Value Innovation Executed Excellently/Brilliantly

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Tesla’s Vision:

Elon Musk’s ultimate vision for Tesla Motors is to deliver zero tailpipe emission vehicles to consumers who generate electricity 100% “Off Grid”.

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Christine and Sam Simonetta live the vision.  They are located in the Munising, Upstate MI area. Their closest Tesla Supercharger station iis 305 miles away in Mauston, WI and their nearest Tesla Service Center is 372 miles away in Highland Park, IL (see map below).

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The Simonetta’s primary source of electricity:

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The Simonetta’s power comes from a residential sized turbine that captures wind from Lake Superior and fuels their net-zero lifestyle. Operating 100% “Off Grid”, they say, “We’re riding on the wind.”

Their car:

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The Simonetta’s purchased a deep blue metallic Tesla S 70D (Range, 240 miles; 0-60mph, 5.2 seconds).  The D has two electric motors (see below):

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Source: Tesla Motors website

Value Innovation Executed Excellently:

We developed a list of the areas where Tesla is “delivering exceptional value to the Moat Important Customer (the consumer)  in the Value Chain

New Business Model:

Sales:

Tesla sells its products on-line and through company-owned showrooms. They do not sell their vehicles through independent auto dealers and do not pay their sales reps a commission.

Service:

Tesla services its autos through company-owned service centers that are not  connected to the showrooms, i.e., servicing cars should not be confused with providing consumers with all the information they need to make a purchase decision.

New Product:

See the Tesla S Value Curve below:

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Source: Value Innovations, Inc.

Performance:

The S 70D accelerates from 0-60 mph in 5.2 seconds.  Top Speed:  140mph. Vehicle weight, 4,647ilb.  Seats, 5 adults and 2 children.  Trunk/frunk capacity, 31.6 cu ft. (without back seat for chlldren)

Drivability:

The center of gravity is very low to the ground allowing the driver to corner at speed with little to no lean;

Safety:

NHTSA has concluded the S Sedan is the safest car they have ever tested;

Quality:

Consumer Reports has concluded the S Sedan is the highest quality car they have tested

Customer Satisfaction:

The Tesla S has won the ultimate testimonial….EVERY OWNER loves their S Sedan

Life Expectancy:

The electric motor is expected to meet performance specs for at least 1 million miles.

Battery Warranty:

The S Sedan’s Li-on battery comes with a 10y warranty; however, the really good news is that battery cost is forecast to drop from $400/KWh in 2013 to $100/Kwh by 2025.

Sustainability:

Tailpipe emissions:  0;  Emissions from the electricity source, 0;  Lifetime C footprint:  Very low.  We believe the C footrpint to produce Li-on cells and assemble batteries will be 0 when the Tesal Giga Factory comes on stream in 2018.

Lower Operating Costs:

For the Simonettas, their fuel cost is essentially 0 and we estimate their maintenance costs will be approximately US$500/annum.

Thank You:

We thank the Simonettas for their incredible story which they shared through Tesla Motors on March 17, 2016

Want to up your innovation game? Want to up your organization’s innovation game? Attending one of our Mastering Value Innovation Workshops is a great place to start. In 2016 we are going to change our approach. We will work with you to develop your own custom workshop that addresses your problems and you define the length and location. More information can be found in the Workshop Brochure.