Tesla Motors is building an electric car. Will the approach (and attitude) of Silicon Valley be able to disrupt the automotive industry or are they 'posers' who don't understand what it really takes to build a car? Certainly the possibility of an electric car has never been more real. The question is, are the big boys going to be able to get there, or will it take a company like Tesla to bring about the disruption that an electric car will have on the industry.

Certainly, one of Tesla's premises is that you can take the skills, knowledge and speed of the electronics and software industries and create a new type of transportation company that isn't burdened by the history, bureacracy and decision making morrass of the traditional auto industry. (An unstated corollary to this is the belief that the automotive inductry will never be able to figure out this new way of developing and manufacturing). An electric car, the thinking goes, bearsmore resemblance to an electronic, computational, software based device than it does to the auto we all know and use today.

On the other side, people in the automotive industry know and understand ALL that it takes to get a vehicle on the road and be safe,reliable and durable. It is inconceivable to them that someone outside the industry would be able to duplicate the kowledge that they have literally been creating for many decades.

The success of Tesla can be seen, then, as primarily dependent on non-technological factors. Certainly, if Tesla can figure out how to use Lithium ion batteries, then certainly GM or Toyota can as well. That is not the issue. The real issues are ones of culture, execution, outlook, risk tolerance, decision making and speed. Tesla's bet, and considering the history of innovation, it's a pretty safe one, is that the old guard won't be able to move fast enough or in the right direction, even though they have just as good technology, just as bright engineers and more resources.

Analysis

The following analysis looks at the Tesla technology, community and solution from an innovation perspective. This analysis is based on our own perspective and is based on analysis of what has been written about the Tesla. It is not based on primary research or any project undertaken by Inovo and is meant for illustrative purposes only.

Technology Effects & Constraints

The old canard that people won't accept an electric car because of it's limitations may be changing for two reasons. First, these limitations are being addressed. Range, speed, performance, size, safety etc. are all part of the new electric car 'package'. The second change is in people's attitudes and perceptions. It is now becoming 'cool' to be green. This, coupled with the rising price of fuel and changes in lifestyles in the developed countries, is creating the acceptance of alternative vehicles to suit specific purposes. Although Tesla is entering the field at the high-end with a high performance (and expensive) roadster, their plans are to create affordable, everyday sedans and other vehicle types.

In considering electric vehicles, it is useful to compare apples to apples when talking electric vs. ICE (Internal Combustion Engine). In an electric vehicle, the battery is the energy storage mechanism. In an ICE, the gasoline serves this purpose. In an electric vehicle, the current powers the electric motors (i.e. makes them turn). In an ICE, heat does this. When thinking of the relevant comparisons with ICEs, think battery = gas and current = heat.

Some of the possible technology effects and constraints of electric power for vehicles are:

• $ per mile
• 'Fill-up' time
• Distance per 'fill-up'
• Performance (acceleration, speed, control, ...)
  
• Access to 'fill-up'
• Vehicle experience (drive feel, sound, ,,,)
• Safety

These effects are what people perceive of vehicles that they use for transport of themselves, others and cargo. The special effects of electric vehicles are what people will compare existing modes against.

Community Needs and Desires

The needs and desires of people with respect to the transportation of selves, others and cargo are confounded by not only the vehicle, but also the environment (i.e. roads, cities, etc.) that determine their driving experience. Some of the possible needs and desires of the community of future drivers are:

• Convenience of use
• Anxiety of stranding
• Leading environment
• Special recognition
• Feeling of performance
• Perception of exclusivity
• Access to 'fuel'
• Reputation of provider
• Continuity of use
• Access to support

These needs and desires, when combined with the technology effects, will affect adoption of the Tesla.

Possible Personas

These are some possible personas the can affect the future or electric vehicles.

• Environment Enthusiast
• Practical Commuter
• Family Optimizer
• Status Quo Satisfied
• Power & Status
• Risk Averse

These possible personas can be used to assess the potential adoption of the Tesla.

Opinion

Tesla will ultimately, not be 'successful' but will influence and propel others, including other startups and existing large OEMs, to develop new vehicles and be more innovative. The likely fate of Tesla is to be acquired for it's technology and design after a highly public and, one could say successful, introduction and promotional campaign. The Tesla will not quite live up to its promise but will drive new technology and drive new thinking.

Outlook & Prognosis