COMPANY PROFILE -Tesla
Business Sector :Automobile and Energy
Operating Geography :United States, North America, Global
About Tesla :
Tesla Inc. was founded in 2003, a Silicon Valley company envisioning and developing vehicles with electric energy to promote sustainability use of energy. Tesla has production facilities at Fremont, California, Lathrop, Tilburg and Nevada and is headquartered in Palo Alto, California. Tesla designs, develops, manufactures and sells fully electric cars. It also sells, installs and maintain energy generation system and storage systems. They are a sustainable energy company offering clean-energy products along with generation, storage and consumption. Sustainable energy products, energy and engineering expertise, and unique business model creates competitive advantage for Tesla over its peers. It was founded by the duo Martin Eberhard and Marc Tarpenning although many also regard Elon Musk and JB Straubel to be co-founders. The Company grew out as an aspiration after General Motor's debacle with EV1 Electric cars which were recalled and destroyed in 2003. It is a technology firm and an independent automaker which also has business in energy storage and solar panel production. The Company endeavors to build robust and affordable electric cars. The company employs more than 127,855 full time staff across all its divisions as of early 2023.
The unique selling proposition or USP of Tesla lies in developing fully powered electrical vehicles, which are better, quicker and fun to drive compared to gasoline vehicles. Tesla’s mission is “to accelerate the world’s transition to sustainable energy.” The vision statement of Tesla reads “Create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.”
Tesla Revenue :
$ 53,823 million - FY ending 31st December 2021 (y-o-y growth 71%)
$ 31,536 million - FY ending 31st December 2020
Competitive Analysis of Tesla
The SWOT analysis report of Tesla presents the internal and external analysis of the Company with insightful details. The SWOT analysis essays the detailed business case of this maverick automobile mammoth covering strengths, weaknesses, opportunities, and threats. Tesla's competitive advantage lays in differentiated product offerings and a wide diversification in the product portfolio. The spike in share price and company valuation of Tesla from around $32 in Jan 2013 is an indicator of its increasing strengths and market growth strategy.
Technology is Tesla’s greatest strength and its core competencies are powertrain engineering, vehicle engineering, innovative manufacturing, and energy storage. The company’s ability to utilize the unique benefits of electric power in their vehicles gives the company an edge over its competitors. Not ending there, even the top brands have used innovative technologies developed by Tesla in their productions. Apart from technology, internal factors like political support, a wide range of products, supplier to other manufacturers, sustainable innovation model, developing high-performance vehicles, brand recognition etc., are some of the quintessential strengths of Tesla Inc.
The internal analysis highlights that high production cost, high investment in research and development, high debt load, expensive vehicles compared to competitors’ brands and low production capacity are key weaknesses that Tesla is currently observing.
In 2018, Tesla secured a 210 acre plot in Shanghai, China for production purpose; it is the first time ever the company has planned to move outside the US. China being the biggest global electric vehicle market, turns out to be a golden opportunity for Tesla to establish itself in such a huge and potential market. However, establishing itself in newer markets invites a lot of competitive threats to Tesla. Hence Tesla is prone to high competition from both luxury and less expensive brands.
The SWOT/TOWS analysis for Tesla Inc., is presented in a nutshell below followed by detailed analysis
Strengths | Weaknesses |
1. High product differentiation – electric power train technology
2. Related diversification in product portfolio – power pack applications
3. Strong marketing, swelling sales and customer base
4. Distinct place in the automobile market
5. Integrated battery manufacturing at Gigafactory
6. Rapid expansion of its supercharging network in China | Limited experience in new product development and handling multiple models
Little profitability and increased debt liability
High dependency on charging systems
Recorded loss from bitcoin
|
Opportunities | Threats |
1. Increased attention towards reducing fossil fuel consumption
2. Expanding the ecosystem to explore related market opportunities
3. Expansion of insurance business internationally | 1. Exit of UK from European Union
2. Limited supplier network base
3. Foreign currency exchange rates risk
4. Huge competition in automobile market
5. Accidents due to autopilot mode
6. Possible issues with lithium-ion cells |
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Detailed SWOT Analysis of Tesla
Strength
1. High product differentiation – electric power train technology: Tesla Inc. has positioned itself as a unique brand in the market with core focus on developing automobiles on electric energy – a shift from fossil fuels. The powertrain consists of battery pack, power electronics, software, motor, and gear box and control software. Tesla employs digitized powertrain system whereby the torque to the front and rear wheels are instantaneously & independently controlled thus resulting in better traction control and improved performance. Electric powertrain empowers the making of energy efficient vehicles that are mechanically simpler than presently available hybrid or internal combustion engine vehicles. Fueling electric cars from Tesla is any day cheaper than fueling any internal combustion vehicles. Tesla has also started rolling out Dual Motor Powertrain vehicles, which employ two electric motors to render greater efficiency, performance, and range in an all-wheel drive configuration.
2. Related diversification in product portfolio – powerpack applications: Apart from manufacturing high-performance fully electric vehicles, the company has successfully diversified its portfolio into offering energy generation and storage systems-related products too. Tesla offers two distinct lithium-ion battery energy storage products, namely Powerwall, for home and small commercial facilities, and Megapack for industrial and energy generation customers. Tesla’s energy storage lineage has also been developed to obtain over-the-air firmware and software updates that keep them open to enhancements in the future. The company is also engaged in selling and leasing of its solar systems. The company sells a wide range of solar roofs which combines premium glass roof tiles with energy generation. Tesla collaborates with real estate developers and builders on new homes to improve their installation capability and efficiency.
The remaining section under “Strength” is available only in the 'Complete Report' on purchase.
Weakness
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Opportunity
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Threat
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The challenging factors for the e-car industry are its high cost, limited driving range, and poor awareness about e-car’s benefits amongst customers. Companies operating in this sector are liable to look at these factors and come up with newer solutions and strategies to overcome these challenges. Hence utilizing the PESTLE / STEEPL / PEST analysis technique, presented below is a discussion of influencers like political, economic, social, technological, legal and environmental that create a huge impact on the automobile industry and largely on Tesla Inc.’s business model, growth trajectory, its business case, and market strategy. The PESTLE analysis helps to understand the external factors that influence the business of a company.
Tesla enjoys political and government support in the US, there have been a lot of initiatives taken up by the government to encourage the production of electric automobiles. Despite the political tension between China and the US, Tesla has entered China for setting up its production and endeavors to manufacture 500,000 vehicles annually. However, operating in 17 distinct countries, Tesla is subjected to various political patterns and legal factors, for instance, the industry is majorly affected by stringent environmental protection laws demanding to reduce carbon footprints.
While the increase in fuel price is an issue for the automobile industry on other hands it is an opportunity for the e-car industry, a hike in fuel prices leads to a high demand for efficient cars. This is an economic opportunity for Tesla to obtain an exponential growth in revenue. Also, the production of vehicles like Model 3 can be economically beneficial for Tesla to target the middle-class niche.
In the current era, people are greatly concerned about the environment, which leads to customers looking for environmentally friendly solutions for transportation. Moreover, with fuel prices skyrocketing, choosing an electric car is a sensible option. These social aspects are favorable for Tesla, as it manufactures an environmentally sustainable car. The Tesla brand has almost become synonymous with electric cars due to its popularity.
Technology as already mentioned is the greatest strength of the e-car industry. It is a boon that helped develop electric cars and made automatic driving possible with computerization. However, with rapid advancement in technology, it is important for companies to stay updated and upgraded with the newest technology to stay ahead of the competition, as technology can become antiquated in no time. Another big strength, exclusive to Tesla is being an environmentally friendly brand, it meets most of the environmental-related regulations and barely has any impact on the environment. It is a brand that successfully retains itself from having carbon footprints.
Find below the competitive analysis of the external environment for Tesla presented in a matrix followed by the complete PESTLE / STEEPL / PEST analysis report:
Political | Economical |
1. Initiatives taken by national and state governments to encourage manufacturing and sale of electric vehicles
2. Tariff imposed on the automobile industry
3. Impact of Russia-Ukraine war on automobiles | 1. Improvement in global economy coupled with rise in sales of electric vehicles
2. Dip in prices of electric batteries to make electric vehicles affordable
3. Rise in power cuts and heat waves affecting EV charging facilities |
Social | Technological |
1. Improving preference of low carbon footprints and use of renewable energy
2. Increasing preference towards electric cars
3. Adverse impact of the Covid-19 led pandemic on the group’s business
| 1. Growing use of embedded technologies in automobiles
2. Advancement of technologies to reduce carbon footprint
3. Semiconductor shortage affecting automakers worldwide
4. Employment of Humanoid robots in factories
|
Legal | Environmental |
1. Increased regulations related to automobile standards by various governments | 1. Increasing concern towards greenhouse gas emissions due to automobiles
2. Tesla will no longer accept Bitcoin over climate concerns
|
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Detailed Pestle Analysis of Tesla
Political
This section is available only in the Complete report on purchase.
Economic
1. Improvement in global economy coupled with rise in sales of electric vehicles: Due to improving factors of production, growth of world economy is expected to grow over the next decade. This backed by political stability in major economies has led to increased investment into electric powertrain development. The Wall Street Journal estimated that 7.8 million electric vehicles were sold globally in 2022, a 68% increase from 2021. Though the EV sales witnessed a drop in 2019, the future looks promising. According to the research firm Canalys, by 2028 approximately 30 million EVs will be sold. Development of countries has also seen better wealth distribution among its countrymen and improving inclusion of people in the mainstream sources of income which has led to affordability of technologically advanced green technologies.
The remaining section under “Economic” is available only in the 'Complete Report' on purchase.
Social
This section is available only in the Complete report on purchase.
Technological
This section is available only in the Complete report on purchase.
Legal
This section is available only in the Complete report on purchase.
Environmental
This section is available only in the Complete report on purchase.
Major Brands :
- Roadster
- Model S
- Model X
- Model 3
- Powerwall
- Powerpack
- Solar Roof
- Tesla Semi
Key Business Segments / Diversification :
Tesla
Development services Renewable energy generation Energy solutions Power-train
Electric Car Batteries
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
Open Table Preview
Name | Business Segment | Year | Type | Objective/Synergy Achieved |
Springpower | Battery manufacturer | 2021 | Acquisition | Tesla acquired Springpower for $3 to develop and manufacture high-quality, dependable, and long-lasting electric vehicle batteries. |
ATW Automation | Battery assembly company | 2020 | Acquisition | In the next few years, Tesla plans to significantly increase the production of battery and sharply reduce the cost of batteries in the next 3 years |
Hibar Systems | Manufacturing company | 2019 | Acquisition | With the purchase of Hibar Systems, Tesla expanded in Canadian battery manufacturing market |
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
On purchase the Tesla SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 1 hour might be caused.
WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
1. The report offers a quick glance into the internal and external factors in the SWOT and PESTLE matrices, followed by a detailed interpretation
2. Insights into the SWOT analysis of Tesla, examining in detail its prevalent Strengths, Weaknesses, Opportunities, and Threats.
3. Gain knowledge of how technology and the company's core competencies have exhibited a competitive advantage to Tesla over its competitors
4. The PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors namely, political, economic, social, technological, legal and environmental and highlighting their impact on the automobile industry and specifically for the electronic car manufacturing segment.
5. Provides holistic information about Tesla's share price, mergers and acquisitions, strategic partnerships and alliances, capital raising, market value, market segmentation, and equity transactions
6. Insights into Tesla’s business diversification, eliciting its key business segments
7. Analysis of the acquisitions, mergers, alliances or partnership ventures that Tesla Inc., consented with deal valuations and the synergies that were achieved with them.
8. Cognizance of current trends of the automobile industry and e-car industry and its influences on the Tesla company
9. A brief overview of Tesla’s founders, headquarters, turnover, revenue, subsidiaries, and employee strength. Followed by a comprehensive company analysis to gain knowledge about company information, company profile, business model, business plans and marketing strategy
10. Synopsis of Tesla’s business model, business case and examination of key business segments and diversification.
11. Review of the Tesla’s USP or unique selling proposition, mission statement, and vision statement, along with a peek into the company’s key performance indicators, value proposition and success factors
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Check Out Analysis of Other Relevant Companies
References used in Tesla SWOT & PESTLE Analysis Report
1. Annual Report- https://www.sec.gov/Archives/edgar/data/1318605/000095017022000796/tsla-20211231.htm
2. Tesla Rapidly Expanding Superchargers, 100 Now Open In Beijing Alone - https://insideevs.com/news/601733/tesla-supercharger-100-now-open-beijing-china/
3. UPDATE: Tesla’s PG&E facility at Elkhorn catches fire, shuts down Highway 1 - https://www.teslarati.com/tesla-elkhorn-bess-battery-fire/
4. 7 Battery Electric Cars a Day Catch Fire in China: The Most Involved Brands - https://batteriesnews.com/7-battery-electric-cars-day-catch-fire-china-most-involved-brands/
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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Tesla Inc. SWOT and PESTLE analysis has been conducted by Anindya Sadhu and reviewed by senior analysts from Barakaat Consulting
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