When you think of innovation in the automotive industry, Tesla probably springs to mind. It was able to shake up a market full of established players with its futuristic cars that felt new and exciting, making the electric car more appealing and practical than ever before.

Tesla’s mission is to accelerate the world’s transition to sustainable energy. To do that, Tesla “build products that are designed to replace some of the planet’s biggest polluters. Every product we sell helps owners lower emissions.”
However, the impact Tesla’s first car, the Roadster sports car, had on its mission was limited. The car cost $109,000, firmly placing it in the luxury market.
Tesla was founded in 2003 and released the completely electric Roadster in 2008. And from the start, it seemed that the company was onto something. The Roadster achieved the highest range on a single charge for any production electric car and its performance was comparable to fuel-powered sports cars. However, these initial electric vehicles (EV) could only help owners lower emissions if they were able to afford one.
In 2012 Tesla welcomed the Model S. This model was designed for efficiency and received glowing reviews. The car was not the only thing making waves. The introduction of the Model S also brought about a change in how people buy cars. Tesla did not have a network of dealerships to rely on. Instead, it opted for an online sales model. A waiting list for the Model S was created and buyers were required to put down a deposit to secure their purchase – many without even seeing the car. This new sales practice has become commonplace but it was unique in the market back in 2012.
Tesla continued to innovate and produce new ranges, each aiming to balance performance, aesthetics, sustainability and cost.
In 2017, the Model 3 hit the road. Not only did the Model 3 become Tesla’s best-selling model, but it also boasted the accolade of being the best-selling electric car of all time. The demand for a more affordable option was there, and the $35,000 price tag opened up the market to even more consumers.
The cars and how they are sold are not the only innovations within Tesla. How they are made is also a key component that sets the company apart. Most car manufacturers start with the vehicle design and then determine how to make it efficiently. Like with the buying process, Tesla decided to work with the challenges it faced and used the constraints of the manufacturing process to influence the design of the vehicle instead. The Cybertruck was born. The EV alternative to the pickup truck.

The Cybertruck is made from stainless steel panels, which are laser-cut rather than stamped as with more conventional automotive parts. The panels form a strong exoskeleton rather than being bolted onto a frame which has changed the game on how the vehicle can be assembled.
Despite previous innovations, the production of Tesla vehicles has remained relatively slow and expensive. Car manufacturing typically uses linear assembly lines, a process popularised by Henry Ford way back in 1913 and not a lot has changed since. However, sticking to how things have always been done isn’t really Telsa’s style. It would prevent it from reaching its ambitious target of producing 20 million vehicles per year, a key goal aligned with its mission.
The solution? Tesla's new 'unboxed' system. The new approach was revealed in 2023 and boasts to reduce production costs by half and reduce factory space by 40%. This new manufacturing style would be a significant shift many legacy car manufacturers would struggle to make due to practicalities and engrained ways of working—Tesla benefits from only producing EVs, which reduces the number of parts and some of the complexity. But, more importantly, it has a culture of questioning the status quo and seeking out innovation.
Not only will the planned approach speed up production, but the cost reduction can be passed on to the consumer. The latest low-cost vehicle produced should cost around $25,000 – a quarter of the price of the ‘original’ Tesla. It is hoped that the combination of affordability and quicker delivery will speed up the adoption of EVs globally, specifically Telsa EVs.
What’s next?
In 2023, the Model Y became the world’s best-selling car. The first EV to earn the title.
However, Tesla is no longer the new kid on the block as rivals vie for the EV market. In fact, in Jul-Sep 2024, revenue at China EV Giant BYD outpaced revenue at Telsa for the first time. Time will tell how the proposed changes to US import charges will also impact the market. What is clear is that the industry will need to continue to innovate and adapt.
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