tesla motors
TRANSCRIPT
Background• Founded in July 2003 by Martin Eberhard and Marc Tarpenning• Headquarter are in Silicon Valley, Palo Alto, California• Manufactures electric vehicles• CEO Elon Musk • Tesla designed its own advanced battery pack, high efficiency motor & control
software. • More than 100 retailer’s and R&D in more than 31 locations all over the world• More than 6000 specialist
Continued….• Partner’s Daimler AG , Mercedes-Benz , Smart Fortwo , Toyota ,
Panasonic• March 2008- Tesla begins production of Roadster. • Eventually sells 2,150 of Roadsters. • June 2008- Announce Model S • May 2010- Tesla buys former GM factory in Fremont, CA and Toyota
signs deal to cooperate in EV development • In 2012, launched supercharger network
Tesla’s MissionTesla Motors designs and sells high-performance; highly efficient electric
sports cars — with no compromises.
Tesla Motors cars combine style, acceleration, and handling with advanced technologies that make them among the quickest and the
most energy-efficient cars on the road.
Tesla Master Plan According to Elon Musk, CEO:a) Build sports car b) Use that money to build an affordable car c) Use that money to build an even more affordable car d) While doing above, also provide zero emission electric power generation options
Elon Musk also puts into action his Master plan which he already planned after setting the Vision of the company. Model by model the company’s target is to create a cheaper model than the previous model.
Strategies Used• No Stationed Tesla Dealers- only sale through their own showrooms
and by ordering on website. Moreover, the cars are marketed better as the company will be dealing directly with the customers.
• The plan intends to create more electronic vehicles, this will also create competition. This will lead for others to create power stations all around which will reduce the cost of making their own power stations by Tesla Company. The main reason behind the plan is that Elon Musk needs the electronic industry to succeed for him to be in business for a longer time.
Industry Analysis• Fully electric vehicles• Tesla- focus differentiation• Driving forces
o Fuel priceso Tax incentives and subsidieso Fuel economy standardso Environmentally conscience mindseto Technological advances
Five Forces Analysis• Competitive Pressures from Potential New Entrants-
Moderateo High capital investment for true new comerso Slow/moderate growth in demand for EVo Opening of patents – technology sharingo Traditional auto manufacturers entering market
• Competition from Substitute Products- Higho Gas vehicles more fuel efficiento Hybrids are a happy mediumo Traditional vehicles cost lesso Buyer switching costs are low
Five Forces Analysis• Supplier Bargaining Power- Moderate
o Lithium batteries more prevalent- numerous supplierso Reliance on partnerships- Tesla suppliero Backwards integration
• Buyer Bargaining Power- Low/Moderateo Demand is moderateo Low switching costs/ not a necessityo Products are differentiatedo Few sellers
Five Forces Analysis• Strength of Rivalry-
Moderateo Increasing number of competitors
• Especially existing car manufacturers
o Sharing of technology- less differentiation
o Buyer demand is moderate- slow growing
o Low buyer switching costs
Value Chain• Operations
o Everything manufactured in Northern California• Innovative and automated
processo Produce approx. 83 vehicles
per dayo Easily programmed to
produce different car models
• Inbound Logisticso Most important components
manufactured in-houseo Other components are
produced/delivered by suppliers
o This minimized wait periods and improves efficiency of production
o Predominantly consumes aluminum, steel, cobalt, nickel, and copper
Value Chain• Marketing & Sales
o Tesla does not market or employ an advertising agency
o Locations are strategically located in high foot traffic and wealth districts
o Celebrity advertising also increases its popularity
• Outbound Logisticso Distributed in own stores
across 18 countrieso Purchasing is made via
online channels and showrooms
o Delivery options are also available
Value Chain• Infrastructure
o Flat/horizontal organizational structure• CEO – decision maker• Delegates authority to
lower levelo Allows for better
communication and faster decision-making, etc.
• Serviceo Locations in North America,
Europe and Asiao Many charging stations for
customer vehicleso Provide 50,000 mile
warranty policy
Value Chain• HR
o High Street Partners• Used for hiring process to
employ talented workforce and preserving culture
o Provides employees with company shares motivating managers to adopt strategies that increase the share price of organization
• Procuremento Developed good relationship
with strategic suppliers• Partnership with
Panasonic• R&D
o Provides Tesla with competitive edge
o Incredibly innovativeo Elegant product design,
superior quality and value
Tesla Financials• Leverage Ratios
2013 2014 2015-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
Total revenues
Total cost of revenues
Gross profit
Total operating expenses
Loss from operations
Net loss
2014 2015
Current Ratio
1.51 .99
Debt to Asset .83 .86
Debt to Equity
5.33 6.39
Working Capital
1M -24.7K
Tesla Financials• P/E Ratio
1/1/20
13
3/1/20
13
5/1/20
13
7/1/20
13
9/1/20
13
11/1/
2013
1/1/20
14
3/1/20
14
5/1/20
14
7/1/20
14
9/1/20
14
11/1/
2014
1/1/20
15
3/1/20
15
5/1/20
15
7/1/20
15
9/1/20
15
11/1/
2015
0
50
100
150
200
250
300Tesla Stock Price 2013-2015
Adj Close
2014 2015(94.24) (34.63)
SWOT Analysis- Internal• Strengths
o Innovation- strong R& D capabilitieso Backward & forward integrationo Best battery rangeo Awards & accoladeso Brand recognitiono Exceptional serviceo Warranty
SWOT Analysis- Internal• Weaknesses
o Vehicle costso Autocratic structureo Product line breadtho Liquidity/ financial performanceo Forward integrationo Detour frustration & range anxietyo Long battery charging times
SWOT Analysis- External• Opportunities
o Leading company in car manufacturing innovation and technology
o Take advantage of the renewable energy and environmental protection craze alongside the rapid technological developments
o Continue growth pattern to become the leading auto company providing best technologies and vehicle design at convenient prices
o Development of affordable mass market electric vehicles
SWOT Analysis- External• Threats
o Established manufacturers entering the electric car marketo Companies with greater economies of scale, o Well trusted and recognizable brand image recognitiono Companies with more experience and higher expertise in
automobile marketo The ability to manage at lower prices than Tesla for an extended
period of timeo General Motors, Toyota Motors, BMW, etc.
Recommendations• Focused differentiation strategy targeting upper-income customers• Provide high performance and innovative vehicles they started with • Continue research and development on cutting edge technology • Continue to improve and increase battery life and distance• Use Tesla technology to create the standard for future charging
system• Seek a global presence as the premium electric car manufacturer• Create a strategic alliance with Apple or Google (1+1=3)