Tesla’s Innovation Essay Example

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Tesla’s Innovation

Tesla’s innovation

Tesla is trying to bring a change in the automotive industry by the continued invention of the electric vehicles to replace the electric-gas combustion cars together with the invention of vehicles of different sizes and shapes. Since the consumer needs are changing every day, manufacturers should have come up with new designs to cater to the changing needs of their customers (King, 2010). As a result, Tesla Company is trying to be innovative to satisfy their customers’ needs. However, other manufacturers in the automotive industry like the Toyota Company in Japan are using their disposable resources to compete with Tesla by also inventing new models. The government has a role to play in protecting such innovative companies for their continued existence. Therefore, innovative companies like Tesla are beneficial and should be encouraged by having them enjoy government protection.

Toyota Company is one of the biggest businesses that is manufacturing motor vehicles in the globe. The company is known for producing affordable cars which are very efficient. Enterprises that produce products which fit every consumer needs wins their loyalty and get a big market share. However, even with the continued production of effective and affordable products in the market, there is continued evolvement. According to Basu (2013), the world keeps on changing, and so the needs of the customers change too. Therefore, innovative manufacturers join the market after identification of unexploited opportunity to fill the gap. As a result, Tesla Company has identified a gap and has continued to invent different types of motor vehicles. In reaction to this, Toyota Company is investing in fun-to-drive sporty vehicles to counter the competition of Tesla («How Big Auto is responding to Tesla,» 2017).

Another company in the automotive industry which is trying to fight Tesla innovations is the automotive industry is General Motors which owns Cadillac and Buick. Saxena (2009) attempts to argue that pricing is a tool that can be used by a company to fight a competitor and throw her out of the market. According to Free (2010), most of the customers will go for the products that are selling at low prices thus lowering the demand for the highly rated products while increasing the request for their products. About pricing, General Motors is trying to fight Tesla Company by inventing similar products but offering them at lower prices than the company’s product are selling in the market. Consequently, the demand for Tesla products in the market goes down despite them having come up with new inventions. Therefore, lowering prices is a tactic that General Motor Company is using to fight Tesla Company.

Another response that the automotive industry is offering to counter the inventions by releasing their won luxury designs which are differentiated. Product differentiation is a tactic of trying to combat competition in the market by studying the products of the target company and producing goods serving similar purposes though with a slight difference which makes it unique in its ways (McGuigan, Moyer, & Harris, 2009). About this, other companies in the automotive industry are studying the inventions by Tesla Company and trying to fight them by manufacturing slightly difference products which are serving similar purposes but which are slightly different and unique compared to those of Tesla Company. For instance, high-end foreign brands are inventing their luxury vehicles which are slightly different like the Porsche Panamera S-E Hybrid whose rear seats are larger. Therefore, product differentiation is another way of responding to Tesla innovations.

Other companies in the automotive industry are trying to fight the new inventions by Tesla by moving their way and trying to invent other means to replace the battery powered vehicles with hydrogen powered vehicles. As a result, the companies have a mentality that the hydrogen-powered cars will fight the electric vehicles being invented by Tesla. Kirzner (2007), argues that the demand for the products to lower due to the emergence of another product which is different. About this, since Toyota Company is making hydrogen-powered vehicles, the many loyal customers of the company might have a mentality that the product might be slightly better than that of Tesla thus lowering the demand for the electrically powered motor vehicle of Tesla.

The government role in Tesla’s case should be supporting and protecting new innovators. For a company to invest, an enormous amount of capital is required to carry out the research in the market to identify a gap and invent a new product (Madrick, 2017). Therefore, since the new innovators might be new in the market and thus funds to carry out the research is a problem to them. Due to this problem of lacking funds, the government should set aside some amounts in the budget to finance the new innovators. Continued innovation tends to increase the competition in the market. Increased competition leads to the reduction of prices in the market thus benefiting the customers (Great Britain & Great Britain, 2012). Therefore, the government should support the young innovators with research funds for competition to increase thus lowering the prices which are a benefit of the citizens.

Regulations set by the government should be set in such a way that they are favoring the young innovators. According to Rezaee (2008), strict rules and regulations scare away investors which lead to exploitation of customers by the existing investors in the market. Therefore, the government should set rules in such a way that it attracts investment in the market by having new innovators invest in the market. The emergence of new investors in the market intensifies competition in the market, and therefore the existing investors will try to improve the quality of the products as a way of trying to fight competition by the new investors. As a result, the citizen who is cared for by the government will feel valued by the government since it is ensuring quality products are offered to them, and therefore the government will have achieved its role.

Another role that the government should play is providing support to education. Moyle (2010) argues that knowledge forms the basis of most innovative activities. Therefore, the government should ensure that learning institutions are set up have all the equipment and facilities needed to support education and research at the same time. For instance, in the energy sector where Tesla Company is investing in electric powered vehicles, a lot of studies in the energy sector is required. Consequently, research which is needed to be done can only be done by a person who has been educated in electrical engineering. Therefore, the government has a role to play to ensure that innovation is encouraged and young innovators are supported by setting up research and training centers which contain all the required facilities to carry out the research on inventing new products to add to the market.

The government should not leave the new innovators to be driven by demand since the existing investors might use all the disposable resources to drive away new innovators in the market. According to Burns (2014), new market entrants face many threats from the existing investors in the market since they have been there and they know the tactics. Therefore, these big investors are even able to steal or even buy the ideas of the young investors since they have a significant amount of resources. Additionally, in the case of legal action, these companies have a huge amount of resources, and they can be able to raise the legal fees required or even use the money to manipulate the process. Therefore, the government should offer support to new investors by helping them protect their intellectual properties through patents and other protection tools.

In short, Tesla’s innovations is providing a great benefit to the general public which the government has the mandate take care of and ensure that product delivered to them are of quality and affordable. However, other investors in the automotive industry are fighting the new innovative company to drive them away. Intense competition has some benefits which most of them help the customers buying an individual commodity. As a result, competition due to new inventions by Tesla Company will see the prices of products with similar countries lower, improvement of the quality of the existing products to counter competition. All the benefits are helping the state, and therefore the government should offer full support to the new inventors. As a result, enjoyment of government protection by new inventors such as the Tesla should be a government priority due to such economic benefits accruing to the state.


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Basu, S. (2013). Real world windows 8 development.

Burns, P. (2014). New Venture Creation. Palgrave Macmillan.

Free, R. C. (2010). 21st century economics: A reference handbook. Thousand Oaks, Calif: SAGE.

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How Big Auto is responding to Tesla. (2017). Theweek.com. Retrieved 17 April 2017, from http://theweek.com/articles/460613/how-big-auto-responding-tesla

King, B. (2010). Bank 2.0: How customer behaviour and technology will change the future of financial services. Singapore: Marshall Cavendish Business.

Kirzner, I. M. (2007). Market theory and the price system. Auburn, Ala: Ludwig von Mises Institut.

Madrick, J. (2017). Innovation: The Government Was Crucial After AllThe New York Review of Books. Retrieved 17 April 2017, from http://www.nybooks.com/articles/2014/04/24/innovation-government-was-crucial-after-all/

McGuigan, J., Moyer, R., & Harris, F. (2009). Managerial economics (1st ed.). Beijing: Ji xie gong ye chu ban she.

Moyle, K. (2010). Building innovation: Learning with technologies. Camberwell, Vic: ACER Press.

Rezaee, Z. (2008). Corporate governance and ethics. Hoboken, N.J: Wiley.Bottom of Form

Saxena, R. (2009). Marketing management. New Delhi: Tata McGraw-Hill.