So someone posted a video on Tuedsay this week with a Tesla S on fire after an apparent collision.
According to Tesla, the car alerted the driver of the problem and he pulled over, got out and called 911. The fire department had to figure out that water will not put out a burning Lithium Ion battery and had to switch to dry chemical fire retardant and reportedly to “punch holes in the battery pack”. No one was hurt and the fire never got into the passenger compartment.
Tesla shares dropped about 10% as a result of the video and my friend sent me the link to the video because he knows that I am in love with the car.
Let me take this opportunity to reiterate my support for the car, its overall strategic positioning and why Tesla is an example of a company that is bringing disruptive technology to market.
A very attractive automobile
Forgetting about its electric power train, the Tesla S is a very nice car. It has sporty, sleek styling, comfortable seats and amazing acceleration! (416 hp, 0 to 60 in 4.2 seconds).
The interior is what you would expect in an expensive sports car and the range is between 230 miles and 300 miles depending on the battery pack you choose to buy. (65KWH or 85 KWH)
In terms of Safety, the Tesla S has a five star safety rating and the battery pack adds to the structural rigidity of the car. The best thing about the Seattle video is that it shows the car burning steadily but not getting out of control and certainly not exploding as it would if it had a tank full of flammable gasoline!
The price tag is, of course high, and the car costs from $ 66,570 to 83,570 depending on the battery pack and if you get the extra performance package.
Sound Strategy
The reason that I believe the Tesla S is a great example, and I use it in my classes on Strategy & Sustainability, is that for its market segment it is a very sensible car.
The car is targeted at commuters who own a second car. Very few people commute more than 100 miles to work so the Tesla can get you back and forth and Tesla’s customers also have a garage or parking place with a plug for re-charging. These people will take their SUV to the mountains.
Disruptive Innovation
Technological change often comes in niche applications and according to Christensen then get better over time until finally displacing another technology. Tesla started with the Roadster, more or less a fun toy for very wealthy people. The S moves them into a larger customer segment but they will still be successful with approximately 20,000 cars per year. As battery life gets longer and Tesla’s on the road re-charging infrastructure gets built up, we will see how far they go!