Tesla Motor Analysis

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As said by Tesla (2014) the association was framed in 2003 as a progressive vehicle business utilizing the most recent innovation as its upper hand. The vehicle could conceptualize and make a freely electric vehicle known as the roadster. The idea of the vehicle structures was Silicon Valley roused. The association “plans, fabricates and moves zero discharge electric vehicles and power train parts, for example, lithium-particle battery packs”. The association has looked for key organizations with organizations, for example, Daimler, Panasonic, Toyota and US division of vitality.

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Tesla’s PESTEL Analysis

In our textbook, it shows what PESTEL stands for which is political, economic, sociocultural, technological, ecological, and legal. This six-segment model gives a straight to the point way to scan, monitor, and evaluate the important external factors and trends that might impinge upon a firm. P- As stated by Tesla (2014), Tesla engines move their autos in various nations over the United States, Europe and Asia and henceforth, the organization is presented to various political circumstances happening in each one of those nations. According to James Article (2016), a few nations political condition are influenced by environmental change issues and thus, law established to cut carbon discharge by a specific rate and this influences vehicle makers. The US government is putting forth motivating forces to vehicle makes that try to item autos increasingly effective and better in using green vehicle innovation.

E- There is an elective road for development for vehicles offering autos, which use elective vitality. The expansion expenses of oil have made business progressively troublesome and thus, organizations and people need an elective answer for the rising fuel costs. Most created nations are presently recuperating from the budgetary emergency; the acquiring power is currently higher, extraordinary new for makers who have items that at required.

S- Today the word green innovation is related with organizations that are viewed as delivering items that are useful for nature. Carbon outflow from vehicle depletes are a major supporter of ozone depleting substances influencing the earth situations.

T- The vehicle part has seen gigantic changes because of mechanical advancement influencing a few parts of the vehicle proficiency. Vehicles have been experiencing transformation with vehicle produces searching for method for decreasing the fuel allow so as to enhance proficiency

E- Eco well-disposed vehicle is the word addressed vehicle maker in the event that they uncommon to stay focused by clients over the world. With fuel spillages announced in a few spots, bringing about lost marine and feathered creature life, there have been a developing number of tree huggers compelling their administration to direct the division and permit just eco-friendly vehicles on their streets. The end result for the ozone layer is another factor pushing some individual and organizations to think about vehicles, which do less harm to the earth.

L- The US has a market presents difficulties for Tesla as a vehicle makes particularly because of the establishment laws in the nation (Jones, 2016). The vitality credit program additionally in the nation builds the odds of vehicle producer to create increasingly green autos in the segment.

Tesla’s SWOT Analysis

On page 134 of our textbook, an internal analysis of the company’s strengths and weaknesses with an external analysis of opportunities and threats is considered a SWOT analysis.

The strengths of Tesla include musk is a great business and engineer for this company. Tesla has beautiful, safe, eco-friendly cars which has been a great sales proposition for them. Their cars are made in the United States so there is a sense of quality. Tesla owns most of supply chain of battery factories and retailers, so costs are lower. Also, Tesla employees are well educated on the company and the cars that they sale. So, the sales people at retailers can educate consumer on what they may need to know.

Tesla’s don’t have too many weaknesses but a few of them can definitely change over time. For example, one weakness consists of them only having a few car models. Meaning they don’t have a huge selection of cars for consumers to choose from. This could cause consumers to go somewhere else cause some people like have a wide variety of options. Also, Tesla has one factory, so distributors costs are high. As time progresses and they understand that it is a weakness, things will tend to grow and will then become a strength. They have not proved themselves to be profitable in the long run which is a huge weakness.

After doing some research I found that Tesla don’t have many threats or opportunities. The opportunity that they are presented with is the preference for new technology. Vehicle inventions is taking a radical new turn and there are a large group of new advances like half and half vehicles, green autos, electric vehicles, battery worked vehicles and self-propelled independent vehicles. Tesla has looked into and propelled numerous items in these rising innovation territories. Just like other companies in the world their main threat is competitors. Mostly everything has a competitor. Even us as individuals have someone that is in competition with us. Tesla have many competitors such as Ford, Chrysler, General Motors, etc. According to marketing 91 Tesla even have competition with technology companies such as GOOGLE (2018).

VRIO Analysis

To be a quality, the firm should have the capacity to either exploit a chance or kill a danger. On the off chance that it can do neither one of the, can be viewed as a shortcoming. Tesla’s manufacturing plant unquestionably makes an incentive in that the plant is relied upon to decrease the expense of the lithium-particle battery by 30% (Kendell, 2016). By lessening their costs, they will have the capacity to move their vehicle more economically than they generally could.

Next a firm should comprehend the rarity of their asset or capacity. In the event that an important asset is normal, that asset does not make an upper hand, yet rather focused equality. Tesla’s plant is unique for automobile makers. They are the main organization wanting to construct their very own lithium-particle battery. Not exclusively is this unimaginably uncommon, however it will enable them to decrease their battery costs, pitch their batteries to different makers, and give them a stage for making elective items. At the time, this irregularity seems, by all accounts, to be economical; be that as it may, the achievement of the electric vehicle could provoke different makers to do likewise, making this an impermanent preferred standpoint.

When taking a look at some organizations assets of significant worth and rarity, we should then think about how likely that asset is to be imitated. On the off chance that there is cost burden to a firm in impersonating the asset, this asset can be viewed as a competitive advantage. There are a high number of substitutes, and the processing factory can be copied whenever needed under comparative cost imperatives. Tesla has conceded, just a couple of firms could bear the cost of the capital required to assemble it. The development of the electric vehicle market will at last choose whether other car producers would present their very own battery production lines. In the event that the market does not develop fundamentally, Tesla will probably have a continued cost advantage over contenders as existing producers will see development of one of these plants as a cost impediment.

Several complementary factors such as its formal reporting structure, explicit management control systems, and compensation policies, all affect whether a firm will fully realize the competitive advantage potential (Kendell, 2016). Tesla prides itself on enlisting quality ability and does as such with seeing turning into the vehicle producer of things to come. Since Tesla is so moderately new it is difficult to know whether their strategies and methods will enable them to exploit their competitive advantage. Tesla’s factory is a resource that is valuable, rare, not realistically imitable, and likely to be fully exploited by the organization. According to the VRIO framework, this classifies this resource as a sustained competitive advantage (Kendell, 2016).

Business, Corporate, and Global Strategy

Tesla CEO Elon Musk has uncovered the new and refreshed edition of the Secret Tesla Motors Master Plan in a post on the organization’s site. Tesla plans to focus on selling integrated energy generation and storage, this will expand them into other forms of ground transportation like trucks and buses. Finally, Elon is looking to allow owners of its cars to share their vehicles with others in order to have the car make money when it isn’t in use. According to the article on the verge, First, Tesla is looking to build an integrated solar-roof-with-battery product. It’s part of the reason for the acquisition of SolarCity, and the two companies, according to Musk’s vision, will be able to combine forces to build a single product. Then, Tesla plans to expand beyond the Model S, Model X, and Model 3. Musk says there are plans for a future compact SUV and a “new kind of pickup truck.” Then, for more industrial applications, he envisions heavy-duty electric trucks and solutions for “high passenger-density urban transport ??” in other words, buses (Golson, 2016).

Tesla is causing the auto industry to change very fast. They got many other companies changing factors in the way they do things. Large, established automakers now are making fully electric and hybrid electric cars. Automakers are starting to explore and include artificial intelligence in their cars, and now major automakers and U.S. Congressmen are discussing autonomous vehicles (AVs) and how best to innovate and regulate them (Patrick, 2018). I believe that with so many companies trying to do what Tesla is doing it will definitely bring more competition for them. Not only that, but Tesla’s software design is state-of-the-art because Tesla can update vehicle software over-the-air as if it were Apple updating an iPhone is unprecedented. As cars become more tech-savvy, Tesla is in the lead.

Recommendations and How to Execute Them

There are many of things that Tesla can do to make sure that they survive in the auto industry. On CNBC.com, they conducted an article that states six ways that Elon Musk can keep Tesla on the right track (Mullaney, 2016). In the article the first way consists of Tesla hiring and empowering a huge chief executive office. Next, Tesla needs to be more transparent about the things that matter and less transparent about the things that do not matter. Also, Elon needs to soon decide what to do about their ability to move freely and easy. The last ways that Tesla can stay on the top are that they should consider separating the mobility and car business and turn Tesla profitable.

The main external environmental factors that Tesla needs to address to achieve a sustained competitive advantage includes them working with planned partners to improve the use of alternate energy products such as powertrains, batteries, and automobiles among the company’s customers. From an internal environment standpoint, the company needs to decrease its production cost through continued investment in R&D. This will help the company reduce the cost of its leading products and them more affordable.


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  2. Golson, J. (2016, July 21). Elon Musk’s ‘Master Plan’ for Tesla is about energy, new cars, autonomous, and sharing. Retrieved December 9, 2018, from https://www.theverge.com/2016/7/20/12242162/tesla-elon-musk-master-plan-solarcity-autonomous
  3. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic management: Competitiveness & globalization: Concepts and cases(4th ed.). Boston, MA: Cengage Learning.
  4. Kendall, J. (2016, February 19). Chapter 5: Evaluating Firm Strengths and Weaknesses – The Resource-Based View. Retrieved December 9, 2018, from https://jonkendallsite.wordpress.com/2016/02/18/chapter-5-evaluating-firm-strengths-and-weaknesses-the-resource-based-view/
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  6. Mullaney, T. (2017, July 23). As skeptics abound, here are 6 things Elon Musk must do to keep Tesla on track. Retrieved December 9, 2018, from https://www.cnbc.com/2017/07/19/6-things-elon-musk-must-do-now-to-keep-tesla-on-track.html
  7. Patrick, K. (2018, February 20). Case study: How Tesla changed the auto industry. Retrieved December 9, 2018, from https://www.supplychaindive.com/news/case-study-how-tesla-changed-the-auto-industry/517251/
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Tesla Motor Analysis. (2020, Feb 07). Retrieved December 6, 2022 , from

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