MEDI-CAPS UNIVERSITY

INDORE

Business Research Report

ON
TESLA –SUPERCHARGING FUTURE
(GLOBAL AUTOMOBILE REVOLUTION)

Submitted as Partial Fulfillment for

Degree of Master of Business Administration
To
Medi-Caps University, Indore

May, 2020

GUIDED BY SUBMITTED BY

PROF. NEHA TOSHNIWAL ANAND DUBEY (MS20MS501025)

ASHISH SWAMI (MS20MS501051)

ANURANJAN CHATURVEDI (MS20MS501040)

ANKITA DWIVEDI (MS20MS501034)

ANSHITA DIXIT (MS20MS501039)

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 ACKNOWLEDGEMENT

We, student of Medi-Caps University, convey our sincere thanks

to Prof. Neha Toshniwal for providing us support for report.
Under his guidance, we completed this report successfully. His
sincere suggestion helped us greatly in bringing out this work at
its present shape.

Above all thanks to Medi-Caps University for providing me an

opportunity for showing my talent.

ANAND DUBEY
ANSHITA DIXIT
ASHISH SWAMY
ANURANJAN CHATURVEDI
ANKITA DWIVEDI
MBA SEC “A” (2nd sem)

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 PREFACE

The research studies are of a great help in enhancing the knowledge

of a person. Practical knowledge is suffix to theoretical knowledge.
Classroom lectures must be correlated with the practical research
situation. It is in this sense that the research report is made
compulsory for the curriculum and has a significant role in the fields
of management. In this study we have put lot of effort to make it
good.

If any finding & recommendations go in any way to prove some new

ground in helping the economy. We shall deem our effort have duly
served the purpose. In the forthcoming pages an attempt has been
made to present report covering different aspect of my study.

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 INDEX

S.NO. PARTICULAR PAGE

NO.
1. ACKNOWLEDGEMENT

2. PREFACE

3. CHAPTER-1 INTRODUCTION 6-8

1.1 The Inefficiency of Cars

1.2 Thesis objective

1.3 Thesis

4. CHAPTER-2 REVIEW OF LITERATURE 9-11

2.1 Review of Literature

2.2 Research Framework

2.3 Research perspective

2.4 Resources & Data

5. CHAPTER-3 RESEARCH 12
METHODOLOGY
3.1 Research Design
3.2 Data Type
3.3 Sampling Techniques

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6. CHAPTER-4 DATA ANALYSIS & 13-45
REPRESENTATION
4.1 Tesla: The innovative disruptor
4.2 Sparkling the electric revolution
4.3 Tesla motor overview
4.4 Moving away from the oil economy
4.5 Competition analysis on Indian market
7. CHAPTER-5 FINDINGS AND 46-55
LIMITATIONS
8. CHAPTER-6 SUGGESTIONS & 56-62
CONCLUSION
9. REFRENCES 63-65

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CHAPTER-1 INTRODUCTION

“I invented nothing new. I simply assembled the discoveries of other men, behind whom
were centuries of work.”

–Henry Ford

 The Inefficiency of Cars Today:-

Few innovations have had as profound an effect on our society as did the invention of the

automobile. What began as a status symbol for the wealthy has revolutionized urban design,

employment patterns, goods distribution and economic and foreign policy. Despite its vital
role in our lives and enormous strides in technology, cars are still driven by the same internal
combustion engine pioneered in 1879. “The internal combustion engine is a complex,
amazing machine. In perfect concert, valves open, spark plugs ignite, pistons move, and the
crank shaft turns”.

Unfortunately, with this obsolete and tremendously inefficient technology, the vast majority
of energy is lost to thermal leakage so that only about 20% of the power actually reaches the
wheels.

There are over one billion vehicles in the world, and with a growing middle class in
developing nations, this number will only increase in years to come; some estimates place
over

6
two billion vehicles on the planet by 2050.2 Without a revolution in the auto industry, this
means

Tesla Motors, About the Size of a Watermelon, with a Lot More Juice

Brad Plumer, One Bi!ion Vehicles Hit the Road. Are We Ready for Two Bi!ion?

billions of barrels of oil and innumerable tons of harmful emissions to be released. However,
for the first time in over a century, change is on the horizon. Almost every automaker, from
behemoths like Toyota and GM to start-ups like Tesla and Fisker, is working on electric
vehicles.

 Thesis Objective
The question on every auto executive, policymaker and consumer’s mind is whether electric
vehicles are a cost-effective replacement for gasoline powered vehicles; if so, what will be
the effects on our society? However, the transformation may have already begun, regardless
of our intentions or potential ramifications. The install base for cars turns over every twenty
years; some industry experts believe that within two decades the majority of new vehicles
manufactured will be electric and that by within four decades, most vehicles on the road will
be electric. Other experts argue that the internal combustion engine is here to stay.

There is one company in particular that is boldly leading the charge towards an electric
future: Tesla Motors. Thus, the focus will be on battery electric vehicles, also known as all
electric vehicles, as opposed to hybrid vehicles, which use both electricity and gasoline. For
the sake of specificity, the main focus will be the electric vehicle industry in the India
,although the global impact will also investigated. In order to better understand the dilemma,
the gasoline powered vehicle base will be carefully examined; for instance, the costs to
consumers, producers and the environment as well as the benefits of traditional cars are all
critical in deciding the necessity for an alternative method of transportation. In addition, the
paper will give a brief

(and Sarah Perez, Elon Musk: Starting A Company Is Like Staring Into The Face Of Death

hopefully, interesting)

synopsis on the engineering behind electric cars; a better understanding of the technical
components can provide insight into the potential for cost savings and risks of the new
technology.

 Thesis

There is a tremendous amount of excitement, as well as apprehension, in the air of the

automotive world. We have reached a point where we can potentially change the world
through a synthesis of technology and innovation. We need to carefully analyze the domestic,
international and environmental effects of the transition if we are to change the world for the
better. The only certainty is that, one way or another, our decisions today will shape the next
hundred years of our future.
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Tesla Motors offers an exceptional vision; as the first public American car company since
Ford, Tesla has led the revolution by mass producing the first line of all-electric vehicles. The
company has taken the notion of an electric future beyond theory and in doing so, has set into
action the real world ramifications of fundamentally altering one of the most critical aspects
of our society.

Tesla Motors will lead the global electric revolution, one which will reshape our national
infrastructure, the world economy and the modern day understanding of transportation.

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CHAPTER-2 REVIEW OF LITERATURE

Review of literature:-

Tesla Motors: A Potentially Disruptive Force in a Mature Industry

By Nicholas Ingram

Barcelona School of Management, Universitat Pompeu Fabra

The purpose of this paper is to analyse Tesla’s strategy for ensuring own sustainable future
growth, while acting as a catalyst of change in the automotive industry. The paper utilises the
document analysis as a main method, with the presentation of the results in a case study
format. It was realised that Tesla has managed to create a product that has a rather unique
positioning in a highly competitive industry. However, Tesla was unable to capitalise on the
potential demand regardless of superiority of its products, as the current market leaders have
a considerably lower price and are competing with a different class of vehicles altogether.
The implications for industry development are discussed in connection with competition in
Hybrid Electric Vehicle and Battery Electric Vehicle categories.

Tesla Motors is one of the leading innovators in the Electric Vehicle market. It is a modern
and potentially disruptive entrant into the mature automotive industry that has benefited from
hundreds of years of research and development and astronomical amounts of funding.

This paper aims to provide an effective analysis of the current position of Tesla Motors in
regards to the company’s competitive advantage in a global context. An industry analysis was
undertaken followed by an analytical breakdown of the influences in the current internal and
external environments, with the focus on factors that affect the firm’s strategy. A framework
is developed to facilitate a better understand the opportunities for strengthening the
company’s positioning, supported by the discussion of practical implications for industry
development in regards to competition in Hybrid Electric Vehicle and Battery Electric
Vehicle categories.

Firstly, a concise overview of the company is provided including a brief history focused on
how the company came to be one of the leading innovators in the electric vehicle and energy
storage industries. Following this, an overview of the industry is presented in addition to a
summary of Tesla’s partnerships, main competitors and strategic options. The discussion of
practical implications aims at raising competitiveness of the company and is structured
around the latest research in the automotive industry and the emerging electric vehicle
market.

Although Tesla motor’s product range includes electric cars, automobile components and
rechargeable energy storage systems this report has its focus primarily on the automobile
industry. In addition to this, the analysis of the internal environment is not going beyond

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analysing the company’s current offerings and target market as there is limited access to data
regarding the firm’s strategy readily available online or in publications. As Tesla’s products
in this industry compete with fossil fuel and hybrid and battery electric vehicles, information
regarding the automotive industry as a whole will be provided illustrating the potential
growth of the market sector in future years. Data shall primarily focus on the U.S. market for
ease of comparison.

Research Framework

The implications of revolutionizing our main form of transportation, national infrastructure

and energy policies are vast. One of the key research issues will be the economics of energy.
In addition to analyzing a gasoline powered vehicle base, the paper will also examine the
feasibility of alternatives such as natural gas and hydrogen powered vehicles. More
importantly, however, is the electricity that will power these new vehicles. Do electric
vehicles offer a sustainable, environmentally-friendly form of transport, or do they merely
shift our dependence from one limited resource to another? Both the short-term and long-
term economics must be carefully scrutinized to decide if electric vehicles are in fact
“greener” than traditional modes of transport.

The shift to battery-power vehicles will also dramatically effect the domestic and foreign
policy of the United States. Domestically, we could potentially see a shift from gas stations to
recharging stations, in both public spaces and the home. As the United States, the largest
consumer of oil in the world (at 18.9 million barrels a day), shifts away from gasoline, the
cost of

oil would fall drastically; the magnitude of the price decrease and its broader impact on the
macro-economy will be a fundamental aspect of the research paper. Finally, since
transportation is one of the greatest contributors of air pollution, the environmental effects as
well as the likely

change in federal policy are both factors that will play a role in assessing the benefits of
electric vehicles.

 Research Perspectives

For any revolution to take place, the two sides of the equation must meet: consumer and
manufacturer, fashion and function, short-term and long-term. The paper will also provide a
two pronged viewpoint for the microeconomics of electric vehicles. On the consumer side,
there is a focus on general consumer sentiment towards battery-powered cars; are they merely
a passing trend, a toy for celebrities and millionaires or are they an emblem of a more
responsible, greener future? From a quantitative perspective, the research will consider the
stock of Tesla Motors, a publicly traded company, to better compare the company’s value
from an investor’s outlook. From the production standpoint, the question comes down to
profitability. How has the cost of materials, mainly batteries, decreased over time? After one

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hundred years of using the same technology, how can the auto industry realize economies of
scale for these new vehicles?

 Resources and Data

A broad variety of resources were utilized to provide the most holistic, balanced picture of
the issue, for both the short and long-term. In analyzing the short-term, current U.S. policy
will play a pivotal role, since many start-ups cannot survive without government subsidies;
tax credits also influence both consumer and producer decisions. Data from manufacturers,
including assembly expenses, research and development costs and consumer characteristics,
will provide

furthur insight on the production side; this information will illustrate any short-term
challenges and long-term obstacles that may hinder the proliferation of electric vehicles.
Meanwhile, research regarding consumer sentiments contribute a qualitative, proletarian
viewpoint. Finally, interviews with industry experts and those who work at Tesla offer an
insightful perspective with regard to playing the role of entrepreneur in a sector dominated by
industrial titans.

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CHAPTER-3 RESEARCH METHODOLGY:-

 Research Design:-
Research design refers to the overall strategy utilized to carry out research that defines a
succinct and logical plan to tackle established research question(s) through the collection,
interpretation, analysis, and discussion of data.

In this report the research is based on secondary data which is collected through research
paper and tesla info cell as well through google where different researcher published their
studies on tesla and its product

 Data Type:-
The data type of this report is based on:-

Secondary data:- Secondary data is the data that has already been collected
through primary sources and made readily available for researchers to use for their
own research. It is a type of data that has already been collected in the past.

 Sampling Techniques:-
The sampling technique which is used to collect secondary data through tesla website
research paper and all. Whole study is based on secondary data on descriptive collection and
its analysis.

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CHAPTER-4 DATA INTERPRETATION AND ANALYSIS:-

Tesla in Context

The Global Auto Industry

The automotive world has hundreds of players but power remains concentrated in the hands
of a select few industrial titans; GM, Toyota and Volkswagen are the largest three firms and
control a disproportionate amount of power in the value chain. In the traditional auto
industry, consumer power is relatively high, given relatively low switching costs and a vast
choice of relatively substitutable products. Meanwhile, the large amount of capital and
extensive networks limit supplier power; many components of the automobile can be sourced
from different suppliers, which maintains competitive input pricing. The high barriers to
entry, due to the capital-intensive nature of development and manufacturing, prevent new
entrants. Similarly, the entrenched nature and familiarity of internal combustion engines
(ICEs) have neutralized any threats of substitutes for over a century. The dense concentration
and high intra-industry rivalry has pressured the already narrow margins of the traditional
auto industry.

However, the electric vehicle (EV) industry demonstrates a different type of dynamic.
Consumer power is middling, due to slightly higher switching costs (since different vehicles
have different charging accessories) and the limited selection of mass produced EVs currently
available. Supplier power is slightly higher due to a limited number of battery producers but
is partially remedied by long-term contracts. The threat of new entrants is much greater since
both traditional automakers are entering the electric market, complemented by an ever-
increasing number of start-ups. The threat of substitutes is also slightly higher since there are
a number of different alternatives currently in development; while electric vehicles have thus
far developed the greatest traction, hydrogen powered vehicles and natural gas powertrains
are also viable prospects in the long-term. Intra-industry rivalry remains vicious, as
automakers slash prices and invest in R&D to earn a first-mover advantage and establish their
name in the burgeoning sector. Tesla's ascent took many investors by surprise. But executives
at Daimler AG (DAIGn.DE), the parent company of Mercedes-Benz, had a close-up view
starting in 2009 of how Tesla and its chief executive Elon Musk were taking a new approach
to building vehicles that challenged the established system.

Daimler, which bears the name of the man who invented the modern car 134 years ago,
bought a nearly 10% Tesla stake in May 2009 in a deal which provided a $50 million lifeline
for the struggling start-up.

Investors favor the Tesla model, in an industry undergoing fundamental and dizzying change
even though the U.S. carmaker will face an onslaught of competing electric vehicles from
established automakers during the next few years.

13
They are putting their money on Musk and his company, even though Mercedes-Benz alone
sold 935,089 cars in the first half of 2020, dwarfing the 179,050 delivered by Tesla in the
same period.

Today, Tesla is worth nearly $304.6 billion, more than six times Daimler’s 41.5-billion-euro
($47.7 billion) market capitalization.

However, with the recent demise of Fisker, Tesla is the only player in the high-end, luxury
EV market; as its technology and convenience trickles down into its more affordable
vehicles, Tesla should maintain a comfortable competitive advantage.

 Tesla: The Innovative Disrupter

The EV industry is older than most people realize, older even than the traditional

automotive industry. The first rudimentary electric vehicles emerged in the 1830’s, a full
forty years before their gasoline counterparts. Around 1890, the first American electric car,
powered by 24 batteries, had a range of 50 miles and went up to 20 mph, double that of the
Karl Benz's gas-powered Patent-Motorwagen. Towards the beginning of the 20th century,
electric cars 104 PBS,

Timeline: History of the Electric Car accounted for a third of sales in the fledgling U.S. auto
industry. However, in 1912, the EV industry began its century-long decline; in that year,
Cadillac introduced “the car that has no crank” and electric cars lost their most compelling
advantage: convenience. By the 1920’s high cost, limited range and cheap oil contributed to a
rapid demise for electric car sales. The final nail in the electric vehicle coffin was hammered
in 1940 when Detroit Electric, which had shifted to commercial vehicles and outlasted all of
its competitors, finally went out of business. Then, about 65 years later and two thousand
miles away, Tesla Motors was founded. Tesla Motors defied the almost universal trend
of being named after its founder; rather, it is named after one of the greatest, and perhaps
most under-appreciated, innovators of his time: Nikola Tesla. He, fittingly enough, was one
of the key contributors to modern-day alternating current (AC) electricity; the AC induction
motor was first patented by Nikola Tesla in 1888.5 As opposed to direct current electricity,
which flows in only one direction, AC current periodically alternates the direction of the
electric charge. The main benefit of the AC motor is that it operates a simpler design without
friction, making it both durable and inexpensive. Known for letting people use his patents
without payment and tearing up contracts for the greater good, Mr. Tesla deserves to be
remembered for his intentions to make the world a better place; having his name attached to
one of the most ambitious sustainability projects of our generation seems to be a fitting way
to do so.

Tesla, Elon Musk’s automotive start-up, is having a very good year. In September, the
company expects to begin shipping its all-electric Model 3 to non-employee customers, who
have already logged 500,000 pre-orders. After reporting earnings earlier this month, its stock
jumped, rocketing the 14-year-old startup’s valuation to over $53 billion, ahead of every

14
other U.S. car manufacturer and all but three worldwide. This despite the fact that the
company lost nearly two billion dollars in the past two years alone.

There’s little argument that Tesla is a wildly innovative company. But is its automotive
business a disruptor, poised to transform the entire transportation sector? That’s the question
that has dogged the company from the beginning, inspiring heated debate among Wall Street
analysts, fanatical customers, and tech-related online communities. Musk himself is
ambivalent about the term. “I’m much more inclined to say, ‘How can we make things
better?’” he said recently.

The answer matters. The company is currently almost $10 billion in debt, and on Monday
last week Tesla announced plans to borrow an additional $1.5 billion to escape what Musk
calls the “manufacturing hell” the company is now experiencing in its transition from small
batch car making to mass production. Investors and lenders are betting on the company’s
long-term potential to dominate a future that may feature autonomous vehicles, sustainable
energy consumption, and the ability to upgrade easily as both hardware and software evolve.
If that potential isn’t realized, the money will quickly dry up.

As Bartman worked through the questions, it became clear that Tesla is not a disrupter. It’s a
classic “sustaining innovation”—a product that, according to Christensen’s definition, offers
incrementally better performance at a higher price. There’s nothing rudimentary about Teslas,
which compete on price against cars by BMW and Mercedes.

. “If Tesla is following a disruptive innovation strategy, theory predicts that it will continue to
see no strong competitive response,” Bartman says. “However, because it’s a sustaining
innovation, theory predicts that competitors will emerge. Our analysis concludes that a
competitive response won’t happen until Tesla expands outside its current niche of people
who prefer electric vehicles to gas-powered cars—but if it expands by creating more variety
(such as SUVs) and more-affordable vehicles, competition will be fierce.”

 Sparking the Electric Revolution

115 UNSW School of Physics, Electric Motors and Generators

Tesla Motors, founded in 2003 by a syndicate of engineers and entrepreneurs, galvanized the
auto industry towards a more sustainable future, and in the process, challenged every
conception as to what a car really is. Upon its IPO in 2010, Tesla became the first public
American car company in over fifty years, since Ford in 1956. But when compared to the Big
Three American auto titans, GM, Chrysler and Ford, Tesla has proven different in every way
imaginable. Beyond its obvious aversion to traditional internal combustion engines, Tesla
opted to manufacture in California, far from the influences of Detroit, home of the Big Three.
The company headquarters in Palo Alto capture Tesla’s distaste for the status quo, as well as
the emphasis on cutting edge technology. Elon Musk, who also serves as Product
Architect, had no intentions of building the world’s best electric vehicle; he wanted to design
the world’s best vehicle, with neither compromise nor excuse. But there is a far larger

15
movement in play; Tesla was founded, in Musk’s own words, “to accelerate the advent of
electric cars”. Every model designed, every vehicle manufactured had to be more than
competitive; it had to be flawless. A single defect could set the electric movement back
decades, as it had been in the past.

Tesla, think again. Those stepping out into the manure-strewn streets of Manhattan in 1897
could have hailed a battery fuelled, as opposed to horse drawn, taxi. In

1900, more than 1,000 electric cars were made in the US, 28 per cent of total American car
production that year.

A few years later, however, Henry Ford produced the petrol-powered Model T and the
electric starter motor replaced the hand crank. From that point on, the electric car was
seemingly doomed: not enough power, not enough range and, as petrol stations proliferated,
not enough charging points.

To be fair, electric vehicles still managed to flourish in niche areas. The humble milk float
had a maximum speed of around 15mph, could travel roughly 25 miles (following a seven-
hour charge) and blocked the streets of Britain for decades. Floats were cheap to run and
could easily be charged at the milk depot after the day’s deliveries (a model that could be
used in the 21st century if we end up with huge fleets of self-driving cars). Still, floats could
never compete with a Ford or, for that matter, a Ferrari.

so can other manufacturers of electric cars, one reason why the Government is now planning
to ban the sale of petrol and diesel cars by 2035. Range is less of an issue than it once was.
The cars unlike milk floats are quick. Fuel-wise, they’re incredibly efficient: they don’t rely
on the controlled explosions taking place in an internal combustion engine (which creates too
much by the way of heat and too little by the way of miles). And, over time, the maintenance
bills will be a lot lower: no gearboxes to go wrong, no spark plugs to clean, no engine oil to
be changed.

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The Man Behind the Machine
Elon Musk

Elon Musk: equal parts visionary and rocket scientist, billionaire and environmentalist,
philanthropist and playboy as well as the inspiration for Tony Stark of Iron Man fame.
Granted, not quite yet a household name, but very likely one that will go down in history as
one of his generation’s greatest minds. Those who know him often draw comparisons to
Howard Hughes, due to the sheer magnitude of his vision and disdain for the status quo; still
others see hints of Thomas Edison in the diversity of his pursuits or perhaps Steve Jobs in his
love of simple and elegant design.

Then there’s the possibility that Mr. Musk is a new breed of innovator altogether... an
entrepreneur who brings his vision to life by aligning the proper intellectual and financial
capital, fueling their amalgamation with social media and inter-industry synergy. Ask a
random person on the street if the name “Elon Musk” means anything to them and they may
well shrug it off; however, there’s a good chance one of his innovations has already played a
role in their lives and a near certainty that his vision will shape the future they live in.

Entrepreneur from the Start

Born and raised in South Africa, but educated at the University of Pennsylvania in both
economics and physics, Elon Musk dropped out of Stanford University, abandoning a PhD in
Applied Physics and Materials Science, to start his first venture.7 Success did not take long to
find; Zip2, an online content publishing software, was sold to Compaq in 1999 for around
$300 million in cash. Later that year, Musk created a website specializing in online financial
services and e-mail payments; he soon refocused the company to specialize in a global
payment system, one which he believed to be both inevitable and imperative to realize the
true potential of internet-based transactions. By 2002, the company known as PayPal, was
acquired by eBay for $1.5 billion. Musk, the company's largest shareholder, owned 11.7% of
PayPal's shares and walked away with over $100 million.8 At that point, he could have easily
walked away and lived comfortably on the interest for the rest of his days, having already
established his legacy with PayPal and its role in facilitating online business. Instead,
however, he put every dollar he had into the most pressing social issues he believed the world
faces today. Musk sought to combat global warming by provided the initial concept and
serving as chairman for SolarCity, which specializes in designing, financing and installing
solar energy systems. However, it is his dual quest is to remake the auto industry with electric
vehicles and to privatize space travel that will profoundly, and irreversibly, alter the world we
live in. Mr. Musk founded Tesla Motors to combat the first issue and SpaceX for the second.

 Space X
population but a finite number of resources, Elon Musk believes that the interplanetary
Space Exploration Technologies Corporation, or SpaceX, is a space transport company that
made history in 2012, a mere decade after its founding, to become the first private company

17
to dock with the International Space Station.9 Under the assumption that the world has a
growing

SpaceX, Company Overview

colonization is the next step, and an inevitable one, for the human race. The main issue is not
setting up a greenhouse on another planet, such as Mars, but rather getting there; the problem
is that rocket ships have traditionally been treated as “disposable”, leading to near prohibitive
costs.

In order to control quality and costs, SpaceX designs, tests and fabricates the majority of its
components in-house. The Falcon launch vehicles, which carry the Dragon spacecraft, were
designed from conception to eventually become reusable to make interplanetary travel
affordable. SpaceX is reported to have nearly $2 billion in government and private contracts
on the books and has a demonstrated track record of successful launches; with no shortage of
customers, a limited number of competitors and demonstrated competency in its core
business, SpaceX is positioned to thrive. Meanwhile, Tesla is taking on a mature industry
with many competitors and excess capacity in uncertain economic times. The automobile
business requires huge investments on products that sell for relatively small margins

18
Tesla Motors Overview
Company Offerings

Tesla was able to infiltrate a densely-concentrated, highly competitive arena with a

threephase trickle down strategy. The first step was the Roadster, a low-volume, high-price
sports car that garnered much critical acclaim but was known to relatively few. The next
phase was a couple of mid-range vehicles, one sports sedan and one sport utility vehicle;
these vehicles would be critical in proving Tesla’s capability to mass produce high quality
EVs while keeping prices competitive. However, the most important phase, the one which
will determine Tesla’s legacy, is the third and final one. Internally codenamed Project
BlueStar, the low-price, massproduced vehicle will be produced in the hundreds of
thousands. If successfully executed, Project BlueStar could singlehandedly revolutionize the
auto industry.

 Phase I. Roadster

Five years after its establishment, the company released the Tesla Roadster. The Roadster
was based on the Lotus Elise, a traditional British sports car, and modified to run on an
allelectric drive system. Roughly 2,300 vehicles were produced, a drop in the ocean
compared to the one billion cars around the world. Yet its razor-sharp handling, class-leading
speed and eerily silent powertrain sparked a small but fiercely loyal group of followers. The
sports car was discontinued in 2012 as the company geared up for the next step in its entry
strategy. While not necessarily revolutionary, the Roadster was instrumental in establishing
the Tesla brand and proving, once and for all, that electric vehicles were not inherently
compromises.

 Phase II. Models S and X

The next phase was a pair of mid-volume, mid-price vehicles that could serve as a
affordable, everyday drivers with no compromises. The Model S is a seven-seat sports sedan
that competed with Mercedes, Audi, and BMW in the $50,000 to $100,000 price range. The
Model X is an SUV based on the Model S platform that sought to capitalize on American
consumers’ proclivity towards large vehicles.

Model S:

As the world’s first practical non-combustion vehicle, the Model S has earned a place
alongside game-changing vehicles like the 1886 Benz Patent-Motorwagen (recognized as the
first combustion-powered automobile) and the 1908 Ford Model T (which set the standard for
automobile manufacturing for the next century). The Model S was the company’s first
cleansheet design, designed and built from the ground up entirely by Tesla. Arguably the
most critically lauded vehicle of the year, the Model S won myriad awards both inside and
outside the automotive industry, including the 2013 Automobile of the Year and Time’s 25
Best Inventions of 2012; in particular, when the Model S was elected Motor Trend’s 2013

19
Car of the Year by a unanimous vote of all eleven judges, it was a victory for not just Tesla
but also the United States,

as a “testament to innovation and entrepreneurship, the very qualities that once made the
American automobile industry the largest, richest and most powerful in the world”.

Model X:

The Model X was designed to combine the best attributes of minivans and SUVs with the
performance and efficiency that only an electric car can provide. Equipped with all-wheel
drive and offloading capabilities, the Model X has enough differentiating features from the
Model S to prevent intracompany sales cannibalization. Moreover, very much like its sedan
sibling, the

Model X was designed to look like nothing else currently available. From its “falcon-wing
doors”, which open up and out of the way, to the use of cameras instead of side mirrors, the
SUV continues the Tesla tradition of integrating function and style. But perhaps its most
distinguishing contribution is its rejection of the status quo: gas-guzzlers and SUVs need not
be synonymous.

 Phase III. Project BlueStar

Without a doubt, the most imperative vehicle in the Tesla fleet, as well as the most
mysterious, is the yet-to-be-named Project BlueStar. Designed using the lessons learned from
the previous two generations, the high-volume, low-price entry level vehicle is intended to be
Tesla’s best selling vehicle. At an estimated base price of $30,000 (the average selling price
of a new vehicle today), the EV will target the mass market from the BMW 3-Series to the
Toyota Prius;what it lacks in brand recognition, it will make up for with better performance,
greater mileage and luxury appointments found in no other car, regardless of price. While
details remain scarce,

the Generation III EV will begin production in 2014 and eventually ramp up production to
400,000 vehicles a year by 2020.

How It Works: The Model S

The Design

As Tesla’s first original design and mainstream offering, the Model S serves as both the
inspiration and template for the future; more importantly, it transitioned Tesla from a niche
product to one that competes on the world stage. As the brainchild of Elon Musk and the
engineers at Tesla, as well as the face of the fledgling company, the Model S was designed
from the ground up. From its flush door handles (for both aerodynamic and style purposes)
that pop out when the driver approaches to the aptly named “frunk” (the front trunk space as
a result of no engine), nothing was taken for granted. There is no ignition for the key fob nor
a button to start the vehicle; as the driver sits down, the car senses the driver’s weight as well
as the proximity of the key and simply powers up; starting the car may seem like a small

20
step,but one which had grown superfluous and was promptly eliminated. The Model S can
outrace a Porsche Carrera, coast smoother than a Rolls-Royce Phantom, hold more than a
Chevrolet Equinox and is more efficient than a Toyota Prius; the flowing exterior design,
often compared to Jaguar, also does not hurt.

The most stunning centerpiece is its massive 17-inch touchscreen that controls everything
from the suspension to the sunroof and eliminates the need for any buttons in the car, save for
thehazard lights and glovebox opener. Using the impressive, responsive and intuitive screen
often draws comparisons to the impact when the first iPhone was released. In addition, the
internetconnected Model S has been effectively future-proofed: more functionality is only a
software update away. For instance, in its first major update, Tesla added a new “sleep” state
which powers down the displays and other non-essential electronics for a boost in range of
around eight miles per day. Tesla demands security and integrity are given priority; software
downloads take place over a VPN and the firmware bundle is signed by Tesla while both
private and public keys

validate its authenticity.

 The Mechanics
Mechanically, the car was designed atop the “skateboard” architecture with a flat battery
pack (composed of seven thousand rechargeable lithium-ion cells) spanning the length and
width of the car, fitted beneath the floor in between the wheels. [See Figure 2] The
skateboard creates design and dynamic advantages, meaning future electric cars can have
unprecedented styling; the flat cabin floor (no transmission tunnel) allows for huge boot
space, allowing legroom for two children in the optional rear-facing jump seat, making the
Model S the first seven seater sedan in history. With no engine located in the front or back of
the vehicle, the car benefits from an extraordinary center of gravity, on par with the Ford GT
supercar (around 17.5 inches), as well as space and safety for drivers and passengers alike.10
The vehicle was designed with an athlete in mind: lightweight and nimble despite a 4600 lb.
curb weight thanks to a class-leading point 24 coefficient of drag; aerodynamics also benefit
from an air suspension (closed loop and fully air) which correlates ride height with speed to
increase efficiency.

While a gas-powered engine has many components, electric cars have relatively few moving
parts, leading to more efficient use of energy; about 75% of the battery’s energy goes into
moving the car compared to 20% in a gas-powered car. When the driver hits the accelerator
(the term “gas pedal” is hardly applicable), the top level 85-kWh battery sends 270kW of
energy

 Model S Specs

to the rear-mounted AC inductor motor, which was pioneered by none other than Nikola
Tesla himself. Maximum torque (443 lb. ft. of it) is instantly recognized at 0 RPM, leading to

21
acceleration times typically reserved for hundred-thousand dollar sports cars. In addition, the
Model S benefits from regenerative braking which slows the car down and converts the
rolling momentum back into electric energy, which it feeds back to the battery. This not only
allows the driver to slow down without using the brake pedal, but it also extends the range of
the car. However, assuming a typical inverter efficiency of around 80 percent, the regen
process wastes about a third of the energy it processes; for example, 100 watt-hours of kinetic
energy from the car turns into 80Wh of electricity back into the battery, which delivers 64Wh
of energy back to the wheels.

Having said that, future software updates should greater optimize the regenerative braking
process. The center touchscreen already has an energy chart that maps acceleration and
regenerative braking patterns to maximize energy efficiency.11 Tesla, aware of the
unfamiliar nature of the process, allows drivers to customize the level of regen. For instance,
when shifted into neutral, the Model S is one of the best, if not the very best, coasting car on
the planet, due to its aerodynamic drag coefficient, low-resistance tires (inflated to 45 psi, the
highest tire pressure on any production car) and flat underside with no drive shaft or exhaust
system to disrupt airflow. In addition, the Model S appears to lose no more than 10% to 20%
of its range capacity during the winter, dramatically better than the Chevrolet Volt, which
loses up to 50% of its range in winter, as does the Nissan Leaf.12

David Noland, I Was Surprised By A Few Things In My New Tesla Model S

The result of all these features, innovations and designs is a sum greater than the individual
parts. At the end of the day, it was the Model S that proved “Tesla, like Apple in the
electronic device realm, the sort of ambitious and fearlessly innovative company”13. How
Did They Do It?

Defining “It” Before answering how Tesla did “it”, one must first determine what exactly “it”
is. There are two aspects to what Tesla aimed to do and both are closely intertwined. The first
was the creation of a better car, one which demonstrated to critics and consumers alike
exactly how obsolete our automotive technology had become... and the imperative need to
reignite innovation in the industry. Perhaps most impressively, Tesla did so in a intensely
competitive and lowmargin sector, surpassing international conglomerates that had immense
capital budgets, extensive networks and decades of experience. Which leads to the second
half of the “it”: singlehandedly beginning a revolution within the automotive industry which
will force established names to reinvent themselves, while pushing the less adaptive and
flexible companies into the history books. In the longer term, this shift extends beyond the
industry and could very well reshape the United States’ infrastructure and potentially shift the
global economy.

 Elon Musk’s Vision

There is no Tesla without Elon Musk. His role as a talent magnet and his vision of a
completely fresh consumer experience enabled Tesla to become what it is today as well as
what it will become tomorrow. Mr. Musk’s reputation for reinventing the status quo has
become a magnet for the best and brightest minds in the industry; recruiting engineers and

22
innovators from both automotive stalwarts like GM and technology firms like Apple
alike,Tesla’s talent acquisition strategy still more closely resembles that of a small start-up
rather than a multi-billion dollar enterprise. Quite simply, people want to work with him; they
believe in his vision and are inspired by his passion. In an interview for this paper, an
employee who elected to remain anonymous claimed there is a saying at SpaceX “No matter
how hard you work, someone else is working harder”... one might imagine who that someone
else is. Despite Musk’s meticulous attention to detail, bordering on obsessive-compulsive,
perhaps best demonstrated by his personal inspection of each and every Model S to roll off
the assembly line, his emphasis on loyalty and hard work allows a certain level of
independence for employees. After all, given his 50/50 time split for each Tesla Motors and
SpaceX, Musk has to delegate accordingly assuming a certain level of trust for his team.
Tesla also benefitted from its isolation from the industry and the norms that have hindered the
advancement of other vehicles; as an entrepreneur not backed into narrow traditional business
thinking, Musk designed the Model S from a clean slate. During an interview, Martin
Eberhard, co-founder and former CEO of Tesla Motors, claimed the traditional automakers
inability to create a better car was “a classic case of the ‘Innovator’s Dilemma’; these
companies make all their money selling gasoline and diesel cars...thus, they see no short-term
benefit from presenting a car that suggests that their gasoline cars will perhaps be obsolete
soon”.

The short-sighted rationale and shiftless complacency lead to “all sorts of internal logical
mistakes” that remained unchecked for decades, until one car company decided to question
the status quo.

One of the most important aspects of the Model S’ development was the thought process that
produced it: reasoning by first principles. Reasoning by first principles is a physics concept in
which concepts are first boiled down to their most fundamental truths and then reasoned up
from there, a process which takes more mental energy but allows for far greater innovation.
Reasoning by analogy, rather than by first principles, would have eliminated cars in favor of
horses, which had been the norm and were best supported by the present infrastructure... the
same way the status quo very nearly almost eliminated electric cars. Instead of accepting the
conventional wisdom that batteries would always be expensive, Musk broke them down into
their core components (cobalt, nickel, aluminum, carbon etc.) and their prices to calculate the
cost per kWh and deemed them financially feasible.14

Reasoning by first principles allowed for a completely new consumer experience and a new
level of synergy between seemingly unrelated industries. Mr. Musk applied his training as a
engineer and best practices from SpaceX to apply theories of rocket science to the production
of cars. Tesla recently ordered laser calibration devices so the manufacturing division can
literally calibrate the dimensions of the car within tenth of millimeters; if there are any errors,
they can trace the error to the point of origin and fix it. While this may be extreme for the car
business, it’s something that Elon Musk does every day at SpaceX. Musk also allowed for
inter-industry synergy by using his other company, SolarCity to develop, manufacture and
install the solar cells that power Tesla’s fast-charge electric charging stations, called
Superchargers. In this manner,

23
Tesla accomplished what no other company in the industry could do because it was not
limited to the automotive sector; rather it was an union of synergy and innovation from the
clean tech, space exploration and manufacturing industries. Re-Imagining the Product
Experience For Tesla, a better car was just the beginning; equally important was the
accessibility of the product and the retail experience. Everything, from the purchase of the car
to starting it for the first time to sending it in for servicing, had to be designed from the
ground up. Tesla, much like Apple did with consumer tech, is reinventing the actual retail
experience of the auto industry by bypassing the traditional dealer network; again rather than
viewing the lack of an established network as a downside, Tesla viewed it as an opportunity
to rethink what the purchasing experience should feel like. The Tesla stores themselves were
designed by George Blankenship, “best known as the chief strategist behind Apple’s
revolutionary retail stores, one of the most successful, brand-bolstering retail growth plans in
history”.15 At Tesla, George's goal is to reimagine the way people buy cars, forgoing the
traditional dealership model in favor of stylish, consumer-focused showrooms. The number
one fear of consumers is being cheated by the dealer; by selling all products through
proprietary stores and eliminating third party salesmen,

Tesla was able to establish a no-haggle pricing policy that means all clients pay exactly the
same for the same service.

One of the main issues that had to be contended with was price; even without haggling,
many people view EVs to be more expensive than their gasoline counterparts, largely due to
the upfront costs of a battery, despite the fact that many of those costs are often recovered in
lower energy consumption. However, to mitigate the greater upfront expenses, Tesla
established a new financing option that aimed to combine the “best aspects of car leasing and
ownership” and thus broaden the affordability of its products; in a press release, Musk said he
“expects around half of the Model S sales in the US to be this new lease-like option”. Under
the new pricing structure, the 10% down payment is covered by U.S. federal and state tax
credits starting at $7,500. “When considering the savings from using electricity instead of
gasoline, depreciation benefits and other factors, the true net out of pocket cost to own a mid-
range Model S drops to less than $500 per month”.16 After 36 months, as a guarantee of
value the company will offer consumers the right, but not the obligation, to sell the vehicle to
Tesla at a residual value higher than that of any luxury sedan, particularly those offered by
Mercedes, BMW, Audi, Lexus or Jaguar. “Not only is Tesla guaranteeing that resale value,
but Elon Musk is personally standing behind that guarantee to give customers absolute peace
of mind about the value of the asset they are purchasing”. Given any remaining concerns
about affordability, resale value and technological defects, Tesla has created what may be the
world’s best warranty. As part of its service program, Tesla will seamlessly valet the loaner
cars to the owner’s location, offering top of the line Model S Performance sedans or Tesla
Roadsters as temporary replacements. Should customers enjoy the

service loaner more than their other car, they are welcome to keep it at a discounted price,
based on the replacement’s age and milage. From Tesla’s perspective, this is an opportunity
to ensure “that the service fleet is constantly refreshed and gives customers the best
optionality”. Again, a service never before offered in the auto industry but one which serves

24
as a win-win situation for both the consumer and producer, a net surplus for both parties.
Moreover, the program now includes an unconditional warranty for the Model S battery, even
for user error, which should alleviate any customer concerns that EVs are any less reliable.
The Perfect Storm for an Impending Revolution Regardless of its necessity, no product can
flourish without the proper environment. Similarly, Tesla could not have flourished, or
survived for that matter, without the proper confluence of external factors. The political
environment, economic conditions and evolving consumer preferences all met to form the
perfect storm that would help Tesla Motors find its footing in the automotive world.

The financial crisis served to help Tesla on a number of grounds; while 2008 was marked by
crisis in the auto industry, including the bailout of GM and Chrysler under the Troubled Asset
Relief Program (TARP), Tesla took the opportunity to grow while its competitors were
downsizing. Tesla had initially intended to bring the Model S to market via the capital
markets but the Great Recession precluded the notion of commercial funding. Instead, as a
part of the

Obama Administration’s Stimulus Act in early 2009, Advanced Technology Vehicle

Manufacturing (ATVM) loans were “intended by the President and Congress to accelerate the
market introduction of promising automotive technologies”17. Thus, it was through federal
funding that Tesla was able to accomplish the timely launch of the Model S. However, the
government policy was not met with unanimity, even though Tesla had received the smallest
loan compared to Ford’s loan for $5.9 billion, Nissan’s for $1.4 billion, and Fisker’s for $529
million.

Presidential candidate Mitt Romney labeled Tesla a “loser” during the debates, taking issue
with the $465 million loan Tesla received from the U.S. Department of Energy.18 Yet, as of
February 2013, Elon Musk announced the company “will pay off the Department of Energy
loan five years early, twice as fast as required by the original 2010 loan agreement signed by
Tesla and the DOE”.

Evolving consumer tastes also served as a catalyst for Tesla’s rapid rise to prominence. Part
of Elon Musk’s motivation were the negative externalities of internal combustion engines:
“since we are not appropriately pricing the CO2 capacity of the oceans and atmosphere, then
the only way to address that was with innovation”. Consumers, whether through concern for
the environment or self-interest in the face of rising gas prices, have come to a similar
conclusion. In a recent survey, AAA concluded “half of U.S. adults consider gas prices to be
‘too high’ when it reaches $3.44 per gallon... 90% believe gas is too high when the price
reaches $4.00 per gallon”, indicating a potential breaking point for gas prices.19 Inevitably,
as energy demand increases and our finite supply of oil decreases, more and more drivers will
look to alternatives to the traditional internal combustion cars. Moreover, shoppers are also
seeking unique products and experiences to substantiate the additional cost of a premium
vehicle. In other words, the car itself

AAA Identifies Motorist Breaking Point on Gas Prices in New Consumer Indexis no longer
the product; a more intimate dealer relationship and pleasant purchasing experience, such as

25
the class-leading program designed by Tesla, serves as a determining factor when selecting a
brand. Automotive journalists and customers alike have likened their first Model S
experience to the first time using an iPhone, the technology that not only propelled Apple to
the pinnacle of the consumer tech world, but also redefined exactly what a smartphone should
be. The Model S could serve as a similar catalyst, one which defines a vehicle worthy of the
technology today as well as the dealer experience that should accompany it... and in doing so,
set

26
Moving Away from the Oil Economy
 The Oil Industry

Tesla Motors has created an incredible car with the Model S and promises an even more
impressive pipelines of products. But the ramifications of Tesla, and the revolution it is
sparking, extend far beyond the automotive industry alone. The energy industry is perhaps
the one that will be impacted most profoundly, with the oil sector in particular facing a
rapidly changing future. The multi-billion dollar oil industry all begins with marine plants
and animals, which lived millions of years ago, that have been covered by layers of silt; “heat
and pressure from these layers helped the remains turn into crude oil; hence, the word
‘petroleum’ means ‘rock oil’ or ‘oil from the earth’”.20 After being collected, the crude oil is
sent to a refinery, by either ship or pipeline, to be developed. At a refinery, different parts of
the crude oil are separated into useable petroleum products. “Refineries in the United States
produce about 19 gallons of gasoline from every 42-gallon barrel of crude oil that is refined...
the rest of the barrel gets turned into other petroleum products like diesel fuel, heating oil, jet
fuel, and propane”.Tesla at the zenith of the automotive world.

Oil-backed groups have challenged electric companies’ plans in 10 states, waging regulatory
and lobbying campaigns against the proposals. The showdown is taking place as utilities,
eager to increase the demand for power, push for approval to build charging networks in
locations such as shopping centers and rest stops in more than half the nation.Fossil fuel
interests control 90 percent of the transportation fuel market in the U.S. and are really feeling
threatened,” said Gina Coplon-Newfield, director of the electric vehicle initiative at the Sierra
Club.In the Midwest, the American Fuel and Petrochemical Manufacturers, a trade group for
gasoline makers, has filed comments against charging plans in Kansas and Missouri, and has
opposed Colorado’s new zero-emission vehicle mandate as part of a “Freedom to Drive”
coalition of auto dealers and oil groups. The typical consumer, they say, should not have to
pay for incentives or charging stations that mainly benefit people wealthy enough to afford
cars like Teslas.

Oil-backed groups have challenged electric companies’ plans in 10 states, waging regulatory
and lobbying campaigns against the proposals. The showdown is taking place as utilities,
eager to increase the demand for power, push for approval to build charging networks in
locations such as shopping centers and rest stops in more than half the nation.Fossil fuel
interests control 90 percent of the transportation fuel market in the U.S. and are really feeling
threatened,” said Gina Coplon-Newfield, director of the electric vehicle initiative at the Sierra
Club.In the Midwest, the American Fuel and Petrochemical Manufacturers, a trade group for
gasoline makers, has filed comments against charging plans in Kansas and Missouri, and has
opposed Colorado’s new zero-emission vehicle mandate as part of a “Freedom to Drive”
coalition of auto dealers and oil groups. The typical consumer, they say, should not have to
pay for incentives or charging stations that mainly benefit people wealthy enough to afford
cars like Teslas.

27
  A Fossil Fuel Free Future
Yet the future is still in our hands. If Tesla gains traction and the company’s vision is
realized, the world of tomorrow may be brighter than the one we have today. Elon Musk has
predicted “that more than half of new cars manufactured will be fully electric in 20 years... a
bet he will put money on”.31 For the record, the last time Musk made a bet, it was with The
Wall Street Journal writer Dan Neil that the Model S would be released on time; needless to
say, Mr. Musk won. If he is correct, and if Tesla succeeds, the United States will shift away
from oil, leading to what could be a worldwide movement towards renewable energy in place
of fossil fuels. As a result of falling demand from America, and given a steady global supply,
as “prices are inclined to fall, some oil-exporting countries will prop them up by cutting back
their own

supplies”

This “strategic cooperation” will lead to a decrease in supply and higher prices, which may
be profitable for oil producers in the short-term but will only accelerate the shift towards
alternative energy, which will lead to a virtuous cycle: more investment in renewables,
leading to falling energy prices, leading to increased consumption of alternative energies
which loops back to greater investment in them and the cycle repeats. Already, in the past
twenty years there has been an exponential increase in wind electricity output which as of
2011, generates nearly 125 billion kilowatt-hours of energy. [See Figure 6] Should this be the
future we choose, the ramifications will be immense, affecting not just the automotive and
energy industries but also entire national infrastructures and the modern-day understanding of
transportation.

28
29
Automobile industry in India

 Who are we?

Tesla was founded in 2003, California, USA by Elon Musk and Martin Eberhard

Design, manufacturers and sells electric cars and vehicle powertrain components

Tesla is positioned as a high-end green electrical car’s company in a luxury market

Gained widespread attention after launching first fully electric sport carsThe Tesla Roadster
in February 2008

Tesla in india

Tesla India Motors And Energy Private Limited is a subsidiary of Tesla Inc. for its
operations in India. The company was registered on 8 January 2021 in Bengaluru, Karnataka.
It has officially registered with the Registrar of Companies in India at its Bengaluru office,
confirmed by Elon Musk, CEO of Tesla on Twitter. Transport Minister of
India NitinGadkari has confirmed the entry of Tesla in India.

30
Tesla plans to sell its Model S, Model X and Model 3 in India from June 2021. Tesla in talks
with Karnataka Government to set up R&D centre in Bangaluru.
Tesla is expected to launch 5 cars in the year 2021-2022. Tesla Model 3, Tesla Model S and
Tesla Model X are launching soon in India at an estimated price of Rs. 60.00 Lakh, Rs. 1.50
Crore and Rs. 2.00 Crore, respectively.

Strategy to Capture the Indian market

“Electric car market in India hasn’t seen much success. But it has humungous
potential. History must not be repeated. Hence, careful measures have to be
taken.”

-Enter the market in strategic partnership with a local partner (JV)

-Establish a solar powered - super charger network in India in collaboration with the Indian
Government by 2018-19 – PPP Model

- Set up lithium battery manufacturing units by 2018 to reduce massive import costs (this can
be used for household purposes too) and a fully automated car-production facility at one of
the strategic locations discussed by 2020. This will facilitate domestic production as well as
exports targeted to the Asia region.

-Localize the brand using marketing strategies with the assistance of the local partner
(Introduce only Tesla Model-3)

-Open showrooms in Tier-1 cities such as Delhi (No VAT, No Registration, No road tax,
15% subsidy on electric cars), Bangalore & Mumbai

Terms and Conditions

Tesla is the most successful electric car company in the US simply because of its
supercharger network. That however is absent in India. In the US, Tesla charging network is
quite close to the gas station network compared to the competition. Readers should realize
that Tesla does not make the best electric vehicles. The perfect charging network of Tesla’s in
the USA makes it a success. To enjoy the same level of comfort here, the charging network
has to get strong in India. Tesla as a car manufacturing company has already faced backlash

31
over fit and finish and quality issues on the majority of its cars. More about Tesla India lineup
2021 below.

Tesla's entry is expected to give a boost to the EV segment, which may result in a jump in
demand for batteries.

Besides, Tesla's entry into India will be a good advertisement for India's ambitions to be s
global hub for manufacturing EVs but it will take time.

"Its proliferation is expected to take a good amount of time as neither Tesla nor India is ready
for EV infrastructure. It will take establishing a wide network of vendors, software
infrastructure, R&D, testing, etc. for its further development though the company is set for its
Indian debut in 2021," said AshwinPatil, Senior Research Analyst at LKP Securities.

Patil said Tesla was planning to enter India through a launch of its Model 3, which will range
up to Rs 55 lakh, thus causing no threat to any of the domestic OEMs initially.

"However, later on, there will definitely be an EV revolution in India over a period of time
but again affordability may act as a dampener from the customer's point of view. Therefore
battery pricing will play a major role in the overall pricing of the EV," Patil said.

He also pointed to the uncertainty over the mode of manufacturing. So, Tesla's entry will not
impact the auto industry in the near to medium-term.

RusmikOza, Executive Vice President, Head of Fundamental Research at Kotak Securities,

agrees.

"Entry of Tesla will not impact the auto industry in the near to medium-term. Unlike mobiles
that cost below Rs 1 lakh, Tesla’s popular Model 3 will cost more than Rs 50 lakh in India as
and when it is launched," said Oza.

Tesla does not have any manufacturing plant in India, so the cars will be completely built
units (CBU) attracting very high duty. India does not have proper charging infrastructure,
which could be a big deterrent for EV car buyers, especially while travelling long distances,"
Oza added.

As the car will be imported, there will be no benefit to any Indian auto component
manufacturer.

Oza also said the entry of Tesla will also not hurt battery manufacturers in the near-to-
medium term as the market for premium cars costing more than Rs 50 lakh is nascent and
minuscule in terms of sale volumes in India.

The maximum volumes come from cars costing below Rs 10 lakh, so unless "we have
appropriately priced electric vehicles they may not pose a big threat", he said.

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  Tesla Competitors in India

Tesla's competitor Triton is planning to launch its N4 electric sedan in India

Delhi Transport Department has issued notice to Tata Motors over Nexon EV performance
concerns

Ola Electric has partnered with ABB for robotics and automation solutions for its electric
scooter factory

 Tesla has a number of competitors among traditional carmakers, such as Ford and
Honda.
 Tesla has managed to see success by focusing on high-status and premium electric
vehicles (EVs).
 There is more competition, however, now entering the higher-end electric and self-
driving car market.
 Still, when it comes to luxury EVs, Tesla owns the top spots.

Kia has launched an EV SUV, called the Kia Niro EV, argued to be the EV SUV on the
market. Nissan and Volkswagen have long offered relatively inexpensive options for EVs,
with Nissan having the Leaf and Volkswagen offering its E-Golf.

TATA MOTORS

The Tata Nexon EV, which is currently India’s best-selling electric passenger vehicle and
celebrating its one-year anniversary today, is approaching the 3,000-unit sales
milestone. Launched on January 28, 2020, the eco-friendly compact SUV has seen rapid
consumer acceptance.

 Nexon EV sales crossed the 2,500 mark at the end of December 2020
 Tata claims a 64 percent market share in the EV segment

MAHINDRA MOTORS

Mahindra Electric Mobility Limited, formerly known as the Reva Electric Car Company,
is an Indian company based in Bangalore, involved in designing and manufacturing of
compact electric vehicles. The company's first vehicle was the REVAi electric car, available
in 26 countries with more than 4,000 of its different versions sold worldwide by mid March

33
2011.[Reva was acquired by Indian conglomerate Mahindra & Mahindra in May 2010. After
the acquisition, the company launched the electric hatchback e2o in 2013.

HYUNDAI MOTORS

Hyundai Motor India introduced its Kona Electric in the domestic market on July 9, 2019;
and is seeing good market response for the five-seatermonocoque electric vehicle

BMW I3

The BMW i3 is a B-segment, high-roof hatchback manufactured and marketed

by BMW with an electric powertrain using rear wheel drive via a single-speed transmission
and an underfloor Li-ion battery pack and an optional range-extending petrol engine.

TATA ALTROZ EV

Tata Altroz EV has been engineered on the ALFA (Agile Light Flexible Advanced)
Architecture. With lightweight, modular and flexible characteristics, the new platform allows
the manufacturing of multiple body styles with a choice of powertrains, including gasoline,
diesel or full electric.

AUDI E-TRON

The Audi e-tron is an all-electric, midsize luxury[2] crossover produced by Audi, which
was unveiled as a concept car at the 2015 Frankfurt Motor Show. It is the company's
first electric mass production car, and was first delivered in May 2019. It has an EPA
range of 204 miles (328 km), or 222 miles (357 km) in the updated model.

ORA R1

The ORA R1 is a city car produced by the Chinese car manufacturer Great Wall
Motors and sold under its electric vehicle sub-brand, ORA, since 2019.] The R1 was
unveiled at the Shanghai Motor Show in April 2019.

The lithium-ion battery of the R1 can propel the vehicle up to 102 km/h (63.4 mph) and has
an NEDC range of up to 301 kilometres (187 mi). The motor is a front-positioned 48 hp
(36 kW; 49 PS) and 125 Nm permanent magnet motor.
The ORA R1 is priced between 59,800 and 77,800 yuan ($8,680 to US$11,293), making the
R1 the world's cheapest electric car as of 2019.

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Automobile contribution in environment

You see it every time that smoke billows from your car's exhaust pipe, so there's no denying
that vehicles are major contributors to air pollution. Air pollution refers to the presence of
foreign substances in the air that don’t belong there, or excessive amounts of certain
impurities that wouldn't harm us otherwise. When cars burn gasoline, they emit pollutants.
Gasoline fumes escape into the air even when we pump gasoline into our fuel tanks.

There are four major pollutants that come from cars:

1. A car emits carbon monoxide when the carbon in fuel doesn't burn completely.
2. A car's exhaust emits hydrocarbons, a toxic compound of hydrogen and carbon.
3. When fuel burns, nitrogen and oxygen react with each other and form nitrogen oxides (NOx).
4. Particulate matter -- small particles of foreign substances -- in the air contribute to
atmospheric haze and can damage people’s lungs.

Pollutants from cars contribute to various types of air pollution. When hydrocarbons and
NOx combine in sunlight, they produce ozone. High in the atmosphere, ozone protects us
from the sun’s ultraviolet rays. When holes in the atmosphere's ozone layer allows ozone to
come closer to Earth, it contributes to smog and causes respiratory problems.

Air pollutants emitted from cars are believed to cause cancer and contribute to such problems
as asthma, heart disease, birth defects and eye irritation.

Emissions from cars increase the levels of carbon dioxide and other greenhouse gases in the
atmosphere. At normal levels, greenhouse gases keep some of the sun’s heat in the
atmosphere and help warm Earth. That said, many scientists believe that burning fossil fuels
such as gasoline causes greenhouse gas levels to spike, leading to global warming.

Scientists use sophisticated instruments to measure concentrations of harmful substances in

the air, but it’s tough to say exactly what percentage of air pollution comes from cars. This
makes sense, because many other human activities contribute to air pollution as well. In fact,
the production of electricity by coal-fired power plants and other sources can cause more
pollution than most cars. If that wasn't enough, we pollute the air when we heat our homes
and public buildings with fuels other than electricity -- just as we do when we drive our cars.
Even people who don’t drive add to pollution when they buy goods and services that involve
fuel when they're made or delivered.

Although the U.S. Environmental Protection Agency (EPA) declared cars "mobile sources"
of pollution, they aren’t the only culprits. Big trucks, bulldozers, ships and boats, trains and
even snowblowers pollute the air.

According to the EPA, motor vehicles collectively cause 75 percent of carbon monoxide
pollution in the U.S. The Environmental Defense Fund (EDF) estimates that on-road vehicles
cause one-third of the air pollution that produces smog in the U.S., and transportation causes
27 percent of greenhouse gas emissions. The U.S. has 30 percent of the world's automobiles,
yet it contributes about half of the world's emissions from cars.

35
The United States was long considered the world’s biggest polluter in terms of carbon
dioxide and other greenhouses gases, but by 2008, the United Nations had reported that China
had moved into the top spot.

The percentage of air pollution caused by cars is higher in urban areas and higher still near
major highways.

 Daily pollution

Did you know that your biggest daily exposure to air pollutants comes while
driving your car to work?

Until manufacturers start making intelligent vehicles that automatically keep

the car cabin’s air clean, the ventilation settings on your car’s dashboard are
the best way to protect your health. Fan speed, ventilation mode, and cabin
air recirculation options can help protect your respiratory health, but how do
you know what the best combinations are?

36
Research led by the University of California, Riverside, has the answer.

Cabin air filters were originally designed to remove relatively large particles
like pollen and dust and are not very good at filtering out the much smaller,
submicrometer particles from vehicle emissions. Gases like carbon dioxide,
which is exhaled by passengers; and nitrogen oxide, which infiltrates the
cabin from vehicle emissions, aren’t usually filtered and can impair decision
making, make people sleepy, or exert adverse health effects. Cabin air quality
can be affected by heavy or stop-and-go traffic, ventilation fan speed, vehicle
speed, pollutants in outside air, and the number of passengers in the car.

Over the course of a long drive, your car’s cabin can accumulate levels of
particulate matter and gases that are very unhealthy to breathe. If you drive a
lot, as many commuters do, your respiratory system is exposed to substantial
pollution.

The car cabin is like a box with small holes for gas exchange. That means the
air in the cabin will eventually be ventilated, or equilibrated, with the outside
air. But that can take anywhere from a minute to an hour depending on fan
speed, ventilation mode, and cabin air recirculation.

Vehicles differ in their ability to filter air pollutants and maintain clean cabin
air quality, yet until now there has been no standard test method or index to
quantify these toxins.

Heejung Jung
Credit: UC Riverside

Heejung Jung,
a professor of mechanical engineering in UC Riverside’s Marlan
and Rosemary Bourns College of Engineering and the Center for Environmental

37
Research and Technology,studies how outdoor pollution gets inside cars, and
identifies ways to improve cabin air quality.
Jung worked with consultancy firm Emissions Analytics to develop a
standard test method, which took its first step toward regulatory agency
approval at a European Committee for Normalization workshop in November 2019.
The team tested 100 vehicles and is using the data to build a database that
will help drivers protect their respiratory health by including cabin air quality
among factors to consider when buying a car.
Closing the windows and choosing the recirculation setting of the car’s
ventilation system reduces particulate matter concentration. Recirculation,
using a low fan speed, removes most of the ultrafine nanoparticles that are
particularly good at penetrating human lungs.

Unfortunately, this setting increases accumulation of carbon dioxide, a

normal byproduct of breathing that increases when more than one person is
in the car. Few cars have technology to reduce cabin carbon dioxide.

Jung’s group has developed a way to open the recirculation flap door at
specified angles so that it can control the extent of exchange between
recirculated and fresh air. This method can reduce carbon dioxide while
keeping particulate matter at acceptable levels.

Car manufacturers could incorporate this method, known as fractional air

recirculation, into improved air filtration systems that would minimize
particulate matter, carbon dioxide, and nitrogen oxide.

For now, however, drivers can experiment with fractional recirculation on

their own. How often they need to switch modes depends on how fast the car
is going, the number of passengers, how well sealed the car’s body and
windows are, and how efficient the car’s cabin air filtration system is. The
latter is something drivers can estimate for themselves when Jung and
Emissions Analytics unveil a database that will eventually consist of up to
2,000 car models.

“When you see polluted road conditions such as a congested road or lots of
trucks in front of you, then choose recirculation mode and adjust the fan
speed. Full recirculation at the lowest fan speed should not be used for more

38
than a few minutes as carbon dioxide will quickly build up within the cabin,”
Jung said.

If recirculation mode is required for longer than a few minutes, Jung

recommends increasing the ventilation fan speed. Vehicle air cabin systems
are not airtight for safety reasons, and a higher fan speed results in a bit more
ventilation than low speed. But it is noisier, and Jung said that auto
manufacturers should incorporate fractional recirculation into their
ventilation designs.

“This principle applies to all enclosed environments such as airplanes, buses,

trains, subways, and buildings,” Jung said. “We can significantly reduce
exposure to air pollutants in some environments where people spend the most
time with air circulation systems that include fractional recirculation.”

 What is a renewable energy source?

A renewable energy source means energy that is sustainable - something that can't run out, or is endless, like the
sun. When you hear the term 'alternative energy' it's usually referring to renewable energy sources too. It means
sources of energy that are alternative to the most commonly used non-sustainable sources - like coal.

39
 What is zero-carbon or low-carbon energy?
Nuclear-generated electricity isn't renewable but it's zero-carbon(1), which means its generation emits low levels
or almost no CO2, just like renewable energy sources. Nuclear energy has a stable source, which means it's not
dependent on the weather and will play a big part in getting Britain to net zero status.

The most popular renewable energy sources currently are:

1. Solar energy
2. Wind energy
3. Hydro energy
4. Tidal energy
5. Geothermal energy
6. Biomass energy

The future of renewable energy

As world population rises, so does the demand for energy in order to power our homes, businesses and
communities. Innovation and expansion of renewable sources of energy is key to maintaining a sustainable level
of energy and protect our planet from climate change.

Renewable energy sources make up 26% of the world’s electricity today, but according to the International
Energy Agency (IEA) its share is expected to reach 30% by 2024. “This is a pivotal time for renewable energy,”
said the IEA’s executive director, Fatih Birol.

In 2020, the UK hit a new amazing renewable energy milestone. On Wednesday 10th June, the country
celebrated two months of running purely on renewable energy for the first time ever. This is a great step in the
right direction for renewables.(1)

In the future, it’s expected that the number of renewable energy sources will continue to increase as we
see an increase in demand for power. This will drive down the price of renewables – great for the planet, and
great for our wallets.

Renewable energy and your home

The advantages of using renewable energy in a domestic setting are persuasive:

 Cut your electricity bills: Once you’ve paid for the costs of installing a renewable energy system, you
can become less reliant on the National Grid and your energy bills can be reduced.
 Get paid for the electricity you generate: The UK Government’s Feed-in Tariff pays you for the
electricity you generate, even if you use it.
 Sell electricity back to the grid: If you are generating enough energy to export an excess back into the
National Grid, you can receive an additional payment from the Feed-in Tariff scheme.
 Reduce your carbon footprint: Green, renewable sources of energy don’t release carbon dioxide or
other harmful pollutants into the atmosphere. According to the Energy Saving Trust's Solar panels

40
 page, a typical solar PV system could save around 1.5 - 2 tonnes of carbon per year. You can find out
more in our solar panels guide.

Want to become even more of an expert in renewable

energy?

Find out everything about EDF Renewables

EDF Renewables is the part of our business that’s entirely dedicated to generating renewable energy through
wind farms and battery storage. EDF Renewables.

Wondering about alternative energy?

Wondering what new and innovative ways scientists are looking at in order to reduce our dependence on
traditional fossil fuels? Some of these innovations might surprise you: Alternative energy sources you
probably haven’t heard of.

Renewable energy facts:

1. Solar PV could account for 5% of global demand by 2020 and up to 9% by 2030(2)
2. By the year 2050, our energy needs can be met by 95% renewable energy(2)
3. Price Waterhouse Cooper predicts that Africa could run on 100% renewable energy by 2050 (2)
4. Over the last four decades, the price of solar PV panels has declined 99%(3)
5. A US study showed that renewable energy creates three times more jobs than fossil fuels (4)
6. Investment in renewable energy has surpassed fossil fuel investment. The global renewable energy
market is now worth over $250 billion

41
42
How electric vehicles can eliminate climate crisis

Electric vehicles (EV) and their production have recently emerged as the latest trend in the

automobile industry with various acclaimed and known automobile companies such

as Tesla, Nissan, Chevrolet, Hyundai, Kia and many more plummeting straight onto the

bandwagon. Even luxury brands like Audi, Porsche as well as BMW have embraced the

trend and have positioned electric models on sale recently.

Considering the growing preference for electric vehicles, can it be a possibility that in a few

decades gas or diesel-powered vehicles could become an extinct tale?

Now, what exactly is an electric car and why are they becoming so popular?

Electric Cars are driven by an electric motor rather than being fueled by gasoline. The electric

motor retrieves its energy via a controller that regulates the degree of power depending on the

driver’s accelerator pedal use. The electric cars are powered by rechargeable batteries. These

batteries can also be used for performing other functions like the functioning of the lights and

wipers.

Conventional vehicles, on the other hand, are fueled by gasoline or diesel-powered engines.

Electric vehicles, however, are not all the same. The “plug-in hybrid” vehicles are ones that

offer both gasoline or diesel engine while also offering an electric motor. While other electric

vehicles completely forsake liquid fuels and operate solely on electricity. These are “battery-

electric” vehicles. Some EVs, namely “hydrogen fuel cell” vehicles power electric motors

by the conversion of hydrogen gas into electricity.

43
Electric Vehicles as an asset for the environment

How Electric Vehicles are an asset for the environment

A debate has emerged among the automobile world, regarding how favourable an asset the

electric vehicles actually are for the environment and whether they are veritably benefiting

the environment at the cost of their incurred prices. So let’s highlight some of the crucial

benefits the electric vehicles have to offer.

Zero tailpipe emissions

The biggest factor making electric vehicles an asset is that EV’s that run on electricity emit

zero tailpipes (direct) emissions. The emissions from driving electric are far less from the

ones incurred by driving petrol or diesel.

44
With EVs getting more prevalent and their manufacturing more widespread, battery recycling

has the scope of getting more efficient and reducing the need for extraction of new materials,

thus reducing the dependency on mining and production of new batteries.

EVs generate considerably lower emissions over their lifetime than vehicles running on fossil

fuels, irrespective of the source that generates the electricity.

This becomes extremely advantageous when we factor in how the lower emissions are saving

the pedestrians and the locality from breathing in poisonous gases. This makes EV’s much

more eco-friendly compared to the conventional gasoline-powered vehicles crowding the

market today.

Cleaner CO2 emission

Tailpipe emissions have a direct and dire impact on the air quality of their locality. The CO2

emissions of electric vehicles, however, are much cleaner compared to the emissions from the

most eco-friendly petrol engines. As per the U.S. Department of Energy, fully electric

vehicles emit an average of 4,450 pounds of CO2 each year while conventional cars emit

over twice as much annually.

Fewer Particulates

The ICE vehicles, even the new ones, emit large amounts of health harmful particle pollution.

The emission of these particles can have various grave health consequences, which include

asthma, heart attacks and cancer and many other diseases. The electric vehicles meanwhile

are not directly emitting these particulates into the street air.

45
Curtailing Noise Pollution

Electric motors are generally very quiet, particularly in comparison with the ICE vehicles and

their exhaust systems and thus generate less noise pollution. While gas and diesel vehicles

may be incorporated with muffling devices to curb the noise the mufflers are often noisier

than their stock counterparts.

Energy Efficiency

As per fuel economy, Electric vehicles convert over 77% of the electrical energy from the

grid to power at the wheels. Conventional gasoline vehicles meanwhile, only convert

about 12%–30% of the energy stored in gasoline to power at the wheels. Thus Electric

Vehicles contribute towards less energy-loss as compared to gas-powered engines.

Electric cars, having fewer parts to funnel energy through, undergo less energy conversion.

This results in less energy loss compared to gas-powered engines. The electric car brakes

have regenerative braking as opposed to ICE cars. This allows the car to charge the battery

while braking as the car runs on a generator which helps it to renew some wasted energy back

into the battery as opposed to using a brake pad which converts friction into heat.

Night charging leads to cleaner energy

With the overall energy consumption being lower in the nights, it’s the time when the wind

generation is most eminent in the energy mix. Thus charging during the nights leads to

electric vehicles assisting in the devouring of better amounts of renewables. Alongside this, it

also serves as a safeguard for stabilising the electricity system.

46
CHAPTER-5 FINDINGS AND LIMITATION:-

Challenges faced by Electric Vehicles

In a recent discussion over an interview with tech YouTuber Marques 'MKBHD'

Brownlee, the Microsoft co-founder Bill Gates had unfolded his views regarding the trend

of electric cars while also mentioning some of the challenges that behold them.

Tesla Impact
Tesla is not a typical automaker. In most ways it closely resembles a Silicon Valley
technology start-up. Traditional Auto companies, “the metal benders,” are adept at making
complex reliable products at massive scale, but the software experience in those products is
still not as sophisticated as we experience every day with our mobile devices, gaming
consoles, smart wearables etc.

Very soon, we may see well known Auto brands – the likes of VW, Toyota, FCA, GM -- join
the list of Silicon Valley technology companies.

But why?

Why can’t auto companies focus on building good cars and let their tech partners/suppliers
build the software for the cars?

The reason for this paradigm shift in the auto industry is the competition from clean sheet
companies who are changing the rules of the game - Tesla, Lucid, Revian. They have
embraced technology at their core. This has completely changed the relative importance of
software vis-à-vis hardware in a vehicle. The customer and market acceptance of this new
future paradigm is also reflected in the valuations of companies like Tesla (see figure below).

47
Traditional cars start getting degraded from the day they are driven out of the showroom -- it
is a downhill road. Companies like Tesla are improving the performance of their cars over
time by intelligently using the data collected through frequent over the air updates (OTA).
One recent example is Tesla increasing the performance of its Autopilot system significantly
over a period of 18 months (see figure below). The Autopilot performance almost doubled in
the period of 18 months, whereas the performance of active safety features remained almost
the same.

48
This is their true edge; the software core turns every Tesla car into a learning machine.
Tesla’s global fleet of cars have collected data of 3bn miles, have identified multiple edge
scenarios and done over 120 OTA updates since 2017 -- that’s an average of one update
every 16 days. These updates have added new features like Smart Summon (valet service),
added performance like additional 40 BHP to Model-S, added support for new content like
Netflix, and fixes and updates to systems like BMS, braking, Autopilot, etc. This is a major
competitive advantage. For other car companies, these would have meant expensive and
messy recalls and updates, or may not even be possible in the existing vehicle platforms.

This concept of products getting better over time is not at all new – we are used to it in our
smart phones, smart TVs, tablets, PCs. They add functionalities, content, bug fixes, etc.,
through updates. However, this concept was alien to the Automotive industry until recently;
almost all car models deteriorate from the time they roll out of the show room. Also, these
products are disconnected from our digital life, unlike our other smart devices.

The Ship is Turning

The ICE industry has grown by outsourcing subsystems, including software and the
processing compute hardware. Some of the major OEMs have outsourced nearly 90% of the
software which goes into their cars. To make software and data analytics the core of the
industry, there are calls for a significant change in the way the OEMs function.

This is not lost on the major Auto players. Some of the major Auto giants like Volkswagen
and others have made commitments to build software and data analytics at their core.
Companies like VW, GM, Toyota, Hyundai, FCA are making large investments towards
making this shift. But it is a major leap ahead for traditional Auto companies. There needs to
be a significant shift in culture, skills, processes and many more of the legacy aspects of the
automotive industry.

The vehicle design and manufacturing process has generally been quite linear with a typical
lead time of 2-3 years for a new product, and there isn’t much learning built into the vehicle.
The software development process is quite different. It has a built-in mechanism for
collecting vast amounts of data from the products in the field to capture the edge cases and to
better understand how the product is being used in the field. It can uncover newer
requirements and continually improve the product while in use. This process of continuous
improvement i.e., learning by collecting large amounts of data and improving the product. is
baked into everything from a small mobile game to the largest software platforms on the
planet, from mobile phones to large industrial machines. It also needs to be an intrinsic part
of the automobiles of the future.

The Data Conundrum and the Secret Sauce

This calls for appreciating a very fundamental issue. The scale, speed and complexity of data
from the vehicles and the need for analysing that data in conjunction with the enterprise data
of BoM, customer master, service history, etc. A typical ADAS equipped car would generate
roughly 1TB of raw data per day. A vehicle fleet of 100 thousand such cars would generate
100 petabytes of raw data per day! That’s a lot of data to store and analyse. This requires the
ability to manage data at extreme scale in a reliable manner.

Also, there are decisions to be made regarding the following: which data to extract and store,
what is the cost of storage, who gets access to which data, what will be the design of the data
transfer pipeline, what advanced analytical algorithms can be used, which architecture will

49
perform at such scale, which platform has the ability to handle unstructured and semi-
structured data and many more.

There is a need to architect and build a data pipeline that can manage exabyte scale data. A
data pipeline that can collect and intelligently sift out important data elements and then link
those with enterprise data for the analysts to work on using advanced pattern recognition and
other machine learning and AI techniques. Managing this data deluge intelligently will be a
critical capability for OEMs to succeed in this race.

The OEMs need to partner with a data and analytics organization that understands the
complexities of operationalizing hyperscale architectures to support critical business
challenges at scale. Teradata has been helping organisations make sense of sensor data at
massive scale, and to use that to solve complex business problems and create future-ready
capabilities.

Survey

This iis the small survey conducted by us

We circulated this in about 100 people to get the view about how the
majorty of people think and how its going to effect The tesla

50
Ques.1 what you prefer fossel Fuel or an electric car ? Score

Yes No May Be Absolutely YES

72% 5% 20 % Not
3%
Ques.2 In India which automobile company will be your first Score
choice ?
Tesla Tata BMW Mahindra TATA
30% 32% 10 % 28%
Ques.3 How much you will pay for an electric car ? Score

10-15 L 15-20L 20-40L 40L + 10-15 L

56 % 28 % 11% 5%
Ques.4 Do you believe you can contribute to the nature by Score
adopting electric cars ?
Yes No May Be Absolutely YES
89 % 0% 11% Not
0%

Ques5. Preferred Electric car Life cycle ? Score

5-10 Y 10-15 Y 15 + Y Does not 15 + Y

2% 12% 79% matter
16%
Ques.6 Do you think that electric cars will take over the future Score
?
Yes No May Be Absolutely YES
95% 2% 2% Not
1%
Ques.7 At how much of distance you wish to see charging Score
stations to be all around the county like India ?

100 KM 200 KM 250 KM 350+ KM 250

21% 32% 35 % 12 %
Ques8 will you chose electric car if you get the chance to get Score
the fuel and electric car at the same price point ?

51
Yes No May Be Absolutely YES
88% 7% 3% Not
2%
Ques.9 Do you believe that going on electric cars can change Score
ongoing global warming crisis ?

Yes No May Be Absolutely YES

46% 22% 26 % Not
6%
Ques.10 I am willing to spend 5 lack more if i have to save my Score
nature
Will you ?
Yes No May Be Absolutely Absolutely
12% 32% 21% Not Not
35%

52
Long-Term Ramifications
The Redevelopment of National Infrastructure

In the eyes of Peter Carlsson, VP of Supply Chain for Tesla, “people want to drive
environmentally-friendly vehicles... they just need the opportunity.” In part, the opportunity
is driven by products; they need to be better than combustion or hybrid alternatives and they
need to extend to segments beyond the Model S. But it will also require investments in
charging equipment and national infrastructure. The big question is, when gas stations
disappear, what will stand to replace them. Tesla, in an attempt to quell range anxiety,
perhaps best understood as a Michael Levi, Why More U.S. Oil May Not Mean Cheaper U.S.
Gas dead battery in the middle of nowhere, has already started to answer that question: The
Superchargers. The Supercharger network is “a game-changing solution to a common
question –

how to enable long road trips in an electric vehicle without long stops; the answer is simple:

more power, and a faster path to your battery” by bypassing the onboard charging
equipment.33 Capable of recharging an EV’s battery to half of its capacity within 30 minutes,
many of the Superchargers run purely on solar power, installed by none other than Elon
Musk’s own

SolarCity; thus, after the initial installation cost of around $250,000, the marginal cost of
running a charging station is near zero. Tesla owners benefit from free energy while the rest
of the world benefits from fewer carbon emissions; moreover, the system is so efficient, it
may even feed power back into the grid.

The Supercharger network can be envisioned as a replacement for gas stations, running on a
range of different sources to produce electricity, and enabling cross-country road trips at zero
cost. While currently only available at select cities in California and New York, the goal is to
strategically deploy them across the nation to allow point-to-point traveling without any
range anxiety. As other car companies follow Tesla’s precedent and the government increases
its involvement in the development of the nation’s newly electric infrastructure, the concern
of range will no longer hinder consumers from purchasing EVs. It is worth noting that the
source of the electricity that powers the grid is as important as the grid itself. After all,
electricity produced from oil or coal is not the sustainable future that Tesla strives for;
however, regardless of the source, an electric generator is still more efficient than a
combustion engine Tesla Motors, with a conversion rate of 80% as opposed to 20%, leading
to a net gain for both the consumer and environment.

“A generator powered by renewable energy is the dream” of Peter Carlsson. While the

U.S. relies mostly on coal for electricity generation, many states in Europe are able to drive
with zero environmental impact. According to Mr. Carlsson, one of the biggest markets for
Tesla is

53
Norway, which has the highest percentage of EVs in the world and benefits from an
electricity grid powered by hydropower. In particular, the United States, Canada and Europe
(specifically the region north of the Alps), “have a high level of environmental consciousness
along with high fuel prices” which make them ideal candidates for EVs and the deployment
of an electric grid powered by alternative energy. During an interview for this paper, Mr.
Carlsson added that the Chinese government has been offering many incentives and
promoting their electric infrastructure, two factors which have prompted Tesla to begin its
penetration of the nation’s EV market; Tesla plans to open stores in Beijing and Shanghai,
with the first deliveries scheduled for the third quarter of 2013. As these nations move away
from the inefficiencies of combustion engines and decrease their dependence on fossil fuels,
the world will begin along a path that is far more sustainable than the one it is currently on.

Scalability of Electric Technology

Eventually, however, the electric revolution must extend beyond cars alone. Elon Musk has
insinuated the feasibility of electric trucks in the future. However, both light and commercial
trucks would require an entirely new platform to be designed from scratch; while the
mechanics 35 and powertrain Tesla currently uses could be readily adapted, the unibody that
the Model S rides on will not support a heavy duty vehicle. Moreover, in addition to the
research to build a new platform, Tesla would likely have to invest in a new factory with
different equipment, a capital expenditure that is not very feasible for the company as of right
now. In Eberhard’s view, “trucks split into two categories: short-haul trucks and delivery
trucks are good candidates for electrification, especially true trucks with predictable routes”.
However, unlike his successor Elon Musk, Eberhard believes, given the current technology
“long-haul trucks use a lot of energy... and so the batteries are not yet practical.” Whether this
problem could be solved with the development of the Supercharger network, Mr. Eberhard
did not comment.

Beyond road-going vehicles, there are three other modes of transportation: ships, trains and
airplanes. Mr. Eberhard who once claimed on the Tesla Founders Blog that “without plug-in
capability, a hybrid is just a gasoline-powered car with some fancy hardware” believes that
scalability is more “a political problem more than anything” but remains a necessary
component of moving forward towards a sustainable future. Despite the fact that many of
these transportation industries rely on resources other than gasoline, including diesel, natural
gas or coal, there are two key issues that remain. First, the energy source is more often than
not a finite resource that has a strongly detrimental effect on our environment; second, the
conversion process from fuel to movement is still often inefficient due to the energy lost in
thermal leakage.

Most of these transportation methods would benefit from the increased productivity of an
electric powertrain, as well as the increased variety of sustainable energy resources. “Trains
are, of course, already electric in much of the world. This is not a technological problem... it's
a political one”, continued Eberhard. While trains are among the most efficient modes of
transportation, especially when electric, they are often limited in terms of flexibility and
cannot adapt to changing distribution patterns the way cars or planes can. In addition, they

54
require high capital expenditures to install and may in interrupt current urban infrastructure.
Thus, the true emergence of an electric world will be marked by the day larger, longer-range
vehicles, such as trucks or jets, run on electric powertrains rather than fossil fuels.

In an interview during the research phase, Eberhard also said, “scalability is a function of the
required energy storage; a jet, for example, consumes a lot of energy - more than is feasible
to store in batteries in the foreseeable future.” However, the ‘foreseeable future’ may be
arriving a bit earlier than Mr. Eberhard may have initially anticipated. Mr. Carlsson, the man
in charge of battery sourcing at Tesla, said that capacity improves around 7% to 8% every
year; compounded annually, batteries should double capacity around every ten years. Musk
has already commented that a “500-mile battery — nearly twice as good as the best they can
offer today — could be available at about the 4-5 year mark in the life of Model S”, around
2016.34 However, these calculations operate under the assumption of current technological
bounds. Phinergy, an Israeli tech firm has “developed an electric vehicle that can travel 1,000
miles on a single charge”; like the Model S, the vehicle uses a “traditional lithium-ion battery
but also uses as an aluminum-air energy system that uses the energy released by the reaction
of aluminum with oxygen to generate power”.34 Mark Rogowsky, Tesla: Better Warranty?
Check! Upgradeable Cars? Sure! 500-Mile Batteries? Maybe Soon! 35 Jeff Siegel, Tesla,
Graphene, and the 1,000 Mile EV Tesla has been working on similar ‘metal-air’ batteries and
has filed eight patent applications since 2012, using this dual-source system.36 A direct
excerpt from the filing details “optimizing the operation of the power source of an electric
vehicle... where the power source is comprised of a first battery pack (a non-metal-air battery
pack) and a second battery pack (a metal-air battery pack)”. At the very least, the patent
demonstrates that Tesla is not resting on its laurels at the zenith of the EV industry and is
innovating in ways few other companies on the planet are capable of. More importantly, the
filings indicate the immediacy with battery technology is advancing with, far more
expeditiously than even the most optimistic assumptions.

Innovations like a metal-air battery, along with “the new micro-battery recently developed at
the University of Illinois [which] is essentially a millimeter-sized battery... that can shrink
battery sizes down by 30 times while allowing electric vehicles to charge 1,000 times faster
than what's available today” indicate an entirely new type of electric power.37 Given the
restraints of today’s technology, an electric jet is simply not feasible. In ten years, however,
the idea hardly seems like any stretch of the imagination. And that is how Tesla thinks, not in
quarters or years, but in decades.

Risks to the Vision

There are several factors that could pose a risk to Tesla’s vision, either directly to the
company itself or to the emergence of electric vehicles. First, it is worth noting the rapidly
evolving and intensely competitive industry that Tesla competes within; while the traditional
automotive sector remains extremely saturated, with most of the volume and profit going to a
handful of manufacturing behemoths, the overall competitive dynamic for the EV sector has
yet to be determined. However, it would not be a stretch to envision an EV sector as
aggressively cut throat as its internal combustion counterpart. Traditional manufacturers, as

55
they catch on to the burgeoning movement, can leverage their expertise and scale to offer
competitive products at or below Tesla’s cost.

To further compound the competition, start-ups will continue to try and enter the
marketplace while the EV trend is still in its early phases; Fisker Automotive’s recent failed
attempt to mass produce its flagship sedan will likely be the first of many ventures, from both
domestic and international competitors. There are rumors of China’s own BYD Auto entering
the U.S. while Detroit Electric, a company that ceased operations in 1939, was recently
revived; the newly resurrected Detroit Electric will begin production in 2014, starting with a
sports car built of a Lotus Elise... the exact platform Tesla’s Roadster was built upon. Detroit
Electric is also partnering with Chinese automaker Geely Automobile group, signaling an
entirely new dynamic within the EV sphere, one which transcends not just technological
barriers but national ones as well. As these companies and ventures gain traction around the
globe, competition will intensify, margins will narrow and Tesla may lose the competitive
advantage that had propelled it to the pinnacle of the automotive world.

Of course, the greater risk is that the EV movement fails to gain momentum altogether, in
which case Tesla won’t face diminishing profits but absolute losses. One of the main risk
factors is the viability of traditional and alternative energy sources; given the widespread
acceptance of gasoline and familiarity of ICEs, a decrease in oil prices, could slow the
adoption of electric technology. Risk-averse consumers will always choose the safer, cheaper
route even in face of a better technology. Then there is the question of other alternative
energy powertrains; natural gas is currently one of the biggest threats to EVs but natural gas
powertrains are only marginally more effective than their gasoline counterparts. While the
resource may be more readily available than oil, the engine itself still has more moving parts,
and thus thermal leakage, than electric powertrains. Companies such as BMW and Aston
Martin are also experimenting with hydrogen powered vehicles, which produce near zero
environmental impact but have yet to be implemented on a mass production scale.

There are certain difficulties in adapting to a new powertrain; not only is the switch from a
gasoline pump to charging station a rather jarring transition but the driving experience also
requires adjustment. The lack of a start button for instance, while small, can easily turn away
consumers who are find comfort in familiarity; in addition, aggressive regeneration often
slows the car down, thus requiring a constant pressure on the accelerator leading to a different
driving style. The complete silence of an electric powertrain, compared to the visceral roar of
a combustion engine, has already drawn more than its fair share of ire from automotive
enthusiasts. Finally, there is the risk that the early success of Tesla, and to a less extent
Nissan and GM, was due to the novelty factor; as this novelty fades with time, demand may
decrease proportionally, making EVs a less profitable investment; naturally, decreased
interest from consumers would disincentivize automakers from pursuing EV projects, a
vicious cycle that had all but killed the electric car in the past. While all of these factors
remain relevant in the analysis of the future of the automotive industry, the confluence of
environmental factors, economic policy, political relationships and consumer trends point
towards a future lead by the electric vehicle.

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CHAPTER-6 SUGGESSTIONS AND CONCLUSION:-

Redefining Success

Tesla is only just beginning its stratospheric rise as the company transforms everything that
is taken for granted in the automotive sector and tech world. Its innovative vehicles, lean
operations and relentless pursuit of a brighter future will continue to redefine standards across
industries. The only question that remains, when or perhaps how, will Tesla identify success?

There are two perspectives to consider in quantifying success; the first is from the perspective
of the company’s owners: shareholders. From the investors’ perspective quantifying success
is quite easy. Anyone who bought Tesla’s stock at its IPO at $17 in July of 2010 would have
more than quintupled their money as of May 2013, when the stock traded at $87. Even those
who owned Tesla at the beginning of 2013 would have seen their money double in a matter
of five months.

Needless to say, from a financial perspective, in light of the company’s profitable operations
despite heavy spending on R&D and the Supercharger infrastructure, Tesla has succeeded.

However, Tesla Motors was founded for a greater purpose that reporting a positive cash
flow. Again, in the words of Elon Musk, Tesla was founded to “accelerate the advent of
electric vehicles”. So when can Tesla officially declare the emergence of EVs a success?
Waiting for the 41complete disappearance of ICEs is unrealistic, simply because the wind
down and eventual extinction will take decades, if ever, to fulfill. A more realistic benchmark
will be the ‘tipping point’, the moment when the volume of electric vehicles produced is
greater than the number of gasoline cars manufactured. Elon Musk foresees this milestone
within twenty years, by 2032.

The idea of entirely turning over the install base of vehicles within two decades, especially
given fewer than 1% of cars produced are EVs, may initially seem outlandish; however, in
light of inevitably rising fuel prices, stricter environmental regulation and exponentially more
efficient batteries, 2032 may seem to be a rather conservation estimate. One thing remains
certain: until, and even after, the transition is accomplished Tesla will continue to innovate
with relentless drive.

Transportation’s Future

Another question that needs to be answered is, are cars really the future? Regardless of

their powertrain, bearing in mind the rising congestion and increased energy needs that arises
with a rapidly increasing population, cars may not be the most efficient mode of
transportation.

In a move that may in fact drive his own company into obsolescence, Elon Musk proposed a
fifth mode of transportation, called the ‘hyperloop’. As a revolutionary transport system, the
hyperloop is immune to weather delays, never crashes, runs off solar power and can transport
57
people from Los Angeles to San Francisco in thirty minutes, less than ten percent of the six
hour drive currently required.39 Most impressively, it can be constructed for $6bn, one tenth
the price Tesla Motors, Elon Musk’s Hyperloopof the proposed electric train California has
proposed. So, is the hyperloop the real face of transportation’s future?

Maybe one day, but not yet. An official design has not yet been proposed and considering
the years it would take to implement, the auto industry is in no danger. Furthermore, to
implement across the country would take decades, so it is more than likely that cars are here
to stay. Beyond their practical uses of getting people from Point A to Point B, cars today
serve a

number of other purposes; they are fashion statements and status symbols, a form of self
expression. They are sources of enjoyment, for both spectators and enthusiasts alike. And
they are nothing less than art, archetypical relics of the era in which they were created; from
the iconic 1964 Aston Martin DB5 to the modern classic 2008 Morgan Aero SuperSports,
these vehicles are the materialization of a vision that defined their generation. The true
question is not whether cars will exist one hundred years from now; it is, what will the cars
feel like one hundred years from now? And for an answer, one needs to look no further than
their local Tesla store.

“Life shouldn’t just be about solving problems... It should be exciting and inspiring.”

–Elon Musk

Appendix

58
Figure 1:

Source: Tesla Motors, Model S Specs

Figure 3:

Source: Behrens, Carl and Carol Glover, U.S. Energy: Overview and Key Statistics

59
Figure 4:

Source: U.S. Energy Information Administration, Annual Energy Review

60
Figure 5:

61
Figure 6:

62
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