Prepare a PPT summarizing the Strengths, Weaknesses, Opportunities and

Threats of Tesla.
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SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and it is a
methodical planning technique for analyzing an organization's, projects, or
commercial initiative's four characteristics. A SWOT analysis is a simple yet
efficient framework for, exploiting Strengths, correcting Weaknesses maximizing
Opportunities and tackling Threat.
Tesla, an American electric vehicle manufacturing company formed by Elon Musk,
Martin Eberhard, JB Straubel, Ian Wright, and Marc Tarpenning in July 2003. Tesla
Motors has its headquarters in Palo Alto, California. Tesla was chosen by the
founders as an homage to Nikola Tesla, a well-known physicist and innovator.

Tesla's growth and operation are fascinating; thus, a SWOT analysis is required to
fully comprehend its major performance and success.
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Tesla’s Strengths:
Let’s start with the strengths of Tesla Inc. that will include the positive aspects of
the company, which have reinforced the position of Tesla to become one of the
most dominant companies in the world.
The following factors which are believed to be Tesla’s stronger points have
ensured the company’s profitability, expansion, and popularity, especially in the
long term.
1. A Top Employer Company
Any organization is as good as it employs. In the case of Tesla Inc., it is one of the
key factors for the company’s remarkable success. Wall Street Journal reports
that Tesla has emerged as an ideal company for employees due to its diversity
and innovation-encouraging culture.

It has recently been listed as one of the ideal places to work, attracting young
jobseekers with fresh talents and energy. The company has also been featured in
Forbes’ ‘America’s Best Employer 2021’.

2. Most Valuable Automotive Company

Despite its issues, Tesla’s sales revenue was $53.8 Billion with 936,172 cars
delivered to customers in fiscal year 2021. The increase in the number of
deliveries and its profitability of $5.6 Billion pushed the company’s market
capitalization to over $1 Trillion and surpassed the market cap of top 5 automaker
(Toyota, Volkswagen, Daimler, Ford and General Motor) combined.
Tesla has now become the world’s most valuable automaker by market value.
3. Best in-class Electric Cars
Tesla has left behind every other brand in the race of the finest electric cars.
When compared by their range, Tesla’s electric cars have proven to be the best
covering maximum distances. The recent comparison shows that Tesla occupies
the top three places in terms of range. The Tesla Model S will get you the furthest
– traveling up to 600 kilometers on a single battery charge. The nearest another
brand has got is the Opel Ampera, with a range of 520 kilometers.
4. Tesla Doubles its Electric Vehicle Delivery
In 2021, Tesla delivered 936,172 vehicles, an 87% increase in vehicle delivery
compared to 2020. Despite the supply chain challenges and shortage of chips,
Tesla demonstrated incredible performance in 2021.
5. Cross-sell and Diversification
Tesla has launched a comprehensive insurance program for its vehicles in
association with Liberty Mutual insurance company called as InsureMyTesla.
6. Innovative Company
Tesla has a very high rate of innovation, (not to forget the recent developments of
world’s first fully electric semi truck and new sports car). Therefore, the market
trust and expects the company to develop competitive and profitable products
which of course leads to substantial financial gains.
7. Better Positioned
According to experts, Tesla is in a better position to survive economic uncertainty
compared to other US automakers. For one, Tesla’s revenue increased to $53
Billion in 2021 and delivered more than 900,000 cars by the end of 2021, which is
about double compared to 2020. [3]

8. Unconventional but Effective Strategies

Tesla’s unique but highly effective management strategy was recently exposed to
the public after its employee handbook was leaked. It revealed the
unconventional secrets behind its success. Just like its founder, Tesla’s handbook
is no-nonsense, direct, and to the point. The company hires the smartest and
most innovative employees and holds them accountable by setting clear and
concise targets. [4]
Tesla’s Weaknesses
All the internal factors in a company which causes any damage or bounds
performance evaluation are identified weaknesses in the SWOT Analysis. So,
these are some of the shortcomings of Tesla’s organizational structure, which
reduce its competitiveness and business growth.
1. Manufacturing Complications
The higher standard of innovation, the greater will be mechanical complications
and production risk factor. Tesla faces continuous launch, manufacturing and
production ramp delays while launching their new vehicles and other products.

For example, Tesla faced endless manufacturing challenges when they were
about to launch Model X, which lead to constant delays for distribution. Similarly,
the company went through extreme troubles while manufacturing Model X’s
battery module assembly line at Gigafactory 1.
2. Unable to meet demand might affect brand value
Due to highly experimenting and complicated procedures, Tesla’ might face an
unbalanced supply and demand, unable to meet the production ramp in the
future.

3. Lack of High-Volume Production

There is no doubt that Tesla is the pioneer of actual energy-saving cars. But it has
failed to produce high volumes of automobiles for any of its models. Even now, as
the company plans to manufacture Model 3 vehicles at high volume, it faces
issues in terms of production cost and management resources and space
expansion in Gigafactory 1.

4. Shortage of Batteries
In the annual shareholder meetings, CEO Elon Musk accepted that their
production rate has decreased due to the limited supply of batteries. The
shortage directly affected the sales of electric vehicles and energy storage
systems.

5. Elon Musk as Tesla’s Sole Representative

Tesla accepts that the company is a ‘one-man show.’ Sadly, that man, Elon Musk
has a lot on his shoulders to give his hundred percent to the company. Musk is
also deeply involved in other projects like space launch vehicles at Space
Exploration Technologies Corporation and The Boring Company.

6. Financial Uncertainty
Immense financial capabilities allow companies to compete for market share
more effectively. Tesla has outstanding debt of $5.38 Billion. If the company is
unable to generate enough cash flow to repay its debt, then there is a risk of
delaying expansion, reducing investments, selling assets, etc.
7. Employee Safety Concerns
Tesla was recently fined for creating a tent production line without a permit or
safety inspection. Also, the company did not train workers about the risks of
working in the tent for long periods under the scorching California’s heat. The
soaring temperatures in the tent could have caused breathing issues for some
employees. [6]

8. Leadership Wrangles
Friction and conflict between management and the board of directors can
undermine productivity and long-term success. Tesla’s management and board
have been engaged in several power tussles. [7]

Tesla’s Opportunities
The opportunity section of this SWOT Analysis emphasizes the emerging chances
of growth for the company. It is an external factor which, when identified, can
help Tesla to improve its business performance, management structure, and
strategic growth and other aspects.
1. Sales expansion in untapped Market
The most significant opportunity for the company right now is the Asian market,
which is still unsaturated in the field of automotive and renewable energy
markets. Especially in the situation where Tesla needs to expand its global market
to increase its financial stability and stronger market presences.
2. Less Expensive Car
Tesla is expensive due to its unconventional reliance on innovation, which
requires maximum financial support to entertain new technology.

Recently, Tesla has launched Model 3, which is a more affordable version of

Model S with less range, power, and fewer features. However, it is an excellent
opportunity for Tesla to expand the size of their audience market.

3. Bringing battery production technology in-house

Tesla intends to make its own battery cells. The move can be a big game-changer
as it will help the company to increase its manufacturing rate while reducing its
production cost. Currently, Panasonic is their primary supplier of batteries.

4. Introduction of pick-up truck

According to National Automobile Dealer Association market share data, Pick-up
truck accounts for 17.6 percent of the US automotive market, which has huge
opportunity of growth in Electric Vehicle. Cyber Truck can bring a lot of growth
opportunities for Tesla in this segment.
5. Market Confidence in Tesla
The stock market has shown confidence in Tesla after beating the projected car
deliveries. As a result, Tesla has reached a Trillion Dollar market cap.
6. Exploit Air-Taxi Market
Demand for innovative urban air-taxi services to supplant conventional taxis and
reduce traffic congestion and pollution is projected to increase drastically by
2025. Tesla has the expertise and technology to deliver electric vertical takeoff
and landing (eVTOL) vehicles and a second-largest shareholder has already
invested millions in air taxi startup Lilium. [9]
7. Hertz Books Order for 100,000 Tesla Cars
In a bid to meet the rising demand for electric vehicles, Hertz plans to buy
100,000 Tesla cars. However, a deeper reason for such a large purchase is staying
two steps ahead of their rivals that are having trouble fulfilling the demand for
gasoline-powered vehicles due to a chip shortage. This is great for Tesla as it
hasn’t been able to successfully sell a large fleet of its popular electric vehicles.
Tesla’s Threats
The threat factor is combined with the phenomenon which stops the company
from taking full advantages of the benefits that can be derived from the available
strengths. Therefore, these are the few threats which Tesla faces to maintain the
business despite the unpredictable conditions of the market.

1. Product Liability Claims

Despite Tesla’s premium quality assurance and high standards of manufacturing,
the automobile industry, in particular, is accustomed to facing significant product
liability claims which the company’s fears to be one of the biggest financial blows.
Tesla has launched many autopilot vehicles, and not all of them have been
successful in case of an accident. The company has faced lawsuits and claims
related to the failure of technology in their products. If these liability claims
continued, then Tesla may be subjected to greater financial setbacks.

2. Extensive Competition
Tesla, Inc. faces aggressive competition from both alternative fuel vehicles
(Hybrid, Plug-in hybrid, fully electric car) and self-driving technology. Many
automotive brands in the luxury segment like Mercedes, BMW, Audi, Lexus and in
the economy segment like Toyota, Ford, General Motors , Volvo are getting ready
for a fierce competition.
Many brands are not only launching or planning to launch their environment-
friendly -Self-driving technology but also, they are offering them at a comparably
lower price. It is a definite threat for a company like Tesla, which thrives on its
unique value for innovative cars which are extremely expensive and unaffordable
for many.
3. Product Defects
Due to highly complex engineering for innovative vehicles, Tesla’s cars and other
energy products have exhibited major flaws in many cases. The defective
products often have weaknesses in design, manufacturing, and other features
which can harm the company’s image permanently.

4. Long term confidence

For any company, the assurance of long-term sustainability is essential to
maintain the public image and the company’s morale. Tesla, due to its unstable
manufacturing conditions, suffers from disbelief among the public about its long-
term existence, which can result in a deficiency in further business development.

5. Customer Adaptation
Any business run along the lines of customer’s acceptance. If the public is ready to
adapt change, companies benefit from the innovative range of products.
However, it can be a slow, unforgiving process, producing new challenges for
companies like Tesla. The organization highly depends upon customers
willingness to adopt electric vehicles.

6. Self-Driving Cars Are Still a Concern for Pedestrians

In a survey from YouGov, US adults still feel unsafe to walk around self-driving
cars. Especially, people above the age of 55 are the most afraid to be around self-
driving vehicles.
7. Disruption of Supply Due to Shortage of Materials
Tesla can face major suspensions in the supply of manufacturing materials due to
the increased prices. The company uses aluminum, steel, lithium, nickel, copper,
and cobalt, as well as lithium-ion cells from suppliers. All these materials have
volatile prices, which can affect the company’s production line severely in the
future.

8. High-Risk Factor Due to Usage of Lithium-ion

Tesla uses lithium-ion cells in their battery packs. Lithium is a highly reactive and
explosive element, which increases the risk factor of our products. Tesla has faced
a a few cases where their cars have caught fire and vented smoke, which has
defamed the company on a major level.
9. Lack of Regulations for Self-Driving
As there are no proper regulations for self-driving in many countries, including the
US, Tesla’s sale is affected by the self-driving restrictions in many areas. This
confusing situation of legal complexity increases uncertainty about Tesla’s self-
driving project’s future.

10. Elon Musk’s Erratic Behavior Affecting Tesla’s Reputation

Tesla’s entire reputation is built upon the revolutionary personality of Elon Musk.
But recently, his strange behavior and impulsive reactions are affecting Tesla’s
worth as an iconic, innovative brand.

Recently his marijuana smoking incident on Joe Rogan’s podcast created

controversy for being inappropriate. Subsequently, Tesla’s stock value dropped
close to 9 percent by this unexplainable behavior from a man who is a visionary
genius.
10. Economic Uncertainty
Even though Tesla is better positioned to survive economic uncertainty than
competitors, the looming recession is still a major threat to the company. [10]

11. Toyota Increases Production for its EV Vehicles

It seems that Toyota is going to give Tesla a solid run for its money. The Japanese
automaker announced it’s going to ramp up its electric vehicle production, aiming
to sell up to 40% of its EV vehicles by 2030. In a relatively short time, Toyota has
managed to get a bigger slice of the EV market share.
Conclusion
In this SWOT analysis for the company, we highlighted each of the strength,
weakness, opportunity, and threat which Tesla faces in the market. To grow its
market share and financial stability, Tesla needs to take vigorous actions.
Reference:
https://bstrategyhub.com/tesla-swot-analysis/
https://www.edrawmax.com/article/swot-analysis-of-tesla.html
https://freeessays.club/tesla-swot-analysis-and-recommendations-free/
https://www.studypool.com/documents/3204553/swot-analysis-of-tesla-model-3
https://www.scribd.com/document/255273459/About-Tesla-Motors
https://www.investopedia.com/companies-owned-by-tesla-5092764
https://www.cnbc.com/2021/05/03/heres-how-tesla-worked-with-spacex-and-
the-boring-company-in-2020.html