SWOT Analysis of Tesla

SWOT Analysis of Tesla

Tesla Inc. is a product of America’s Silicon Valley owned by Elon Musk. Tesla Inc. has been a success story driven by innovation, which has enabled it to rise as a dynamic automotive organization as well as in energy solutions. The company is currently dominant worldwide for its topnotch innovative mindset in its products. Through the introduction of unmatched automotive models which are electrically powered and environmental friendly, the company is revolutionizing the automotive industry worldwide. The company, similar to other businesses, is exposed to an environment that can impact its performance in the market. The company has invited many business enthusiasts who seek to analyze and learn about its success. In this analysis, it will be able to unravel the company’s business model and factors that constitute its performance, which include threats, strengths, opportunities, and weaknesses.

Strengths

Several factors have enabled the company to stay profitable, expand, and become popular as time progresses. For instance, the company is regarded among top employer organizations in the United States. It receives top talents as the company engages in a unique talent search model. It demands a diversity of employees and has a culture that embraces and encourages innovation. It currently features as an ideal place to work and hence inviting fresh talents yearly.

Tesla Inc. is also a leader in the automotive industry. The sales of Tesla have increased despite a range of legal issues. In 2019, the company is leading with 90,000 vehicle deliveries in the previous year’s last quarter with its Model 3 achieving 63,150 deliveries, Model X with 14,050 deliveries, and Model S with 13,500 vehicle deliveries. Its brands are exclusive similar to BMW and Mercedes.

Tesla Inc. is the best in electric car production. Its vehicles have been able to cover maximum distances. The company occupies three top positions in distance traveled per single battery charge. For instance, Tesla Model S has its battery, which covers 600kms per charge. The company also dominates in EV sales in the US. It beats other companies with EV, including Chevrolet, Nissan, Toyota, and Ford. The company also insures its vehicles, assuring its customers of damage cover.

The culture of innovativeness in Tesla Inc. is a primary factor in its success. For instance, the company has been able to develop a fully electric new sports car and semi-truck. Therefore, customers expect the company to remain competitive and its products to be profitable.

Weaknesses

The company has demonstrated a range of internal weaknesses such as in its organizational structure, which tend to limit its growth and competitiveness. For instance, the company experiences complications in its manufacturing. Due to its focus on high innovation standards, there is always a huge production risk factor and mechanical complications. The company often experiences continuous production, manufacturing, and launch ramp delays of its products. For instance, Model X experienced continuous manufacturing challenges and hence resulting in continuous delays in distribution, which was a similar case to its Model X battery.

The company tends to experience unbalanced supply and demand. This is because of its highly complicated and experimenting procedures. This can be seen through its 2019’s delivery rate, which was abysmal by 63,000 vehicles in the first quarter, which was a drop by 31% compared to the previous period in 2019. Tesla Inc. also experiences a shortage of batteries, which adversely impacted the sale of energy storage systems and electric vehicles. It also does not produce massively and faces challenges such as management resources, production cost as well as expansion issues in its Gigafactory 1. Tesla is run by Elon Musk, who cannot put one hundred percent of his energy to the company due to his other projects in his companies, such as The Boring Company and Space Exploration Technologies Corporation.

Opportunities

The electric vehicle industry has a very wide untapped market globally. Currently, Tesla has set a foothold in Asia to tap the Asian market. The Asian market is also in high demand for renewable products, which is offered by the company due to high pollution levels in countries such as India and China and other Asian nations. The company has gone further to come up with Model 3, which is less expensive compared to Model S and hence tapping another chunk of the market. The company can also make its own batteries rather than purchasing them. This will cut costs and increase profits.

Threats

Tesla produces high-quality products, which is the reason for the spike in consumer interest. However, it faces liability claims if its products fail in cases of accidents, which it indeed fears. It has faced a number of lawsuits regarding the failure of some of its systems in vehicles, which is a big setback. There is an increased competition in the electric vehicle market and mainly emerging from the traditional automotive companies, which have started to provide alternative fuel vehicles and self-driving technology. In addition, some of its customers have complained of product defects which might destroy the company’s image. Long term consumer confidence in the company is a challenge due to internal problems experienced, such as unstable manufacturing conditions.