Teaching Resources Library

Strategy

Entrepreneurship

Tesla's Entry into the U.S. Auto Industry

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ABSTRACT

In mid-2018, the U.S. auto industry was in the early stages of what many believed would be a significant evolution in how people thought about and used cars. The future would be dominated by electric and autonomous vehicles. Car ownership in which people paid for a hard asset with all its bells and whistles would give way to people buying miles on shared vehicles. Tesla co-Founder and CEO Elon Musk had envisioned his company’s electric vehicles leading the charge in the industry’s evolution. However, the company was burning through cash at an unsustainable rate as it prepared to launch the industry’s first mass-market electric vehicle, the Model 3. Many industry observers doubted whether Tesla would have enough money to stay afloat and if Musk was the right leader.

LEARNING OBJECTIVE

To analyze the structure of a complex industry in the midst of a major transition; assess the fit between a company’s strategy and the structural attributes of its industry; and, evaluate how well a company is executing its strategy.

COULD BE TAUGHT IN THE FOLLOWING COURSE(S)

strategy, entrepreneurship, leadership, operations management

TESLA'S ENTRY INTO THE U.S. AUTO INDUSTRY

 

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