How Tesla will win and take Mergon on their coat tails.
By Mergon VP of Business Development, Caolan Bushell
Wow! I’ve just gone from 0-60mph in less than 3 seconds. In a 7 seat SUV. With no engine.
Ludicrous Mode. Bioweapon Defence Mode. No these aren’t armoury choices on the latest shoot ‘em up video game. They’re actually choices you can select on the operating system of Tesla Motors latest car; The Model X.
Are these features really required in a vehicle? Probably not. Are they cool to have? Hell yeah, they are.
Elon Musk, the visionary entrepreneur behind Tesla Motors understands cool. He understands innovation. He knows “what wows”. By wowing Tesla is gaining momentum through Schumpeter’s famous process of “Creative Destruction” and shaking up every element of the automotive supply chain along the way.
The world’s investment community has piled in behind the dream Musk hopes to make a reality. The company now has a market capitalization of almost $30 billion dollars.
Tesla is spending $5 billion constructing the largest lithium-ion battery factory in the world in Sparks, Nevada. By 2020 the diamond shaped Gigafactory will be 13.6m square feet making it the second largest building in the world by volume.
My company Mergon has been fortunate enough to have embraced the “fail fast” “minimum viable product” mentality that pervades Tesla.
Fortunately, Mergon realised that growing at Tesla needed our “A” team. Tesla lamented that many traditional auto suppliers sent their “B” teams to Fremont thinking the operation was doomed to failure.
By mirroring the Tesla culture we’ve become known as a can-do company that can take a concept and run with it. We embedded a small team of people – usually including external subject matter experts – into Tesla that we pay to “learn our way into the future before it gets too expensive”.
Mergon believes the investment has paid off already with Tesla. Mergon is a more agile company than ever before doing new exciting things we wouldn’t have entertained doing even 3 years ago. Mergon is taking this mindset into our relationships with other customers and are starting to reap the rewards.
It hasn’t all been great fun. You need a different mindset to “fail fast”. The disappointment and stigma of failure are hard to accept at the start. You work intensely with a focused tight knit team to make something succeed. When it doesn’t the failure hurts your pride. You learn to get over failed projects quickly. There are lots of new ones to try.
So we’ve lost some. We’ve won some too. By innovating with Tesla Mergon has 48 parts on the Model X. The company usually has 10-12 parts per vehicle. From a business standpoint, it is clear that if Tesla hit their growth projections Mergon stands to be in a good place.
Currently, Tesla is building just under 80,000 vehicles per year at their Fremont, California manufacturing site. When the Gigafactory kicks into gear in 2020/21 the company plans on producing upwards of 500,000 vehicles.
From a business standpoint working with Tesla has been, is and will be every bit as exhilarating as engaging Ludicrous Mode on a P90D Model X and flooring the accelerator.
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