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Pages:
3 pages/≈825 words
Sources:
3 Sources
Style:
Other
Subject:
Management
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
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Topic:

Alternative Strategies Of Tesla: Automotive Industry Structure

Essay Instructions:

One 800 word essay
Preparation:
visit tesla.com
www(dot)tesla(dot)com/powerpack
www(dot)solarcity(dot)com
What are Tesla Inc. true core competencies?
Based on a quick analysis of the automotive industry structure, would you stay in the auto industry as an independent car maker? Why or why not?
Considering the amount of capital required to succeed as a car maker, evaluate the opportunity cost associated with Tesla Inc.'s staying in the auto business as an independent auto maker.
If you find yourself short of ideas some quick searches on Bloomberg.com and the WSJ could give you ideas. Also, you could take a quick look at analyst reports.
The key to this essay is weighing the alternative strategies - does TESLA have what it takes to compete with a US$ 40 billion investment in electric vehicles planned by Volkswagen alone, and the tens of billions pledged by other car makers?
A lot depends on what you identify as TESLA's core competency - which may not be car manufacturing.
Consider an analogy with Apple's iPhone which has design and brand features that earn it a huge premium over cost; can the same business model be replicated in the auto industry, and are there enough buyers who can afford to pay a 20% premium on a car with the promise of future fuel savings?
And finally as fuel efficiency of its competitors increases and more hybrid cars hit the road, the US government may eliminate the $7500 electric vehicle tax credit - which is basically a $7500 per vehicle subsidy to TESLA.

Essay Sample Content Preview:
Students name Professors name Course Date Alternative Strategies for Tesla The car manufacturing industry is a competitive field especially when it comes to utilizing alternative fuel options which are becoming popular and widely employed due to the need of maintaining a healthy environment (Tesla Motors, 2). Tesla Motors and auto mobile company has blend acceleration, style, and technology advancements making their vehicles consume less energy and more swift globally. The company’s zero emission Sedan brand is number three in Europe, USA and some parts of Western Europe (Tesla Motors, 2). The company is well established and is operational in more than sixteen countries in three continents, which include Asia, Western Europe and North America. These companies have blend with the political states in these regions despite the political structures affecting its operations. All the operations of this company in the three continents have been affected by environmental protection laws that dictate how a company should carry its activities in a given country. Most of these laws tend to protect the environment from destruction and excessive exploitation. These laws try to influence companies to produce an automobile that is environmentally friendly. These rules are meant to ensure that automobiles do not pollute the environment as the environment is a resource (Alpert, par.5). Most customers who are buying cars at this age try to buy vehicles that are gasoline free as most of them are concerned about environmental protection. Customers abstain from gasoline cars as the society has been known to judge individuals as per the vehicles they drive. This has forced individuals to prefer owning electric vehicles as they are considered wealthy. Also, the aging population in any region prefers these electric vehicles to gasoline-driven vehicles for purposes of saving and reducing the costs incurred. The Tesla Company is also facing a lot of competition from other car manufacturers who are using most of their resources to manufacture fuel-efficient and eco-friendly vehicles. Problem statement Tesla Motors is facing threats from well-established automobile companies such as Volkswagen and Toyota companies. Most of these found motor companies are channeling their resources to creating electric cars which are fuelled by alternative sources of energy. These alternative sources of energy are meant to eliminate gasoline in the picture. For instance, Volkswagen and other automobile companies have posted a $ 40billion challenge to Tesla (Tesla Motors, 2). This amount is used in the production of plug-in and hybrid electric vehicle programs which are environmentally friendly and consume lesser energy to move. However, despite all these challenges, Tesla can ...
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