Tesla Core Competencies

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Summary Tesla Motors is a Silicon Valley based automaker founded in 2003 that develops, sells and manufactures niche luxury-sports electric vehicles and electric vehicle powertrain components. Tesla has built the first truly usable all-electric lineup of sports cars with battery ranges of more than 400 kilometers and the horsepower to outrun some Ferraris and Porsches. Tesla cars are sold all over the world with a top-down approach to the market focused toward high-end buyers and wealthy early adopters. Tesla cars achieve certain environmental and performance advances that are currently unprecedented in the automotive industry, giving Tesla a sustained competitive advantage in the market and the characteristics of a disruptive company. This…show more content…
This resource provides Tesla with a temporary competitive advantage on account of being fairly replicable later by its competitors. Technological capabilities. One of Tesla's core competencies is its ability to drive one of the industry's best R&D programs. According to Tesla's 2014 annual report Tesla spent a total of US$464.7 million on R&D, which centers on its commitment to R&D. This capability is valuable because it directs every organizational activity in Tesla at building and innovating the core technologies that go into making Tesla cars more performance and energy efficient than hybrid and legacy gasoline cars. This point of being differentiated enables Tesla to provide a valuable offering and a disruptive substitute to a market that has limited alternatives to petrol cars. The capability is rare because no other automaker in the industry possesses sufficient strength in its R&D force inasmuch as Tesla to produce an all-electric sports car that can match and exceed the traditional gasoline car. Many automakers such as Ford and GM are also still locked into competency traps about what an automobile should be and reject views on developing all-electric cars as a sustainable solution. (Hartung, A., n.d., para.…show more content…
As of June 2014, Tesla had more than 160 granted patents in the United States. (Carrie, A., 2014). In addition, Tesla's R&D capabilities are centered heavily on context and path dependent successes and breakthroughs in electric vehicle technology, which also renders Tesla's R&D capabilities difficult to imitate. Tesla essentially used electric technology to make a car that cannot be reproduced using a combustion engine. A viable R&D ecosystem in itself is also difficult for an organization to build let alone imitate, and commands heavy investments in financial and organizational resources. The combination of these factors and information asymmetries has therefore allowed Tesla to produce and continue producing a consortium of well-researched and developed solutions to many complex industry problems, with a high level of causal ambiguity. However, this will not last forever because other automakers must someday catch
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