MINOR PROJECT REPORT

ON

“STRATEGIC ANALYSIS OF TESLA”

IN PARTIAL FULFILLMENT OF
BACHELORS OF BUSINESS ADMINISTRATION
[2023-26]

Guided By: Submitted By:

Ms. Sonam LOKESH KUMAR
FACULTY, FIMT 35151401723
BBA(G) 2nd B

FAIRFIELD INSTITUTE OF MANAGEMENT AND TECHNOLOGY

KAPASHERA, NEW DELHI

AFFILATED TO:
GURU GOBIND SINGH INDRAPASTHA UNIVERSITY
(DWARKA, NEW DELHI)

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 CERTIFICATE

This is to certify that this MINOR PROJECT REPORT “STRATEGIC ANALYSIS OF

TESLA” is submitted by “LOKESH KUMAR” who carried out the project work under my
supervision. I approve this project for submission of the Bachelor of Business Administration
(G) in the department affiliated to Guru Gobind Singh Indraprastha University, Delhi.

DATE: MS. Sonam

FACULTY
FIMT

2
 DECLARTION BY THE CANDIDATE

I hereby declare that the work, which is being presented in this project entitled “STRATEGIC
ANALYSIS OF TESLA”, is an authentic record of my own work carried out by me under the
supervision and guidance of Ms. Sonam project guide, FAIRFIELD INSTITUTE OF
MANAGEMENT AND TECHNOLOGY.

This project was undertaken as a part of the major project report as per the curriculum of GURU
GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI for the partial fulfillment of
BBA(G) from FAIIRFIELD INSTITUTE OF MANAGEMENT AND TECHNOLOGY.

I have not submitted the matter embodied here in this project for the award of any other
Degree/Diploma.

LOKESH KUMAR
35151401723
BBA (G), 2nd SEM

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 ACKNOWLEDGEMENT

The project entitled “STRATEGIC ANALYSIS OF TESLA” for one required an improved
environment, extensive Endeavour, and all necessary support. I take this an opportunity to
express my gratitude to Ms. Sonam, my project guide for her able guidance, cooperation and
out of the box thinking without which this project would not have been exciting at all.

The successful progression of my project also gives me the opportunity to acknowledge and
appreciate the staff of the college that provide me much needed stimulating suggestions and
encouragement in order to stem this project towards completion.

Thanking You
LOKESH KUMAR
35151401723

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 EXECUTIVE SUMMARY

Tesla Motors is a public trading company in the automotive industry that was founded in
2003 by a group of engineers from the Silicon Valley in California. Core founders of Tesla
Motors are Elon Musk, Martin Eberhard, Marc Tarpenning, JB Straubel and Ian Wright. Its
headquarters are in Palo Alto, California. The CEO of the company is Elon Musk. It has
over 3000+ employees. Tesla motors have their cars in thirty seven countries worldwide
and continuously expanding. Tesla also opened an assembly and distribution centre in
2012 for all of Europe in Tilburg, Holland. This factory will house between 50-60 jobs
starting off with room for growth depending on sales. Having a European base cuts down
on transport cost making the Tesla product cheaper to purchase.
Tesla current target market is upper class, rich, affluent and green conscientious people
looking to own an all electric sports car. But this is changing with each model produced.
There are currently two models on the market and one in the process of production. The
first car produced was the “Tesla Roadster” at a base price (€84,000), the second car
produced was the “Tesla Model S” at a base price of (€47,000). Tesla motors are now
building the “Tesla Model X” the price is still too be published, but what is guaranteed is
that it will be a cheaper car then the “roadster and Model S”. With all Tesla vehicles you
can add extras onto your car when you design it from the shop. Usually being extended
battery life, interior, wheels, performance packages, these all are costly extras but not
necessary either. With each new model the price is coming down and with that the
companies target market range is expanding, with the goal of eventually having a low
cost efficient electrical vehicle available at affordable prices to the public.

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 TABLE OF CONTENT

S.NO. TITLE PAGE NO.

1 Certificate from Guide

2 Student Declaration

3 Acknowledgement

4 Executive Summary

5 Chapter - 1: INTRODUCTION

6 Chapter - 2: LITERATURE REVIEW

7 Chapter - 3: RESEARCH METHODOLOGY

8 Chapter - 4: RESULT & DISCUSSION

9 Chapter - 5: CONCLUSION

10 BIBLIOGRAPHY
11 ANNEXURES

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 CHAPTER-1
INTRODUCTION

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 INTRODUCTION TO RESEARCH

Tesla (NASDAQ: TSLA) is the leading manufacturer of electric vehicles based in the US and with
a fast-growing global footprint. The company was founded in 2003, and its CEO is Elon Musk.
During 2019, Tesla acquired rapid growth and experienced a sharp increase in its car sales. The
company has also enjoyed sharp growth in popularity as well as market cap. Now, Tesla’s market
cap is at around $400 billion.

Apart from sustainability, the company’s focus on technological innovation and passenger safety
has also been driving its popularity and sales around the world. The US and China are currently
the largest markets of Tesla Motors. Apart from electric cars, the company also makes energy
generation and storage products and offers related services to its customers. Compared to the other
leading automobile makers like VW, Toyota, or GM, Tesla has a limited footprint. Still, the sales
and popularity of EVs have been picking up, which indicates a brighter future for the company.

The automobile industry is going through a difficult phase. The pandemic has put the resilience
of the supply and manufacturing chains of these companies to test. Demand has also declined
heavily due to the pandemic since people have mostly remained confined indoors due to the
lockdowns in various key market regions. Apart from that, the economic fluctuations caused by

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the pandemic have also had a negative impact on automobile demand worldwide. However, Tesla
has proved to be more resilient than the other car brands, which showed in its sales in the Chinese
market during June. With the largest market cap in the car industry, Tesla is not the most valuable
automaker.

Tesla’s business model and business strategy move along three key pillars:

• Internalized design and development.

• Owned manufacturing.
• Direct distribution.

These three pillars together enable Tesla to be vertically integrated and therefore reach important
economies of scale, which makes it possible for it to become more profitable as it scales.

SWOT analysis of Tesla Motors:-

High Market Valuation:

The market valuation of Tesla has grown very fast in recent years. Its market cap has surged to
around $400 billion in 2020, which is the highest of all the automobile brands globally.

Its shares climbed very fast in August 2020, making Tesla the seventh-largest US-based company
for a short period. In the September- October period, the shares of Tesla declined again. However,
the company is still a lot ahead of other major automakers like VW and Toyota in terms of market
capitalization.

Tesla may still not be the largest automobile company in the world regarding car production and
sales. Still, the overall valuation of the company has grown much higher than its rivals. In the last
few months only, Tesla stocks have climbed insanely and steadily.

Technological Innovation:

One of the main factors driving fast growth in popularity and sales of Tesla cars is the company’s
focus on technological innovation. The automobile industry is marked by heavy competition, but
Tesla belongs to a distinct class of automakers. It makes only Electrical vehicles and that too for
the higher end market. Tesla cars are great in terms of product quality, design, performance, and
passenger safety. The company spent around $1.34 billion on research and development in 2019.
Apart from these things, Tesla cars are loaded with technology. These cars’ maintenance costs are
very low because of the lower number of parts used inside them, which more than makes up for
the one-time purchasing costs. Autodrive and other technologies make these cars safer and

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performance-wise superior to the other cars on the roads. The Model 3 earned the 2019 Top Safety
Pick award from IIHS. It achieved a good performance in all six IIHS crash tests. The award is an
endorsement of Tesla’s safety systems that Elon Musk often touts in the media and on social media.
Overall, Tesla cars offer a superior riding experience compared to most cars on the road, and
therefore they easily stand out from the competition. It has resulted from the company’s consistent
focus on technological innovation over time. The company also provides regular software updates
for its cars. Tesla’s cars also offer a superior battery range compared to the rival EVs and hybrids
on the roads.

Fast sales growth:

With the release of Model 3, Tesla sales have grown worldwide. The company has experienced a
sharp increase in its vehicle sales in 2019, and despite the decline in demand due to the pandemic,
it has retained a lot of its growth momentum. In 2019, the company delivered around 3,67000
units, which was a sharp rise from around 2,45000 in 2018. The pandemic has led to a sharp decline
in automobile sales worldwide. However, despite the pressure in demand, Tesla has seen its sales
in the second quarter of 2020 rise compared to the first. While overall sales in the first half of 2020
were lower than the previous year, Tesla has still proved itself a lot more resilient in the face of
the pandemic than all the other automobile brands in the industry.

According to Statista, Tesla delivered around 90,650 vehicles between April and June in 2020,
which was around 2250 units higher than the previous quarter. It is lower than in the same quarter
in the previous year when the company had shipped more than 95,000 units. Still, considering that
the automobile industry is passing through a challenging phase, Tesla’s performance counts as
nothing less than rock solid. In the light of low automobile demand overall and shrinking sales of
nearly all automobile brands, Tesla’s sales in the second quarter of 2020 can be seen as a big
success. In the second quarter of 2020, Tesla delivered more than 80,000 of Model 3 and Model
Y. Since Tesla introduced the Model 3 in the third quarter of 2017, its sales have continued to soar.
However, in the third quarter of 2020, the company has experienced impressive sales growth. Its
total sales for the third quarter of 2020 were around 40% higher than the sales during the same
period in the previous year. According to sources, Tesla sold more than 64,000 units in the US in
the third quarter of 2020 compared to around 52,000 units during the same period in the previous
year. Given how automobile demand has crashed due to the pandemic, Tesla’s performance is
nothing less than stellar.

Strong performance of Tesla Vehicles:

Based on overall performance, Tesla vehicles are classified among the best on the roads. Apart
from zero-emission of their vehicles and their superior battery range, they are also among the safest
and require nearly no maintenance than the other vehicles. Its model S can drive roughly 370
miles without stopping for a charge. This is more than 50% higher than the range that competing
cars from brands like Chevrolet, Nissan, or Jaguar offer. Their cars can make up to 240 miles at
best on a single charge, which is nothing compared to Tesla’s Model S. It marks a major difference
for Tesla and is also the primary reason behind the superior demand for its SUVs. Tesla cars are
also enjoying superior safety ratings overall. These cars use fewer parts overall compared to a

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regular car due to which the maintenance costs for the owner and technical complications are also
lower. These factors have led to higher satisfaction for the Tesla car owners.

Leading position in the US and China EV markets:

Tesla is the leading EV brand in the world. However, its position is the strongest in the US
and China markets. Even during the pandemic when the demand for automobiles has continued to
fall around the world, the company is enjoying stronger sales and growth.

Tesla has quickly risen to the top in terms of EV sales in China since it started production in its
Shanghai manufacturing facility. According to Counterpoint Research, Tesla accounted for around
23% of EV sales in China in June 2020. On the other hand, in the US, the company is enjoying
even stronger sales in 2020 despite the slowdown due to the pandemic. While it sold fewer cars in
the first and second quarters of 2020 compared to the previous year, sales surged again in the third
quarter of 2020 compared to the same period in the previous year. In the third quarter of 2020,
Tesla cars’ sales were at least 40% higher than in the same period in the previous year. While
Tesla’s overall market share in the US automotive market was only around 1.3% in December
2019, the company enjoys an enormous market share in the US EV market. It is the market leader
in battery-electric car sales in the United States. Its Model 3 enjoys a 60% share in the US Electric
vehicles market.

Growing charger network:

Tesla’s sales worldwide also depend on its supercharger network since Tesla cars depend on
superchargers mainly for charging. Therefore, the company has focused on growing its network
of chargers by including the company’s superchargers as well as destination chargers. Tesla has
established supercharger stations along well-traveled routes in the key areas where its products
sell. The density of superchargers is especially very high in the North American region. The
company has established 1971 supercharger stations with 17,467 superchargers. Tesla has also
partnered with various other businesses including Hilton Hotels to establish its destination charger
network throughout the United States and other markets. The destination charging network of tesla
complements its supercharger network very well and offers an easy option for Tesla car owners to
charge their vehicles. Charging a Tesla vehicle costs much less than gasoline. The costs of full
charging a Tesla vehicle is around only $116 compared to $204, a person would have to spend if
he was using a gasoline car.

Weaknesses:

Higher cost of revenues and operating expenses:

Despite the rapid growth in its market capitalization, Tesla is not as profitable as the other
automobile brands, It has been running its business in losses for the past several years. In fiscal
2019, the net loss of the company was $862 million compared to $976 million in 2018 and $1,962
million in 2017. With growing production, the cost of revenues has also grown for Tesla. In 2017,

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its total cost of revenues stood at $9.5 billion and grew to $17.4 billion in 2018. During 2019, the
costs of revenues of Tesla grew to $20.5 billion. Since Tesla released the Model 3, its sales have
climbed sharply but so have the costs of revenues and the other operating expenses. For 2019, its
operating expenses stood at $4.14 billion compared to $4.4 billion in 2018. The company has
started generating some profits in 2020. However, it is still too low as compared to most
automobile brands with a global presence. In the second quarter of 2020, the net income of Tesla
attributable to common stockholders grew to $104 million compared to a net loss of $408 million
during the same period last year.

Limited customer base:

Tesla cars are made mainly for the higher end of the market. Even the Tesla Model 3, which is the
lowest priced car in the Tesla range, is priced at around $48,000. While Model 3 is the most
affordable car made by Tesla, it is still out of reach for many middle-class consumers. Moreover,
the world economy has slowed down due to the impact of the pandemic. Automobile demand has
reduced overall. One key factor that has helped Tesla during this period is that the impact has been
lower on the higher end market. So, while Tesla sales may have jumped in the third quarter of
2020, once sales again start picking up post-pandemic, shipments from other brands will also grow.
Tesla will deal only in the higher end market. It limits the company’s customer base considerably
against the other brands. This will also make achieving growth in the emerging markets like India
difficult because of the high level of taxes there.

Low market presence compared to other leading players:

While the US and China are the leading markets for Tesla cars, its presence worldwide is limited
compared to the other leading automobile brands. To expand its presence worldwide, apart from
establishing Tesla stores in the emerging markets, the company will also need to expand its
network of superchargers and destination chargers faster, which is essential for maintaining car
sales in new regions. People will buy Tesla cars only if they have easy access to superchargers
needed to charge their cars. While the company has grown its density of superchargers and
destination chargers in its existing markets, it is also a key hurdle to finding new market growth.
Unlike the other cars on the roads, these cars rely on Tesla’s own charging infrastructure, without
which they cannot play on the roads.

Low manufacturing capacity:

Tesla seems to be lacking the manufacturing capacity it needs to produce everything it has
promised till now. The company will need to expand its production capacity to meet popular
demand. For example, when it unveiled semi-trucks in 2017, the company had promised that they
will be available by 2019. However, only a few prototypes have been available by now and Tesla
has pushed semi to low volume production by the end of 2020. It means while Semis may become
available for sales by the end of 2020, they will not be available in large volumes yet. Tesla plans
to produce Semi trucks in its upcoming plant in Austin, Texas. The case of the solar roofs Tesla
had promised is also similar.

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Opportunities:

Emerging Markets:

The emerging markets like India and Brazil present significant growth opportunities for the EV
brand. A large base of upper middle class consumers in these regions is waiting eagerly for Tesla
to set its stores there. For the past several years, these countries have seen impressive economic
growth. While the pandemic might have affected the economic performance of these regions, the
higher end market has mostly remained less affected as compared to the lower end. Once the
pandemic’s effect is over and economic activity revives again, these markets will again start seeing
growth. So, strengthening its presence in these markets can help Tesla attract more sales and find
growth faster.

Rising demand for EVs:

The demand for EVs has kept rising worldwide over the past few years. By 2025, EVs’ global
market is projected to grow to above $567 billion, which is an attractive opportunity for Tesla. In
the US, while Tesla’s overall share in the automotive market is only 1.3 percent, its share of the
EV market has grown to above 60%. Since the release of the Model 3, the company is enjoying
higher sales in the global market. However, the pandemic also seems to have pushed the demand
for EVs higher, which was evident in the growth of Tesla car sales during the third quarter of 2020.
Its sales compared to the past year grew more than 40% during the third quarter. It also indicates
that tesla will see higher success in the coming years, driven mainly by the growth in demand for
EVs. Other factors that have led to increasing EV demand worldwide include government
subsidies and the zero environmental impact of these cars.

Growing charger and manufacturing network:

Tesla has focused on growing its supercharger and destination charger network. Expanding its
supercharger and destination charger network is critical to finding faster growth. Its supercharger
network supports its sales of cars in all the leading markets. If the company wants to increase its
footprint in the existing and new markets, it will need to grow its supercharger network in all the
markets. While this will help the company grow its presence and create more demand, it will also
help it beat other brands’ competitive pressure. As of now, the tesla supercharger network is robust
in key regions and mainly North America. If Tesla can grow its supercharger infrastructure
simultaneously in the other regions, its sales will grow even faster.

Technological innovation:

Technological innovation is critical to the growth of Tesla motors and sustaining the competitive
advantage it has achieved. While the company has produced excellent results until now and is
known as a highly innovative automobile company, it should maintain a consistent focus on
innovation in the future and remain ahead of the competitors worldwide. In the automobile
industry, technological innovation can be a major source of differentiation and faster growth. Apart

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from growing its existing product portfolio’s strength, the company can generate additional
sources of competitive advantage through research and development. While according to the CEO,
the company is planning to release additional services like Robotaxis, faster future growth of the
company depends on its focus on innovation. If Tesla has achieved stronger brand recognition
without spending a fortune on its marketing, it is mainly because of its focus on innovation.

Threats:

Pandemic impact on automobile demand:

The impact of the pandemic on the automobile industry has been the severest. It was one of the
industries that felt the most adverse impact on the demand for its products caused by the economic
slowdown that followed the pandemic. Several leading brands have felt a bitter impact of the
pandemic on automobiles’ sales throughout the world. While Tesla has emerged as a
comparatively resilient company during the pandemic, its sales declined during the first two
quarters of the year compared to the previous year caused by the pandemic. In the third quarter,
demand has started picking up, but for the impact of the pandemic to fully go, it will take some
time. All brands have alike felt the impact of the pandemic on their manufacturing and supply
chain networks.

Competitive pressure:

While Tesla is enjoying the lion’s share in the US and China EV markets, the competitive pressure
on the company will continue to grow. More and more brands are working on their own fully
electric models. While many brands have already introduced some efficient EV models, they are
also working on improving their battery range. One significant competitor has emerged in the form
of Polestar. Tesla’s advantage lies in its batteries. While Tesla has currently maintained its lead in
the EV market, it is predicted that the company could lose its lead to VW, Renault, Nissan-
Mitsubishi alliance, and China’s Geely by 2025. The competitive pressure is already mounting on
Tesla, which can maintain its lead only if it can introduce a significantly lower-priced model for
the emerging markets and gain sales at a very high level. However, this does not seem possible
given the company likes to deal only in the higher-end segment.

Regulatory threats:

Tesla is a sustainable brand that makes fully electric cars. Due to that, it has some additional
advantages compared to the other car brands in the world. Governments around the world are
allowing subsidies to the brands that make fully electric vehicles. These subsidies helped Tesla
gain ground in the Chinese and American markets against that other EV brands. However, the
subsidies on Tesla’s Model 3 could be expiring soon, and that could cause a decline in sales. There
are other types of regulatory pressures on automobile brands. Despite Tesla’s advantage because
of its sustainable business model, taxes, and other regulatory threats like those related to self-
driving car models will continue to trouble the brand.

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Pestle analysis of Tesla Motors:

Operating in the international environment also brings a large set of challenges and the automobile
industry which is highly regulated is facing several such challenges that exist in its
microenvironment. These challenges can be understood through a PESTLE analysis that analyses
six important factors affecting businesses internationally. Tesla operates in several leading markets
including the two largest automobile markets China and the USA. From political to economic, and
technological, all these factors have a direct impact on its business. In this PESTEL analysis, we
will look at how deep the impact of these factors is on Tesla Motors.

Political:

Political factors have gained a central importance in the automobile industry which is regulated
heavily worldwide. The political environment of a market region has a direct impact on the success
of international automobile business in the given market. Government policies as well as rules
and regulations related to the automobile industry, all have a significant impact on the performance
of automobile businesses operating in a specific market. For example the China market differs
widely from the US market. Both in terms of demand and supply, China is the largest automobile
market in the world. However, entry into the Chinese market for the foreign players is made
difficult by the local laws and government regulation of the industry. The only leading factor that
has helped Tesla achieve the kind of success it found in China is that it is a sustainable brand.
However, most other foreign players have formed local alliances to gain a stronger footing in the
Chinese market.

China is strategically a very important market for Tesla. Here, the demand for Tesla cars has grown
sharply mainly because of the growing popularity of EVs. While China is a rather complex
automobile market, it has formed policies as well as rules and regulations that help EV companies
grow their footprint in the market. The government offers a set of subsidies aimed at growing EV
demand in China and it has also tasted a lot of success in this area. It offers direct subsidies to both
the manufacturer and the consumers, apart from tax exemptions and support with growing the
charging infrastructure in the country. In this area, the Chinese government’s actions and policies
have played a significant role in helping Tesla gain ground in the Chinese market. Tesla has set a
production facility in Shanghai to locally produce cars. This helped the company achieve
significant cost advantages and sell profitably. IN several key market regions worldwide including
the US, governments are offering similar subsidies and tax exemptions in order to help EV
companies grow their footprint. Governments around the world are growing more and more
conscious about their roles in terms of reducing environmental pollution and apart from curbs on
polluting vehicles and heavier taxes, they are encouraging the use of electric and nonpolluting
vehicles. The support from governments worldwide is going to play a key role in Tesla’s growth
in the future.

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Economic:

Economic factors are a key driving factor in terms of automobile sales worldwide. While higher
economic activity has generally resulted in higher sales of automobiles, lower economic activity
has mostly resulted in a corresponding sharp reduction in the sales of vehicles. Following the
spread of the pandemic, economic activity reduced sharply in various markets. While China was
the first market to be affected, it was also the first one to start on the path to recovery. So, sales
again rose in the Chinese market sooner than other leading markets like the US, Japan, and India.
Currently, the entire automobile industry is facing heavy pressure caused by the pandemic. Apart
from a steep decline in sales, companies are also troubled by the disruption of their supply chains.

However, the impact of the pandemic has not been even and mostly remained focused at the lower
end market. So, the highest decline was felt in the affordable passenger car segment. For example,
in India, sales of passenger cars declined by around 58% in the month of June compared to the
same period last year. In the third quarter of the year, sales picked up again after the reopening of
the Indian economy. The case of the Us economy is also somewhat similar where sales picked up
faster in the third quarter. Tesla also experienced sharper growth in sales in the third quarter as
compared to the first and second when its sales remained lower than the previous year. As the US
economy starts recovering from the impact of the pandemic, sales are expected to soar again. Tesla
has proved itself the most resilient brand during the pandemic. However, with faster economic
recovery it too could achieve more impressive sales like the other automobile brands. At least, in
the case of the automobile brands, the impact of fluctuations in the world economy is more direct
and severe as compared to the other industries. Tesla is not an exemption either.

Sociocultural:

Sociocultural factors have also gained importance in the context of international business.
Companies cannot afford to ignore these factors anymore. Apart from the changing demographics
of the world population, there are more sociocultural factors that affect business strategies as well
as sales of specific brands. Local cultures and social changes have a clear impact on the sales of
particular products and services. One example is the growing acceptance and use of digital
technologies in societies worldwide. It is why companies are making sociocultural factors a central
concern when formulating their annual business and marketing strategies.

Worldwide, societies are getting increasingly conscious about the social and environmental impact
of businesses. It is showing in the form of growing sales and the popularity of sustainable
businesses. Tesla’s growing popularity which is also evident in the form of the euphoria
surrounding the brand on social media and in the public media arises mainly from its sustainable
business model. Considering the growing role of sociocultural factors, it is now even important for
businesses to maintain a clean and strong social image. The increasing environmental awareness
worldwide is also an important concern for businesses since customers are concerned about how
businesses affect the environment. Consumers like to buy from the brands with a low
environmental impact. In this regard, Tesla has been able to outperform all the other brands in the
automobile sector. Apart from having the image of clean and sustainable business, Tesla is also

16
known worldwide as an innovative company. It has enabled the company to achieve faster growth
in its popularity in several key markets.

Technological:

Technology is one of the core factors driving the growth of businesses worldwide. In the 21st
century, most of the growth worldwide in various industry sectors including automobiles has been
made possible through technological innovation. Tesla’s business model also rests on
technological innovation fundamentally. It’s an innovative brand that makes fully electric cars as
well as energy generation and storage products. However, the role of technology is not limited to
just that since Tesla does not offer an ordinary driving experience, Instead, the company’s focus
is on offering its customers worldwide safer and connected driving experience.

There are several features inside a aTesla car that differentiate it from the other cars available
worldwide.

The Tesla cars include a large touchscreen that apart from driving related features also includes
infotainment features. The 12.3 inch LCD display shows the car’s position on the road as well as
the surrounding traffic, land markings and speed. The screen also displays the vehicles surrounding
the car with high accuracy. Another standard feature called Autopilot is aso now available on Tesla
models. However, customers need to pay a little extra to enjoy the full self driving features. It’s
the company’s advanced driver assistance system that basically combines adaptive cruise control
with lane guidance as well as takes care of speed, steering and braking. Drivers can also use the
Tesla app to control their cars from outside. Tesla provides regular updates to the app. These
technological features onboard Tesla cars are a major attraction for buyers. The company has also
paid special attention to the safety features which make Tesla one of the safest cars in the world.

Environmental:

Environmental impact and sustainability are among the core concerns for the automobile brands
worldwide. Apart from the growing awareness among customers worldwide, the growing
governmental regulation of automobile businesses, is also a reason that the car brands have to
place extra focus on sustainability and their environmental impact. Tesla is already at an advantage
in this regard since its sustainable business model of the company is an important source of
competitive advantage for the brand. It makes and sells fully electric car models which have zero
environmental impact. Because of its zero emissions cars, the company is able to generate extra
emissions points that the company can sell to other businesses and generate extra profits. However,
there are other major advantages of its sustainable business model as well. For example
governments around the world have formed policies that help brands like Tesla grow their
footprint. The company is enjoying impressive benefits including tax benefits and subsidies in the
Chinese and the US markets. Other countries are also willing to allow Tesla the space and
infrastructure it needs to grow its business there including Brazil and India. Having a low
environmental impact makes Tesla the favorite of customers as well as governments. Worldwide
governments have formed policies that help sustainable brands and punish the brands with a higher

17
environmental impact. Overall, the situation has proved profitable for Tesla and in the past three
years, the company has been able to find impressive growth. The pandemic has again brought the
focus back on the environment. There has been a sharp increase in Tesla’s sales during the third
quarter of 2020 which shows increasing popularity of Tesla cars amid the pandemic. The pandemic
has made people and governments realize the importance of the environment and that is going to
help brands like Tesla flourish in the world market.

Legal:

Legal factors have also taken center stage in the automobile industry as the web of laws and
regulations related to the operations of the automobile brands worldwide in all the leading markets
grows. Apart from the laws related to the environmental impact of automobiles, there are more
laws like those related to labor and product quality which also affect automobile businesses
worldwide. Tesla has been able to avoid a large number of legal hassles because of its focus on
technological innovation as well as sustainability. However, it does not mean the company is
exempt from all laws. There are some laws related to passenger safety and product quality which
still affect Tesla. For example, the self driving features of Tesla are an area that require continuous
focus if the company wants to avoid a legal tussle. The company as well as its CEO are facing
various legal issues according to the media reports. After its legal tussle with the SEC in 2019, the
company faced fresh probes related to fatal crashes involving Tesla cars. NHTSA and NHTB that
continuously watch Tesla cars for crashes started an investigation in March 2019 after a fatal crash
involving a Tesla car. The company has also been involved in some internal legal tussles involving
tesla employees. Since 2012, the Tesla owned solarcity has been subjected to several SEC
investigations.

Five Forces Analysis of Tesla Motors:

There are several forces in the automobile industry that affect the market position of businesses
and their competitive strength. One of the simplest tools used throughout the industry and in
academic circles for analyzing the competitive position of firms and the level of competition in a
particular industry is the Porter’s five forces model. This analytical model was named after
Michael E Porter.

There are several forces in the tech industry that affect the market position of businesses and their
competitive strength. One of the simplest tools used throughout the industry and in academic
circles for analyzing the competitive position of firms and the level of competition in a particular
industry is the Porter’s five forces model. This analytical model was named after Michael E Porter.

Harvard Business School.

In a 1979 article titled How Competitive Forces Shape Strategy, published in the Harvard Business
Review, Michael E Porter noted regarding his five forces model that it is the collective strength of
18
these forces that ultimately determines the profit potential of any industry and it can range from
intense to mild. The profit potential grows with the weakening of these forces. In each and every
industry, a different force may grow more prominent than the others. Porter offers three examples
in his HBR article. In the ocean-going tankers industry, the buyers are the most important force
whereas, in the tires industry, it is the powerful OEM buyers coupled with tough competitors. On
the other hand, in the steel industry, foreign competitors and substitutes are the most prominent
forces.

In Porter’s words,

“Every industry has an underlying structure, or a set of fundamental economic and technical
characteristics, that gives rise to these competitive forces. The strategist, wanting to position his
or her company to cope best with its industry environment or to influence that environment in the
company’s favor, must learn what makes the environment tick.”

Michael E Porter in his HBR article, How Competitive Forces Shape Strategy.

Let us take a look at how these forces work in the automobile industry and how Tesla can cope
best with the level of competition in its industry environment.

Bargaining power of suppliers:

The bargaining power of suppliers in the automobile industry overall is moderate which is mainly
because of the high number of suppliers in the industry. Apart from that, the threat of forward
integration from the suppliers is also low. There are some moore factors that reduce the bargaining
power of the suppliers like the dependence of the suppliers on buyers. The suppliers in the
automobile industry are mostly smaller firms that depend heavily on the larger buyers for business.

Tesla’s scase is somewhat different from the other automobile manufacturers that need thousands
of parts from various suppliers to manufacture their cars. According to the company, its drivetrain
has only 17 moving parts compared to the 200 moving parts in the typical drivetrain for an internal
combustion engine. So, while the traditional cars including their engines are a lot more complex
than an electric car, they also need a lot of parts for assembly. However, tesla’s task is
comparatively simpler. Another important factor that has helped the company reduce its
dependence on the suppliers is the ability of backward integration. In partnership with Panasonic,
the company manufactures batteries in its Nevada Gigafactory. The company sources batteries
from suppliers so that it can exclusively focus on building cars. However, there can slo be a
shortage of batteries which are one of the most critical components that Tesla needs. It is why the
overall bargaining power of the suppliers of tesla is moderate.

19
Bargaining power of buyers:

The bargaining power of buyers is moderate in Tesla’s case which is for several reasons. First of
all, the bargaining power of buyers becomes higher when the number of suppliers is high and there
are multiple substitutes available in the market. However, in the case of Tesla, while there is a
shortage of substitutes, the number of sellers that make fully electric cars like Tesla is also very
low. Tesla’s products are highly differentiated and that also grants the company some extra
bargaining power. Its car models are superior in terms of performance as compared to the rivals
Electric vehicles in the market. These cars are more attractive than the rival cars in terms of overall
driving experience and come equipped with technologies that are not available on all cars like the
self driving technology and the user interface. While these factors grow the attractiveness of the
Tesla car models, the company also benefits from its sustainable brand image and superior
technologies. However, Tesla cars are made for the high end market and therefore each unit sales
matters. The overall bargaining power of buyers in case of Tesla is moderate.

Threat of substitute products:

The threat of substitute products in case of Tesla is moderate since there are few manufacturers
whose electric vehicles can compete with Tesla cars. While the competitors are also focusing on
technological innovation to bring superior electrical vehicles to the market, Tesla cars are far ahead
in terms of battery range and overall performance as well as passenger safety. This is why Tesla
rules the EV market in both China and the United States. In the United States Tesla holds at least
60% of the market share in the electric car market. Its performance in China is also strong where
it is leading among the EV brands. Till now, there is hardly a brand whose performance overall
compares with that of Tesla. However, there are also a large number of hybrids and electric
vehicles in the market that compete with Tesla. Tesla’s performance, design of products as well as
focus on technological innovation helps the company reduce the threat of substitute products.
Overall, substitute products and brands are not a major threat for Tesla motors. Tesla’s cars belong
to a distinct class of their own. The only car that has emerged as a tough competitor for Tesla’s
model 3 is the Polestar by Volvo. However, the high level popularity of Tesla’s Model 3 still leaves
very little space for substitute products.

Threat of New Entrants:

The threat of new entrants in the automobile industry and especially the electric car segment is
very low. There are several major barriers to entry in the automobile sector. Apart from the large
capital required for entry in the automobile sector, companies will also need to invest in
technological knowhow as well as human resources. There is also a large investment required in
marketing and for creating brand recognition. Any new player cannot gain market share overnight
even if it invests a large capital to develop the required infrastructure as well as in marketing. The
regulatory barriers are also very high which deter any new players from entering the market.

Moreover, the incumbent players are quite aggressive about maintaining their market share and
position in the industry. They invest large sums each year in research and development to improve

20
their existing models as well as bring new models that increase the attractiveness of their product
portfolio. Apart from that, these brands also focus on marketing to retain the demand of their
products and sales level. Overall, entry of new players is very difficult and the overall threat of
new entrants for Tesla is very low.

Intensity of rivalry among existing players:

The intensity of competitive rivalry among the existing players in the automobile industry is very
high. Apart from there being a large number of global players in the industry, the increased demand
for automobiles has also shaped the level of competition in the industry. Tesla makes only electric
cars but it also competes with the premium brands in the market. There are various hybrid models
made by premium brands which also compete with Tesla cars. While there are various factors that
have helped Tesla beat the competitive pressure and emerge as the electric car brand of the world,
the company still faces a lot of competition from rival brands. Volvo has released Polestar which
matches Tesla’s performance in some areas and is seen as an attractive and tough competitor in
the EV segment. The main factors that have helped Tesla beat the competitive pressure and stand
out from the crowd is the attractiveness of its product portfolio, focus on technological innovation,
driving experience and the zero environmental impact of tesla cars.

Value Chain Analysis of Tesla Motors:

Michael E Porter introduced the concept of the value chain in 1985. The idea of the value chain
has gained immense popularity since then. For more than 30 years, business managers have used
the value chain model for strategy formulation and strengthening their competitive advantage.

“The value chain is a powerful tool for disaggregating a company into its strategically relevant
activities in order to focus on the sources of competitive advantage, that is, the specific activities
that result in higher prices or lower costs.”

Institute for Strategy & Competitiveness. HBS.edu

According to Michael E Porter, a firm’s value chain is typically the part of a more extensive value
system, including companies either upstream (suppliers) or downstream (distributors), or both.
This perspective of value creation forces the managers to consider each of the steps involved in
the value chain as a crucial step that adds an increment of value to the final product or service and
not as a cost.

There are four key concepts involved in the value chain – activities, competitive advantage, and
set of choices. The value chain itself is a set of activities involved in delivering value to customers.
The activities, including the entire value chain in which they are embedded, are the basic units of
competitive advantage. The firm’s strategy is reflected in the set of choices about how the activities
in the value chain are configured and interlinked.

21
The value chain includes two types of activities – primary and support activities. The primary
activities are the set of activities related directly to value creation. On the other hand, the support
activities are secondary activities that lend support to the primary activities in the value chain.

Primary Activities:

The primary activities in Porter’s value chain bear a direct relationship with the creation of
products or services.

Inbound logistics:

Inbound logistics refers to the inward flow of goods into business which includes transport,
storage, and delivery. Tesla has a large number of warehouses located in the United States (one in
Taiwan), most of which are leased facilities. The principal manufacturing facility of Tesla which
is owned by the company is located at Fremont, California, United States. This facility is used for
warehousing as well as manufacturing. The approximate size of this facility is 5.5 million square
feet apart from the other warehouses which the company uses for storage as well as delivery are
located at the following locations:

Livermore California.

Lathrop, California

Sparks Nevada

Taipei City, Taiwan.

Elkridge, Maryland and

Bethlehem, Pennsylvania.

Tesla uses these facilities for storage as well as distribution.

The warehouse in Taipei City, Taiwan is used for storage as well as administration and service.
The company has also leased several other facilities and warehouses in other corners of the world
including North America, Asia, and Europe.

Operations :

Tesla was founded in 2003 by a group of engineers who dreamt of making electric mobility
possible for everyone. In 2008, Tesla launched its Roadster and then later Model S. The company
has its headquarters in Palo Alto, California, United States. However, the company has expanded

22
its operations as well as manufacturing, sales, and supply chain network to various corners of the
globe. Its European headquarters are located at Amsterdam in Netherlands, Europe. Tesla also has
a manufacturing facility at Tilburg, where its operations include final assembly testing and quality
control for Model S and Model X delivered to the European Union. Tesla’s Gigafactory 1 is located
outside of Reno, Nevada. The company uses the battery packs manufactured at Giga factory 1 in
its vehicles and energy storage products. It also manufacturers model 3 drive units at Gigafactory
1. Gigafactory 2 is a 1.2 million square foot facility in Buffalo, New York. Giga factory 3 is located
in Shanghai, China. The latest Gigafactory that Tesla has opened at Berlin- Brandenburg is its
most advanced Gigafactory. It is the most advanced high volume electric vehicle production plant
in the world.

Tesla also has administrative offices in other corners of the world including North America,
Europe, and Asia.

Outbound logistics:

Gigafactory one outside of Reno, Nevada is a leading manufacturing facility in Tesla’s

manufacturing network. The Fremont, California facility of Tesla Motors contains several
manufacturing operations including final vehicle assembly and end of line testing. Operation in
Tilburg includes a parts distribution house for the company’s European service centers. The
company has several warehouses in the United States, many of which are leased facilities where
the company stores or ships parts and completed vehicles from. Production has begun at
Gigafactory 3 in Shanghai, China as well from where Tesla ships completed Model 3 cars to its
Chinese customers.

Support activities:

Primary activities in Porter’s value chain are linked to support activities. The support activities
improve the effectiveness or efficiency of the primary activities.

Technology:

Worldwide, the automobile industry is experiencing intense competition. The market for
alternative fuel vehicles has also evolved a lot. Several of Tesla’s competitors including BMW
have brought fully electric cars to the market and plan to expand the range of fully electric and
hybrid vehicles. Technology is the main source of differentiation in the global automobile industry.
Autonomous driving technology and electric mobility are currently the hottest technological areas
in the auto industry. Tesla is one of the leading firms at the helm of research and development in
both of these areas. In fiscal 2018, the company invested $1.46 billion in research and
development. Compared to the previous year, the R&D expenses of Tesla increased by $82.3
billion million or six percent. Investing in technology has helped Tesla continuously improve its
products and grow its attractiveness in the global market.

23
Infrastructure

Tesla is organized into two main divisions based on product categories. They are the automobile
segment and the energy product segment. The administrative structure of Tesla is different. Elon
Musk is at the top as the leading decision-maker. Tesla’s chief financial officer (CFO) is Zachary
J Kirkhorn who leads the accounting, finance, and other related areas. Tesla also has vice-
presidents to lead the other several divisions including production, engineering, sales, finance, etc.

HRM:

As of 2019, Tesla employed 48,016 people full time. The company depends upon thousands of its
talented employees for running the organization and maintaining high operational efficiency. HR
management has emerged as an important area of focus for most technology organizations since it
is important to attract and retain talented employees to stay competitive. Tesla is now placing a
higher focus on HR management to find faster growth and to increase its competitive strength.

Procurement:

The vehicles manufactured by Tesla use thousands of parts that the company sources from
thousands of suppliers worldwide. Tesla has developed strong relationships with several key
suppliers. There are some important parts like cells and other key system parts for whose
procurement, the company has built close relationships with their suppliers. While Tesla has
several suppliers of some raw materials, for many others, it depends on single sources. Panasonic
is one of the leading Tesla suppliers. It has been a long term supplier of battery cells for Tesla
vehicles.

VRIO Analysis of Tesla Motors:

The resources and capabilities of a company are its drivers of competitive advantage. Nearly all
that a business owns can be classified as a resource or capability. By understanding the resources
and capabilities of different enterprises, one can understand why overall performance differs from
one business to another. To achieve a competitive advantage, the resource or capability that a
company owns needs to be valuable, rare, inimitable, and organized.

The VRIO framework comes to the help of managers when analyzing the company’s resources
and capabilities. VRIO is an acronym that stands for Valuable, Rare, Inimitable, and Organized.
These four bricks of VRIO represent the four properties of the resources and capabilities that lead
to sustainable competitive advantage. When the resource or capability satisfies all the four
requirements, the competitive advantage it generates will be sustainable, whereas, when it meets
fewer standards, the competitive advantage will be temporary.

Moreover, a sustainable competitive advantage comes from core competencies that arise from
resources and capabilities.

24
Tesla Motors VRIO Table:

Core competencies Valuable Rare Inimitable Organized Advantage

Brand Image Yes Yes Yes Yes Competitive

advantage

Innovation Yes Yes Yes Yes Competitive advantage

Customer experience Yes Yes Yes Yes Competitive advantage

Product Range Yes No Yes Yes Temporary advantage

Market Position Yes Yes Yes Yes Competitive advantage

HRM Yes No NO Yes Competitive advantage

Brand Image:

Tesla’s brand image is one of its core sources of competitive advantage. It is also one of the main
differentiators for the brand that sets it apart from the world’s crowd of automobile brands. While
several auto brands are there in the industry, including those making EVs and hybrids, Tesla has
acquired a very distinct image. Tesla’s sustainable business model and its focus on innovation have
helped it acquire the image of a transformation leader in the world of mobility. Brand image affects
several things in the automobile industry, including its popularity and overall sales and revenue. It
is why companies in the automobile sector focus on managing a strong image.

While an automobile company’s products play a leading role in terms of brand image and its
vehicles’ performance affects how the customers perceive the brand, the company’s marketing
strategy also affects the brand image and sales overall. Tesla has proved itself outstanding in all
these areas, and apart from product quality and innovation, the company’s marketing strategy does
not employ heavy promotions. It has achieved strong brand recognition and word of mouth and
publicity through consistent focus on innovation and customer experience. Overall, its strong
brand image has helped it generate a sustainable competitive advantage for the brand.

Technological innovation:

Technological innovation is also an important source of competitive advantage for businesses in

the automobile sector. To maintain their market position and market share, they must focus on
research and development for automobile businesses. The competition level in the automobile

25
industry has grown, and every business needs to innovate to maintain its market share. Tesla is
renowned for its focus on innovation and for bringing high-quality products equipped with the
latest technologies. Apart from self-driving technology onboard and the large touchscreen that
allows the car owner to manage his driving experience with higher convenience, the company also
provides a Tesla app that allows drivers to control their cars from the outside.

Apart from the advanced batteries that Tesla uses, the types of technologies used inside these cars
increase Tesla’s car models’ attractiveness. The battery range of Tesla cars is higher than any other
car in the entire market’s EV category. Overall, innovation has helped the company bring advanced
products that none of its competitors has created. Its technological features also make Tesla a
superior car brand in terms of passenger safety. This has helped the company achieve a major
advantage, which seems impossible for Tesla competitors to match in the near term.

Product range:

Tesla has brought an attractive product range to the market. While its product range is much limited
as compared to the other brands like BMW or VW, but still its product range efficiently caters to
the higher end market that it targets to serve. Its cheapest car model is Model 3, and following the
release of Model 3, the company has gained a significant market share, and its popularity apart
from sales has also soared worldwide. The company will need to add to its manufacturing capacity
in order to cater to popular demand. Apart from the Model 3, the company has also brought Model
S, Model X, and Model Y to the market, which are higher priced as compared to the Model 3.

The company has also brought a nice range of power generation and storage products for customers
that want to use renewable energy. Model S, X and Y are the higher priced car models of Tesla.
While the company has mainly targeted the higher end market, it has also been able to increase its
penetration in the middle class and upper middle class of consumers with the Model 3. Tesla
products stand out easily from the crowd of competitors due to their efficiency and design. Overall,
they are an important but temporary source of competitive advantage for the brand since
competitors are also building cars that are comparable in terms of style and can match Tesla’s
performance in some aspects.

Financial performance of Tesla Motors:

Tesla has been operating in losses for the past several years. However, the company has
experienced growth in sales and profitability since it released the Model 3. It was able to acquire
a larger customer base from the middle class and upper-middle-class customer segments. While
the remaining models released by Tesla target the higher end of the market, the company expanded
its customer base with Model 3, which has proved key to market expansion and revenue growth.
Until 2019, the company has been incurring net losses. However, in 2020, the company has been
able to generate positive net income. Its net income in the first quarter of 2020 remained only $68
million but grew to $129 million in the second quarter. In the first quarter of 2019, the company
had earned a net loss of $668 million. During the first half of the latest fiscal, the company has
generated a net income of $197 million. Compared to that, Tesla had incurred a net loss of $1.1
billion during the same period in the previous year.
26
The company’s gross profit has also climbed $1.3 billion in the second quarter of 2020 compared
to $921 million during the same period last year. For the first half of the latest fiscal, the gross
profit of Tesla Motors jumped by $1 billion compared to the same period during the same period
in the previous year. The gross profit of Tesla jumped to $25 billion for the first half of 2020
compared to $1.5 billion in the first half of 2019. Overall, the company is expected to start
generating profits from this year. Tesla Motors has also experienced impressive growth in sales in
the third quarter of 2020, which indicates that the company could see impressive growth in revenue
and net income in the second half of the year.

27
 INTRODUCTION TO COMPANY’S PROFILE

Tesla Inc (Tesla) is an automotive and energy company. It designs, develops, manufactures, sells,
and leases electric vehicles and energy generation and storage systems. The company produces
and sells the Model Y, Model 3, Model X, Model S, Cybertruck, Tesla Semi and Tesla Roadster
vehicles. Tesla also installs and maintains energy systems and sells solar electricity; and offers
end-to-end clean energy products, including generation, storage, and consumption. It markets and
sells vehicles to consumers through a network of company owned stores and galleries. The
company has manufacturing facilities in the US, Germany and China and has operations across
Asia Pacific and Europe. Tesla is headquartered in Austin, Texas, the US.

Martin Eberhard

From Wikipedia, the free encyclopedia

Martin Forest Eberhard

Eberhard in 2006

Born 1960/1961 (age 61–62)

Nationality American

Alma mater University of Illinois Urbana-Champaign

Known for

Co-founder of Tesla

Lead scientist at SF Motors

Martin Eberhard (born 1960/1961)[1] is an American inventor, engineer and entrepreneur who co-
founded Tesla, Inc. (then Tesla Motors) with Marc Tarpenning in 2003. Eberhard served as Tesla's
original chairman, and its CEO until late 2007.[2][3][4][5] In 2015, he was inducted into the
University of Illinois Engineering Hall of Fame.

Elon Musk has become a global figure and a symbol of invention, innovation, technology,
entrepreneurial creativity, and leadership. The younger generation wants to be like him. He

28
motivates individuals by showing them what is achievable and how to manage a high-performance
team to develop a worldwide corporation. Musk is the creator of numerous futuristic firms that
have become brands in their own right, such as Tesla, Neuralink, SpaceX, and The Boring
Company, but he is most known for the electric vehicle manufacturing company Tesla. Musk has
amassed a net worth of $57.9 billion via hard work, perseverance, and of course his smart work.
But, what young and fresh entrepreneurs or leaders can learn about leadership from this renowned
and ambitious billionaire? Here are the top 10 leadership lessons that you should be learning and
inculcating from Elon Musk.

Headquarters No of Employees

United States of America 127,855

Address Industry
1 Tesla Road, Austin, Texas, 78725 Automotive

Ticker Symbol & Exchange

$588.8B Net Profit Margin (2022)
TSLA(NASD) 50.6%
(2022 vs 2021)
Revenue (2022)
$81.5B
51.4%
(2022 vs 2021)

Products and Services

Products Services Brands
Electric Vehicles Installation and Maintenance Tesla
Energy Generation and Storage Systems Vehicle Insurance
Solar Inverter Vehicle Leasing

History

Founding (2003–2004)
The company was incorporated as Tesla Motors, Inc. on July 1, 2003, by Martin Eberhard and
Marc Tarpenning. Eberhard and Tarpenning served as CEO and CFO, respectively.Eberhard said
he wanted to build "a car manufacturer that is also a technology company", with its core
technologies as "the battery, the computer software, and the proprietary motor".

Ian Wright was Tesla's third employee, joining a few months later.In February 2004, the company
raised $7.5 million in series A funding, including $6.5 million from Elon Musk, who had received

29
$100 million from the sale of his interest in PayPal two years earlier. Musk became the chairman
of the board of directors and the largest shareholder of Tesla.J. B. Straubel joined Tesla in May
2004 as chief technical officer.

A lawsuit settlement agreed to by Eberhard and Tesla in September 2009 allows all five –
Eberhard, Tarpenning, Wright, Musk, and Straubel – to call themselves co-founders.

Roadster (2005–2009)
Main article: Tesla Roadster (first generation)
Elon Musk took an active role within the company and oversaw Roadster product design at a
detailed level, but was not deeply involved in day-to-day business operations. The company's
strategy was to start with a premium sports car aimed at early adopters and then move into more
mainstream vehicles, including sedans and affordable compacts.

In February 2006, Musk led Tesla's Series B venture capital funding round of $13 million, which
added Valor Equity Partners to the funding team. Musk co-led the third, $40 million round in May
2006 which saw investment from prominent entrepreneurs including Google co-founders Sergey
Brin and Larry Page, and former eBay President Jeff Skoll. A fourth round worth $45 million in
May 2007 brought the total private financing investment to over $105 million.

Tesla's first car, the Roadster, was officially revealed to the public on July 19, 2006, in Santa
Monica, California, at a 350-person invitation-only event held in Barker Hangar at Santa Monica
Airport.

In August 2007, Eberhard was asked by the board, led by Elon Musk, to step down as CEO.
Eberhard then took the title of "President of Technology" before ultimately leaving the company
in January 2008. Co-founder Marc Tarpenning, who served as the Vice President of Electrical
Engineering of the company, also left the company in January 2008. In August 2007, Michael
Marks was brought in as interim CEO, and in December 2007, Ze'ev Drori became CEO and
President. Musk succeeded Drori as CEO in October 2008. In June 2009, Eberhard filed a lawsuit
against Musk for allegedly forcing him out.

Tesla began production of the Roadster in 2008.

By January 2009, Tesla had raised $187 million and delivered 147 cars. Musk had contributed $70
million of his own money to the company.In June 2009, Tesla was approved to receive $465
million in interest-bearing loans from the United States Department of Energy. The funding, part
of the $8 billion Advanced Technology Vehicles Manufacturing Loan Program, supported
engineering and production of the Model S sedan, as well as the development of commercial
powertrain technology. Tesla repaid the loan in May 2013, with $12 million interest.

30
Automotive products

Model S

Model X

Model 3

Model Y

31
Tesla Semi

Roadster (second generation)

Cybertruck

32
Tesla Roadster

Tesla Energy products

Main article: Tesla Energy

Two Tesla Powerwall 2 home energy storage devices from Tesla Energy
Tesla subsidiary Tesla Energy develops, builds, sells and installs solar energy generation systems
and battery energy storage products (as well as related products and services) to residential,
commercial and industrial customers.

The subsidiary was created by the merger of Tesla's existing battery energy storage products
division with SolarCity, a solar energy company that Tesla acquired in 2016.

Tesla Energy's generation products include solar panels (built by other companies for Tesla), the
Tesla Solar Roof (a solar shingle system) and the Tesla Solar Inverter. Other products include the
Powerwall (a home energy storage device) and the Powerpack and Megapack, which are large-
scale energy storage systems.Tesla Energy also develops software to allow customers to monitor
and control their systems.

In 2022, the company deployed solar energy systems capable of generating 348 megawatts, an
increase of 3 megawatts over 2021, and deployed 6.5 gigawatt-hours of battery energy storage
products, an increase of 64% over 2021.

33
34
35
 COMPETITORS PROFILE

Tesla faces competition from various companies in the automotive industry, particularly in the
electric vehicle (EV) market. Here are some notable competitors of Tesla:
Traditional Automakers:
General Motors (GM): Known for its electric vehicles like the Chevrolet Bolt EV and upcoming
models under the GMC and Cadillac brands.
Ford Motor Company: Has introduced electric models like the Mustang Mach-E and plans to
expand its EV lineup.
Volkswagen Group: Investing heavily in electric vehicles through its brands, such as Volkswagen,
Audi, and Porsche.
BMW: Offers electric models like the BMW i3 and plans to expand its EV lineup with new models.
Nissan: Known for the Nissan LEAF, one of the best-selling electric vehicles globally.
Electric Vehicle Startups:
Rivian: An American automaker producing electric pickup trucks and SUVs.
Lucid Motors: Known for luxury electric vehicles like the Lucid Air.
NIO: A Chinese company specializing in premium electric vehicles with innovative features.
Xpeng Motors: A Chinese automaker offering electric SUVs and sedans with advanced
technologies.
Byton: A Chinese startup focused on developing smart electric vehicles.
Other Tech Companies:
Apple: Rumored to be developing an electric vehicle under the codename "Project Titan."
Google/Waymo: Working on autonomous driving technology and has partnerships with traditional
automakers for self-driving vehicles.
Amazon: Investing in electric vehicle technology and has ordered electric delivery vans from
different manufacturers.
It's important to note that the competitive landscape in the automotive industry is constantly
evolving, with new players entering the market and existing competitors introducing new electric
models. Market dynamics, product offerings, and market share can vary based on geographical
regions as well.

36
Tesla’s power battery
When the company started its journey with the original Tesla Roadster, there were not many types
of lithium-ion batteries to choose from. Tesla simply decided to use 18650-type (recently called
1865) cylindrical batteries, designed for general purpose (slightly adapted to EVs).
They were difficult to use, due to a high number of small cells (low capacity) in the battery pack
(several thousand), but available at a consistent quality and in high volume. With outstanding
engineering to handle electrical and thermal management (liquid cooling), Tesla went the
pragmatic path (some other companies started to use the new pouch or prismatic cell types at the
time). The 1865-type cells were used in the Roadster and Model S/Model X (including the
refreshed ones). The primary supplier of those cells for Tesla is Panasonic (from Japan).
Later on, Tesla figured out that it would be better to have a larger battery cell (higher capacity per
cell, and a lower number of cells), optimized for electric cars. This is how the 2170-type cylindrical
cell entered the market in high volume for the Tesla Model 3/Tesla Model Y as well as for energy
storage products. The 2170-type was initially produced by Panasonic at the Tesla Gigafactory 1 in
Nevada (currently at roughly 38-39 GWh/year). In recent years, LG Chem's LG Energy Solution
has also become the supplier of such cells for Tesla - producing them in China, mainly for the
Tesla Giga Shanghai plant.
The newest and so far the largest cylindrical cell format, the 4680-type, entered the market this
year. The cell is physically 5-times bigger than the 2170-type, which allows for further optimizing
the system and introduction of some new technologies. However, the size and new solutions make
it challenging to produce. This is why Tesla has started its own, in-house development and
production in California and Texas, and encourages suppliers - including Panasonic - to accelerate
their efforts. Those are the three cylindrical cell types used by Tesla in its electric cars, but there
is a fourth one - prismatic type, for the LFP batteries, supplied by CATL. As of Q1 2022, almost
half of all Tesla cars were equipped with prismatic LFP batteries. It's another clear example of
pragmatic adaptation to market demand, as the prismatic LFP batteries are the foundation of the
less expensive, entry-level Tesla models.

37
CHAPTER-2
LITERATURE
REVIEW

38
Tesla Motors, Inc. - Pioneer towards a new strategic approach in the
automobile industry along the open source movement? (2015)
In many industries, we observe a paradigm shift from traditional value creation towards co-
creation and open production approaches. The boundaries of companies dissolve and many more
players (suppliers, customers, community members, etc.) are integrated into the value creation
process. This also implies the share of knowledge to set industry-wide standards and to advance
new technologies. Tesla Motors, Inc. recently announced that it would give away all their patents
to anyone who in good faith wants to use them. They say their aim was to foster the advancement
of electric vehicles to compete with conventional vehicles and give the zero-emission mobility a
push. Nevertheless, what about the traditional automobile industry with its big players where even
the slightest growth in market share is crucial and the intellectual property (IP) of a company is
kept secret like the Holy Grail as it ensures competitive advantages? Based on a Tesla case study
our research focusses on product-, company- , market- and industry-specific factors that might
enable even small players to start an industry-wide revolution by applying strategic aspects of
openness in their business model.

MODERN ELECTRIC CARS OF TESLA MOTORS COMPANY (2016)

This overview article shows the advantages of a modern electric car as compared with internal
combustion cars by the example of the electric vehicles of Tesla Motors Company. It (в смысле-
статья) describes the history of this firm, provides technical and tactical characteristics of three
modifications of electric vehicles produced by Tesla Motors. Modern electric cars are not less
powerful than cars with combustion engines both in speed and acceleration amount. They are
reliable, economical and safe in operation. With every year the maximum range of an electric car
is increasing and its battery charging time is decreasing. Solving the problem of environmental
safety, the governments of most countries are trying to encourage people to switch to electric cars
by creating subsidy programs, lending and abolition of taxation. Therefore, the advent of an
electric vehicle in all major cities of the world is inevitable.

THE ‘PRODUCTION HELL’ OF TESLA: THE THEATRE OF

ORGANIZATION AND FAILED CEO PERFORMANCES (2018)

In this paper, we employed the historical methodology of ‘narrative construction’ by using

content analysis of major business newspapers about the Tesla company and its CEO, Elon
Musk. By constructing this historical narrative on Tesla, we were able to apply the metaphor of
‘organizations as theatre’ to highlight the dramaturgical performances of Musk which sometimes
succeeded and other times failed. Musk was able to build a formidable reputation for himself and
for his radical ideas on changing the world through exquisite performances. He was able
to generate financing for an outlandish idea and was ultimately able to disrupt the traditional
automobile industry. Nevertheless, some of his recent performances, especially with regards to
the ‘production hell’ of Model 3 miserably failed. This allowed us to theorize the fall of
organizational as well as CEO reputation as a specific case of ‘theatrical accidents’. We believe
that this spin on the theatre metaphor is more suitable for understanding the complexity and the
chaotic nature of organizations and their environments. Keywords: Metaphor, organizations, theat.

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Electric vehicles – An Introduction of the Tesla case for strategy and leadership
(2019)
The need for sustainable growth is felt now than ever before because of various disasters and
catastrophes due to unplanned human activity. The dwindling fossil fuels are a major issue and
various alternate sources of energy are sought by companies. The E vehicle is an emerging concept
and the automobile industry is conducting extensive research to make the option feasible and
commercially viable. There are already some first movers like Tesla who have successfully
developed their model and moving forward. This paper analyses the strategy and leadership of
Tesla which have enabled them to be take the first mover advantage. A descriptive research based
on secondary data had been employed in this study.

Problems Faced by Automobile Industries: Case Study on Tesla (2020)

The study is being done on the problems faced by Automobile Industries while launching
Electric Cars. The problems are common for all the automobile industries which had launched
the EV, are launching or will launch them. But here the research is done specifically in respect to
Tesla. Tesla Motors Inc. is an American automotive and energy company that was founded in
2003 is based in Palo Alto, California. The company specializes in electric car manufacturing,
SolarCity subsidiary and solar panel manufacturing. The company is well known for its
exclusive models like Model S, Model 3, Model X and the newest one Model Y. Tesla Motors
released its first electric car in 2008 that was called The Roadster. Roadster achieved 245 miles
(394 km) on a single charge. Since 2008, Tesla sold approximately 2,450 Roadster in over
30 countries through December 2012. Tesla faced many problems while launching the very first
EV not only with the model but with its marketing too. So, this Project Report is being prepared
by researching the problems faced by the Tesla regarding its first EV and its marketing. There are
some particular solutions that are recognized by our team for the respective problems which
will be useful for the automobile industries to overcome certain problems. These solutions
will open the doors for the industries that are going to launch EV by referring the past data analysis
of Tesla which is studied and prepared by our team in this Research Project.

Tesla and the Stock Market (2021)

Tesla has changed the way in which the world views sustainable energy since its inception in 2003
and has become a strong force in the stock market. Tesla focuses on building all electric vehicles
as well as clean energy generation storage products. The success of Tesla has been proven in the
stock market with their steady increases in stock prices and interest of investors. Tesla is a prime
example of sustainable energy companies beginning to surpass investor interest in the auto industry
as more and more people begin to focus on the environmental impact of gas vehicles. Tesla
produced massive share increases in 2020 showing that investor enthusiasm was at an all-time
high. In 2021, this began to change when the company shares dropped approximately five percent.
As more and more companies begin to invest in all electric vehicles and they start to offer
additional electric alternatives to their gas vehicles at a much lower cost, is it possible for Tesla to
maintain their momentum within the stock market? Tesla needs to remain innovative if they want
to stay ahead of their competitors. In this article we discuss how an increase in all electric

40
competitors and COVID-19 has impacted Tesla in the stock market. We review if innovation can
be the only tool for success in order for Tesla to continue surpassing their competitors.

Business Analysis and Future Development of an

Electric Vehicle Company--Tesla

The boom in electric vehicles in recent years has caught the attention of many companies that are
investing or will be
investing in the industry due to the increasing demand for electric cars. Tesla as a leader of the
electric vehicles (EVs)
industry, its development is of vital significance for referential value. Previous research on electric
vehicle acceptance
and behavioral intention of purchase is comprehensive, which could enable the EVs industry to
understand consumer
psychology. However, there is little analysis of the business strategy and future development of
specific companies.
When it comes to sustainability, almost every company has a path that is best suited to. This paper
presents a
comprehensive review of the historical background of Tesla, followed by in-depth states on its
current strategy and
future analysis. Given recommendations on its future development, Tesla could engage more in
other different industries
to increase the source of revenue and invest more into the development of autonomous public
transportation, such as
electric car-sharing services (ECS). These will help Tesla move steadily into the next stage.

Human’s Plexus Systems and “Nikola Tesla’s 369 Theory” for Forming
Universe and God (2022)

All activities which are taking place in the Cosmos also exist in a human body in subtle micro-
scale. Plexuses centers in a human body are the most mysterious kinds of energies. The six-center
plexus system is the path of the Kundalini shakti, the primordial cosmic energy of a person. Each
plexus has its own propensities (vibrating words/dimensions/vritti) and an acoustic root. These
plexuses control some cluster of words of sounds and corresponding physical organs in human
body. The 50 main propensities of the human’s unit mind are expressed through the vibration-
expression of these plexuses. These vibrations cause hormones to secrete from the corresponding
glands of the human’s body. These plexuses can play very important roles in curing the diseases.
According to the Theory of Nikola Tesla’s 369, there are all together 1 to 9 digital root numbers
exist. All other higher or lower numbers are the combination of those digital root numbers. This
statement seems quite true when we compare it with Theory of Absolutivity. If 3, 6, 9 numbers are
arranged together it makes a letter Ohm (AUM) which represents actually a Sagun Bramh/Nikola
Tesla’s 369 triangle which is a part of Nirgun Bramh having higher dimensions. Number zero is
the Nirgun Bramh (having all the qualities but in dormant form) which does not possess any quality

41
in action. Number 3, 6, 9 forming as an equilateral triangle of static, mutative and sentient forces
representing the Black-hole which is a part of Sagun Bramh projecting Himself as a Visible World
through Big-bang along with forming five basic elements such as Ethereal, Areal, Fire, Liquid and
Solid. According to the biological science, life emerged in this planet from matter about four
billion years ago in the form of DNA that carried the software for the development of billion of
species on the way to its final destination in humans. These facts also fully support the above
hypothesis of universe formations.

Tesla Marketing Strategy 2023: A Case Study

Tesla is an American business established in Palo Alto, California, offering electric vehicles and
clean electric power solutions. It specializes in creating high-quality electric cars for the general
public around the globe and clean, renewable electric energy. They are known for their vehicle's
incredible on-road performance.
What may come to you as a shock is that Tesla is renowned worldwide for its $0 marketing
approach. It may seem unusual, yet this is the case. Multiple advantages from Tesla's operations
have been utilized, and these advantages have been applied to its marketing methods.

Growth Strategy of Tesla in 2023

Tesla is one of the biggest automotive industries in the world. Despite the sales problem in the
China markets, Tesla doubled its earnings in comparison to 2022. In 2023, Tesla has been selling
tons of cars in the first quarter, unlike in the Q1 of past years. It has continued to grow strongly
over the globe.
With the rapidly growing capacity, new products will launch in 2023. According to reports, the
stored energy growth will kick in quickly and be the company's game-changer. Again, due to short-
term price cuts, Tesla will harm the auto's efforts to get the taste of the EV pie.
The company's auto demands have grown at a tremendously rapid rate. As per the data, the
increased production facilities will come in North America in 2023 and Asia in 2034. The newer
products expected to come onto the market in 2023 will be Cybertruck and Semi, and Model Y
and Model 3 of lower-cost versions.
The report reveals that Tesla ended Q4 2022 with a net income of $3.7 billion. Also, it was able to
generate $1.5 billion in 2021. Despite high raw materials prices in 2022, Tesla maintained a profit
margin of 25 percent. In 2022, Tesla's vehicle deliveries rose by 40 percent to 1.31 million, and
production rose 47 percent to 1.37 million.
If the world economy goes into recession, it would also certainly weigh on Tesla. But with the
expected profit margins to contract and rising competition, 2023 is supposed to be a challenging
year for Tesla stock.

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Research on the Tesla’s Strengths and Weakness
Today, when new energy is becoming more and more important, environmental protection is the
most important issue for people around the world. As we all know, Tesla isa well-known electric
vehicle company, ranking first among new energy vehicles in the world. Therefore, this paper will
study Musk's Tesla company and use professional methods to analyze Tesla's current real situation.
Due to Tesla's huge contribution to global environmental protection, Tesla has a strong
representation in the global environmental protection field. This paper will use SWOT method to
study the development status of different aspects of Tesla Company. Tesla will be analyzed from
the following four aspects, strengths, weakness, Opportunities and Threats. SWOT analysis offers
many advantages, it’s crucial to remember that it's only a single component of the strategic
planning process. For optimal effectiveness, organizations should combine SWOT analysis with
other analytical tools and techniques and integrate the results into their overall strategic planning
approach. “Tesla enjoys a global leadership position in electric vehicles and sustainable energy,
which isa significant advantage. However, in order to remain successful, it is critical to improve
its semiconductor supply chain management. As the industry evolves, Tesla's innovation and
foresight will play a key role in achieving its mission of advancing sustainable energy.

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CHAPTER-3
RESEARCH
METHODOLOGY

44
 Objective of the Research:

This project is a strategic analysis of Tesla Motors, Inc.: “How Tesla Motors Inc. can improve its
strategy to sustain its competitive advantage on the electric vehicle market and confirm its position
as a transformational leader in sustainable life-style?”. Tesla Motors was created in 2003 by a
group of engineers in Silicon Valley with a vision to create the most compelling car company of
the 21st century by driving the world’s transition to electric vehicles. In 2008, Tesla shattered those
standards by creating the Roadster, a car capable of traveling 245 miles on a single charge, along
with a 0-60 time of 3.7 seconds. With a slow growth and declining sales margin within the early
release of its “Roadster”, tesla has made a remarkable recovery and has proved that “electric
vehicles can be safe, user-friendly usable and reliable to the market. The Model S, an electric
luxury sedan, being released in 2012, won Motor trends 2013 car of the year award. It has been
the best-selling plug-in electric car for two consecutive years: 2015, 2016. Of the approximate
356,232 electric vehicles around the world today, Tesla accounts for 50,000. It reached a peak of
150000 units sold by November 2016. As of December 2016, it lies best, being second to the
Nissan Leaf. The Model S was then followed in September 2015 by the Model X. Tesla's next
vehicle is the Model 3, releasing mid 2017 with a base price of US$35,000, assuming it to be the
most-affordable wide-range EV ever released in the industry. All large auto manufactures, other
than Toyota (the limited production Rav4e can travel 103 miles per charge), have yet to create an
electric vehicle that can travel more than 100 miles on a charge. A seventh of the market share is
remarkable for a company started just more than a decade ago. The EV company specializes in
lithium-ion batteries, electric vehicles and residential-consumer based solar panels, in co-operation
with Solar City. The TESLA Model consists of two parts: a highly parameterized non-linear
regression model and a time series filter for forecast adjustment based on recent experience.
Combined, they offer significant accuracy advantages. Energy demand is determined by a very
large number of independent decisions made by a very large number of people. To attempt to
model that kind of system, the TESLA Model takes an information-intensive approach to the
problem.

Objective of Research analysis of tesla are:

Assess Tesla's competitive position: Understand and evaluate Tesla's competitive position within
the automotive industry and the broader clean energy sector. Identify the company's strengths,
weaknesses, opportunities, and threats in relation to its competitors.

Analyze Tesla's business model and strategy: Examine Tesla's business model, including its
approach to electric vehicle manufacturing, energy storage, and renewable energy solutions.
Analyze the company's strategic choices, such as its emphasis on vertical integration, disruptive
innovation, and sustainable transportation.

Evaluate Tesla's market expansion and diversification efforts: Assess Tesla's efforts to expand into
new markets and diversify its product portfolio. Investigate the company's international expansion

45
strategy, partnerships, and potential entry into new industries.
Examine Tesla's technological advancements: Analyze Tesla's technological capabilities and
innovations in areas such as electric vehicle technology, autonomous driving, battery technology,
and renewable energy solutions. Evaluate the company's research and development efforts,
intellectual property portfolio, and potential for future breakthroughs.
Assess Tesla's financial performance and sustainability: Evaluate Tesla's financial performance,
including its revenue growth.

Type of research
Strategic analysis involves a combination of qualitative and quantitative research methods. Here
are the main types of research commonly employed in a strategic analysis.

Qualitative research: Qualitative research in a strategic analysis of Tesla include conducting

interviews with Tesla executives or industry experts to gain insights into strategic decision-
making, assessing customer feedback and opinions through surveys or focus groups, and analyzing
Tesla's corporate communications and public statements for understanding the company's vision
and values.

Quantitative research: Quantitative research in a strategic analysis of Tesla include analyzing

financial statements and key financial ratios to assess the company's profitability, conducting
surveys to measure customer satisfaction and preferences, and using statistical analysis to identify
correlations between variables, such as market trends and Tesla's sales performance.

Desk research: Desk research is essential for understanding the industry landscape, market
trends, competitor analysis, and regulatory frameworks. It helps in gathering data on Tesla's
financial performance, market share, and industry dynamics from reliable and credible sources.

Comparative analysis: Comparative analysis often involves collecting and analyzing

quantitative data, such as financial metrics and market share data, to make meaningful comparisons
between Tesla and its competitors. It can also involve qualitative analysis of factors such as product
features, customer satisfaction, and brand perception.

It's important to note that a strategic analysis of Tesla involve a combination of these research
types to gain a comprehensive understanding of the company's strategic position, competitive
landscape, and market dynamics. The specific research methods employed will depend on the
research objectives, available data, and resources.

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 Source of data

When we conduct a strategic analysis of Tesla, both primary and secondary data sources are
utilized. Here's a breakdown of primary and secondary data sources:

Primary Data Sources:

Interviews: Conducting structured or semi-structured interviews with Tesla executives,

employees, or industry experts can yield primary data by gathering their insights, perspectives,
and firsthand knowledge about Tesla's strategic position, operations, and industry dynamics.

Focus Groups: Organizing focus group discussions with relevant participants can provide primary
data by facilitating in-depth discussions and obtaining qualitative insights on specific topics or
issues related to Tesla's strategic analysis.

Observations: Direct observation of Tesla's operations, processes, or customer interactions can

generate primary data by capturing real-time information and insights about the company's
practices, customer behavior, or market dynamics.

Experiments and Prototypes: In some cases, conducting experiments or creating prototypes can
generate primary data that helps assess the viability or effectiveness of Tesla's strategic initiatives,
product features, or technological advancements.

Secondary Data Sources:

Company Reports and Documents: Tesla's annual reports, financial statements, SEC filings,
sustainability reports, and other company-generated documents provide valuable secondary data
on its financial performance, market position, strategies, and sustainability initiatives.

Government Reports and Publications: Government agencies, such as the U.S. Securities and
Exchange Commission (SEC), provide access to secondary data sources like regulatory filings,
industry reports, economic data, and policy documents that can be relevant to Tesla's strategic
analysis.

Industry and Market Reports: Published reports by market research firms, consulting firms,
industry associations, and financial institutions offer secondary data on market trends, competitor
analysis, customer behavior, and industry dynamics related to Tesla and its markets.

Academic Research: Scholarly articles, research papers, and dissertations can serve as secondary
data sources, providing insights from academic studies and analyses conducted by researchers in
relevant fields such as electric vehicles, renewable energy, or business strategy.

News Media and Press Releases: News articles, press releases, and media coverage from reputable
news sources and publications can offer secondary data on Tesla's latest developments, product
launches, strategic partnerships, and industry-related news.

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Online Databases and Archives: Online databases, platforms, and archives such as financial
databases (e.g., Bloomberg, FactSet), market research platforms (e.g., Statista, IBISWorld), or
academic databases (e.g., JSTOR, ScienceDirect) provide access to secondary data in the form of
financial metrics, market reports, scholarly articles, or industry analyses.

Method of analysis

The method of analysis are:

Tesla SWOT Analysis – Strategic Analysis of Tesla Motors

Strengths 1- Top Employer Company One of the most important points that Tesla is good at is its
employment rate. ...
Weaknesses 1- Manufacturing Complications ...
Opportunities 1- Global Sales Expansion ...
Threats 1- Extensive Competition ...
Final Words As you can see, the Tesla SWOT analysis above examines a company in terms of its
strengths, weaknesses, opportunities, and threats.
SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to
assess Tesla's internal strengths and weaknesses, as well as external opportunities and threats. This
analysis helps identify areas where Tesla has a competitive advantage or disadvantage and
highlights potential opportunities for growth or threats to its business.

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CHAPTER-4
Result&Discussion

49
 RESULT & DISCUSSIONS

Result & Discussion of tesla aims to provide a comprehensive understanding of the strategic
position, performance, and key factors impacting Tesla. Here's an outline of what could be
included in the Results and Discussion section:
Strategic Position: Present an overview of Tesla's strategic position based on the analysis
conducted. This includes discussing Tesla's mission, vision, and core values, as well as its market
presence, market share, and competitive positioning.
SWOT Analysis: Summarize the findings of the SWOT analysis, highlighting Tesla's key
strengths, weaknesses, opportunities, and threats. Discuss how these factors influence Tesla's
competitive advantage, market opportunities, and potential risks.
Porter's Five Forces Analysis: Discuss the outcomes of the Porter's Five Forces analysis and its
implications for Tesla. Analyze the bargaining power of suppliers and customers, competitive
rivalry, the threat of new entrants, and the threat of substitutes. Assess the overall attractiveness
and competitiveness of Tesla's industry.
PESTEL Analysis: Present the findings of the PESTEL analysis and discuss the significant
political, economic, social, technological, environmental, and legal factors affecting Tesla.
Highlight the opportunities and challenges arising from these factors and their impact on Tesla's
strategy.
Financial Performance: Provide an overview of Tesla's financial performance based on the
financial ratio analysis conducted. Discuss key financial ratios such as profitability, liquidity, and
solvency, and assess Tesla's financial health and stability. Compare the financial performance to
industry benchmarks and historical trends.
Value Chain Analysis: Discuss the value chain activities of Tesla and identify areas where the
company creates value and incurs costs. Analyze the efficiency and effectiveness of Tesla's value
chain and identify opportunities for improvement or optimization.
Competitive Benchmarking: Compare Tesla's performance, strategies, and key metrics to its
competitors. Evaluate Tesla's competitive advantage, market positioning, and differentiation
strategies. Identify areas where Tesla outperforms its competitors and areas that require attention.
Scenario Analysis: Discuss the outcomes of the scenario analysis and the potential impact of
different scenarios on Tesla's business. Analyze the resilience and adaptability of Tesla's strategies
in response to various future scenarios.
Stakeholder Analysis: Present the findings of the stakeholder analysis and discuss the key
stakeholders influencing Tesla's business. Assess their interests, influence, and potential impact
on Tesla's strategic decisions and reputation.

Trend Analysis: Highlight the trends and patterns identified through the trend analysis. Discuss
the implications of these trends on Tesla's strategic direction, product development, market
expansion, or risk mitigation strategies.
Insights and Recommendations: Based on the analysis conducted and the findings discussed,
provide insights and recommendations for Tesla's strategic direction. Offer actionable
recommendations to leverage strengths, address weaknesses, capitalize on opportunities, and
mitigate threats.
It is important to support the findings and interpretations with evidence and data gathered during
the research process. Visual aids such as charts, graphs, and tables can be used to present the results

50
in a clear and visually appealing manner. The discussion should be concise, coherent, and focused
on the key findings and their implications for Tesla's strategic decision-making.

The biggest survey of Tesla drivers ever conducted shows that the automaker
has finally figured out how to deliver cars with fewer problems, cutting the rate
of defects nearly in half.

Tesla Inc. has sold more than 350,000 of its best-selling Model 3 sedans since 2017, and many of
those cars have rolled out of the factory marred by defects: chipped paint, misaligned panels and,
in fewer cases, mechanical troubles. These flaws became a point of fixation for the electric
automaker’s critics and a source of frustration for some owners. Depending on whom you asked,
Tesla had just turned out one of the best-made cars in the world—or one of the worst.
The first comprehensive survey of almost 5,000 Model 3 owners, conducted by Bloomberg, found
that the rate of defects peaked in the third quarter of 2018, with 80 issues for every 100 cars sold.
This was when Tesla famously started up a new assembly line in its factory parking lot and tripled
Model 3 production.
But Tesla is now cranking out almost 100,000 cars each quarter, and for the first time, there’s data
to show that experience and volume has brought consistency to its manufacturing operations.
That’s one of the key take-aways from Bloomberg’s Model 3 owner survey: The rate of complaints
from new owners declined 44% in the third quarter this year, compared with the same period a
year ago.
A decade after cobbling together its first vehicle, Tesla has graduated from a niche maker of
electric vehicles to a high-volume global manufacturer. This has been an experiment in creating a
new kind of car, with unorthodox approaches to service, charging and software updates. The first
several hundred thousand Model 3 customers essentially signed up to road test a new vision for
the industry. Now, for Tesla continue its explosive growth, it must convince mainstream car buyers
that it can deliver the dependability expected of a Toyota, Volkswagen or Ford.
To track Tesla’s progress, Bloomberg has been talking to the Model 3’s early adopters. We started
with a 164-item questionnaire that covers every aspect of having Tesla, and followed up with
smaller surveys about crash repairs and new Autopilot features. So far, we’ve analyzed almost half
a million words of feedback—enough to fill the first four Harry Potter books.
Take the survey
The results are organized into four installments. Part 1 explores the car itself: reliability,
performance, design and features. The other sections—covering customer service and charging,

SWOT analysis of Tesla’s business model

One of Tesla's biggest selling points is self-driving technology, this subverts the traditional car
making concept and attracts a large number of people who pursue technological innovation.
Additionally, Tesla electric cars have no greenhouse gas emissions during driving, and this is

51
praised and respected by many people. In 2019, Musk publicly stated that in the past 10 years,
Tesla has spent about 22.5 billion US dollars on research and development, which is an investment
that other traditional car companies do not have [2]. This means that the demand for capital and
investment at the very beginning is very large. The new company that wants to imitate Tesla’s
business model would be difficult in this part as few companies have access to such large capital
support. Also, the capacity of the factory is not enough to support a large number of orders to
complete the on-time delivery. In 2002, the U.S. Department of Energy specifically approved $15
million for research to improve battery efficiency and power supply quality. In March 2009,
President Obama invested $2.4 billion in the development of vehicles and advanced battery
technology for home power charging. In addition, the government spends a huge sum of 14 billion
US dollars to provide car purchase subsidies and vigorously support the construction of electric
vehicle charging infrastructure [3]. Tesla has seized the above opportunities, and now companies
should also take advantage of today's policy subsidies. The policy of the times is a good
opportunity for emerging companies to obtain subsidies from the national government. General
Motors, Ford Motor Co., Volkswagen, Mercedes-Benz, Porsche, etc., are the main competitors in
America and Europe countries, and BYD, NIO, Xiaoping and other car companies are Tesla's main
competitors in China. On the other hand, people's acceptance of electric vehicles is not as fast as
imagined, and the transformation of electric vehicles in the market is relatively slow. At the same
time, the government's subsidy support for electric vehicles will also decrease in the future.

52
Porter’s five force analysis of Tesla’s business model
When Tesla was first founded, the electric car market was in a situation full of potential and
unknown. Thus, Porter’s Five Forces can be used to give contextualized analysis in this market
and understand how Tesla can fare in this environment.

Rivalry Among Existing Competitors-Relatively Low

When Tesla was first founded, it created a precedent for the electric vehicle industry, and there
was no comparable product on the market. Competitors at the time only had gasoline vehicles,
but due to their excellent performance and environmental friendliness, he gradually gained a firm
foothold in the market and attracted a large number of buyers.

Threat of New Entrants-High

Electric and hybrid vehicles are more popular than ever due to the increasing importance of
sustainability [4]. This change is also being driven by governments around the world.
Governments have begun to put pressure on automakers to shift a portion of their sales to electric
vehicles.

Threat of substitute product-Relatively Low

Natural gas vehicles, hydrogen-powered vehicles may pose a threat to electric vehicles [5].
However, this threat is not very high for Tesla, as governments around the world are focusing on
electric vehicles as the main development direction of the future and investing a lot of money in
EV vehicles.

Determinants of buyer power-from low to High by the time

Low switching costs lower barriers for Tesla customers to buy cars from other brands. In many
cases, however, alternatives have limited functionality and product power, which limits customers'
bargaining power with Tesla [6]. In addition, the low purchase volume (each customer only buys
and keeps one or a few cars) reduces the influence of customers on Tesla, and most people will
prefer Tesla because of product strength and brand power.

Determinants of supplier power-from low to High by the time

Low switching costs lower barriers for Tesla customers to buy cars from other brands. In many
cases, however, alternatives have limited functionality and product power, which limits customers'
bargaining power with Tesla [6]. In addition, the low purchase volume (each customer only buys
and keeps one or a few cars) reduces the influence of customers on Tesla, and most people will
prefer Tesla because of product strength and brand power.

53
CHAPTER – 5
CONCLUSION

54
 CONCLUSION

The "Conclusion" section of a strategic analysis of Tesla provides a concise summary of the key
findings and insights derived from the analysis. It aims to tie together the research objectives,
results, and implications to provide a clear and comprehensive conclusion. Here's an outline of
what could be included in the Conclusion section:
Recap of Objectives: Briefly restate the research objectives that guided the strategic analysis of
Tesla.
Summary of Findings: Provide a concise summary of the main findings and insights derived from
the analysis. Highlight the key strengths, weaknesses, opportunities, and threats identified through
the SWOT analysis. Discuss the competitive dynamics identified through Porter's Five Forces
analysis. Summarize the significant factors identified through the PESTEL analysis and their
implications for Tesla. Recap the financial performance, value chain analysis, competitive
benchmarking, and stakeholder analysis findings.
Strategic Assessment: Based on the findings, evaluate Tesla's strategic position in its industry
and market. Assess its current strategies, competitive advantage, and market positioning. Highlight
any unique or innovative approaches that contribute to Tesla's success or areas where
improvements are needed.
Implications for Tesla: Discuss the implications of the analysis for Tesla's future strategic
decisions and actions. Identify key opportunities for growth and improvement based on the
identified strengths and external opportunities. Address the weaknesses and potential threats that
Tesla should mitigate or overcome. Consider the potential impact of market trends, regulatory
changes, and technological advancements on Tesla's strategy.
Limitations: Acknowledge any limitations of the analysis, such as data availability, sample size,
or research constraints. Highlight areas where further research or analysis may be needed to
enhance the understanding of Tesla's strategic position.
Conclusion: Provide a clear and concise conclusion that summarizes the overall findings of the
strategic analysis. Emphasize the key takeaways and insights derived from the analysis. State the
significance of the analysis in understanding Tesla's strategic position and the potential
implications for its future success.
Recommendations: Offer actionable recommendations based on the analysis and conclusions.
Provide suggestions for strategic initiatives, areas of focus, or improvements that Tesla should
consider to maintain or enhance its competitive advantage and achieve its strategic objectives.
The conclusion should be concise, logical, and aligned with the research objectives and findings
presented in the earlier sections of the strategic analysis. It should provide a sense of closure and
leave the reader with a clear understanding of the key findings and implications of the analysis
conducted on Tesla.
Tesla has experienced robust growth in sales since the company released the Model 3. The
company has been running in losses for several years, and the loss run is expected to end from this
year. Its position in the US and China continues to strengthen. The company has successfully

55
grabbed a market share of more than 60% in the US market alone. However, to grow its profits
and net income, the company will first need to expand its production capacity. Considering the
demand level, Tesla’s production capacity is still deficient and will need to be scaled to meet
demand efficiently. Apart from its German plant, the company needs to establish more plants to
produce Model 3 and Semis in larger numbers and grow its sales worldwide. The company’s
operating expenses are very high and cannot cut back to grow its profits. To increase its
profitability, the company will have to grow its manufacturing exclusively. Reducing the research
and development expenses can hurt its sales and revenue in the future.

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 BIBLOGRAPHY

Journal Articles:

Ahuja, R. (2019). Strategic analysis of Tesla, Inc. using SWOT and Porter’s five forces
frameworks. Journal of Strategic Innovation and Sustainability, 14(1), 38-53.

Markovic, G. (2018). Competitive Advantage and Strategic Sustainability of Tesla Motors Inc.
Economics and Organization, 15(1), 73-82.

Books:

Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regner, P. (2020). Exploring Strategy:
Text and Cases (12th ed.). Pearson.

Reports:

Bloomberg New Energy Finance. (2021). Electric Vehicle Outlook 2021. BloombergNEF.

International Energy Agency. (2020). Global EV Outlook 2020: Entering the decade of electric
drive?. International Energy Agency.

Company Documents:

Tesla, Inc. (2021). 2020 Annual Report. Retrieved from [Tesla Investor Relations website]

Tesla, Inc. (2022). 2021 Impact Report. Retrieved from [Tesla Official Website]

Online Sources:

Statista. (2022). Tesla's Revenue from 2008 to 2021. Retrieved from [Statista website]

CNBC. (2021). Tesla's Gigafactories: The Global Manufacturing Network Behind Tesla's Electric
Vehicles. Retrieved from [CNBC website]

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