TESLA (Automotive Company)

https://www.tesla.com/

Unit Code: MMM267

Student Name: Kamau, Hezron Gichuki
Deakin ID: 5016743
Lecturer: Mitul Khan
Class Number: LA3.112
Class Time: Monday at 3:00pm – 5:00pm & Wednesday from 4:00pm – 6:00pm
 Organization Profile
Tesla Motors is an American automobile company founded by five California entrepreneurs in
2003. Its current CEO is Elon Musk. Recently, a research by Hedges & Company. (2018) stated
that a typical Tesla buyer is around 54years earing around $140,000 and their biggest
competitors in the market are Ford and General Motors, just to mention a few.

Supply Chain Practices

One of the key functions of Tesla is not only manufacturing cars but ones that are sustainable
and environment friendly. This is achieved through their making practice. The making process
includes incorporates generation planning, overseeing work in process, manufacturing, testing,
bundling and product ahead of release. Tesla. (2023) states that “We recently visited Canada,
Chile, Rwanda, Uganda, the Democratic Republic of Congo and Indonesia to complete social
and environmental risk assessments”. This vision grew out of Musk's desire to focus more on the
results that can be achieved by improving product density and factory output speed, as well as
improving the production process. In other words, deviate the focus from improving machines to
improving machines made by machines. Moreover, Tesla has invested in the making process by
having several locations for their manufacturing processes like:
1. Fremont, CA Factory – First factory that focuses on Model S, 3, X and Y
2. Giga Factory Nevada – Electric motors and batteries
3. Giga Factory New York – Solar Panels
Above are some of the factories that Tesla has set up to ensure that the making process is
effective in that different parts of their cars are scrutinized well before the cars are assembled.
Other factories include; Gigafactory Shanghai, Gigafactory Texas, Gigafactory Brandenburg,
Kato Factory and Megafactory Lathrop.

Tesla Supply Chain Challenge

Recently, during the COVID pandemic, Jacob Bourne. (2012) stated Elon Musk was worried
about the company’s future prospects especially being that almost every supply chain challenge
was affecting them. Actually, there has been a decline in the number of productions is the first
quarter of 2022 since the pandemic. One of the biggest headlines was when Tesla blamed
Shanghai for its slow production growth due to the pandemic lockdown. This is because there are
some parts that are sourced from there in their car assembly line. Below are some supply chain
challenges/risks theories that have impacted Tesla:
1. Customers – Tesla had thought of delivering some cars without accessories such as USB
ports due to held cargo.
2. Technology – Some features like radar sensors had been scheduled to be removed in
order to make the cars easier to build.
3. Workforce – There was a 10% salary cut off to all salaried clients for about three months
4. Globalization – More fierce competition especially in countries like China where there
are over 450 EV manufacturers.
5. Sustainability – The aspect of certain features like auto-pilot have had a big fuss in the
market especially in a recent accident that encountered a fatality of a 40year old
6. Optimizing supply chain – The Shanghai concern really raised an eyebrow in Tesla’s
outsourcing mechanism.

References
Andrew, T. (2022). Challenging times in the Automotive Supply Chain: Lessons from Tesla.

https://www.pedersenandpartners.com/news/challenging-times-automotive-supply-chain-

lessons-tesla

Francisco, S. (2017). TESLA becomes a model for sustainable leadership: David and Goliath

revisited. https://www.imd.org/research-knowledge/sustainability/articles/tesla-becomes-

a-model-for-sustainable-leadership-david-and-goliath-revisited/

Jacob, B. (2022, June 27). Tesla ‘losing billions of dollars’ due to supply chain issues isn’t its

only problem. https://www.insiderintelligence.com/content/tesla-losing-billions-of-

dollars-due-supply-chain-issues-isn-t-its-only-problem

Mark, K. (2023, July 22). Tesla Production Sites By Model Assignment.

https://insideevs.com/news/678076/tesla-production-sites-model-assignment-july2023/

Nicholas, R. (2022, April 20). Supply chain challenges finally caught up to Tesla.

https://qz.com/2157289/supply-chain-challenges-finally-caught-up-to-tesla

Tesla. (n.d). Manufacturing Build a Sustainable Future.

https://www.tesla.com/en_au/manufacturing