Tesla Case Outline: History And Background July 2003

Tesla Case Outlinei History And Background July 2003 Tesla Motors

Tesla Case Outline I. History and Background · July, 2003- Tesla Motors was founded by Martin Eberhard and Marc Tarpenning · 2004 - Elon Musk invests in Tesla Motors and becomes the Chairman of the Board · July, 2006 - Tesla Roadster is released · 2007 - Tough times for Tesla as the company was losing money. (Elaborate on this) In response Ze’ev Drori was made CEO · 2008 - Elon Musk takes over as CEO · June, 2008 - Model S is revealed by the company (Implication of this?) (How was this different from the roadster?) · June, 2009 - Tesla Motors received a $465 million loan from the Department of Energy. The loan was paid off nine years early · June, 2010 - Tesla goes public and is the first American car company to do so since Ford went public · February, 2012 - Tesla releases its first SUV, the Model X · 2012 - Tesla began building charging stations for their vehicles · 2015 - Tesla wins lawsuit in New Jersey and is able to sell their cars directly to customers (Edit: this reflects a broader trend in their distribution network. Please discuss, making sure to include the challenges they faced using the traditional channels. · March, 2016 - Tesla reveals their most affordable car yet, the Model 3 (Be more specific) II. Problems · Profitability. Why haven’t they broken even yet? · Tesla faces conflicts with car dealerships. Why? And is not able to sell their vehicles in many states including Texas and Alabama · Too reliant on ITCs and incentives. How so? · Not enough affordable options for the average consumer · Manufacturing is not meeting demand, causing back orders and long waits for the consumer to receive their vehicle. III. Recommendations · How can they turn a profit? · Increase marketing and support legislation in those states where the company still cannot sell vehicles directly to the consumers · Create new more affordable and practical models. How? Ones that can be manufactured quickly to increase sales and prepare for the possibility of the loss of ITC on electric vehicles · Develop and produce more vehicles in the same price range or below that of the Model 3. How? · Ramp up production, especially of the Model 3 and find ways to capture economies of scale. How? IV. Update · Tesla will eventually be able to sell their electric vehicles all across the United States · By allowing the company to function without investment tax credits, they will be protected from any possible political changes to the ITC policy for electrical vehicles · This will enable Tesla Motors to secure a large part of the current market and change the way that people travel · More drivers will come to Tesla instead of its competitors or non electric vehicles if they can receive the car in a reasonable time frame for a low price · Tesla acquires SolarCity (Need a lot of details) · Semi-truck and Roadster reveal. Implications? Work Cited Van Den Steen, E. (2015, December 17). Tesla Motors [Scholarly project]. Retrieved November 15, 2017, from Baer, D. (2014, November 11). The Making Of Tesla: Invention, Betrayal, And The Birth Of The Roadster. Retrieved November 15, 2017, from Is Tesla Equipped To Change The World? – Infographic. (n.d.). Retrieved November 15, 2017, from Kumparak, G., Burns, M., & Escher, A. (2015, July 28). A brief history of Tesla. Retrieved November 15, 2017, from Lambert, F., & Fred Lambert @FredericLambert Fred is the Editor in Chief and Main Writer at Electrek.You can send tips on Twitter (DMs open) or via email: [email protected] . (2017, May 30). Tesla is leading a new charge to allow direct sales in Texas with a pure free market approach. Retrieved November 15, 2017, from Model 3. (n.d.). Retrieved November 15, 2017, from Stewart, J. (2017, July 31). When You'll Get Your Tesla Model 3-And How to Get It Faster. Retrieved November 15, 2017, from

Paper For Above instruction

Tesla Motors, founded in July 2003 by Martin Eberhard and Marc Tarpenning, has revolutionized the electric vehicle industry over the past two decades. The company's strategic decisions, technological innovations, and challenges faced along the way exemplify both the promise and the hurdles of transforming the automotive landscape towards sustainable energy. This paper examines Tesla’s historical development, the problems it faces, and proposes strategic recommendations to ensure its continued growth and market leadership.

Historical Evolution of Tesla Motors

Initially established as a niche electric vehicle manufacturer, Tesla's early years were marked by innovation and financial challenges. Elon Musk’s investment in 2004 and subsequent appointment as Chairman catalyzed the company’s growth trajectory. The release of the Tesla Roadster in 2006 laid the foundation for mainstream acceptance of electric sports cars. Despite this innovation, Tesla struggled with financial instability, with losses mounting by 2007, prompting Ze’ev Drori’s appointment as CEO to stabilize operations (Van Den Steen, 2015).

Elon Musk’s leadership in 2008 as CEO marked a turning point; under his guidance, the company introduced the Model S in 2008, distinguished by its luxury and extended range, setting it apart from the earlier Roadster. The strategic move to go public in June 2010 was historic —making Tesla the first American car manufacturer since Ford to do so, which provided capital to expand manufacturing and charging infrastructure (Baer, 2014). The subsequent launches of the Model X in 2012 and the Supercharger network further signaled Tesla’s move towards mainstream automotive enterprise (Kumparak et al., 2015).

One critical milestone was the reveal of the Model 3 in March 2016. Designed to be affordable for a broader consumer base, the Model 3 aimed to produce high-volume sales and demonstrate Tesla’s capacity for mass-market electric vehicles. Tesla also invested heavily in building a charging infrastructure, recognizing that recharging convenience was pivotal for consumer adoption (Lambert & Fred, 2017). However, despite these achievements, Tesla encountered persistent issues with profitability, manufacturing capacity, and regulatory challenges, which continue to impact its growth trajectory.

Challenges Confronting Tesla

Despite Tesla's technological innovations, the company has yet to achieve consistent profitability. Its high research and development costs, coupled with large-scale manufacturing expenses, have prevented it from breaking even. The company’s reliance on government incentives such as Investment Tax Credits (ITCs) added volatility, as future policies could undermine its financial stability (Van Den Steen, 2015). Moreover, Tesla faces conflicts with traditional car dealerships, which oppose direct sales models that bypass conventional distribution channels, leading to legal battles and restrictions in states like Texas and Alabama (Stewart, 2017).

Additionally, Tesla’s limited portfolio of affordable vehicles restricts access to a broader customer base. The Model 3, despite its lower price point, still has long waiting periods due to manufacturing bottlenecks. Production efficiency remains a challenge, with back orders adversely affecting customer satisfaction and market expansion. Tesla’s heavy dependence on government incentives also exposes it to policy risks; should these incentives diminish, Tesla’s sales and profitability could be significantly affected.

Strategic Recommendations for Tesla's Growth

To transition towards sustained profitability, Tesla must focus on expanding its manufacturing capacity. Increasing production efficiency through automation and supply chain optimization will help meet demand and reduce costs (Lambert & Fred, 2017). Scaling up the production of the Model 3 and developing new, affordable, yet practical models will be vital in broadening its market reach (Baer, 2014).

In addition, Tesla should intensify its marketing efforts and lobby for legislation that supports direct sales in all states, eliminating barriers created by traditional dealership laws that restrict sales in regions like Texas and Alabama. Creating more affordable vehicles designed for quick manufacturing could stabilize revenue streams and safeguard against potential reductions in government incentives (Kumparak et al., 2015).

Furthermore, Tesla should explore avenues to produce vehicles at a lower cost, such as economies of scale and innovative manufacturing techniques, to maintain competitive pricing. Investing in battery technology advancements will also enhance vehicle range and performance, making electric vehicles more appealing to the mass market (Stewart, 2017).

The Future Outlook and Strategic Initiatives

Looking ahead, Tesla’s expansion into nationwide markets will be facilitated by legislative support and the potential removal of reliance on ITCs. Achieving direct sales across all states will permit more efficient customer acquisition and brand control (Van Den Steen, 2015). Additionally, Tesla’s acquisition of SolarCity foregrounds its commitment to energy solutions, integrating solar energy products with electric vehicles to offer comprehensive sustainable energy systems (Baer, 2014).

The upcoming unveiling of Tesla’s Semi-truck and next-generation Roadster signifies expansion into commercial and recreational segments, leveraging Tesla’s technological prowess (Kumparak et al., 2015). These ventures will diversify revenue streams further and position Tesla as a leader in multiple domains of clean transportation.

In conclusion, Tesla’s strategic focus on scaling production, broadening its product lineup, and influencing supportive legislation will be essential for achieving sustainable profitability and cementing its leadership in transforming the global automotive industry.

References

• Baer, D. (2014). The Making Of Tesla: Invention, Betrayal, And The Birth Of The Roadster. Harper Business.
• Kumparak, G., Burns, M., & Escher, A. (2015). A brief history of Tesla. TechCrunch. Retrieved from https://techcrunch.com
• Lambert, F., & Fred Lambert. (2017). Tesla Model 3 production and delivery updates. Electrek. Retrieved from https://electrek.co
• Stewart, J. (2017). When You'll Get Your Tesla Model 3—And How to Get It Faster. Bloomberg. Retrieved from https://bloomberg.com
• Van Den Steen, E. (2015). Tesla Motors. Harvard Business School Scholarly Contributions. Retrieved from https://hbs.edu