Actually the way the Innovator's Dilemma" uses the word disruption is very specific and doesn't match your explanation or the article's for that matter. Christe

Actually the way the Innovator's Dilemma" uses the word disruption is very specific and doesn't match your explanation or the article's for that matter. Christensen doesn't use disruption to mean "making something better than others for a lower price". Disruption, as he defines it, is specifically about making a product that is actually inferior on the metrics valued by the existing market. The canonical example from his book is about hard drive manufacturers increasing the storage space of their hard drives for mainframes (something the market asked for). They got disrupted by manufacturers making hard drives that had much less storage space (so considered inferior by the existing market), but were physically smaller allowing them to be used in minicomputers, a new market. Now, it might still be possible to apply disruption as Christensen defines it to the market for cars, though arguably it might be stretching it. It seems to me that Tesla sacrificed some of the metrics used by current buyers of luxury cars, but appealed to a previously ignored segment of "green" or "techie" buyers. Compare for instance the interior of a Tesla model S against a Mercedes S class and the Tesla would lose. However, Tesla correctly identified that there appears to be a market for electric cars where customers are willing to pay a premium.