Table Of ContentCapital Project Management M Capital Project Management
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Evolutionary Forces G
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Evolutionary Forces
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Volume III
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Robert N. McGrath, PhD
As an extension of Volumes I and II of this series, this book contains a detailed elaboration
Volume III
of the Tesla story, in a way that also serves to examine the interaction of technology
and economic forces that determine the structural profi tability of any industry, especially
capital-intense industries. The economics are the “fi ve forces” introduced to the management
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lexicon by strategic management scholars. Here there is strong emphasis on the interplay
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among product technology, production and supply chains, and “Wall Street.” P
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T
The author is a retired business professor; his research interest has been the management A
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of technology and innovation. For this book, he double-checked none of the 1,250 media
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items collected, accepting their overall veracity at face value. This approach advocates no R
one person, no one company, no one technology, and no portion of the global automobile O
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industry. Analysis and practical application came foremost. E
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Dr. Robert N. McGrath, PhD, MBA, PMP, began his career by graduating from the T
U.S. Air Force Academy and served fi ve years in logistics fi elds. Afterward, he worked in M
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aerospace environments as a logistician, engineer, and manager for Texas Instruments,
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General Electric Aircraft Engines, and the Lockheed Aeronautical Systems Company. A
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He then completed a PhD in business administration at the LSU, and entered academia
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full-time. At several Universities he served as the MBA/EMBA program director, and the M
director of the largest online project management curriculum in the world. He has published E
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over 75 scholarly, pedagogical, and practitioner items. In 2007, he became a PMI project T
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management professional (PMP) and afterwards, taught mostly online. He is now retired to
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continue writing. His 1996 PhD dissertation addressed the electric vehicle industry of that O
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day, a content analysis of 2,000 media items for biases for and against battery technologies U
as theory would predict. The events that have transpired since 1996 are consistent with that M
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dissertation, motivating further study culminating in this book series.
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Portfolio and Project Management Collection
Timothy J. Kloppenborg, Editor Robert N. McGrath, PhD
ISBN: 978-1-94999-188-8
Capital Project Management,
Volume III
Capital Project Management,
Volume III
Evolutionary Forces
Robert N. McGrath
Capital Project Management, Volume III: Evolutionary Forces
Copyright © Business Expert Press, LLC, 2020.
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All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
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except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.
First published in 2020 by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-94999-188-8 (paperback)
ISBN-13: 978-1-94999-189-5 (e-book)
Business Expert Press Portfolio and Project Management Collection
Collection ISSN: 2156-8189 (print)
Collection ISSN: 2156-8200 (electronic)
Cover and interior design by Exeter Premedia Services Private Ltd.,
Chennai, India
First edition: 2020
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
Abstract
As an extension of Volumes I and II of this series, this book contains a
very detailed elaboration of the Tesla story, in a way that also serves to
examine the interaction of technology and economic forces that deter-
mine the evolution of the structural profitability of any industry, espe-
cially capital-intense industries. The underlying economics are the “five
forces” introduced to the management lexicon in the strategic manage-
ment corpus of research. Here there is strong emphasis on the interplay
among product technology, production and supply chains, and “Wall
Street.”
Many popular media articles are excerpted and abridged to illustrate
points of emphasis. This keeps the story alive, meaningful, and urgent.
However, the author is a retired business professor, scholar, and researcher,
and not an investigative reporter. His abiding research interest has always
been the management of innovation and technology, a legitimate branch
of management scholarship. For this book, he conducted no interviews
and double-checked no media data, though multiple media sources by
themselves typically provided cross-checks. This approach does not por-
tend to be any kind of tell-all “inside story.” It advocates no one person,
no one company, no one technology, and no portion past, present, or
future of the global automobile industry at large. It accepts the veracity of
reported events and turns to their practical and theoretical interpretations.
Keywords
Tesla; Musk; technology s-curves; technological discontinuities; d ominant
design; economy of scale; economy of scope; capital intense; breakeven;
productivity; profitability; competitive advantage; industry life cycle; core
capability; supply chain; vertical integration
Contents
Preface ..................................................................................................ix
Chapter 1 Tesla through 2015: Something Old and
Something New .............................................................1
Chapter 2 2012–2015: Industry Form Follows Technology
Function ......................................................................27
Chapter 3 2016: “Real Cars” and Real Competition .....................53
Chapter 4 2017: “Enter” the Incumbents .....................................75
Chapter 5 2018: One “Hell” of a Purgatory ................................107
Chapter 6 Epilogue: Into 2019 ...................................................143
Summary and Conclusion: Volumes I–III .............................................157
Media Articles ....................................................................................161
References ...........................................................................................171
About the Author ................................................................................173
Index .................................................................................................175
Preface
As an extension of Volumes I and II of this series, this book contains a
very detailed elaboration of the Tesla story, in a way that also serves to
examine the interaction of technology and economic forces that deter-
mine the evolution of the structural profitability of any industry, espe-
cially capital-intense industries. The underlying economics are the “five
forces” introduced to the management lexicon in the strategic manage-
ment corpus of research. Here there is a strong emphasis on the interplay
among product technology, production and supply chains, and “Wall
Street.”
This volume may be likened to a complete case study of Tesla through
the time of publication, with the most salient learning points boldfaced
and italicized. Many popular media articles are excerpted and abridged to
illustrate points of emphasis. This keeps the story alive, meaningful, and
urgent.
However, the author is a retired business professor, scholar, and
researcher, and not an investigative reporter. His abiding research interest
has always been the management of innovation and technology, a legiti-
mate branch of management scholarship. For this book he conducted no
interviews and double-checked no media data, though multiple media
sources by themselves typically provided cross-checks. This approach does
not portend to be any kind of tell-all “inside story.” It advocates no one
person, no one company, no one technology, and no portion past, pres-
ent, or future of the global automobile industry at large. It accepts the
veracity of reported events and turns to their practical and theoretical
interpretations.
The development of this book started in 1993 when the author
decided on a research setting worth risking a career on, for his Ph dis-
sertation in business administration. The “experiment” of choice was the
electric vehicle (EV) movement in the early 1990s, and the unit of anal-
ysis was “the battery.” Data included over 2,000 public media items col-
lected systematically and professionally. That dissertation was published
