BUSM 410 Final (Tesla)

Business Analysis Report:

Tesla and How It Uses Data

Created for: BUSM 410 Advanced Analytics & Big Data

Prepared by: Yerang Park, Katie Almazan, Kangsan Park, Jinhwan

Kwark, Jershon Carulla

Table of Contents

I. Company Introduction ..................................................................................................................... 2

II. Main Competitive/Absolute Advantage .......................................................................................... 2
Tesla AI ....................................................................................................................................2
Tesla’s software updates...........................................................................................................2
Tesla’s supercharger network ...................................................................................................3
III. 4 parts of SWOT Analysis Model .................................................................................................. 3
Strengths ...................................................................................................................................3
Weaknesses...............................................................................................................................3
Opportunities ............................................................................................................................4
Threats ......................................................................................................................................4
IV. KPI List Section ................................................................................................................................ 5
V. Data Management ........................................................................................................................... 5
VI. Business Intelligence/Data Analytics System ................................................................................ 6
Neural Networks .......................................................................................................................6
VII. BI/Data Analytics Section.............................................................................................................. 8
Tesla Fraud Prevention .............................................................................................................8
Tesla Marketing ........................................................................................................................9
VIII. Summary/Conclusion .................................................................................................................. 10
Bibliography .......................................................................................................................................... 11

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 I. Company Introduction

Tesla is a manufacturer of electric vehicles and other sustainable products such as solar

panels and batteries that stores clean energy Tesla’s target market is mainly in the United States

while the company aims to extend to the European and Chinese markets (Carlier, 2022).

According to the article by Lambert 2022, Tesla is dominating market shares and owns two-

thirds of the electric vehicle market.

II. Main Competitive/Absolute Advantage

Tesla AI:

Tesla's self-driving capacity, which is provided at the highest level in the "full self-

driving" package, is improving quarterly, and more autonomous functions are

being added regularly. Tesla AI analyzes images while cars are being driven. Tesla Uses

these images to train self-driving neural networks that continues to develop autopilot/full

self-driving capabilities of cars.

Tesla is now rewriting software for these features to get more out of its hardware.

Converting the video images from multidimensional models utilizes computing power by

building dynamic and geometric theoretical world which is using for navigation.

Tesla’s software updates:

As you can see on smartphones, tablets, and computers, wireless updates continue to

improve all Tesla's electric vehicles. Updates occur quite often. In the latest update from

the end of June 2020, Tesla has provided seven new software updates: enhanced traffic

light and stop signal control, improved backup cameras, improved dash-cam viewers,

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 improved door locks on walks, improved tune-in, new language support, and cabin

cameras.

Tesla’s supercharger network:

Tesla's exclusive super-fast charging station provides efficient charging opportunities for

electric vehicle drivers. “Currently, Tesla's supercharger fleet supplies power from 72 kW

by Tesla's Urban Supercharger to 250 kW by the latest supercharger being installed

around the world. The supercharger network, which once matched Tesla's car prices, is

now a pay-as-you-go system. So far, the biggest benefits of a completely unrivaled

supercharger network are how extensive and well-integrated the network for road driving

and how easy supercharging is for Tesla drivers.” (Fortuna C, 2020)

III. 4 parts of SWOT Analysis Model

As we look at Tesla’s SWOT analysis, we can understand the company better in what

area they are performing well and in what place they need to develop.

Strengths: Tesla’s strengths lie in producing the best electric cars. Tesla’s electric cars can travel

further distances compared to other electric cars. Especially, the Tesla Model S allows for

traveling up to 600 kilometers for a single battery charge which is the furthest distance for an

electric car (S.K. Gupta, 2022). Tesla is known to be innovative. Recently, it developed the

world’s first electric semi-truck and sports car. With this innovation, the market trusts the

company with its financial gain (S.K. Gupta, 2022).

Weaknesses: Since Tesla aims to provide high quality, there is a restriction on producing

products. The manufacturing process requires high cost and there are restrictions in managerial

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resources, spaces, and others. The shortage of batteries is another weakness. Tesla’s production

rate is impacted by the supply of batteries (S.K. Gupta, 2022). When there are limited supplies of

batteries, their production rate decreases.

Opportunities: With the problem of the battery supplies impacting production, Tesla could

produce their own battery cell. That will lead to an increase in manufacturing rate and reduce

product cost (S.K. Gupta, 2022). Asian Market expansion can provide opportunities as well. The

Asian market is still “unsaturated in the field of automotive and renewable energy markets” (S.K.

Gupta, 2022). Asian Market expansion can provide Tesla a stronger market presence in the

global market.

Threats: There is extensive competition in electric vehicles and self-driving technology. Other

automotive brands are also developing and producing cars that are electric or have self-driving

technology. Additionally, with Tesla using Lithium-ion in their batteries, there is a high risk of

explosives in Lithium-ion. There were already several cases where Tesla batteries exploded.

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IV. KPI List Section

Tesla establishes specific KPIs, or Key Performance Indicators, to assess its success during a

given year. The main KPIs are the number of cars delivered, the number of cars sold, the number of

vehicles produced, revenue, and gross profit (Tough Nickel). With these data points, Tesla can keep track

of their goals and discover potential conflicts sooner. In the chart below, the KPIs are compared from the

year 2021 to the year 2020. The data shows that all the numbers increased, meaning that Tesla was more

successful in 2021 than 2020. The baseline KPIs are set based on the latest quarter’s results and the goals

for the next quarter.

TESLA 2021 vs. 2020 KPIs¹

KPI 2021 2020

Number of cars delivered 184,800 cars 88,400 cars

Number of cars sold 935,950 cars 499,535 cars

Number of cars produced 180,338 cars 102,672 cars

Revenue 53.8 billion dollars 31.5 billion dollars

Gross Profit 13.6 billion dollars 6.6 billion dollars

V. Data Management

Tesla produces large amounts of data each day. One of the reasons being is the devices

and programs that come with a Tesla car. Current models hold eight cameras, 1 radar, and 360

ultrasonics (Tesla 2016). With all these sensors Tesla launched an Auto Pilot program with their

cars that allow for a car to be on “auto pilot”. This means that the car would drive itself once it

was put in auto pilot. This is done through a machine learning model that is constantly taught

every time a car drives, whether the car is on self-pilot or not.

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 The company has data stored locally in a data center in China but also incorporates a

cloud system as well (DCD 2021). According to regulation, Tesla keeps a separate datacenter in

China as the laws restrict using data collected in China in other countries. Thus, this separation

was created.

According to their job postings, systems that are used to manage Tesla’s database are

MySQL, Kafka, Oracle, PostgreSQL, Redis, MongoDB, MS SQL (Singh 2021). There are more

technologies used but the main data visualization tool that Tesla uses is Tableau (Yvanovich

2016). Since there is not much information in how they organize the data, it would be under the

assumption that they also use data marts as many of the dashboards they use are meant to notify

and monitor processes, such as production.

VI. Business Intelligence/Data Analytics System

With Tesla being in the business of Big Data, it holds its own data centers. These data

centers hold Tesla’s advanced deep neural network. This design was made to mimic the way a

human processes and reacts to information. It is a system of nodes that collect data for the A.I.

The data is then used to train the A.I. In this case, the nodes that collect the information are the

vehicles that are constantly being driven and the A.I. that is being trained is called the Tesla

Network.

Neural Networks:

Data that comes in constantly teaches the neural network new things such as construction

or accidents on the road. Nvidia was brought in to help with the training of the A.I. and provided

a comment on the process. “In contrast to the usual to create all necessary internal

representations necessary to steer, simply by observing human drivers” (Nvidia 2016). To start a

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training set is created to help build a basis for pattern recognition. Over time the A.I. will start to

pick up on these patterns and eventually learn on its own patterns that people do not pick up on.

The process was made to mimic how a human learns and processes information. Any

neural network has three different parts: input layer, hidden layer, and the output layer. The input

layer is how the information is first entered into the system. This would be comparable to human

senses as we taste, touch, see, hear, and smell to process information. The hidden layers then are

used to parse, and in a sense categorize incoming data. There can be multiple layers as long as

the A.I. can handle the complexity of the data. This would be comparable to the multiple neurons

that connect our senses to the brain. The output layer is then how the information is stored, or is

categorized. This would also be comparable to the brain as it is the final destination on where

information is stored in the body.

Advantages:

Processing unorganized data:

The process of parsing, categorizing, and defining is very effective for neural networks.

Data can come in many forms. This is ideal as the data collected from drivers spans from

images, sensor data, and information data about the vehicle.

Adaptive Structure:

ML algorithms struggle with cross functioning. A linear regression model could have

restrictions when we adapt it to a decision tree model. Neural networks are adaptable to

any environment. If the need arose for neural networks in the company, it can cross

function and shine because of the potential of unsupervised machine learning.

Disadvantages:

Possibilities of Incomplete Results:

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 Sometimes there aren't enough variables for a model to perform well enough to be

employed. There needs to be enough data for the A.I. to perform well. Not only that there

needs to be enough data constantly coming in as well. The amount of time that was

necessary to prepare Tesla’s neural network for the eventual implementation of self-

driving cars was two years. On top of this, there were still some problems with the system

and Tesla had to settle a lawsuit for a total of $5.4 million dollars. These incomplete

results are a mistake that can be very costly.

Minimal Control:

With neural networks being an unsupervised ml technology, there is limited control over

the A.I. The A.I. can develop patterns that are incorrect or very damaging because the

processing structure is concealed. If things need to be unlearned, there is a lengthy

process of identifying, correcting, and changing the A.I. to fix these issues.

VII. BI/Data Analytics Section

Tesla Fraud Prevention:

In November 2018, a former Tesla employee was indicted for allegedly embezzling $9.3

million from Tesla by diverting payments from one supplier to another. This embezzlement

happened between Tesla and other subcontractors. In addition, a former employee at self-driving

tech venture Zoox, and Chinese electric vehicle markers, Xiaopeng, alleging theft of trade secrets.

That series of fraud became a trigger to start a new anti-fraud department: Global Fraud

Management(GFM). They predict that GFM will mitigate fraud, waste, and abuse through

prevention, investigation, and remediation. They predict that fraud related problems will decrease

about 35% compared to the previous year.

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 Then, how does GFM predict future embezzlement, theft, or fraud, happening inside and

outside of Tesla? Tesla utilizes big data with predictive analytics. The company has had numbers

of similar data related to illegal actions. When something unusual takes place, Tesla’s system

catches it and sends it to managers to double check if it is wrongdoing or not. As Tesla has

accumulated more data, Tesla will become a more trustful company to its customers.

Tesla Marketing:

Tesla is a company where they use marketing mix effectively. We can divide marketing

into 4 different sections: Product, Price, Place, and Promotion. Product strategy of Tesla is very

unique product names, S,X,3, and Y. This small thing causes a curiosity from customers, and

products are more exposed to its customers. In addition, they framed their products as eco-

accommodation highlights. Whether it is true or not, customers feel that they contribute to the

protection of the environment by merely purchasing Tesla.

Place and Price go together. Tesla does not have any franchises, and Tesla makes it difficult

to purchase its products. Only those who reserve in advance can buy the products that they want.

Tesla products’ prices are not cheap as well. Prices are even higher than premium models of

different automobile companies. Ironically, these two factors satisfy customers’ needs to be special,

unique, and it gives a feeling that I am different from other normal people because I have tesla.

Tesla is an expert in producing an enormous measure of free exposure oftentimes. They

consistently discover better approaches to make the media buzz.

These factors: Product, Place, Price, and Promotion are significantly important to

encourage their customers to purchase Tesla’s products. Tesla exactly knows how to satisfy

customers’ needs, and this has resulted in positive changes in their stock price and increase of

products purchased.

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VIII. Summary/Conclusion

Tesla is leading the electric vehicle industry due to its many competitive advantages and

strengths. Their advanced AI technology and continuous software updates helps optimize their

products and satisfy their target audience. The SWOT analysis provides important information to

better understand Tesla and its position in the automotive industry. While their innovative ideas

have kept them ahead, intense competition has recently increased since other car manufacturers

have begun producing their own electric vehicles.

An important business operation that assists Tesla in overcoming these challenges is

tracking certain KPIs, or Key Performance Indicators. Tesla mainly tracks 5 KPIs to measure its

progress and performance. These include the number of cars delivered, sold, and produced, as

well as revenue and gross profit. Tesla manages all their data through a cloud system and a data

center located in China. They use various softwares to analyze data, such as MySQL, and mainly

use Tableau for data visualization.

A key aspect that sets Tesla apart from other electric vehicle manufacturers is their use of

big data to train AIs and incorporate predictive analytics in their operations. They are able to

more accurately prevent fraud and even create self-driving cars. As technology continues to

advance and companies learn to better manage vast amounts of data, Tesla will continue to use

data analytics to improve their products, service, and operations.

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