Tesla, Inc. – One of the Well-Known Companies that Produces Electric Cars

The company selected is Tesla, Inc., and the reason why I choose this company is that there is a growing concern among people about climate change and environmental protection. “As part of the historic Paris climate accord, 197 nations representing 97 percent of the world’s emissions have committed to national plans to cut carbon pollution, including from motor vehicles which account for 17 percent of global CO2 emissions” (Hwang, 89).

Tesla, Inc. is one of the famous companies who design, manufacture and sell electric cars.

Their models include Model S, Model X, Model 3, and the Roadster. The company also develops and makes lithium batteries. Model 3 is one of the company’s products, and it is the product I will research about. The reason why I have selected Model 3 is that this product is the first mass-market vehicle of Tesla, but it is a challenge for the company, so Tesla needs to work harder for it. Mass productions of cars will be associated with much scrutiny from people about their conservative environmental measures taken.

Background of the Problem

The problem that is associated with Tesla and been analyzed in the report is that of the production of Model 3 cannot meet the demand of customers, which is also because of the lack of production of batteries for Model 3. In the second quarter report of Tesla in 2017, Tesla was confident in promising the company can produce over 1500 vehicles in quarter 3 and produce 5,000 cars per week by the end of 2017 (Tesla Second Quarter 2017 Update, 2017). In the third quarter report, Tesla only delivered 260 Model 3 electric cars. However, its goal was to produce 1500 Model 3 in the third quarter (Ohnsman, 2017). Also, the company expected to produce 5,000 Model 3 electric cars per week by the late first quarter of 2018 (Tesla (d)Third Quarter 2017 Update, 2017).

The reasons that caused this problem were the suppliers and the lack of production of the batteries. Tesla worked with Panasonic to produce a new type of battery for Model 3, and this battery is rumored to be 44160 lithium-ion cells, which would “allow the manufacturers to pack in more energy density with less cost in material and labor” (Spector, J., 2017). Moreover, according to Gene, the Model 3 battery is formed by packing four modules into a case. Parts of battery modules were made by other manufacturing systems suppliers, but now Tesla is doing this by itself (Gene, 2017). If the company cannot produce enough battery to support the number of production of Model 3, there will be a loss for the company and the brand. This problem could cause lack of customer satisfaction, and in the long term, it could lose revenue.

General problem statement: The problem to be addressed is Tesla, Inc. cannot meet customers’ needs with the current production levels, which could lose customer satisfaction and profits. Because increasing satisfaction could improve profitability (Hallowell, 1996).

Specific problem: The problem to be addressed in that demand in Tesla, Inc., located in Palo Alto, CA, is the unmet demand for customers because the number of production of the battery cannot support enough amount of the output of Model 3 in every period. The focus of this study is to explore why Tesla cannot deliver enough Model 3 to its customers. The focus of this study is to investigate qualitative data regarding the Model 3 production and Tesla’s error in calculating.

Purpose Statement

The purpose of this type of study is to explore the qualitative problem of one of the products of Tesla, which is Model 3. Tesla greatly overestimated its capabilities when configuring some possible Model 3 productions. This research will be focused on secondary data attempting to uncover why and how the company Tesla came to the point of overpromising and under delivering to its consumer base. This research will attempt to determine how Tesla initially came up with its promised number of produced Model 3’s within the specified time span it gave. It will then compare that number to a more realistic and time-proven timeline. It will determine how far off Tesla was as well as how and if Tesla should reestablish a realistic production level to suit public demand.

Nature of the Study

I would choose the qualitative method for this report. Because for this report, I want to know underlying reasons and motivations for the delay of Model 3. One of the reasons is Tesla cannot produce enough batteries to support the number of production of Model 3, which fails customers’ satisfaction. Many customers have reserved Model 3 for a long time, for example, according to Tesla forums, there is a customer who booked Model 3 on March 31st, 2017 prior Model 3 was introduced to the public, but he has not received his car yet.

I would choose case study as the design because case study is a type of qualitative research, and this report is related to the how and why questions versus the what, how many and when questions. This report will focus on how Model 3 has the problem of lack of production, why this problem is caused, how many cars Tesla produce each quarter, and when they will fix it.

I was thinking about descriptive research, but based on what definition says, I do not believe it is the right one. Because the study of a phenomenon, which is Tesla, is doing something now, which means it makes changes. For example, the company is about to build up four more factories to produce more batteries to support car manufacturing (Lambert, F., 2017). And I do not think other designs are right for this. Correlational research focuses on if a relationship exists between two or more variables and use a regression equation to make predictions.

References

1. Hwang, R. (2016). Future of Electric Vehicles Is Bright. Retrieved from https://www.nrdc.org/experts/roland-hwang/future-electric-vehicles-bright
2. Hallowell, R. (1996). The relationships between customer satisfaction, customer loyalty, and profitability: an empirical study. International Journal of Service Industry Management,7(4), 27-42.
3. Spector, Julian. (2017, July 31). Battery Advances at the Heart of Tesla’s Model 3. Retrieved from https://www.greentechmedia.com/articles/read/tesla-model- 3-batteries-lithium- ion#gs.xyj3T7I
4. Tesla (b), Inc. (2018). Retrieved from https://www.tesla.com/
5. Tesla Gigafactory (2018). Retrieved from https://www.tesla.com/gigafactory

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