Analyzing Tesla's Growth and Challenges in Electric Vehicle Demand

P a g e | 1 Park University MBA695 Unit 3 Course Project- Introduction and Problem Statement Fall II Dr. Tracy Green Stephen Hill November 5 th , 2022

P a g e | 2 Introduction Tesla Incorporated is listed on the NASDAQ and trades under the ticker symbol of TSLA. Tesla is an American automotive and clean energy company headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles, battery energy storage from home to grid scale, solar panels, and solar roof tiles (Tesla Investor Relations Team, 2022) . Businesses Tesla was founded on July 1 st , 2003, in San Carlos, California by Elon Musk, Martin Eberhard, JB Straubel, Marc Tarpenning, and Ian Wright (Tesla Investor Relations Team, 2022) . Contrary to what is believed, Elon Musk did not start Tesla but has made it his own over the years. Marc Tarpenning and Martin Eberhard started Tesla and developed the first Roadster vehicle (Kolodny & Black, 2021) . Tesla brought on Elon Musk after meeting him at a meeting for Mars Society members where they bonded over their love and passion for their shared love of space exploration (Kolodny & Black, 2021) . Elon Musk eventually took over and is not the sole owner and CEO of Tesla. Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible (Tesla Investor Relations Team, 2022) . Tesla competes in several industries such as electric automotive, aerospace, plug-in electric vehicles, renewable energy, and most recently social media.

P a g e | 3 Financials Tesla has 99,290 employees which is an increase of 40.33% from 2020 (Zachs Investment Research, 2021) . Revenues for Q3 of 2022 grew 56% YoY to $21.5 billion and is the market leader in battery-powered electric car sales in the United States and has roughly 70% of the market share (Zachs Investment Research, 2021) . Tesla reported having profits of $-862 million but reports assets of $34.3 billion. Tesla Energy Storage reported the solar division deployed 94MW with a 25% increase YoY and 1133 MWh which was a decrease of -11%YoY (Tesla Investor Relations Department, 2022) . Tesla has always had a competitive advantage of being innovative and wanting to change the industry through innovation. Tesla is preparing to launch the Tesla truck and has already experimented with self-driving electric semi-trucks. With these products in production, Tesla has set goals to sell 500,000 vehicles each quarter in 2023 which will put their deliveries at 2 million vehicles in 2023 (Kongkunakornkul, 2022) . Problem Statement The problem at Tesla is not being able to meet the demand for its vehicles. Although Tesla is opening new factories, they are still faced with the global chip shortage that has been plaguing every market that utilizes technology. Tesla can’t keep up with the demand for its vehicles and has reported that the Model X and Model Y cars are sold out until 2023 (Technicality, 2022) . This is a great problem to have but Tesla also opens the door for other competitors to steal sales due to the long lead times.

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P a g e | 4 References Kolodny, L., & Black, E. (2021, February 6th). Tesla founders Martin Eberhard and Marc Tarpenning talk about the early days and bringing on Elon Musk . Retrieved from CNBC: https://www.cnbc.com/2021/02/06/tesla-founders-martin-eberhard-marc-tarpenning-on-elon- musk.html Kongkunakornkul, P. (2022, September 30th). Exclusive: Tesla output forecast shows jump in Q4, growth through 2023 -sources . Retrieved from Reuters: Exclusive: Tesla output forecast shows jump in Q4, growth through 2023 -sources Technicality. (2022, March 1st). How Tesla’s Backorder Problem Could Stall the Transition to EVs . Retrieved from Medium: https://medium.com/tech-topics/how-teslas-backorder-problem- could-stall-the-transition-to-evs-54c32053c27d Tesla Investor Relations Department. (2022, October 19th). Investor Relations . Retrieved from Tesla: https://ir.tesla.com/#quarterly-disclosure Tesla Investor Relations Team. (2022, October 22). About Us . Retrieved from Tesla: https://www.tesla.com/about Zachs Investment Research. (2021, 10 19). Tesla: Number of Employees 2010-2022 | TSLA . Retrieved from Macrotrends: https://www.macrotrends.net/stocks/charts/TSLA/tesla/number-of- employees

Unit 3 Course Project

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