Its a report on new product analysis that include 5 crucial steps. The report uses Tesla's 'Powerwall' battery as example to illustrate the steps in developing a new product.

1. Page | 1
SWINBURNEUNIVERSITY OF TECHNOLOGY (SARAWAK)
MKT 20024
(PRODUCT & SERVICE INNOVATION MANAGEMENT)
ASSIGNMENT 1- NEW PRODUCT ANALYSIS
PREPARED BY- ALDRIDGE PROMETHEOUS REBEIRO
STUDENT ID- 4327721

2. Page | 2
TABLE OF CONTENTS
CONTENTS PAGE NO.
EXECUTIVE SUMMARY 3
1 INTRODUCTION 4
2 OVERVIEW ON TESLA MOTORINC. 4
3 TESLA’S PRODUCT INNOVATIONCHARTER 4
4 OPPORTUNITYIN THE MARKET 5
5 CONCEPT BEHINDPOWERWALL 5
6 EVELUATION OF CONCEPT 6
7 DEVELOPMENT PHASE OF POWERWALL 6
8 LAUNCHING 7
9 RECOMMENDATIONS 8
10 REFERENCE 9

3. Page | 3
Executive Summary
This report mainly focuses on analysing the five steps towards new product process. These
processes mainly consist of opportunity of the product in the market, concept behind the product,
evaluating various situations and concepts based on trend, finance and marketing. Also,
substantial amount of market research is done to make sure that producing the product will be
profitable for the entity. Only when all the odds are on favour of the company, they opt to
develop it and launch it for their customers. The report has related the above processes with the
recently released ‘Powerwall’ battery manufactured by Tesla Motor Inc. The report assumes the
Product Innovation Charter for Tesla on releasing such a high-performance product in their
existing product line and creating a revolution in the energy storage market. At the end of the
report, few recommendations have been given for Tesla Motor Inc. as to how they can prolong
their growth in the energy storage market.

4. Page | 4
1 Introduction
The purpose of this report is to analyse the steps towards the innovation of a new product,
generating its concept, development of it and launching of the product. This report focuses on the
recently launched Tesla Powerwall, which is basically a battery produced by Tesla Motors Inc.
The report will reflect on Tesla as an energy storage company followed by the Powerwall
Batteries success stories along with additional information such as- identification of market
opportunity, product concept, evaluating the concept prior to developing it and the launch of the
product. In the end, the report will also provide necessary recommendations as to what Tesla can
do to maintain their growth and increase the products’ maturity Phase.
2 Overview on Tesla Motors Inc.
Tesla Motors Inc. was formed on 1st of July 2003. They mainly design, flourish, assemble and
deal in electric vehicles and energy products. The business manufactures and sells two electric
vehicles- Model S Sedan and Model X Sport utility (SUV). Besides, developing its own products
it also sells energy storage products which include the 7 kilowatt-hour and 10 kilowatt-hour
Powerwall for home applications and the 100 kilowatt-hour Power pack for official uses (Reuters
2016). The organization distributes energy storage products under the Tesla Energy brand. The
products are manufactured at California, Lathrop, Tilburg and at its Gigafactory at Reno,
Nevada. The Powerwall Battery unit is mainly produced at the Gigafactory in Nevada. Tesla’s
aim is to facilitate the world’s step towards sustainable energy (Tesla 2016).
3 Tesla’s Product Innovation Charter
Product Innovation Charter is mainly a written document prepared by senior management to
provide a guideline to new product team. Tesla, who was already in the business of electric cars,
added a new product to their product line. The advancement in battery technology and depth of
the energy storage market was the main driving force that brought Tesla in this industry. With
the objective of solving the world’s energy crisis tesla’s guideline towards innovation was
criterias such as- low cost, high quality, availability, capacity and changing the existing trend of
source the energy.

5. Page | 5
4 Opportunities in the market
As we know, conventional power sources of the world will come to an end in the near future.
The only option to survive this menace is by contemplating on sustainable energy. As a result,
the energy saving market has a huge future and Tesla has successfully taken advantage of that.
Usual Alkaline or Lead-acid batteries are cheap but last only for a few years and aren’t effective
enough to be the single source to store energy. Moreover, they also contain toxic elements (The
Guardian, 2015).
While the global annual market size of stationary storage adds up to 700 Mwh in 2105, this
figure is expected to grow to 14 Gwh by 2020. Within this same time, battery demand for e-
mobility is projected to reach 35 Gwh per year (Haacke 2016). This increased growth
applications build a material growth in demand for lithium-ion batteries with high energy density
that give deeper performance than the commonly used lead-acid batteries.
Tesla, already holding strong grounds in the auto-mobile industry leveraged their strength on
digital technology and realized the fast-growing need of a substitute energy source.
5 Concept behind Powerwall
As mentioned earlier, only a renewable source can solve the energy crisis in the foreseeable
future. Although, the concept of storing energy has been around since 1970, this idea did not
move until 2000s (Manghani 2015). In the past few years there has been a great development in
solar panels and Lithium-ion batteries which have attracted many players to the thought of letting
consumers and businesses put their power in store. Tesla, well known for their electric cars have
moved their focus towards producing high-scale batteries to power residential and commercial
sectors.
As a result, Tesla has built up the concept of a battery that will be small in size but can save and
provide higher capacity power when the grid goes down. These batteries can be connected to
solar panels or any other sort of electricity generating system and will give a backup up to 7Kwh.
The battery has a built in DC inverter which will convert the alternative current to direct current.
In the United States or UK where electricity charges are high during peak hours, the powerwall
will help to cut extra costs and keep things under control during a power outage. The power wall

6. Page | 6
would be capable of storing huge amounts of electricity throughout the day prior to releasing it
into electric systems at times of peak demand when energy from usual network is expensive
(Clark 2016).
6 Evaluation of the concept of Powerwall
Primarily Tesla focused on building two types of batteries with a capacity of 7Kwh and 10 Kwh.
Tesla found that the 10 Kwh project would be costly and people in general would not buy it.
Infact having two quite identical products could harm the overall profit of the company. Also
their objective was to capture the daily energy market. So from a financial and marketing point
of view Tesla chose to go ahead with their 7 Kwh Powerwall.
7 Development Phase of Powerwall
As announced, the Powerwall is a battery system that contains Lithium-Ion batteries, Dc-Ac
converter, liquid thermal control system and a battery management system that receives
commands from a compatible DC to AC inverter. This inverter needs to be purchased separately
since it’s not part of the Powerwall. The dimensions are 1302(L) x 862(W) x 183 (H) mm and
weigh around 97 Kg. The battery is wall mounted and comes with 6.4 Kwh capacities for daily
cycle applications. It is compatible with single phase and three phase utility grid and is rated for
indoor and outdoor installation by a trained electrician.The company is also simplifying methods
for installers.
The battery can be charged either by solar power or directly by using AC power from the grid. In
the case of an outage the powerwall can continue operating as long as it is connected to a
compatible inverter.

7. Page | 7
Figure- Tesla Powerwall
Recently Tesla confirmed a few improvements to its existing system. Mostly the changes have
been made in terms of handling and wiring requirements for installers. It also introduced few
other inverters from SMA, the world’s largest inverter producer.
8 Launch of Powerwall
The Powerwall was unveiled on April 30th 2015 with a 7 Kwh Model with a price of US $3000
and comes with 10 year warranty. The batteries are connected to the internet, so Tesla’s software
can monitor it and provide thermal regulation, safety checks and energy maximization (Smith
2015). Primarily shipments were delivered to US and Australian customers (Johnston 2016).
Since being unveiled, there’s been reservation for over 38,000 units (Welch 2015) which would
take up the pre-determined production through mid-2016. Tesla supposedly delivered 25Mwh of
energy storage to consumers in four continents across North America, Asia, Europe and Africa
(Weintraub 2016).
The Demand has been so high that Tesla took an initiative to build a 5000 square-foot Giga-
factory in Nevada, USA to meet public demand. Among such success Tesla has already
announced their version 2.0 of this product line with changes in capabilities. Tesla is determined
to deliver an extensive user experience to its customers and make sustainable energy accessible
to all walk of people. The company reportedly received 80,000 orders for grid-scale batteries in

8. Page | 8
2015, accounting for almost $40 million in quarterly sales. Elon Musk, the CEO of Tesla Motor,
estimates that sales figures for Powerpack batteries could increase to over $1 billion by 2017
(Consumer Research 2016).
9 Recommendation to Tesla
Tesla is already famous for their battery powered electric cars but they have also revolutionized
the energy storage market. Their Powerwall in an extention to their existing product line and
provides back up during a power outage or stormy weather. Below are few recommendations for
Tesla in order to prolong their business-
 The primary selling price of the Powerwall was said to be overpriced but Tesla has since
discounted their product keeping a very low profit margin for themselves. But still,
customers must pay around $2000 as installation cost. This pushes up the total cost of
Powerwall. However, Tesla can introduce some sort of instalment payments for its
consumers to minimize the pressure of onetime payment.
 Tesla can also provide free installation service to cut costs for the end customers.
 Customers need to buy the DC-AC inverter separately. If tesla can manufacture this or
go into a joint venture with leading inverter manufacturing companies then perhaps this
cost can also be avoided or minimized.
 Tesla can also work on increasing their product sales by promoting it via advertisements
and divert people towards using solar energy.
In conclusion, Tesla Powerwall, as a new product line to their company has immense opportunity
in the market of renewable energy. They have certainly met their business objective soon after
the release of the product which was to lower pressure on the grid and cut additional electricity
cost of during peak hours. It is only a matter of time for Tesla to start mass production and bring
the whole world into using Powerwall.

9. Page | 9
10 REFERENCES
Matasci, S 2016, ‘Tesla Powerwall: The Complete Review’, 7 September, viewed 16 September
2016, <http://news.energysage.com/tesla-powerwall-complete-review/>.
Weintraub, S 2016, ‘Tesla Energy delivered over 2,500 Powerwalls and nearly 100 Powerpacks
(25 MWh total) to 4 continents last quarter’, 4 May, viewed 16 September 2016,
<https://electrek.co/2016/05/04/tesla-energy-delivered-over-2500-powerwalls-and-nearly-100-
powerpacks-25-mwh-total-to-4-continents-last-quarter/>.
‘Tesla Motor Inc (TSLA.O)’, 2016, viewed 16 September 2016,
http://www.reuters.com/finance/stocks/companyProfile?symbol=TSLA.O>.
Wang, U 2015, ‘Tesla's Powerwall to flow batteries: a guide to the energy storage revolution’,
27 October, viewed 17 September 2016, <https://www.theguardian.com/sustainable-
business/2015/oct/27/tesla-powerwall-batteries-flow-lithium-energy-storage-revolution>.
Clark, M 2016, ‘Tesla’s Electricity Storage Expansion’, 7 Jun, Viewed 17 September 2016,
<http://consumersresearch.org/teslas-electricity-storage-expansion/>.
Haacke, F 2016, ‘Energy Storage Market Presents New Opportunities For Material & Polymer
Suppliers’, 11 July, viewed 18 September 2016, <https://cleantechnica.com/2016/07/11/energy-
storage-market-presents-new-opportunities-material-polymer-suppliers/>.
Mazzoni, M 2015,‘3p Weekend: 7 Things You Need to Know About Tesla’s New Home Battery’,
1 May, viewed 19 September 2016,< http://www.triplepundit.com/2015/05/3p-weekend-7-
things-you-need-to-know-about-teslas-home-battery/>.
Davies, A 2015, ‘Elon Musk’s Grand Plan to Power the World with Batteries ’, 1 May, viewed
18 September 2016, <https://www.wired.com/2015/05/tesla-batteries/>.