in improving public relations and decreasing their
liability of foreignness.
Developmentally, Korean car manufacturers today occupy a position in the U.S. automobile market
similar to that of the Japanese companies in the 1980s. Viewed as the cheaper, fuel-efficient alternatives
to American, Japanese, and European cars, they are gaining more widespread recognition and acceptance among American car buyers. Some experts argue that Hyundai is already on par in quality with
Toyota and Honda.
Other competitors on the horizon include the emergence of Chinese car manufacturer’s, including
BYD Motors that is selling plug-in electric hybrids in China. BYD may have a clear advantage from
starting as a battery company and it has developed lithium iron phosphate batteries, which permit
cars to run 250 miles on a single three-hour charge.41, 42 BYD has begun delivering a 40-foot bus with a
24-hour battery life that can travel 155 miles from its Lancaster, California, plant in what is likely a first
step to establishing a U.S. presence for electric automobiles.43 As the first Chinese car manufacturer
poised to break into Western markets, BYD has attracted the attention of Warren Buffett, who invested
some $230 million for a 10 percent equity stake in the company. While BYD is not currently offering
electric automobiles abroad, the sticker price of BYD cars is anticipated to be significantly lower than
current Tesla models.
The three largest German carmakers—Daimler, BMW, and Volkswagen—in 2013 each held between
2 and 4 percent of the U.S. market.44 Demand for Volkswagen vehicles has continued to rise, if slowly,
without hurting profitability.45 Porsche, a wholly owned subsidiary of Volkswagen since 2012, is a
strong niche player in the luxury sports vehicle segment, while Audi, a wholly owned subsidiary
of Volkswagen since 1966, has gained a strong reputation for its mid-size luxury sedans and SUVs.
Like their Japanese counterparts, German car manufacturers have gained market share steadily over
the last several years through perceived superior engineering and styling capabilities. As fuel prices
increased, demand for German vehicles has also risen, since they combine sportiness and luxury with
fuel efficiency.

Alternative Propulsion for Cars
The oil embargoes of the 1970s first highlighted the need for smaller, more fuel-efficient vehicles.
Concerned about U.S. reliance on foreign oil, Congress voted to append Title V, “Improving Automotive
Efficiency,” to the Motor Vehicle Information and Cost Savings Act. This legislation established CAFE
(Corporate Average Fuel Economy) standards for passenger cars and light trucks, and set a goal of
doubling new-car fuel economy by model year 1985.46
In 1990, the California Air Resource Board (CARB) passed a mandate for the introduction of zero
emission vehicles (ZEVs). The act specified that 2 percent of the vehicles produced for sale in California
had to have zero emissions by 1998, increasing to 5 percent in 2001 and 10 percent in 2003. Subsequent
amendments dropped the 1998 and 2001 requirements, but left the 10 percent value for 2003 in place
while also allowing credits for partial-ZEV cars.47

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Importantly, the ZEV mandate is credited with stimulating increased research and development of
the electric-car prototype. The first electric production car EV1 (made by GM) came to market in 1996
in California and Arizona as a lease-only vehicle. Competitors Toyota and Honda quickly followed
suit with their own EV cars. However, most of these early models were discontinued after automakers
successfully challenged the mandate in Federal District Court in 2002, winning significant concessions
and delays from the CARB. In hindsight, former GM Chairman and CEO Rick Wagoner said that the
worst decision of his tenure at GM was “axing the EV1 electric-car program and not putting the right
resources into hybrids. It didn’t affect profitability, but it did affect image.”۴۸ GM research and development (R&D) chief Larry Burns now wishes GM had not killed the EV1 prototype his engineers had on
the road over a decade ago: “If we could turn back the hands of time,” says Burns, “we could have had
the Chevy Volt 10 years earlier.”۴۹
The next major development occurred in 2003, when the U.S. government supported investments
of $1.3 billion in research into hydrogen-powered vehicles. Ironically, around this same time Congress
also passed accelerated depreciation tax breaks of up to $100,000 for buyers of gas-guzzling SUVs,
compared with $4,000 for buyers of electric cars, with major unintended consequences. Although the
$۱۰۰,۰۰۰ tax break was intended for commercial trucks, as written, it included all trucks. This allowed
GM to push sales of the original Hummer 1, with a sticker price of $125,000 and a 7-mile-per-gallon
fuel consumption.
Interest in alternative energy sources has remained strong due to growing environmental concerns
and volatile crude-oil prices. This time, car manufacturers have responded by making significant
investments in the research and development of various competing energy technologies. A classic standards battle seems to be emerging, with the winner likely to create a new paradigm for personal transportation. Electricity, hydrogen, biodiesel, compressed natural gas, and ethanol are the most common
alternatives being considered as replacements for fossil fuels. Still, others predict that the internal combustion engine will be around for another 50 to 100 years, at least in hybrid vehicles. In 2009, however,
CAFE standards were further raised, requiring an average fuel economy of 35.5 miles per gallon for
model years 2012–۲۰۱۶.
There has been a steady increase in the number of alternative-fuel vehicles since 1995 (see Exhibit 5).
As of 2010, there were almost 1 million in use in the United States, and this trend should continue into
the future as more and more manufacturers focus their efforts on this initiative.

BATTERY ELECTRIC VEHICLES
There are two basic types of electric vehicles. One is the “pure” electric vehicle (sometimes referred
to as the battery electric vehicle or BEV), which uses only batteries to supply the electric energy needed
for propulsion. Leveraging the fact that electric motors can also act as generators, electric vehicles utilize regenerative braking to save a significant portion of the energy expended during acceleration, thus
increasing the energy efficiency of the vehicle. In addition, pure electric vehicles have a high torque
over a larger range of speeds during acceleration compared with internal combustion engines. For
example, the Tesla Roadster was rated at 288 horsepower (hp) and accelerated faster than a 911 Porsche
GT. Running and servicing costs of the electric car are also much lower than its gasoline-based counterparts; Tesla Motors estimated that the cost per mile driven with the Roadster was just $0.02. This is
because electric motors and gearboxes have relatively few moving pieces, compared with the hundreds
of precision-engineered parts necessary for an internal combustion engine. BEVs are usually very quiet
and do not emit any exhaust gases.

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The major disadvantage of BEVs is the battery. It is the most expensive part of the car, is subject to
deterioration over its lifetime, is heavy, requires long charging times, and offers a very limited energyto-weight ratio. This low ratio significantly restricts the driving range of electric vehicles. Finding an
economic balance of range versus performance, battery capacity versus weight, and battery type versus cost therefore challenges every BEV manufacturer. A nickel-metal hydride (NiMH) battery typically lasts the life of the vehicle, but the range tends to be less than 200 miles, and it takes hours to
recharge the battery. Newer BEVs equipped with lithium-ion batteries provide 250 to 300 miles of range
per charge. Many experts believe that battery-production problems could be the limiting factor for the
electric-car industry. “Batteries are absolutely the No. 1 constraint for electric cars,” says Mark Duvall,
a researcher at the Electric Power Research Institute in Palo Alto, California, a utility-funded research
organization. “It’s also the single-most expensive component right now.”۵۰
As a result, Telsa has committed to building a 980-acre facility near Reno, Nevada, to build its own
lithium-ion battery intended to produce 500,000 battery packs a year to supply its automobile assembly plant in Fremont, California.51 The facility is intended to begin production in 2017 and require a
$۵ billion dollar investment that places the plant near sources of lithium and allows for powering the
plant with renewable energy.52 Questions remain whether lithium-ion batteries will be able to provide
the needed performance for battery life and recharging time, making this a large gamble. Ironically,
another risky move may help make Tesla’s battery investment pay-off. One June 12, 2014, Elon Musk
posted that Tesla was making its patents open source.53 The move has led established carmakers, such
as BMW and Nissan, to consider using Tesla’s technology, and if this happens, it will help to establish
it as the industry standard.54
Still, others are interested in advancing battery technology. For example, a number of small U.S.
firms focus their R&D on lithium-ion batteries with the hope of supplying automakers. Both Boston
Power Co., which supplies batteries for Hewlett-Packard laptops, and Valence Technology Corp., which
makes batteries for the Segway scooter, plan to expand into making automotive batteries. Chinese and
Japanese firms, such as BYD Motors, Panasonic, Sony, and Sanyo Electric, that already have expertise
making lithium-ion batteries, are also jockeying for a share of this emerging industry. Former chairman Andy Grove is even pushing Intel to manufacture advanced batteries for plug-in electric cars.55
According to Mr. Grove, unless U.S. firms get serious about developing a cutting-edge battery soon, the
nation may achieve a Pyrrhic victory, breaking an addiction to imported oil through the use of electric
cars but replacing it with a dependence on imported batteries.
Despite battery constraints, car manufacturers, including the Big Three and foreign automakers,
have introduced their first electric-only vehicles to the market. Chrysler founded its environmental
protection division (ENVI) in 2007 to create electric-drive vehicles and introduced its first “production
intent” prototype one year later: an electric-only Dodge EV sports car. However, after Fiat took over
Chrysler, the company disbanded the ENVI electric-car division and dropped its models from future
product plans, but it has recently introduced the Fiat 500e that has a range of 87 miles per charge.56 In
December 2012, Ford introduced the Ford Focus electric vehicle into the U.S. market at a starting price
of $39,200 and a range of 76 miles.57 General Motors will add an electric mini-car called the Spark in
2014 ($۱۹,۱۸۵ and expected to go 82 miles on a single charge) to complement its Volt plug-in hybrid
electric compact ($26,685).
Among Japanese carmakers, the Nissan Leaf is a compact five-door, five-passenger hatchback, with
an all-electric range of 73 miles on a single charge in city driving, and an estimated fuel economy of
at least 99 miles per gallon gasoline equivalent. The Leaf is manufactured at Nissan’s Smyrna plant in

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Tennessee, and it leads the electric-car market with 40,000 cars sold in 2014.58 The 2015 model is listed
at an estimated sticker price of roughly $21,510 after subsidies and tax credits are applied.59 Mitsubishi
currently sells its i-MiEV (Mitsubishi innovative Electric Vehicle) in the United States. The i-MiEV will
run for approximately 62 miles between charges and has an estimated fuel economy of 112 miles per
gallon equivalent.60 In addition, several smaller European companies have introduced future concept
cars. Monaco-based Venturi has one high-end electric sports car in production, the Fétish, which sells
for about $400,000 but is not intended for mass markets.61
There are also nontraditional competitors entering the electric-vehicle market. For example, Google
has been working on a self-driving car and in January 2015 it unveiled a prototype.62 There were also
news reports of Apple investing in an electric car under the codename “Titan.”۶۳ None of these has the
performance of a Tesla, but both are firms with established brands, credibility, and significant financial
resources. Overall, BEVs are appearing with increasing variety in range options and pricing points.
An open question is whether Google and/or Apple will enter the car manufacturing business or focus
on the software and batteries, and thus take on more the role of original equipment manufacturers
(OEMs) that license their technology to others, much like Google has done with its Android operation
system, where it set a standard in the industry. On the other hand, Apple preferred a more proprietary
approach with its mobile devices, integrating hardware, software, and services to lock customers into
its ecosystem.

PLUG-IN HYBRID ELECTRIC VEHICLES
The other type of electric vehicle relies on hybrid propulsion, which combines an electric motor with
an internal combustion engine. Hybrid electric vehicles (HEVs) have all the advantages of pure electric vehicles, but avoid the range-restriction problem through the use of a gasoline-powered internal
combustion engine. Plug-in hybrid electric vehicles (PHEVs) contain a battery that stores electricity
for the electric motor and can be recharged. Because the battery shares the propulsion load, hybrid
engines are significantly smaller than their traditional gasoline counterparts, reducing vehicle weight
and cost share. PHEVs can reduce air pollution, dependence on petroleum, and greenhouse-gas emissions. Other benefits include improved national energy security, fewer fill-ups at gas stations, the convenience of home recharging, opportunities to provide emergency backup power in the home, and
vehicle-to-grid applications.
Elon Musk is a strong opponent of hybrid vehicles. He argues that HEVs combine the disadvantages of both electric and gasoline-powered vehicles, negating the advantages that each type offers. He
argues that hybrids are “bad electric cars” because they must carry around an additional engine and
drive train, adding weight, cost, and additional parts to maintain and repair.64 He criticizes the combustion engines as too small, “anemic,” and inherently less efficient than full-size engines. Moreover,
the combination of these technologies in a single vehicle adds to the technological complexity, which
increases cost, error rates, and maintenance efforts. Hybrid supporters, on the other hand, are optimistic that these disadvantages can be mitigated through continued research and development.
Despite their shortcomings, sales of hybrid vehicles in the United States increased steadily from 1999
through 2007, and then they started to decline in conjunction with the overall sales of automobiles due
to the recession. As car sales have climbed again since 2011, hybrid sales have also experienced gains.
Toyota sold the majority of the early hybrids, introducing the Prius in 2000, only one year after the first

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commercial HEV, the Honda Insight, entered the market. In September 2012, Toyota estimated that
“sales of hybrid models worldwide will likely top 1 million this year and every year through 2015.”۶۵
In line with this projection, Toyota plans to roll out 21 new or redesigned hybrid vehicles by the end
of 2015.
American manufacturers have been relatively slow to follow Toyota’s lead in hybrid technologies. At the 2009 North American International Auto Show in Detroit, Chrysler unveiled the 200C EV
Concept minivan (“Electric Town and Country”) and the Jeep Patriot EV, both range-extended (electric
and gas engine) vehicles. As with Chrysler’s pure electric sports car prototype, however, these models
were discontinued when Fiat shut down Chrysler’s ENVI division and have been supplanted by Fiat’s
500e effort. By 2012, Ford had introduced two hybrid-car models into the U.S. market: the Ford C-Max
Hybrid priced at approximately $25,000 and the Ford Fusion Hybrid priced at $23,000.
More than 10 years after the Toyota Prius first debuted, GM is seeking to challenge the Prius’ market dominance with its Chevrolet Volt, first introduced in 2007. The Volt is a so-called plug-in hybrid,
enabling the Volt to achieve a fuel economy of 50 miles per U.S. gallon. The Volt has a long way to go
before it can become a serious contender for the mass-hybrid market, however. Not only does it come
with a sticker price of about $40,000, compared with $23,000 for the Prius, 66 but also the early model
Volt experienced some serious technical problems. It needs to be charged for six hours to gain the
necessary battery power for a single 40-mile drive. The Volt’s gas engine extends its range beyond the
40-mile battery limit, but this introduces another issue: the gas tank must be drained periodically in
order to keep the gasoline from going bad.
Even worse, GM is unlikely to recoup its R&D expenses, causing some analysts to charge that the
Volt is nothing more than a “show car” to demonstrate that GM understands the trends in the market
and is investing in next-generation vehicle technologies.67 In fact, GM had to halt production of the Volt
for several weeks in 2012 due to weak demand for the vehicle. There is also strong speculation that GM
is losing money on every Volt sold, partly due to low-priced leasing packages and price reductions that
were intended to attract customers and drive sales.68
In the luxury segment, Quantum Technologies and Fisker Coachbuild, LLC, announced the launch
of a joint venture (Fisker Automotive) in September 2007. Fisker Automotive launched a luxury plug-in
hybrid, the Fisker Karma, in 2011 with an initial price of $110,000, but it halted production in July 2012
due to financial problems. In December 2012, the company announced that it had hired an investment
bank to help raise funds for the cash-strapped company. It is also actively seeking partners in China
and parts of Europe, where the company feels that there is a stronger interest in electric cars. Fisker
Automotive had hoped to find new capital, possibly from the sale of the company.69 In April 2013,
Fisker ended up laying off 75 percent of its employees and began the process of filing for bankruptcy.70
In 2015, Fisker Automotive was renamed Elux as part of a deal with Chinese automotive-supplier
Wanxiang with plans to relaunch its Karma electric vehicle in 2016.71
Despite the problems it has encountered with the Chevrolet Volt, General Motors entered the luxury
plug-in hybrid market with the introduction of the Cadillac ELR. The Cadilac ELR was introduced in
June 2014 and it was universally criticized and experienced low sales.72 It is expected to be available
in the United States in 2014 and will be manufactured in Michigan in the same plant as the Volt. The
Cadilac ELR remains in production with updates planned for its 2015 and 2016 models.

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BIOFUELS AND NATURAL GAS
In addition to electricity, researchers are exploring ethanol and natural gas as alternative fuels for
automobile propulsion systems. Ethanol is a biofuel easily derived from natural sugars (starch) in crops
such as sugar cane and corn. With a small amount of redesign, gasoline-powered vehicles can run on
ethanol concentrations as high as 85 percent (E85).
While biofuels do not contribute to carbon dioxide emissions, they are still not free of criticism. Some
believe that the use of ethanol as a source of fuel is responsible for an increase in food prices.73 Not only
must huge swaths of land be devoted to specific crops, but also the crops that are grown must go to
make fuel instead of feeding people or farm animals. Critics also argue that growing the crops requires
more energy than the fuel they produce, making the process inherently inefficient. Further, the use of
crops for fuels is highly politicized. In the United States, ethanol derived from corn or sugar cane can
be competitive in price only because of government subsidies. Other countries, such as Brazil, can
produce biofuels much more cost effectively due to the ready availability of an unskilled labor force,
but the U.S. government has barred these cheaper Brazilian imports from entering the U.S. market in
order to protect domestic producers. Factoring in these subsidies and trade barriers makes biofuels a
net-loss-incurring business.74
Biodiesel, produced from oilseed, has been a more popular substitute in European countries, where
gasoline is four times more expensive than in the United States. Although biodiesel is commercially
available in most oilseed-producing states, it is somewhat more expensive than fossil diesel. In addition, biodiesel has lower energy density than either fossil diesel or gasoline, resulting in a decreased
fuel economy. Nevertheless, biodiesel engines are considered to be more environmentally friendly than
gasoline engines because they do not emit carbon dioxide.
High-pressure compressed natural gas, composed mainly of methane, can also be utilized in place of
gasoline to fuel normal combustion engines. The combustion of methane produces the lowest amount
of carbon dioxide of all fossil fuels. Cars can be retrofitted to run on compressed natural gas as well as
gasoline, allowing the driver to alternate between fuel sources during operation.

HYDROGEN AND FUEL CELLS
Hydrogen may serve as an alternative fuel through one of two methods: combustion or fuel-cell conversion. In combustion, the hydrogen is “burned” in engines in fundamentally the same way as gasoline. In fuel-cell conversion, the hydrogen is turned into electricity through fuel cells, which then power
electric motors. German carmakers Volkswagen and Audi have started their own research departments
on fuel cells, while Mercedes plans to start a limited 200-car series of its B-class model based on fuel-cell
technology.
One primary area of ongoing research aims to increase the range of hydrogen vehicles while reducing the weight, energy consumption, and complexity of the storage systems. The major disadvantage
for both the combustion and fuel-cell methods is that there is no infrastructure to supply and store
hydrogen in mass quantities. Building such infrastructure will require not only the automakers, but
also governments, to make commitments to hydrogen technology. As a result, some experts believe
it will be some time before hydrogen cars are economically viable.75 Still, major manufacturers have
formed partnerships for researching fuel-cell technology. In the summer of 2013, GM and Honda

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decided to work together to create the technology and infrastructure for refueling fuel-cell-powered
vehicles. Nissan and Ford are working together to develop fuel-cell-powered vehicles as early as
2017.۷۶ Meanwhile, Toyota has announced plans for a $57,000 car using fuel cells relying on network of
hydrogen-fuelling stations.77

QUEST FOR A STANDARD
Although many alternative fuel sources are currently in production and development, no overall
industry standard has yet emerged. Companies that have invested considerable sums of money in
R&D continue to push their technology as the best. Wary of betting on the wrong technology, many car
manufacturers have opted to sit on the sidelines until a clear winner emerges, which slows the pace of
progress.
Meanwhile, determining a new standard for fuel and propulsion systems is only the first step toward
reducing our reliance on fossil fuels. Just as we have multiple oil companies, nationwide systems of
gas stations, and pipelines to ship gasoline from the refineries to the pump, any alternative energy
will require its own unique infrastructure. At the same time, standardized supporting technologies
and peripheral devices must be developed so that the new vehicles can be “refueled,” repaired, and
serviced anywhere they travel. We take for granted that the same gas pump nozzle fits into the tank of
a Honda minivan and a Mini Cooper, and that the same grade of gasoline is available no matter where
we stop to refuel. Similarly, windshield wiper fluid, engine oil, and antifreeze can be purchased without regard for make or model. These supporting “details” are perhaps the biggest obstacle that has kept
any of the new alternative propulsion technologies from being fully embraced.

Electric-Car Infrastructure
There have been four major types of infrastructures under development to extend the range and
decrease the charging times of pure electric vehicles. First, the U.S. National Institute of Standards and
Technology and the Federal Energy Regulatory Commission are heavily involved in the definition of
future smart-grid standards.78 The U.S. government currently offers economic incentives to encourage electric vehicle ownership, and it realizes that an electric infrastructure must be in place to meet
the needs of on-the-go Americans. Smart grids are electricity networks that utilize two-way digital
metering, sensing, monitoring, and control technologies to improve electricity production, transmission, distribution, and consumption. By providing information about grid conditions to system users,
operators, and automated devices, the smart grid enables dynamic responses to energy needs, which
in turn saves energy, reduces costs, and increases reliability. Once installed nationwide, the smart grid
could also provide a means of recharging batteries for electric-powered vehicles.
Better Place, a California-based electric-vehicle services provider, attempted another infrastructure
type. Shai Agassi, the Israeli-American founder of Better Place, likened the firm’s model to that of
a telecom provider, from whom users buy charged-battery minutes. If the service contract is large
enough, Better Place might even provide a “free” or highly subsidized car itself, much like telecom providers provide discounted cell phones when customers sign two-year service agreements.79 In March
2008, Deutsche Bank analysts stated that the company’s approach could mark a “paradigm shift” that

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causes a “massive disruption” to the auto industry, and that Better Place has “the potential to eliminate
the gasoline engine altogether.”۸۰
However, major German carmakers (which wield considerable market power) are skeptical of
Agassi’s model. They claim that Better Place’s business plan stifles creative design freedom by introducing too many constraints on the car’s body. Further, there are unresolved legal issues with battery
ownership between the station operator, Better Place, and car owners. As forecasted by the skeptical
German automakers, Agassi’s company eventually filed for bankruptcy and started liquidating assets
in July 2013 due to the slow-paced development of the electric-car market.81 Since Better Place’s demise,
it has been up to Tesla to make the push for a nationwide network of electric-vehicle service stations.
Tesla is prepared to build charging stations around the United States so that drivers can drive across
the country for free. Tesla developed and built the start of this network largely in secret, rolling out stations in the California towns of Folsom, Gilroy, Harris Ranch, Barstow, Tejon Ranch, and Los Angeles.
As of spring 2015, Tesla operates close to 400 supercharger stations with over 2,100 superchargers (see
Exhibit 6). The company has stated that the goal of the infrastructure is to enable “fast, purely electric
travel from Vancouver to San Diego, Miami to Montreal and Los Angeles to New York.”۸۲
This only applies if you drive a Tesla, or cars using the same technology. So far, the charging stations
are compatible only with properly equipped Model S vehicles, which raises the question of whether
or not Musk should be spending millions of dollars building an infrastructure that only one car on the
road can benefit from on a daily basis. Increasing the utilization of this investment appears to be behind
Tesla making its patents open source. Tesla’s “supercharging” stations are capable of charging a battery
up to a 200-mile range in 30 minutes, free of charge. Realizing that this is still much slower than pumping gas, Musk prepared his own public marketing stunt. At a live event, he publicly demonstrated the
replacement of two Model S battery packs via a robotic system in the same amount of time that it took
a Tesla employee to pump 20 gallons of gas. Thus, he proved, at least in his mind and the mind of many
Tesla enthusiasts, that electric cars have the potential to refuel faster than their gas-powered brethren.
Eventually, supercharging stations will be equipped with this battery-swapping system. Although the
service would cost Tesla-owners between $60 and $80 per swap, it is intended to be comparable to the
cost of pumping a full tank of gas.83

Strategic Partnerships
Tesla has managed to strike some important deals with big players in the automobile industry. In
2009, German automotive engineering powerhouse Daimler purchased a nearly 10 percent equity stake
in Tesla, worth an estimated $50 million.84 Musk and his team wowed the skeptical Daimler executives by modifying an off-the-shelf Daimler Smart car into an all-electric vehicle in only six weeks.85
The collaboration deepened in February 2012, when Tesla released the following statement: “We are
also pleased to announce the start of a development program with Daimler for a new Mercedes-Benz
vehicle with a full Tesla powertrain.”۸۶ By the end of 2014, however, Daimler had sold its equity holdings in Tesla, although plans on continued partnership and cooperation.87
Daimler isn’t the only traditional automaker to take an interest in Tesla. After Musk took the company public in 2010, Toyota bought $50 million (or 2.4 percent) of Tesla’s stock.88 With this deal, Tesla
got ownership of the New United Motor Manufacturing, Inc. (NUMMI), automotive factory, which it
later purchased outright, in Fremont, California. NUMMI was initially set up as a joint venture between

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Toyota and GM. GM withdrew from NUMMI as part of its bankruptcy reorganization in 2009. Tesla
announced in October 2010 that it would go into a further partnership with Toyota by providing parts
that will power the electric version of Toyota’s crossover SUV, the RAV4.89 Like Daimler, by the end of
2014, Toyota had sold some of its 2.4 percent stake in Tesla.90 Both, Daimler and Toyota, walked away
with sizeable capital gains.
In addition, Tesla managed to bring Panasonic, one of the world’s electronic giants, on board.
Panasonic’s aim is to combine its experience in battery technology with Tesla’s capabilities in electric powertrain development. The goal for Panasonic is to become the number-one Green Innovation
Company in the electronics industry by 2018, the 100th anniversary of its founding.91

International Expansion
At the same time that Tesla was pursuing strategic relationships with leading electronic and automotive companies, it started to expand its network of company-owned stores. Previously, all sales had
been conducted either via the phone or Internet or in person at corporate events or company headquarters. By early 2015, Tesla had over 60 sales locations throughout the United States and Canada, 40 stores
in Europe, and 7 in Asia.92 However, Tesla appears to have stumbled in China with high prices, limited
service locations, and problems with charging stations.93 Tesla will continue to push internationally,
and the company is targeting major metropolitan areas, including Chicago, New York, Los Angeles,
London, Munich, Madrid, Tokyo, Hong Kong, and Sydney (Australia).
To differentiate itself from its competitors and provide a superior customer experience, Tesla has
opted not to create franchised dealers, but instead maintains all sales and service operations in-house.
Still, the approach of owning its own stores and not franchising dealerships has led to legal issues in
several states.94 Beginning in 2010, the company also created a wholly owned subsidiary, Tesla Motors
Leasing Inc., to provide a leasing alternative to its customers.95 The program was “improved” in 2014
by bringing in U.S. Bank to provide the needed financing at a lower cost than Tesla.96

Price Pressure
Importantly, a study conducted by Nielsen found that, in the United States, 72 percent of people
polled have considered buying or would buy an electric vehicle. However, 65 percent of Americans
would not pay more for an electric vehicle than for traditional car models. Of those who said they
would be ready to pay more, most were willing to pay no more than an additional $1,000 to $5,000. 97
Thus, electric vehicles will need to compete on price and not on technology alone. To bring down unit
costs, however, electric-car manufacturers like Tesla must be able to scale production and thus must sell
more units. Conventional wisdom in the industry holds that a car manufacturer must produce at least
1 million units on a given platform to be price competitive.
Combined with lower fuel prices, the contents of the Nielsen report may spell trouble for Musk’s
second generation of electric vehicles, the Model S. Tesla delivered approximately 2,650 Model S vehicles in 2012, just a little over half of what it projected, but it planned to deliver an additional 21,000 by
the end of 2013.98 Buyers have the option to purchase a model with either a 230-mile or 300-mile battery
capacity. The 230-mile edition sells for $63,570 (which includes a $7,500 tax credit), and the 300-mile

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model sells for $73,570 (including the tax credit). In addition, Tesla offers the Model S Performance edition with a 300-mile range that boasts additional upgrades to the interior, suspension, and wheels. The
Performance edition is priced at $83,570 (including the tax credit). Exhibit 7 shows the specifications
for all three models. While the Model S costs less than the Roadster did, all three versions still retail at
a premium compared to current electric vehicles, such as the Nissan Leaf.
Critics are sceptical that Tesla can get its prices down to a competitive level, produce the Model S on
time, and have it perform as promised. Moreover, due to the relatively low price of gas in the United
States compared to Europe, where the price of a gallon of regular gas hovers around $10, the economic
incentive to buy and maintain an electric vehicle is not there at this point. Plans for Tesla’s launch of its
Model X SUV and additional models to more regular buyers planned for 2014 have been delayed until
late 2015. It remains to be seen whether Tesla can deliver electric cars at a price point and with features
that appeal to a mass market.99

Manufacturing Challenges
Tesla Motors’ original production at the former NUMMI plant started with five Model S vehicles
manufactured per month, but has climbed in a year’s time to 500 vehicles produced per month. Musk
intends to eventually reach the NUMMI plant’s 500-million production capacity. The discontinuation
of the Roadster and the low-end version of the Model S help with increasing production capacity.
Adding additional models to the production line potentially increases the complexity of manufacturing and managing demand for different vehicle models.
Musk’s current manufacturing challenge is to reduce the cost to produce a vehicle. According to the
Nielsen report mentioned earlier, many buyers are interested in all-electric vehicles but are much more
price sensitive than they are willing to buy into the new technology. One option on the table is to move
some manufacturing overseas closer to new markets and where labor costs are lower. These facilities
could also serve to grow capacity and provide a means to expand into other global markets such as
Asia and Europe.100 Another plan to reduce costs is to share a few common parts with other manufacturers instead of building their own tooling for their own custom parts.101
Another manufacturing challenge facing Musk is how to maintain the high-quality standard cited
in Consumer Reports’ glowing review of the Model S and its sterling reputation as Motor Trend’s 2013
Car of the Year. With increased production rates and the introduction of another product line, Tesla
must carefully design and implement new facilities and processes that will meet the standards set by
the 2012 Model S. This is a very real threat to Tesla’s brand, as early adopters suffered a few software
glitches that kept the door handles, which retract into the body when not being used, from becoming
accessible when the owner wanted to get into the car. While the early adopters were willing to tolerate
these types of glitches, the mass market would be much less sympathetic.

Tesla Motors: Strategic Choices
Despite progress over the last several years, Tesla still faces a serious laundry list of problems.
Consumers are still reluctant to invest in all-electric cars, especially with so many other alternative
technologies vying for market dominance. The infrastructure is not yet ready to support widespread

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use of electric vehicles, so buying one can come with significant inconvenience. No all-electric car has
proven to be even a quasi-standard, with the result that any investment in an electric vehicle could
backfire in the long term. Also, not enough models are available to enable consumers to make an educated selection, especially compared to the number of hybrid vehicles available.
Meanwhile, the gasoline-powered car industry keeps chugging along. The 2009 Car Allowance
Rebate System (CARS) program (commonly referred to as “Cash for Clunkers”) announced by the U.S.
government in 2009 did not exactly help reduce sales of traditional gas-powered vehicles. According
to the U.S. Department of Transportation, about 700,000 cars were exchanged for newer, more fuelefficient models, which will remain on the roads for the next 10 to 15 years.102
In early 2013, Tesla also had to deal with two negative news articles about the Model S in The New
York Times. The first article detailed the experience of a father-and-son team in Florida who, in the
hopes of winning a Tesla-sponsored contest, attempted to be the first to drive the Model S at least 400
miles on a single charge. The team was able to drive the vehicle 423.5 miles, but it took them 17 hours
at an average speed of approximately 25 mph to do so.103 The second article recounted the journey
of staff writer John M. Broder as he drove the Model S from Washington, D.C., to two of Tesla’s new
charging stations in Newark, Delaware, and Milford, Connecticut, in January 2012. The two stations are
approximately 200 miles apart, well within the 300-mile single-charge range of the Model S as stated
by Tesla. However, Broder’s trip did not go as planned. As the car’s battery power fell faster than the
miles accrued, Broder was forced to turn off the heat despite the winter day’s low temperature, set the
cruise at 54 mph on a 65-mph highway, and eventually call a tow truck when the car lost power before
reaching the next charging station.104
In response to Broder’s article, Musk released data logs from the car Broder drove that contradicted
his tale, leading to a back and forth that ended in a stalemate. Regardless of the veracity of the article’s
claims, the negative publicity presented yet another challenge for Tesla. Musk claimed that the negative review potentially cost the company $100 million in lost revenue and stock value and hundreds of
cancellations for the Model S.105 ,106 ,107
On top of production delays on new models, increased competition, and problems in China, Elon
Musk now has to face lower gasoline prices following large investments in battery manufacturing.
Further, he is not only running Tesla Motors on a daily basis, but also has high-level responsibilities at
SpaceX and SolarCity. Critics of Musk allege that he is spread too thin and cannot continue to run three
companies at once. Although there is no doubt Musk is a great visionary, engineer, and entrepreneur,
is he also a great CEO? A reputation for starting a business and then selling it off (e.g., PayPal sold to
eBay) precedes him, but he wants to silence critics. While sipping his coffee and reviewing the challenges facing Tesla, Musk debates how to address multiple questions.
Will Tesla be able to make the transition to higher production volumes in a relatively short time
frame? Larger automakers have a significant competitive advantage: they have the financial and technological resources to produce automobiles at a much lower cost and get them to the market and
customer more quickly. Can Tesla compete with the largest carmakers in the United States (GM, Ford,
Chrysler, Toyota, and Honda) and disrupt their dominance with an electric vehicle? Musk also worries about Nissan CEO Carlos Ghosn’s strong push toward low-cost electric vehicles. Will the gamble
of making Tesla’s patents open source and investing in lithium-ion batteries pay off? Finally, how can
Tesla hold off new competitors at for high-price electric cars as it simultaneously enters the market for
lower-price electric cars with other firms?

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EXHIBIT 1

Tesla Financial Data ($ millions, except EPS data)

Fiscal Year
Cash and short-term investments

۲۰۱۰

۲۰۱۱

۲۰۱۲

۲۰۱۳

۲۰۱۴

۱۷۳.۱۵۵

۳۰۳.۸۰۳

۲۲۰.۹۸۴

۸۴۸.۹۰۱

۱۹۲۳.۶۶۰

Receivables (total)

۶.۷۱

۹.۵۳۹

۲۶.۸۴۲

۴۹.۱۰۹

۲۲۶.۶۰۴

Inventories (total)

۴۵.۱۸۲

۵۰.۰۸۲

۲۶۸.۵۰۴

۳۴۰.۳۵۵

۹۵۳.۶۷۵

Property, plant, and equipment-total (net)

۱۲۲.۵۹۹

۳۱۰.۱۷۱

۵۶۲.۳

۱۱۲۰.۹۱۹

۲۵۹۶.۰۱۱

Depreciation, depletion, and
amortization (accumulated)

۲۲.۳۹۳

۳۴.۲۲۲

۶۰.۸۴۳

۱۵۹.۶۴۲

۳۰۷.۲۵

Assets (total)

۵۸۴۹.۲۵۱

۳۸۶.۰۸۲

۷۱۳.۴۴۸

۱۱۱۴.۱۹

۲۴۱۶.۹۳

Accounts payable (trade)

۲۸.۹۵۱

۵۶.۱۴۱

۳۰۳.۳۸۲

۳۰۳.۹۶۹

۷۷۷.۹۴۶

Long-term debt

۷۲.۳۲۴

۲۷۱.۱۶۵

۴۱۱.۴۶

۵۹۸.۹۷۴

۱۸۱۸.۷۸۵

Liabilities (total)

۱۷۹.۰۳۴

۴۸۹.۴۰۳

۹۸۹.۴۹

۱۷۴۹.۸۱

۴۸۷۹.۳۴۵

Stockholders’ equity (total)

۲۰۷.۰۴۸

۲۲۴.۰۴۵

۱۲۴.۷

۶۶۷.۱۲

۹۱۱.۷۱۰

Sales (net)

۱۱۶.۷۴۴

۲۰۴.۲۴۲

۴۱۳.۲۵۶

۲۰۱۳.۴۹۶

۳۱۹۸.۳۵۶

Cost of goods sold

۷۵.۳۹

۱۲۵.۷۲۸

۳۵۴.۳۶۴

۱۴۵۱.۱۵۱

۲۲۰۰

۱۷۷.۵۶۹

۳۱۳.۰۸۳

۴۲۴.۳۵

۵۱۷.۵۴۵

۱۰۶۸.۳۶۰

۰.۱۷۳

۰.۴۸۹

۰.۱۳۶

۲.۵۸۸

۹.۴۰۴

Income before extraordinary items

-۱۵۴.۳۲۸

-۲۵۴.۴۱۱

-۳۹۶.۲۱۳

-۷۴.۰۱۴

-۲۹۴.۰۴۰

Net income (loss)

Selling, general, and administrative expense
Income taxes

-۱۵۴.۳۲۸

-۲۵۴.۴۱۱

-۳۹۶.۲۱۳

-۷۴.۰۱۴

-۲۹۴.۰۴۰

Earnings per share (basic)
excluding extraordinary items

-۱.۶۶

-۲.۵۳

-۳.۶۹

-۰.۶۲

-۲.۳۶

Earnings per share (diluted)
excluding extraordinary items

-۱.۶۶

-۲.۵۳

-۳.۶۹

-۰.۶۲

-۲.۳۶

Source: Compustat.

۱۸

۶۳۵

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Strategic Management

Tesla Motors, Inc.

EXHIBIT 2

Tesla Motors’ Stock Performance since Initial Public Offering (01/29/10) vs.
Dow Jones Industrial

TSLA Price Mar 2 ‘۱۵ ۱۹۷.۳۲
Dow Jones Industrials Level Mar 2 ‘۱۵ ۱۸۲۸۸.۶۳
325.۰۰

۱۹۸۳۳.۳۴

۲۷۵.۰۰

۱۸۲۸۸.۶۳

۲۲۵.۰۰

۱۶۵۰۰.۰۰

۱۹۷.۳۲

۲۰۱۱

۲۰۱۲

۲۰۱۳

۲۰۱۴

۱۷۵.۰۰

۱۴۸۳۳.۳۳

۱۲۵.۰۰

۱۳۱۶۶.۶۷

۷۵.۰۰

۱۱۵۰۰.۰۰

۲۵.۰۰

۹۸۳۳.۳۳

۲۰۱۵

Source: Publicly available data displayed using YCHARTS, http://ycharts.com.

۱۹

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Tesla Motors, Inc.

EXHIBIT 3

۳۰

U.S. Market Share: The Big Three vs. “Others,” ۲۰۰۰–۲۰۱۴

۲۷.۹۷

۲۵
22.۵۸

۲۰
17.۴۳

GM
Ford
Toyota
FCA

۱۵

۱۴.۱۶

۱۴.۷۳
14.۱۵
12.۴۱

۱۰

۹.۱۰

۹.۱۵
8.۲۳

Honda
Nissan

۴.۳۱
3.۴۵

Hyundai
Kia
Volkswagen
Subaru

۶.۵۱

۵
0

۴.۲۲
1.۳۷
0.۹۷

۲۰۰۰ ۲۰۰۱ ۲۰۰۲ ۲۰۰۳ ۲۰۰۴ ۲۰۰۵ ۲۰۰۶ ۲۰۰۷ ۲۰۰۸ ۲۰۰۹ ۲۰۱۰ ۲۰۱۱

۲۰۱۲ ۲۰۱۳ ۲۰۱۴

Source: Ward’s Auto U.S. Total Vehicle Sales Market Share by Company, 1961–۲۰۱۴. Market share expressed in percent. The Big
Three are depicted with solid lines. The rise of Japanese OEM market share is evident over the last decade.

۲۰

۶۳۷

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Strategic Management

Tesla Motors, Inc.

EXHIBIT 4 U.S. Average Retail Price of Gallon of Gasoline in the United States,
January 2001–March 2015

$۴.۵
$۴.۰
$۳.۵
$۳.۰
$۲.۵
$۲.۰
$۱.۵
$۱.۰
$۰.۵
$۰.۰
2000

۲۰۰۵

۲۰۱۰

۲۰۱۵

Source: http://www.eia.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html. Prices are quoted every two
weeks.

۲۱

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Tesla Motors, Inc.

EXHIBIT 5

Sales of Battery Electric Vehicles in the United States, 2010–۲۰۱۴

۸۰۰۰
7000
6000
5000
4000
3000
2000
1000
0
Jan

Apr

Jul

۲۰۱۰

Oct

Jan

Apr

Jul

۲۰۱۱

Oct

Jan

Apr

Jul

۲۰۱۲

Oct

Jan

Apr

Jul

۲۰۱۳

Source: http://electricdrive.org/index.php?ht=d%2Fsp%2Fi%2F20952%2Fpid%2F20952.

۲۲

Oct

Jan

Apr

Jul

۲۰۱۴

Oct

۶۳۹

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Strategic Management

Tesla Motors, Inc.

EXHIBIT 6 Tesla’s Expanding Supercharger Networks

United States, March 2015

United States, 2016

Source: http://www.teslamotors.com/supercharger.

۲۳

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EXHIBIT 7

Specifications for Model S Editions
60kWh

85kWh

۸۵ kWhD

P85 kWhD

Est. Range at 55 mph

۲۰۸ miles

۲۶۵ miles

۲۷۰ miles

۲۵۳ miles

۰ to 60 mph

۵.۹ seconds

۵.۴ seconds

۵.۲ seconds

۳.۲ seconds

Top Speed

۱۲۰ mph

۱۲۵ mph

۱۵۵ mph

۱۵۵ mph

Peak Motor Power

۳۸۰ hp

۳۸۰ hp

۳۷۶ hp

۶۹۱ hp

Energy Storage

60kWh

۸۵ kWh

۸۵ kWh

۸۵ kWh

Battery Warranty

۸ years, 125,000 miles

۸ years, unlimited

۸ years, unlimited

۸ years, unlimited

Supercharging

Optional

Included

Included

Included

Enters Production

In production

In production

In production

In production

Source: http://www.teslamotors.com/models.

۲۴

۶۴۱

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Endnotes
1 Zumbrun, J. (2014), “Americans getting pumped for the holidays, The Wall Street Journal: 22 December.
2 Malone, M. (2009), “Uber entrepreneur: An evening with Elon Musk,” Fora, April 7, http://bit.ly/R4PHZg.
3 Fowler, G. (2013), “Being Elon Musk, Tony Stark of SXSW,” The Wall Street Journal Digits, March 9, http://
on.wsj.com/161hD1P.
4 Belfiore, M. (2007), “Chapter 7: Orbit on a Shoestring,” Rocketeers (New York: HarperCollins), pp. 166–۱۹۵.
5 This case draws on: Davis, J. (2009), “How Elon Musk turned Tesla into the car company of the future,” Wired
Magazine, September 27, http://bit.ly/18X7gPP; and Malone, M. (2009), “Uber entrepreneur: An evening with
Elon Musk.”
6 Elon Musk, “USA Science & Engineering Festival,” http://www.usasciencefestival.org/schoolprograms/2014role-models-in-science-engineering/1260-elon.html.
7 http://cleantechnica.com/2015/03/11/solarcity-vivint-take-top-spots-us-residential-solar-installers-2014/
8 http://www.floridatoday.com/story/news/local/2015/03/10/
boeing-spacex-look-beyond-nasa-space-customers/24724977/
9 Malone, M. (2009), “Uber entrepreneur: An evening with Elon Musk”; and Davis, J. (2010), “How Elon Musk
turned Tesla into the car company of the future.”
10 Page, L. (2009), “Musk hits out at co-founder’s Tesla Roadster allegations,” The Register, June 23, http://bit.
ly/17wcKBU.
11 Zinsli, C. (2010), “Tesla mounts new defense of Elon Musk’s travel: IPO savings,” The Wall Street Journal, May
27, http://on.wsj.com/16kW8ep.
12 “SEC 10-K filing,” Tesla Motors, Inc., December 31, 2012, http://1.usa.gov/ZA9pOV.
13 “Second quarter 2012 shareholder letter,” Tesla Motors, Inc., July 25, 2012, http://bit.ly/167Hvx2.
14 Vance, A. (2013), “Why everybody loves Tesla,” Bloomberg Businessweek, July 18, http://buswk.co/19rt3js.
15 Musk, E., and J. B. Straubel (2012), “Model S efficiency and range,” Tesla Blog, May 9, http://bit.ly/18iWcQG.
16 Motavalli, J. (2012), “Father and son drive 423 miles on one charge in Tesla Model S,” The New York Times,
December 12.
17 Vance, A. (2013), “Why everybody loves Tesla.”
18 Tesla Motors, http://www.teslamotors.com.
19 “۲۰۱۳ Motor Trend Car of the Year: Tesla Model S,” Motor Trend, http://bit.ly/U8vlhs.
20 http://blog.caranddriver.com/not-a-shocker-tesla-pushes-back-model-x-crossover-to-late-2015/.
21 Chowdhry, A. (2014), “Tesla Motors officially confirms Model 3 electric vehicles will go on sale in 2017,”
Forbes, July 16.
22 “Tesla posts second biggest rally for 2012 US IPO,” Bloomberg Businessweek, http://bit.ly/17wcKBU.
23 “SEC 10-K filing,” Tesla Motors, Inc., March 3, 2010, http://1.usa.gov/16oOdiE.
24 Jakab, S. (2015). “Telsa growth is a matter of survival,” The Wall Street Journal: 11 February, p. C1.

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۲۵ Wardsauto.com key automotive data, retrieved October 29, 2010.
26 Zumbrun, J. (2014), “Americans getting pumped for the holidays, The Wall Street Journal: 22 December.
27 “Obama’s car puzzle,” The Wall Street Journal, November 12, 2008.
28 Woodyard, C. (2013) “GM bailout played out over five years,” USA Today: http://www.usatoday.com/
story/money/cars/2013/12/09/gm-bailout-timeline/3929953/.
29 Higgins, T., Katz, I., Klimasinska, K. (2013) “GM bailout ends as U.S. sells last of ‘government motors,’” BloombergBusiness: http://www.bloomberg.com/news/articles/2013-12-09/
gm-bailout-ends-as-u-s-sells-last-of-government-motors-.
30 Newsday: http://www.newsday.com/classifieds/cars/
gm-ignition-switches-takata-air-bags-lead-to-record-number-of-recalls-in-2014-1.9932627.
31 Keegan, M. C. (2009), “DaimlerChrysler: Merger or acquisition?” October 31,http://bit.ly/1GB4DWn.
32 Surowiecki, J. (1998), “The Daimler-Chrysler collision,” Slate, May 15, http://www.slate.com/id/2654/.
33 Merced, M. J. (2009), “Judge clears way for sale of Chrysler to Fiat,” The New York Times, June 1, http://nyti.
ms/161i0cQ.
34 “Chrysler bankruptcy filing,” The New York Times, April 20, 2009, http://nyti.ms/15oJpdf.
35 Reuters: http://www.cnbc.com/id/102081712
36 Stoll, J. D., M. Dolan, J. McCracken, and J. Mitchell (2008), “Big three seek $34 billion aid,” The Wall Street
Journal, December 3, http://on.wsj.com/17TB41f.
37 CBS News: http://www.cbsnews.com/news/ford-regains-assets-including-blue-logo-after-credit-upgrade/.
38 Ramsey, M. (2012), “Ford results show power of U.S. operations,” The Wall Street Journal, October 30, 2012,
http://on.wsj.com/PEq7KY.
39 http://www.bidnessetc.com/36538-ford-motor-company-to-manufacture-ecoboost-engines-at-cleveland/.
http://www.ibtimes.com/electric-car-rumor-ford-motor-company-weighs-electric-vehicle-rival-chevroletbolt-1837302.
40 Ramsey, M. (2012), “U.S. November auto sales rise,” The Wall Street Journal, December 3, http://on.wsj.com/
RwiYNB.
41 “Bright sparks. Electric propulsion provides some excitement amid the gloom,” The Economist, January 15,
2009, http://econ.st/162Y4q0.
42 “BYD zooms past Toyota, GM in electric car race,” China Daily, December 16, 2008, http://en.people.
cn/90001/6554270.html.
43 Edwards, A. (2014) ‘BYD Motors delivers its first two California-built electric busses to Antelope
Valley Transit, Press-Telegram: http://www.presstelegram.com/environment-and-nature/20140428/
byd-motors-delivers-its-first-two-california-built-electric-buses-to-antelope-valley-transit.
44 http://www.goodcarbadcar.net/2013/03/usa-february-2013-auto-sales-brand-rankings.html.
45 Boston, W. (2015). “Germany’s Volkswagen posts rise in 2014 profit,” The Wall Street Journal: http://www.wsj.
com/articles/germanys-volkswagen-posts-rise-in-2014-profit-1425052616.
46 National Highway Traffic Safety Administration, http://www.nhtsa.dot.gov.

۲۶

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۴۷ California Air Resource Board, http://bit.ly/1esdwWR.
48 Motor Trend, June 2008.
49 Naughton, K., and A. Sloan (2007), “Comin’ through!” Newsweek, March 13.
50 Smith, R., and D. Clark (2008), “Ex-chief says Intel should power cars,” The Wall Street Journal, December 12.
51 Elkind, P. (2014) “Tesla closes on free Nevada land for gigafactory,” Fortune: http://fortune.
com/2014/10/28/tesla-closes-on-free-nevada-land-for-gigafactory/.
52 The Wall Street Journal: http://www.wsj.com/articles/
tesla-confirms-nevada-to-get-battery-factory-1409871734.
53 Musk, E. (2014) “All our patent belong to you,” Tesla: http://www.teslamotors.com/blog/
all-our-patent-are-belong-you.
54 http://knowledge.wharton.upenn.edu/article/whats-driving-teslas-open-source-gambit/.
55 Smith, R., and D. Clark (2008), “Ex-chief says Intel should power cars,” The Wall Street Journal, December 12.
56 Krolicki, K. (2009), “Chrysler dismantles electric car plans under Fiat,” Reuters, November 6.
57 Fuel Economy, http://www.fueleconomy.gov.
58 The Economist. 2015. “Upsetting the Apple car,” February 21, pp. 61–۶۲.
59 “Nissan Leaf,” Nissan, http://www.nissanusa.com/electric-cars/leaf/.
60 Vance, A. (2013), “Why everybody loves Tesla.”
61 Berman, B., “Venturi fetish,” Hybrid Cars, http://bit.ly/1esf1Ex.
62 http://www.autonews.com/article/20150103/OEM06/301059928/where-is-googles-car-going?
63 Wakabayahshi, D, and Ramsey, M. 2015. “Apple secretly gears up to create car,” The Wall Street Journal,
February 14, p. A1.
64 Malone, M. (2009), “Uber entrepreneur: An evening with Elon Musk.”
65 Dawson, C. (2012), “Toyota details broader hybrid lineup,” The Wall Street Journal, September 24.
66 “Hybrid Cars,” Motor Trend, http://bit.ly/15XPJLe.
67 Corkery, M. (2010), “The great IPO race: Tesla vs. GM,” The Wall Street Journal, January 29, http://on.wsj.
com/1beFKCd.
68 http://nlpc.org/stories/2014/08/07/chevy-volt-resale-values-plunge-lease-returns-hit-market.
69 Terlep, S. (2012), “Fisker hires investment bank to help raise funds,” The Wall Street Journal, December 7.
70 Vance, A. (2013), “Why everybody loves Tesla.”
71 http://www.digitaltrends.com/cars/fisker-karma-to-be-rebranded-as-elux-report-says/.
72 http://wallstcheatsheet.com/automobiles/was-the-cadillac-elr-the-electric-vehicle-flop-of-2014.
html/?a=viewall.
73 Mitchell, D. (2008), “A note on rising food prices,” World Bank–Development Economics Group (DEC), July 1,
World Bank Policy Research Working Paper No. 4682.

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۷۴ Ridley, M. (2010), “The rational optimist: How prosperity evolves,” Harper.
75 “Hydrogen vehicles won’t be viable soon, study says,” MIT Tech Talk, March 3, 2003.
76 Takahashi, Y., and J. Bennett (2013), “GM, Honda team up on fuel-cell technology; Auto makers to collaborate
on fuel-cell vehicle systems,” The Wall Street Journal, July 2, http://on.wsj.com/15Gax9M.
77 Ramsey, M. (2014) “Debuting: $57,000 fuel-cell Toyota,” The Wall Street Journal: November 19, p. B1.
78 Friedman, T. L. (2009), Hot, Flat, and Crowded: Why We Need a Green Revolution—And How It Can Renew
America, 1st ed. (New York: Farrar, Straus and Giroux).
79 ۶۲ . Schwartz, Nelson D. (2010), “Sites to refuel electric cars gain a big dose of funds,” The New York Times,
January 25, http://nyti.ms/162YhcE.
80 “Deutsche Bank: Project Better Place has ‘the potential to eliminate the gasoline engine,’” Cleantech Investing
in Israel, April 15, 2008, http://cleantech-israel.blogspot.com/2008/04/deutsche-bank-project-better-place-has.
html..
81 Patel, Y. (2013), “Israel’s Better Place seeks creditor protection in U.S. court,” Dow Jones News Service, July 22.
82 Lavrinc, D. (2012), “Tesla locks other EVs out of its ‘supercharger’ walled garden,” Wired, September 25,
http://bit.ly/16qIOaH.
83 Vance, A. (2013), “Gone in 90 seconds: Tesla’s battery-swapping magic,” Bloomberg Businessweek, June 20,
http://buswk.co/157ZkMK.
84 Squatriglia, C. (2005), “Share in Tesla electrifies the Teutons,” Wired, May, http://bit.ly/18249G9.
85 Davis, J. (2010), “How Elon Musk turned Tesla into the car company of the future,” Wired, September, http://
bit.ly/18X7gPP.
86 Howell, D. (2012), “Tesla Motors rises on Q4 revenue, wider Daimler deal,” Investors Business Daily, February
15, http://bit.ly/1esW44F.
87 Ramsey, M., J. B. White (2014), “Daimler sells its 4% stake in Tesla,” The Wall Street Journal, October 21.
88 Muller, J. (2013), “What do Toyota and Mercedes see in Tesla? A bit of themselves,” Forbes, June 1, http://
onforb.es/1gbwSuQ.
89 “Tesla notifies SEC of agreement with Toyota to develop electric version of RAV4,” Tesla Motors, October 13,
http://bit.ly/1eaaB3U.
90 White, J. B. (2014), “Toyota confirms sale of part of Tesla stake,” The Wall Street Journal, October 24.
91 “Panasonic invests $30 million in Tesla: Companies strengthen collaborative relationship,” Tesla Motors,
November 3, 2010, http://bit.ly/162ZJfp.
92 http://www.teslamotors.com/findus – /bounds/42.076253,-93.5542299,41.975428,-93.69852300000002,d?sear
ch=store.
93 http://www.nytimes.com/2015/02/11/business/international/tesla-seeks-a-stronger-foothold-in-china.
html?_r=0.
94 http://www.bloomberg.com/news/articles/2014-03-10/tesla-s-direct-sales-push-raises-auto-dealers-hackles.
95 “Tesla Motors 2010 annual report,” Tesla Motors, http://bit.ly/162ZssS.
96 http://www.teslamotors.com/blog/significantly-improved-leasing-tesla-us-bank.

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Strategic Management

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۹۷ Reed, J. (2010), “Buyers loath to pay more for electric cars,” The Financial Times, September 19, http://on.ft.
com/1K4UfKq
98 “Second quarter 2012 shareholder letter,” Tesla Motors.
99 Vance, A. (2013), “Why everybody loves Tesla.”
100 Ohnsman, A. (2013), “Tesla CEO weighs Europe, Asia plants for mass-market car,” Bloomberg Businessweek,
August 21, http://bloom.bg/14RQnUa.
101 Vance, A. (2013), “Why everybody loves Tesla.”
102 Information accessed at Department of Transportation, http://1.usa.gov/1825cWD.
103 Power S., J. Mitchell, and M. Dolan (2009), “Ford, Nissan among first to tap loans for retooling,” The Wall
Street Journal, June 23, http://on.wsj.com/1bfdtvl.
104 Bernard, S., and J. Soble (2010), “Ford, Nissan and Tesla win green loans,” Financial Times, June 24, http://
on.ft.com/1RmyioS.
105 Motavalli, J. (2012), “Father and son drive 423 miles on one charge in Tesla Model S.”
106 Broder, J. (2013), “Stalled out on Tesla’s electric highway,” The New York Times, February 8, http://nyti.
ms/18cfLEd.
107 Muller, J. (2103), “Elon Musk: Bad review in New York Times cost Tesla $100 million,” Forbes, February 26,
http://onforb.es/18cfz8b.

۲۹