Tesla Incorporated_Unit 1 Assignment

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Electrical Engineering

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Feb 20, 2024

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Running head: TESLA INCORPORATED 1 Tesla Incorporated Jeremy A. Martinez

TESLA INCORPORATED 2 Tesla Incorporated Tesla incorporated was founded in July 2003, with a sole purpose of designing, developing, and manufacturing high performance electric cars and energy storage products. Tesla was established by current Chief Executive Officer Elon Musk and Marc Tarpenning. Throughout the tenor of Tesla’s growth, they have persisted in the creation and improvement on EV1 electric cars. As of October 1 st , 2020, the current leadership within Tesla are Elon Musk (Chief Executive Officer), Robyn Denholm (Chairman of the Board), Zachary Kirkhorn (Chief Financial Officer), Jeffrey B. Straubel (Chief Technology Officer), and Vaibhav Taneja (Officer) (Hoover, 2020). Competitive Factors Since Tesla’s introduction to automobile market in 2003, it has seen huge impact through the major companies already saturating the market such as but not limited to, Ford Motor Company, General Motors Company and Toyota Motor Company (Hoover, 2020). Based on reporting from Hoover’s Company records Tesla’s Annual Sales are approximately 100 million dollars less than its top competitors. Major competitors have identified that Tesla is having success with EV1 electric vehicles due to their current 16.56% gross profit margin (Hoover, 2020) which is leading to top competitors transitioning into the EV1 sector saturating the market with an increase in EV1 vehicles. Due to the current automobile market being heavily saturated it is with great confidence that I assess that Tesla’s primary competitive factor is its rival corporations as they affect several other factors. Minor competitive factors for tesla include customers, solely for the fact of the current above average pricing for their vehicles. Due to the higher market price to purchase their vehicles the primary consumer is the upper-middle class severely hindering their ability to sell to

TESLA INCORPORATED 3 a wider market. The ability to sell to the wider market enables its rivals to possibly produce more cost-effective and cheaper vehicles. In the aspect of substitute services and supplies Tesla weakness will revolve around its minimal supplier for powerpacks (SWOT, 2020). The limited supplier can greatly affect production, especially competing with major corporations with the means of having multiple suppliers. These can play directly into substitute services that rival corporations can provide, whether it be through different patents to alternate/cheaper suppliers when creating their own versions of EV1 vehicles. Macroenvironmental Factors 1 Tesla’s primary means of concern are its macroenvironmental factors specifically Political Factors due to its experimental market. Due to its factories/headquarters being based in the continental united states its primary issue will be political factors. The varying political factors include but not limited to Taxation, Wage legislation and Trade Regulations/Tariffs (Development, n.d). If there were legislation targeting the above-mentioned issues it will severely hinder its profit margins due to the increase in taxes and wages required. Trade regulation and tariffs will hinder its international market if a target country gets imposed with trade regulation and tariffs, limiting its production/export within the affected countries. Since Tesla’s primary focus is developing and producing high performance electric vehicles and storage devices its secondary microenvironmental factor would be its Technological Factors, Recent Technological Developments by Tesla Competitors (Development, n.d). This factor would greatly hinder its current EV1 Vehicle market if cheaper and reliable vehicles came into market.

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TESLA INCORPORATED 4 In the aspect of the economy and demographic factors Tesla has been known to market their vehicles as affordable but do to its above average price it severely limits its demographic to the middle to upper middle class. This will have a direct tie into the economy as if the global economy is succeeding so will the individuals Tesla is marketing to but if it is decreasing the overall company will be damaged due to its increased focus on Research and Development. Tesla’s factor of social values will benefit its overall end state due to its primary mission of providing environmentally friendly and technologically advanced vehicles. Although, with every positive comes a negative factor such as individuals’ attitudes towards environmental issues, if the population steers clear of being environmentally friendly Tesla will have to rely solely on its technologically advanced vehicles and vice versa.

TESLA INCORPORATED 5 References Department, S. (n.d.). Tesla, Inc. Pestel analysis & Environment Analysis. Retrieved March 28, 2021, from http://fernfortuniversity.com/term-papers/pestel/nyse4/862-tesla-- inc-.php#:~:text=Environmental%20Factors%20that%20Impact%20Tesla%2C%20Inc. %201%20Weather,9%20Attitudes%20toward%20and%20support%20for%20renewable %20energy Tesla Inc . (2020, October 01). Retrieved March 28, 2021, from https://search-proquest- com.libauth.purdueglobal.edu/central/docview/1860778463/DE50E65FDEF4B01PQ/3? accountid=34544&requestingPage=browsetitles. doi:1860778463 SWOT & PESTLE analysis: SWOT & PESTLE. (2020, September 04). Retrieved March 28, 2021, from https://www.swotandpestle.com/tesla-inc/#:~:text=Competitive%20Analysis %20of%20Tesla%201%20Exit%20of%20UK,exchange%20rates%204%20Huge %20competition%20in%20automobile%20market