Abstract

Electric vehicles have existed for over 100 years as a disruptive innovation. Even though they have always been easier to use, quieter and cleaner, gasoline cars have beaten it in price, range and faster fueling. As gasoline cars have been the technological standard for the past 150 years there has been no motivation by car manufacturers to advance electric vehicles. By producing electric vehicles Tesla Motors has appropriately become the first successful startup car manufacturer in over 100 years. This research studies the systemic innovating of electric vehicles by Tesla Motors. Disruptive innovation is widely researched and often connected to electric vehicles. However systemic innovation has been rarely researched and none has shown that electric vehicles can be seen as one since they require significant adjustments to the business system they are embedded in to succeed as a disruptive innovation. Therefore I suggest that in certain instances a disruptive innovation requires systemic innovating. In the context of electric vehicles systemic innovating can be done on the disruptive technology level of batteries, on the finished product level of the car and on the external level of services such as charging stations. Tesla Motors is doubling the world’s lithium-ion battery production to enable inexpensive electric vehicles. It has produced an electric vehicle platform architecture that has advantages not seen in gasoline cars. It is also creating the standard for charging stations and its battery swapping technology is providing almost instant charging. As Tesla Motors is solving the challenges of high price, low range and slow charging, at the same time it is capitalizing and building on the unique advantages electric vehicles have always had and ultimately proving electric vehicles superiority. This is largely the result of the visionary of Tesla Motor’s CEO Elon Musk who is aiming to transform the world into sustainable energy and transportation through solar panels and batteries.