How Tesla Became the Most Innovative Company in The World
ExamplesIt’s no surprise to see Tesla leading major automakers in the deployment of artificial intelligence (AI). The California-based car maker is arguably the most innovative company in the world.
Tesla’s innovation strategy has resulted in an extreme level of in-car hardware and software integration. Most other automakers have yet to adopt such cutting-edge tech, let alone unleash the potential of AI and deep learning.
Against this backdrop, it’s little wonder that Tesla consistently ranks high on the Forbes most innovative companies list. Currently, as of August 2020, Tesla ranks #4.
Defining the Tesla Innovation Culture
The deep-rooted Tesla innovation culture sets the business apart – even among top-tier competitors. Here are the key areas that contribute to Tesla’s position among the elite.
There are many innovative people at Tesla, but CEO Elon Musk is most associated with Tesla’s growth. Recently, he’s been the focus of countless news stories concerning his other company, Space X. As an example, May 2020 saw the Crew Dragon Demo-2 Mission become the first private launch to take astronauts to the International Space Station.
Beyond Musk, the Tesla leadership is packed with innovative individuals who’ve made it the world’s most valuable car maker.
Key figures include Tesla co-founder JB Straubel, who was Chief Technology Officer (CTO) until 2019. Meanwhile, Beth Davies was former Director of Learning and Development at Tesla, as well as previously holding senior roles at Apple and Microsoft.
Both Straubel and Davies were key contributors to Tesla’s innovation. Their signature efforts supported Tesla’s growth as it became the world leader in electric automobiles. You’ll find more details about both JB Straubel and Beth Davies at the end of this article.
Technology reigns in Tesla’s journey of innovation, and commentators have rightly praised the way Tesla’s innovations are transforming the auto industry.
Their electric cars have consistently defied consumer expectations for reliability, performance, and style. Perhaps most importantly, they also have the stamina to dispel wide-held concerns regarding mileage. (The Tesla S and Tesla X mileage figures stood at 370 and 325 miles respectively in 2019. 2020 upgrades to the US version of the Model S then pushed it above the 400-mile mark.).
And the demand for Tesla cars seems unstoppable: the recently announced Tesla Cybertruck has reportedly over 700,000 reservations already.
But record-setting electric cars are just the start, and the list of Tesla innovations goes much further:
- Tesla’s cars are only able to set mileage records thanks to their fast-charging sustainable batteries.
- Tesla innovations now reach into the arenas of home power storage and grid power storage. The Powerwall and Powerpack are examples of it. Meanwhile, the Megapack serves for grid-deployment by utility companies.
- In 2016, Tesla moved into the solar power space with the acquisition of SolarCity. As a result, Tesla’s product range now includes solar panels and solar roof tiles.
The Business Model
Many experts identify Tesla’s business model as the reason it has remained financially sustainable. Let’s take a closer look:
- Tesla’s ambitious mission of transforming global transportation and energy production/consumption systems resonates with consumers. This message also resonates through board calls and every customer engagement. As consumers demand greener and more sustainable products, Tesla’s mission to ‘accelerate the world’s transition to sustainable transportation’ is just perfect.
- Tesla’s marketing reaches out directly to customer-enthusiasts, without relying on dealers or other middlemen who might dilute the message.
- Many Tesla investments have a refreshingly long-term feel. The company has invested heavily in building the Supercharger stations – which some consider the most significant energy infrastructure development for 80 years. The aim is clear: To make prospective Tesla owners feel comfortable with long-distance electric-powered travel. Tesla has also poured billions of dollars into their Gigafactories around the world, to be able to produce enough batteries to keep up with demand.
Tesla’s innovations haven’t always come from the top. The company opted for agility over a traditional corporate hierarchy in order to gain the advantage over larger competitors.
Adopting a management style that breaks communication barriers means that “anyone can talk to anyone”. As such, Tesla’s employees have free access to the executive team, allowing for an exchange of ideas that may benefit the company.
There’s an interesting lesson here for growing companies: Problem-solving is dependent on effective communication, and rigid hierarchies can often re-route or prevent the optimal flow of information.
Recent Tesla Stock Performance
At every stage, the Tesla innovation culture reduces friction and allows for ideas to be brought forward and implemented – fast. It’s little wonder then that Tesla stock is among the most talked about of investments.
Against a backdrop of extreme turbulence, Tesla’s stock suffered a short-lived drop of over 50% between February and March 2020. Then came a sustained surge over the course of several months that’s taken values to all-time highs. The company’s bold response – a five-for-one stock split – is expected to further extend the appeal of Tesla stock to small ‘retail’ investors. Since the announcement, the stock has reached even higher highs and at the time of writing this post, it breached $2000 per share.
After the recent crazy surges in stock prices, Elon Musk became in August 2020 the world’s fourth-richest person with an estimated net worth of over $90 billion dollars.
It would be easy to attribute the recent strength of Tesla stock to the wider positive performance of tech companies. However, it may also reflect the public demand for a ‘green recovery’ following the coronavirus pandemic.
Exclusive Tesla Representation at Aurum
JB Straubel – Tesla co-founder and founding Chief Technical Officer – was responsible for many of Tesla’s innovations until mid-2019. Straubel oversaw the technical direction of the worldwide supercharger network of fast DC chargers. He was also responsible for Tesla’s battery technology, power electronics, Tesla motors, firmware/software, and controls.
Aside from managing his current business interests and keeping a Senior Advisor role in Tesla, JB Straubel has become a globally recognized innovation keynote speaker. JB has been an instrumental figure in building Tesla, having invented the carmaker’s core technologies. On the official day of his departure as an executive, Musk said:
“If we hadn’t had lunch in 2003, Tesla wouldn’t exist basically.”
As Tesla’s former Director of Learning and Development, Beth Davies brought the team from 600 to 33,000 employees – in just six years. She was a key player in evangelizing the company culture and protecting it from the dilution that can accompany rapid growth. Davies meticulously designed and developed the training and support to factory-wide operations. She also oversaw on-boarding for all new hires globally.
Recently named a Luminary as a distinguished Alumna with Indiana University, Davies is one of only 12 people to receive this honor. While working as a thought leader with McKinsey & Company, Beth Davies can often be found on tour as a highly engaging speaker.
Both JB Straubel and Beth Davies are exclusively represented by Aurum Speakers Bureau. If you are interested in booking any of our innovation speakers for either physical or virtual events, you are welcome to contact our team for support.