How Tesla created advantages in the ev automotive paradigm, through an integrated business model of value capture and value creation

Abstract

There has been no research conducted that uses a holistic conceptual framework that simultaneously relates the ecosystem, platform technologies, innovations, and modularity to the firms business model. These elements are central to Tesla’s shifting of the automotive paradigm from internal combustion engine transportation to electric vehicle (EV) energy powertrains. The purpose of this paper is to explore how the ecosystem, business model, modularity and innovations of Tesla, as an illustrative case, have contributed to a new vehicular platform and business model EV paradigm. The paper draws on the strategic and operations management literature and examines the relationship between the ecosystem platform's attributes, modular innovations, and a new business model created by Tesla. Battery technology has been a focal point of the Tesla platform, and this is predicted to be an essential part of the battleground for the future of the electric vehicle automotive industry. Our analysis shows the attributes of the Tesla business model's configuration, which have been the drivers of its disruptive approach to the existing legacy automotive markets, have been instrumental in creating and capturing value for its continual platform development.