Tesla 2016 Annual Report Download - page 8

Autopilot Systems
Wehavedevelopedanexpertiseinvehicleautopilotsystems,includingauto-steering,trafficawarecruisecontrol,lanechanging,automatedparking,driver
warningsystemsandautomatedbrakingfunctions.InOctoberof2014,webeganequippingallModelSvehicleswithhardwaretoallowfortheincremental
introductionofautopilottechnology.Ourautopilotsystemsrelieveourdriversofthemosttediousandpotentiallydangerousaspectsofroadtravel.Althoughthe
driverisultimatelyresponsibleforcontrollingthevehicle,oursystemprovidessafetyandconveniencefunctionalitythatallowsourcustomerstorelyonitmuch
likethesystemthatairplanepilotsusewhenconditionspermit.Ourautopilotsystemleveragesanadvancedsetofhardwareincludingaforwardradar,aforward-
lookingcamera,12long-rangeultrasonicsensors,andahigh-precisiondigitallycontrolledelectricassistbrakingsystem.Thishardwaresuite,alongwithover-the-
airfirmwareupdatesandfielddatafeedbackloopsfromtheonboardcamera,radar,ultrasonics,andGPS,enablesthesystemtocontinuallylearnandimproveits
performance.
Vehicle Design and Engineering
Inadditiontothedesign,developmentandproductionofthepowertrain,wehavecreatedsignificantin-housecapabilitiesinthedesignandengineeringof
electricvehiclesandelectricvehiclecomponentsandsystems.Wedesignandengineerbodies,chassis,interiors,heatingandcoolingandlowvoltageelectrical
systemsinhouseandtoalesserextentinconjunctionwithoursuppliers.Ourteamhascorecompetenciesincomputeraideddesignandcrashtestsimulations
whichweexpecttoreducetheproductdevelopmenttimeofnewmodels.
Additionally,ourteamhasexpertiseinlightweightmaterials,averyimportantcharacteristicforelectricvehiclesgiventheimpactofmassonrange.Model
SandModelXarebuiltwithalightweightaluminumbodyandchassiswhichincorporatesavarietyofmaterialsandproductionmethodsthathelpoptimizethe
weightofthevehicle.
Vehicle Sales and Marketing
Company-Owned Stores and Galleries
Wemarketandsellcarsdirectlytoconsumersthroughaninternationalnetworkofcompany-ownedstoresandgalleries.OurTeslastoresandgalleriesare
highlyvisible,premiumoutletsinmajormetropolitanmarkets,someofwhichcombineretailsalesandservice.Wehavealsofoundthatopeningaservicecenterin
anewgeographicareacanincreasedemand.Asaresult,wehavecomplementedourstorestrategywithsalesfacilitiesandpersonnelinservicecenterstomore
rapidlyexpandourretailfootprint.Werefertotheseas“ServicePlus”locations.Includingallofourstores,galleries,ServicePlusandservicefacilities,we
operated208locationsaroundtheworldasofDecember31,2015.
Weownoursalesandservicenetworkbecausethetraditionalfranchiseddistributionandservicemodelisnotviableforabusinesslikeours.Inour
company-ownednetwork,ourcustomersdealdirectlywithourownTesla-employedsalesandservicestaff,creatingadifferentiatedbuyingexperiencefromthe
buyingexperienceconsumershavewithfranchisedautomobiledealersandservicecenters.Webelievewewillalsobeabletobettercontrolcostsofinventory,
managewarrantyserviceandpricing,maintainandstrengthentheTeslabrand,andobtainrapidcustomerfeedback.
Tesla Supercharger Network
Wearebuildinganetworkofupto120kWfastchargingequipment,eachcalledaTeslaSupercharger,throughoutNorthAmerica,EuropeandAsiaforfast
chargingofTeslavehicles.OurSuperchargernetworkisastrategiccorporateinitiativedesignedtoremoveabarriertothebroaderadoptionofelectricvehicles
causedbytheperceptionoflimitedvehiclerangeandtoprovidefastchargingtoenablelong-distancetravel.TheTeslaSuperchargerisanindustrialgrade,high
speedchargerdesignedtoreplenish170milesofrangeinthebatterypackinaslittleas30minutes.Superchargerstationstypicallyhavebetweenfourtoten
Superchargersandarestrategicallyplacedprimarilyalongwell-travelledhighwaystoallowModelSandModelXownerstoenjoylongdistancetravelwith
convenient,minimalstops.AsofDecember31,2015,wehad584SuperchargerstationsopeninNorthAmerica,Europe,andAsia.Weareplanningtocontinueto
expandtheSuperchargernetworkintheUnitedStates,EuropeandAsia.
Destination Charging
Weareworkingwithawidevarietyofhospitalitylocations,includinghotelsandpopulardestinations,toofferanadditionalchargingoptionforour
customers.ThesedestinationchargingpartnersdeployourwallconnectorsandprovidechargingtoModelSownersthatpatronizetheirbusinesses.Asof
December31,2015,over1,800locationsaroundtheworldhadmorethan3,100Teslawallconnectorsinstalled.
Orders and Reservations
WetypicallycarryaverylimitedinventoryofourvehiclesatourTeslastores.Thevastmajorityofourcustomerscustomizetheirvehiclebyplacingan
orderwithusviatheInternet.Tobeginproductionormakeareservation,werequireaninitialpaymentwhichiscollectedoncethecustomerhasselectedthe
vehiclespecificationsandhasenteredintoapurchaseagreement.Werequireallremainingpaymentofthepurchasepriceofthevehicleupondeliveryofthe
vehicletothecustomer.
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