17-04-2019 Arslan Kamran Assignment#1

Company Name: Tesla

Business Sector: Automobile and Energy
Operating Geography: North America, USA, Global
Tesla Inc. was founded in 2003, a Silicon Valley company envisioning and developing vehicles with
electric energy to promote sustainability use of energy. 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. Tesla has production facilities at Fremont, California, Lathrop,
Tilburg and Nevada and is headquartered in Palo Alto, California. 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. Model S produced by Tesla became
the globe's bestselling electric car for two consecutive years in 2015 and 2016. The company employs
more than 13000 full time staff across all its divisions. In 2018, Tesla setup its factory in Shanghai,
for the first time outside US. 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. 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.” 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 Revenue:

 Around 21.46 billion U.S. dollars in the fiscal year of 2018.

 USD 7.0 billion (FY ending Dec 31st 2016).

Reference: swotandpastle.com, stastica.com

17-04-2019 Arslan Kamran Assignment#1

Major Shareholders:
As of April 2018, the major shareholders of the company are as follows –
1) Fidelity Management & Research Co. (12.14%).
2) Baillie Gifford & Co. (7.72%).
3) T. Rowe Price Associates, Inc. (6.99%).
4) The Vanguard Group, Inc. (4.01%) 5) Capital Research & Management Co. (3.57%).

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.
Strengths:
1. High product differentiation – electric power train technology.
2. Related diversification in product portfolio – power pack applications.
3. Strong marketing policies and improving customer base.
4. Integrated battery manufacturing at Giga factory.

Weaknesses:
1. Single source of supply of cells for battery power packs.
2. Limited experience in new product development and handling multiple models.
3. Little profitability and increased assets and debt liability.

Opportunities:
1. Increased attention towards reducing fossil fuel consumption.
2. Expanding the ecosystem to explore related market opportunities.

Threats:
. Exit of UK from European Union.
2. Limited supplier network base.
3. Foreign currency exchange rates.
4. Huge competition in automobile market

Reference: swotandpastle.com, stastica.com

17-04-2019 Arslan Kamran Assignment#1

Pestle Analysis:
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
inuencers 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
inuence 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.
Political:
1. Initiatives taken by national and state governments to encourage manufacturing and sale
of electric vehicles.
Economical:
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.
Social:
1. Improving preference of low carbon footprints and use of renewable energy.
Technological:
1. Growing use of embedded technologies in automobiles.
2. Advancement of technologies to reduce carbon footprint.
Legal:
1. Increased regulations related to automobile industry.
Environmental:
1. Increasing concern towards greenhouse gas emissions due to automobiles.

Reference: swotandpastle.com, stastica.com