Introduction

Tesla Motors is American energy storage

and automotive that manufactures and

designs luxury electric vehicle powertrain

components and electric cars. Elon Musk

is the founder of Tesla Motors. The name

of the company derives from the physicist

and electrical engineer Nikola Tesla. Roadster of Tesla uses AC motor that comes

from Tesla’s original design of 1882. Roadster is Tesla’s first vehicle and is the first

produced automobile to use lithium battery cells. It is the first production with a range

greater than 200 miles (320 km) per charge. From 2008 to March 2012, Tesla made

sales of more than 2,250 Roadsters in more than 31 countries.

In 2012, Tesla launched Model S, the world’s first premium electric sedan. Initially it

is an all­electric car. Model S provides the comfort and utility of a family sedan while

achieving the acceleration of a sports car: 0 to 60 mph in about five seconds. Model

S was named Motor Trend’s 2013 Car of the Year and achieved a 5­star safety rating

from the U.S. National Highway Traffic Safety Administration.

In late 2014. Now with more than 50,000 vehicles on the road worldwide, Tesla is

preparing to launch Model X, a crossover vehicle featuring exhilarating acceleration,

falcon wing doors, and room for three rows of seating, Model X defies categorization.

SWOT analysis

SWOT analysis of Tesla Motors will elaborate the strength & weakness of, opportunities &

threats for Tesla Motors. It will provide a visual overview that will prompt discussion around

the company’s strategy and situation. This SWOT analysis of Tesla Motors can be used to

evaluate the position of their business, to guide overall business strategy session of Tesla

Motors, or to go deep into a specific segment like production, marketing and sales.

Strengths

1. CEO Elon Musk ­ well known professional with good track record.

The CEO Elon Musk has earlier founded companies like PayPal and SpaceX,

so he has a good track record. He is also a car enthusiast and has owned,

among others, a 2007 Porsche 911 Turbo, a Hamann BMW, an Audi Q7, a

1967 Series 1 E­type Jaguar and a McLaren F1.

2. High­quality car design.

Tesla Motors can design really good cars. The Model S won the 2013 Motor

Trend's Car of the Year award, which is a competition that began in 1949, and

achieved a 5­star safety rating from the U.S. National Highway Traffic Safety

Administration.

3. The Tesla Stores are similar to the Apple Stores and are an innovative

way to market the Tesla cars.

Tesla Motors is only selling electric cars, and people are still suspicious of

electric cars. To tackle the problem, Tesla Motors has begun to build Tesla

Stores. People can visit these stores and learn why electric cars belong to the

future.

4. Has own researches in self­driving cars technology.

Tesla released its Autopilot mode in 2015. It has a fundamentally different

intellectual approach to autonomy than Google’s, and may me a better

solution. More info [external link] .

5. Popular among celebrities.

33 Celebrities Who Drive Teslas [external link] .

Opportunities

1. Environmentalism is in trend now and Tesla has good support from

society.

People care more and more about environmental issues and the fact that

most oil comes from "troublesome" countries.

2. Oil is finite resource, so electric cars will be more competitive in future.

3. Daimler and Toyota bought electric vehicle technology from Tesla

Motors, and more auto manufacturers may decide to do the same.

4. Battery technology can be used in other areas.

For example it can be used for storing power from solar panels, like the

Powerwalls they announced in 2015.

5. If SpaceX will reach it's goal with Mars colonization, Tesla will produce

the first extraterrestrial people transporter.

Sell cars on other planets. Elon Musk is also the CEO of SpaceX which is a

company with the long­term goal to colonize Mars. In an interview, Elon Musk

said, "For sure Tesla would make the first people transporter on Mars!"

Weaknesses

1. CEO Elon Musk has overloaded work schedule.

He is working as CEO and CTO of SpaceX and as the CEO of Tesla Motors.

That's a busy schedule and it would be difficult to find a new CEO. Before

Elon Musk became the CEO of Tesla, the company had to fire one CEO, they

had two interim­CEOs, and they interviewed more than 20 people before Elon

Musk decided to take the job himself.

2. Price is still too high for wide audience.

Announced model X cost scales from $83,000 to $150,000. Even though, the

price may seem reasonable considering the quality; it remains unattainable for

most middle class.

3. Poor infrastructure for electric cars.

Tesla Motors are doing their best to change this by building Superchargers,

which are like gas stations but for electric vehicles only. But it is far from 100%

coverage in USA. Other countries show even worse statistics.

4. Limited revenues and lack of profitability.

Net Income is still negative.

5. Poor variety of products.

Roadster, Model S, Model X, Model 3 (GEN 3). That’s all.

Threats

1. More and more huge manufacturers are releasing their own electric and

environmental friendly cars.

Larger companies can survive longer if the price of oil doesn't increase in the

near future. Companies that also produce cars with fuel engines don’t suffer

from low oil prices.

2. Accidents with brand­new technology usually get more attention.

Everyone got used to thousands of automobile crashes per day, but

accident with electric or self­driven car will be on front­pages.

3. Laws can delay or prevent sales in some regions.

Tesla has refused to cooperate with car dealers in USA. In result direct sales

are allowed only in ~20 states.

4. Possible loss of government subsidies.

Incentive programs are offered and administered by government agencies.

Eligibility and availability vary and are outside of Tesla’s control. Most

programs are limited to a total dollar amount that can be dispersed or will

expire on a certain date.

Conclusion

Tesla doesn't really have problems with its cars — not major ones, anyway. And in

any case, if something does go wrong, Tesla will fix it. Because Tesla is a young

company by auto­industry standards and working with new technologies, it wants to

fix its cars, so that it can learn how to build them better.

That doesn't mean Tesla doesn't have problems. In truth, Tesla has two big ones.

1. Tesla has to maintain its own fueling network.

Tesla sells the only all­electric vehicles on the market than can deliver range that

rivals gas­powered cars. But getting enough charge in the battery of a Model S to

deliver 270 miles is no easy matter, especially if an owner is taking a long trip. For

that, high­speed charging is imperative, unless you're in the mood to wait 12 hours

for that great big Tesla battery to rejuice.

Tesla has always known this, and that's why the company developed its

Supercharger network. For all practical purposes, Tesla owners can now drive their

cars free from range anxiety in the US, given how extensive the Supercharger

network now is.

At the moment, there are nearly 3,000 individual Superchargers worldwide and over

500 Supercharger stations with more to come. One of these things can return an

80% charge to a Tesla battery in under one hour.

Awesome, to be sure, but think about that for a second. Tesla ownership, while

tenable, doesn't really function optimally without the Superchargers. Fast charging is

a must, unless you want to drive 250 miles and then park your EV overnight while it

slowly recharges at a non­Supercharger charger.

So Tesla isn't just in the electric­car business; it's also in the electric­car­charging

business.

It's as if General Motors, in additional to building cars, were operating gas station

nationwide. Which it isn't.

It doesn't cost Tesla very much to operate a Supercharger station. But it does cost

Tesla a decent chunk of change to build one. And if the carmaker reaches its goal of

delivering 500,000 vehicles annually by 2020, it's going to need to build a lot more

Supercharger stations.

2. Tesla is trying to reinvent the car dealership.

Tesla doesn't want to make use of the traditional franchise­dealer system that has

ruled car sales for a century. Rather, Tesla wants to sell cars directly to consumers.

In several US states, the company has been able to convince legislators either to

allow it to do this or create exceptions to the existing dealer­franchise laws.

To facilitate these transactions, Tesla wants to establish a network of "stores," where

prospective customers can check out vehicles, take test drives, order cars, and get

service. Mind Apple Store. Tesla has the retail experience.

That's just not good enough for Tesla, and it makes sense. Traditional dealerships

can be good businesses for one very key reason: service. Oldfangled cars need

relatively routine service, everything from oil changes to more ambitious tune­ups

and repairs. Tesla, though being not free of maintenance concerns (as Consumer

Reports surveyed owners would be quick to note), has far less maintenance

intensive than their gas­burning cousins. A Tesla is essentially an electric motor (or

two), four tires, four sets of brakes, a chassis, and some electronics. It is a simple

machine.

There isn't much for Tesla to gain on the service side. There is plenty for Tesla to

gain on the experience side, however. Ensuring that a customer can be properly

introduced to Tesla's world makes all the difference. That's why Tesla wants to do

direct sales. If a customer checks out a car, he or she is likely to buy one (or at least

order one for delivery when Tesla can build it).

So why are these problems for Tesla?

Here's why: They add, in effect, two more businesses to Tesla's plate. It hard enough

to build a revolutionary automobile. But Tesla also wants to provide the "fueling"

system and the control the retail environment. And while it's true that traditional

automakers often support their dealer networks with financing and incentives, what

Tesla is trying really is much closer to what Apple does with its stores .

Recommendations

1. In order to deal with the major threat ­ high price, it is recommended to widen

the range of models within premium and small premium vehicle segments that

allow competing with other companies. They should aim to be affordable and

available for different markets segments and not just for premium segment

alone.

Tesla should develop 3rd generation cars in price range of $30,000 to be

competitive with other brands outside premium cars area.

2. Furthermore, despite Tesla‘s products have technological advancement, it

should continue to stay on the cutting edge of innovation and quality, and

accelerate new product development. For example, they may reduce the time

of recharging the car to the point that it will be a 1:1 comparison to gasoline

models and improve battery types and modularity, to increase the travel

distance on a single charge.

3. Develop Tesla’s production capacities to support mass production and to

reduce production time.

4. Investigate the feasibility for customizing the powertrain components or

applications in other industries.

Electric Bikes industry: ZERO bikes and BRAMMO for electric bikes the

current max range is 80 miles and the required time for full charge is 7­8

hours.

Aviation industry: Boeing with the 787 Dreamliner battery issues.

Railway Industry: Subway or commercial trains that use batteries for lighting,

air­conditioning emergency braking and door opening systems etc.