Architectural innovation in the automotive industry : Tesla and the renaissance of the battery electric vehicle

Abstract

With the launch of the Tesla Model S all-electric premium sedan, it is evident that, in at least some segments of the automotive market, there is significant demand for battery electric vehicles (BEVs) that have fundamentally different, and for these segments at least, superior attributes to conventional gasoline-powered, gasoline-electric hybrids or previous generations of battery-powered electric vehicles. It appears that BEVs may be in the trajectory to become the dominant design in the automotive industry, replacing the internal combustion engine (ICE) architecture. Tesla's architectural innovation is both in the product and the process domains, its essential difference being how the system architecture evolved from clearly defined stakeholder's needs to elements of function and form as embodiment of a state-of-the art concept. Tesla architected a BEV system that goes significantly beyond the pre-established requirements and outdated standards of the industry, enabling a dynamic organization and a faster product development process focused on rapid improvement and sub-system innovation. It has also built the entire supporting architecture around the product, at the system-of-systems level, resulting in a delightful end-to-end experience. Tesla is leading the transformation of the automotive ecosystem and, by doing so, it is challenging incumbent automakers in the race to sustainable transportation.