Tesla (the Car)

12 July 2010 at 1:29 pm Dick Langlois 4 comments

| Dick Langlois |

Speaking of Tesla: as I was waiting to cross Page Mill Road in Palo Alto the other day, I saw a real live Tesla drive by — the car, not the long-dead inventor. There are several dealerships along El Camino.

In their recent comment, Mari Sako and Susan Helper suggested that electric vehicles might be an example in which, because of the systemic nature of innovation, we might see considerable vertical integration à la Chandler. They talked about the complementary network of charging stations, etc. But it seems to me that what vertical integration the electric vehicle will bring about is more likely to be in the design and production of the car itself. For example, the Tesla website notes that the “Roadster is controlled by state-of-the-art vehicle software. Rooted in Silicon Valley tradition, the code is developed in-house with an intense focus on agile and constant innovation.” Presumably they mean that the code itself, not the vertical integration, is rooted in Silicon Valley tradition.

Apparently, Tesla (along with Toyota) is going to reopen the famed NUMMI plant in Fremont to make its new passenger-car model.

Entry filed under: - Langlois -, Entrepreneurship, Innovation, Theory of the Firm.

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4 Comments Add your own

1. Randy | 12 July 2010 at 3:16 pm

I can lease a Tesla roadster for $250 more per month than the combined cost of my 2010 Nissan Z lease and my home mortgage. Thorstein Veblen would probably have to add a superlative to “conspicuous consumption” to account for such a choice. Shall we start a pool to predict when the new Tesla shares drop from their opening day trade value to become penny shares?
2. srp | 12 July 2010 at 3:38 pm

The roadster is based on the Lotus Elise–total outsourcing of the chassis and body.

The NUMMI deal was a political one. Pelosi and the NoCal mafia put the arm on Tesla, which is another subsidy farmer, not to use the cheaper and better located LA factory they had just about finished contracting with.
3. Dick Langlois | 14 July 2010 at 2:18 pm

Excellent comment, as usual. When I saw the car approaching, I initially thought it was a Lotus.

Part of the NUMMI deal is also a bribe from Toyota, who invested $50 mill in Tesla, as a way to get cheap good will advertising — much needed after the recent quality-control problems.
4. David Hoopes | 14 July 2010 at 7:14 pm

My niece is opening a new Tesla showroom in Newport(?). So, tell me if you want one. She took me for a spin. Quite a ride.