Category winner: Tesla Motors: Disrupting the Auto Industry?

Share this page:
This case won the Strategy and General Management category at The Case Centre Awards and Competitions 2018.
The case

Who – the protagonists

TeslaCurrent Tesla Motors Chairman, Elon Musk, and former CEO, Martin Eberhard.


Tesla is an electric vehicle company making waves in the automobile industry, attracting the likes of Panasonic, Daimler and Toyota to invest in the company.



Serial entrepreneur Eberhard spotted many driveways with both a hybrid Toyota Prius and a sports car. Tying in with his concerns about global warming and America’s dependence on Middle East oil, Eberhard’s plans for a Tesla Roadster were born.

Enlisting Musk as Chairman, Eberhard secured an $6.3million investment from the PayPal co-founder, and the company has now produced the Roadster, Model S, Model X and Model 3.


It was 2003 when Eberhard was initially inspired to produce electric vehicles.

The first Roadsters were mass produced in March 2008, but not before Tusk forced Eberhard out of the company due to long delays in the production process.

Model S followed in June 2012, Model X in late 2015 and Model 3 is being delivered to customers as we speak (March 2018).


Tesla’s 5.3 million square feet factory is based in the Californian city of Fremont in the southern section of the San Francisco Bay Area, otherwise known as Silicon Valley.

Key quote

“It was clear that people weren’t buying a Prius to save money on gas – gas was selling close to inflation-adjusted all-time lows. They were buying them to make a statement about the environment.” – Tesla Motors former CEO, Martin Eberhard.

What next?

While Tesla has made great strides in furthering electrical vehicle technology, and selling a healthy amount of its models, will the Silicon Valley company ever be able to return a profit, and make internal combustion engines a thing of the past?

Interested in finding out more?

Download the case and teaching note

Educators can login to view a free inspection copy of this case and its teaching note.

Tesla Motors: Disrupting the Auto Industry?
Ref 316-0006-1
Teaching note
Ref 316-0006-8

The authors

Jeffrey H Dyer and Nathan Furr

authorsJeff and Nathan discuss the appeal of Tesla to students, and bringing a Tesla Model S to class.

Best of both worlds

Jeff said: “Because Tesla is very popular, we wanted to work with the information that the average participant might have come across, to try and uncover the underlying strategic issues facing Tesla.

“However, we did interview the senior management team at Tesla, including CEO Elon Musk, co-founder and chief technical officer JB Straubel and lead designer Franz von Holzhausen

“We also toured the factory and talked to key stakeholders. This information is subtly woven into the case and more particularly in the teaching note.”

Students engaged

Students engaged

Nathan continued: “It is very easy to engage students with the Tesla case, particularly by contrasting the impact Tesla has had on the automobile industry with Clayton Christensen’s statement that Tesla is not disruptive. This provides an opportunity to clarify what disruption is, according to Christensen, versus what Tesla is pursuing.

“Moreover, students are engaged with the Tesla brand and a large percentage want to own a Tesla.”

use of propsUse of props

Jeff added: “For a great teaching experience, have a Tesla dealership, taxi/Uber/Lyft driver with a Tesla, or friend with a Tesla bring one to class. The contrast between seeing (and maybe for a lucky few riding) the Tesla Model S and talking about it in contrast is stark.”

Spoilt for choice

Nathan concluded: “The case clarifies so many key strategy and technology issues, namely the different types of innovation (disruption from below versus invasion from above), the impact of ecosystems, and firm choice to play in the technology stack.

“Our favourite part of the case is the discussion about whether Tesla is a car company (i.e. product), a battery/energy company (i.e. component), or a system (i.e. ecosystem of product, service, repair, charging and upgrades). This discussion really opens students’ minds.”

About the authors

Jeffrey H Dyer is the Horace Beesley Professor of Strategy at Brigham Young University Marriott School of Business.
tw @Jeffrey_Dyer

Nathan Furr is Assistant Professor of Strategy at INSEAD.
tw @nathan_furr


View all the 2018 winners