Tesla Cars - Exploring Business Model Evolution in the Case of Electric Vehicles - Literature review Example

TESLA CARS Name Institution Course Professor Date TESLA CARS Who The rise of technology and its application in the industries revolutionizes the industrial practices. According to Paul et al. (2016, p. 1), the automotive industry is no different where external forces such as automation, digitization, and new business models continue to influence its operation. Daziano, Sarrias, and Leard (2017, p. 150) agree with the future changes in personal mobility, especially through the technological input in innovating the designs of the automotive. Moreover, the future trends point to the introduction of fully automated vehicles where the control function require little or no input by the driver (Daziano et al. 2017, p. 150). The imperative in these future directions about changes in personal navigations are the car developers who manage the manufacturing process. In particular, examining the Tesla car company, the Chief Executive Officer (CEO) Elon Musk already addresses the possible shift to autonomous vehicles in line with changes in consumer preference and the need to embrace current technologies (Kessler, 2015, p. 1). Paul et al. (2016, p. 3) provide four particular areas that the head of development in car manufacturing industries such as Tesla should consider. The fields include diversity in mobility, electrification, connectivity, and autonomous driving. Although different disciplines, they share a common factor which includes a technological component that integrates the systems into realizing an innovative industry (Paul et al. 2016, p. 1). For a leading car developer, it is important to realize the trends in these four particular areas since they directly impact the consumer. According to Kessler (2015, p. 1), the effective change in line with this future depends on the appropriate software update on existing cars that already incorporate some automation features. The inclusion of software development in the car manufacturing business follows the technology trends that operate within the software industry in creating solutions to existing and future challenges. The head of development of Tesla needs to identify efficient software that falls within the four areas previously identified. Software development raises issues on risks and malfunctioning systems that could cause serious problems in automation. In particular, Tesla cars projects on developing an autopilot system operating in a hands-free mode (Kessler, 2015, p. 1). In this case, the head of development must fit the cars with very updated and accurate software that mitigates any possibility of failure to ensure the safety of the passengers and other road users. What The future of mankind depends on the efficient advancements in technology to enhance performance and increase output. One of the important areas to consider regarding the application of advanced technology is mobility. Humans are continuously in need of more mobility to influence their production. An example of the importance of mobility to man is what mobile companies such as Apple manage to tap through developing innovative devices such as mobile phones facilitating the navigation of humans both in time and place. Relevant to the case is the realization of innovative means of transport through the automotive industry. As Brett (2016, p. 25) discusses, the development of automobile has been a continuous process since history revolutionizing the means of transport for man. The shift from the use of horses to cars involves the application of technology to improving the shortcomings of the previously existing system. Kalia et al. (2016, p. 3) present the case of car development where through the advancement in technology, manufacturers are able to continually produce fast cars and increase the consumers comfort in operating these vehicles. The improvement on speed achieves the advantage of covering long distances within a short time. Based on Bohnsack, Pinkse and Kolk (2014, p. 285) innovators are struggling with the challenge to realize sustainable technologies, particularly as it is one of the most dynamic fields. Currently, car manufacturers are already designing alternative source of fuel in the aim to reduce the environment impacts of these automobiles. In particular, Kessler (2015, p. 1) recognizes the development of electric cars (EV) by Tesla as one of the important pointers of technology advancement. Similarly, Bohnsack et al. (2014, p. 286) support the idea of EV in enhancing mobility. The technology applied in EV involves a shift from a product-based system to a service focus which highlights the importance of consumers in directing the changes and innovation in technology to suit their needs. Moreover, the use of alternative sources of fuel in automation serves to add the elements of the attractiveness of the products (cars) to the consumer, especially through creating a means where they feel directly contributing to the sustainability of the environment. Bohnsack (2013, p. 104) argues that the need to change from a traditional relies on fossil fuels is yet another are the car manufacturers have managed to apply the technology of an advanced level. Consequently, the automotive industry continues to develop low-emission vehicles, electric, hybrid, and those applying fuel-cell. The impacts of these alternative fuels in automation change the manufacturing process from the mechanical engine to an advancement remodeling of the cars. Moreover, Bohnsack (2013, p. 104) describes the shift to low-emission vehicles as being systemic and likely to disrupt the existing system of cars and their consumers. In particular, Bohnsack (2013, p. 104) mentions some the factors rules and regulations, fueling structures, and customer usage as contributors in designing the technology of a car. According to Brett (2016, p. 27), the development of ultrasonic sensors, LIDAR, radar, cameras, and Global Positioning Systems (GPS) advances the technology of the cars, especially fitting these instrument to improve the efficiency of the vehicle. In particular, the inclusion of sensor technology in autonomous vehicles (AV) is one of the significant techniques that improve navigation and minimizes the risk of accidents. Brett (2016, p. 27) includes that the continuous advancement in the technology behind sensors systems allows the AV’s to differentiate between other vehicles, obstacles, and pedestrians. Therefore, manufacturers in automotive will need to improve the efficiency of their cars by including tools such as the sensors and improving its abilities to positively impact navigation. Why The ongoing changes in mobility behavior signify on the shift to technological advancement to improve the current systems. Based on Paul et al. (2016, p. 8), consumers are relying on multiple means of transport to reach their destination. In this case, the traditional means of transport need a complete change to include elements such as speed and efficiency matching the consumer behavior on transport. Moreover, there is the congestion of urban areas requiring a change from the use of private cars to a model that involves sharing. Paul et al. (2016, p. 8) also identify the preference by consumers to use an all purpose vehicle. Specifically, data from the Northern regions of the US and German presents the evidence of the shift from private ownership to a shared system indicated by the 30% annual increase over a span of five years (Paul et al. 2016, p. 8). Supporting the dependence of technology for the success of the future, Tummala (2016, p. 1) highlights of the growth in population reciprocating to approximately 100 million cars in use by the year 2025. With this projection amidst the changes in consumer behavior, companies such as Google, Uber, Toyota, and Tesla are already progressing their technology in developing autonomous vehicles. The attraction of these companies to the new venture follows the economic benefits realized through technology. According to Nunes, Bennett, and Shaw (2016, p. 25), car manufacturing in the UK is a significant source of economic wealth through its role in creating jobs and profits through exports. Highlighting the global importance of technology is the inclusion of other cars manufacturing companies such as Robot Taxi, Nissan, Honda, Baidu Inc, and Volvo following the realization of AV’s technology as a significant boost to the economy (Brett, 2016, p. 23). One of the importance benefits of technology is the provision of safety to the users and the environment. Road safety is one of the issues attracting the attention of multiple shareholders. According to Brett (2016, p. 29), the number of accidents in the US totaled to 5.3 million in the year 2013 with 32000 fatalities. The imperative is that 95% of these occur as a result of human error (Brett, 2016, p. 30). These cases identify the great losses in the US following the use of automobiles. However, the application of innovative technologies projects to a significant reduction of these cases, especially through the radar, LADAR, and sensors in the AV. According to research by Google and Virginia Tech’s Transportation Institute, reports of the studies indicate a reduced crash rate with the application of autonomous model (Brett, 2016, p. 30). Therefore, the future of reduced accidents in the US and other nations depends on the appropriate innovation of vehicle. Brett (2016, p. 34) present the impacts of the automobile in environmental pollution. The use of fossil fuels as the source of energy in cars contributes to air, soil and water pollution. The pollution occurs through the combustion process of the fuel emitting poisonous gasses. According to Brett (2016, p. 34) people living close to the freeways suffer health problems due to their close contact with the pollutants. In providing a solution to these effects is the passing of zero- emission policies in states such as California (Wesseling, Farla & Hekkert, 2015, p. 14). The importance of such laws is their support to the advancement and application of innovative technology in minimizing the adverse environmental impacts. Moreover, data by Wesseling et al. (2015, p. 18) includes a reduction of the average of fuel economy following the passing of zero emission policy as indicated in figure 1. Therefore, it is evident that advancement in technology provides a viable solution to existing challenges, especially in the automotive industry. More specifically, the future depends on effective use of resources to create opportunities which are more realized through technological innovations. When Advancement in technology is a progressive input occurring every single day and tapping numerous industries. Concerning the application of advanced techniques in realizing AV systems, Daziano et al. (2017, p. 150) include a projection of the year 2020 where commercial availability of AV will occur. Supporting the short-time frame of realizing the future of automation in vehicles, Daziano et al. (2017, p. 150) explain on the already existing semi-autonomous cars with comparable features of the fully automated vehicles. In this case, the semi-automated automobile will require some upgrading to reach the status of AV. Comparatively, Paul et al. (2016, p. 9) make a projection citing the year 2030 where AV will become more of a reality than a concept. The time-frame focuses on the policy and regulation factors, economic factors and consumers’ preferences. Based on Paul et al. (2016, p. 11) the current challenges in facing the semi-automated vehicles threaten the progress and adoption of AV in the society. Paul et al. (2016, p. 9), mention pricing, variation in consumer understanding and safety concerns as some of the factors limiting the approval of AV in the market. Daziano et al. (2017, p. 164) agree that the success of AV depends on the consumer whose choices are under the influence of their income, demography, and understanding of these technologies. Therefore, it is evident that the availability of AV can only be realized about 10-15 years to come following the specific challenges as population and use of cars continues to rise. Where According to Paul et al. (2016, p. 10), the possibilities of a quick adoption to the use of AV follows the income of the nation or location. Particular characteristics point to some of the favorable conditions that enable the availability of AV to the society including high-income, high populations, well-established car-base, strict regulations on emission, and low-cost of technology proportional to income (Paul et al. 2016, p. 10). The specific traits apply to developed countries such as the US where the urban areas experience huge traffic and congestion (Brett, 2016, p. 37). The issue of urban congestion increases emissions, fuel and time wastage. Therefore, a country like the US is highly likely to adapt to the use of AV to manage the current challenges in its transport system. Support the position of US in AV technology, Tummala (2016, p. 1) identifies that Google self-driving cars are already available in several states including the US. Moreover, the move by states such as California to include a zero emission policy aligns with the desired characteristics that foster the adoption of AV (Wesseling et al. 2015, p. 14). The US workforce constitutes a huge population relying on automobile occupation as a means of survivals. According to Brett (2016, p. 36), truck drivers account for 2.3% of the workforce which compares to the 0.3% & 0.37% of taxi and bus drivers respectively. These percentages total to over 5 million people. The huge population together with the population with personal cars contributes to the lack of parking space, traffic congestion, and the escalating congestion pricing. Therefore, the particular problems influence the participation of US in automotive innovation as a viable solution to its economy and the society. How Technological advancements in the automobile industry call for the attention of the head of development to direct the innovations in line with the various elements and factors affecting its application. Using the case of Tesla cars, the head of development is likely to change their perception of mobility as a product to viewing it as a service and therefore managing to implement it for competitive advantage (Paul et al. 2016, p. 13). Moreover, Paul et al. (2016, p. 14) included the need to apply a strategy in managing their control of this innovation especially since the current plan points to a reliance on the consumer to design the future of the automobile industry. An example of the importance strategies available for developer includes manage uncertainty, form partnerships, change the proposition of value, and adopt an organizational mechanism. It is also important for the developers to adopt green operations strategies as identified by (Nunes et al. 2016, p. 25). In particular, the head of development needs to work with the company engineer in designing appropriate fields to apply the green practices. Bounds The application of technology in the automation industry is without any limitation such that it provides complete advantages about the existing challenges. Additionally, it is a cost-effective strategy that applies to the society. It is also important to consider the case of improved consumer attraction to the AV following the continued use and adoption of the semi-autonomous vehicles in the society. Moreover, innovation in the industries focuses on the consumer whose environment carries the characteristics of escalating fuel prices, traffic congestion, and economic challenges. Source of data to the report include Sources of data include survey reports, Geographical Information System (GIS), production cost, and data on the level of automation across the continents (Brett, 2016, p. 61). Other contributing sources include census data to determine the rate of population growth, demographic trends, and government trends that inform on policies for the consumer use on AV’s. According to Brett (2016, p. 62), local zoning codes provide useful information regarding parking. Lastly, occupation statistics inform on the frequency in the use of cars as well as the household income which may influence the purchase of AV. An example is the figure below. References Bohnsack, R., 2013. SOURCE (OR PART OF THE FOLLOWING SOURCE): Type PhD thesis Title Car firms and low-emission vehicles: The evolution of incumbents’ strategies in relation to policy developments. Bohnsack, R., Pinkse, J. and Kolk, A., 2014. Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, vol. 43, no. 2, pp. 284- 300. Brett, J. A., 2016. Thinking Local about Self-Driving Cars: A Local Framework for Autonomous Vehicle Development in the United States. Doctoral dissertation, University of Washington. Daziano, R. A., Sarrias, M. and Leard, B., 2017. Are consumers willing to pay to let cars drive for them? Analyzing response to autonomous vehicles. Transportation Research Part C: Emerging Technologies, vol. 78, pp. 150- 164. Kalia, K., Rahman, M.A., Saxena, A. and Walia, M.S., 2016. Advancement in Engineering Technology: A novel perspective. Indian Journal of Science and Technology, vol. 9, no. 25, pp. 1- 5. Kessler, A. M., 2015. Elon Musk Says Self-Driving Tesla Cars Will Be in the US by Summer. The New York Times, p. B1. Nunes, B., Bennett, D. and Shaw, D., 2016. Green operations strategy of a luxury car manufacturer. Technology Analysis & Strategic Manangement, vol. 28, no. 1, pp. 24-39. Paul, G., Hans-Werner, K., Detlev, M. and Dominik, W., 2016. Disruptive trends that will transform the auto industry. [online] Available at: http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/disruptive-trends-that-will-transform-the-auto-industry [Accessed 18 Apr. 2017]. Tummala, R., Wolter, K. J., Sundaram, V., Smet, V. and Raj, P.M., 2016. NEW ERA IN AUTOMOTIVE ELECTRONICS, A CO-DEVELOPMENT BY GEORGIA TECH AND ITS AUTOMOTIVE PARTNERS. Pan Pacific Microelectronics Symposium, pp.1- 4. Wesseling, J. H., Farla, J.C.M. and Hekkert, M.P., 2015. Exploring car manaufacturers’ responses to technology-forcing regulation: The case of California’s ZEV mandate. Environmental Innovation and Societal Transitions, vol. 16, pp. 87- 105. Read More