Tesla lnc. Is an American car manufacturing company named after the famous scientist Nikola Tesla. Tesla has reached the heights of zenith due to its innovative approach in the car industry. Tesla has emerged as one of the most successful business organizations of modern times. This SWOT Analysis helps to discover Tesla’s strengths, weaknesses, opportunities, and threats. Internal and external factors which lead to an organization’s success in the competitive market are discussed in detail.
TESLA’S STRENGTHS
This SWOT section is devoted to the organization’s strengths. It involves those positive aspects of the company, which leads the company to retain its top position in the global automotive industry.
Resourceful Automotive Industry
With the rise in the fondness of modern technology and the ability to produce environmentally friendly cars, Tesla has captured a lot of customers. In the year 2021, Tesla earned a sale value of $53.8 billion, delivering 936,172 cars. The company’s profit was pushed to $5.6 billion and accumulated a market value of $1 Trillion, bypassing the top 5 automotive industries (Toyota, Volkswagen, Daimler, Ford, and General Motors).
Executive Electronic Cars
Tesla has the edge of producing the most refined and reliable cars due to technological advancement. Tesla electric cars are applauded due to their capacity to cover a long distance at a single charge. Tesla Model S can cover 600 kilometers in a single battery charge. This convenience has increased the company’s legacy worldwide.
Innovation as a Tool to Grow
Perhaps Tesla organization is fully aware of the fact that only the best can survive and flourish. Tesla’s rigorous pursuit of innovative technology and innovation in the car industries has enabled the company to gain popularity. Tesla recently introduced the world’s first electric semi-truck, and new sports cars are worth mentioning here.
Best Employer Organization
Tesla has been successful in making highlights in Forbes as ‘America’s Best Employer 2021’. Therefore, it has become an ideal place to work. Experienced employees and freshmen are impressed by the company’s healthy corporate culture and innovative strategies.
Increased Delivery and Better Positioned
Tesla’s demand rose to double in 2021 as compared to 2020. It sold more than 0.9 million units of Tesla cars, almost double that the previous year. Therefore, it has proved to be an organization that can stand adverse crises like a pandemic.
TESLA’S WEAKNESSES
This SWOT Analysis gives a company’s weaknesses that damage or hinder the performance and financial gains of the corporation. These are the disadvantages responsible for feeble growth and reduced business growth.
Small Volume Production and Incapable of meeting demand
Tesla company is facing many obstacles in an urge to produce higher volumes. Product’s complicated and highly experienced designs make it difficult to manage resources. Like, the company desired to produce Model 3 in volume but failed to meet the expected figure. Tesla must balance the supply and demand sides of the business.
‘Musk’ Centralized Corporation
Elon Must capable leadership qualities have aspired those who live around him. The company’s chief has a lot of other stuff than Tesla to deal with. Therefore, it Must capacitate its employees to keep the professional work up under the general guidelines of the chief.
Financial Burdens
Tesla’s debt ramping up to over $5.38 billion is another burden on the organization. Although the company has shown a lead in market share, there are still risks of strained expansion, low capital, and auctioning assets.
Severe Discrimination among the Workforces
Tesla’s workforce and the board of directors are involved in a certain power struggle. Moreover, gender-based discrimination and sexual misconduct can hurt a company’s normal functioning and stability. These weaknesses make the company prone to many dangers.
Problematic Manufacturing
The organization faces a lot of issues while dealing with the production of its designs. Due to high experimentation and a permanent quest for innovation, the company faces delays in launch, manufacture, assemble, and delivery services. For instance, Tesla’s launch of Model X met several delays and inconveniences at Gigafactory 1.
TESLA’S OPPORTUNITIES
This section gives a view of opportunities that are available to Tesla. These are the external factors that can enable Tesla to compete, grow, prosper, and innovate. These opportunities can lead to expansion in the global market to increase financial stability and recognition.
Launch of Battery Production Technology
Panasonic is the major supplier of batteries. As Tesla’s products heavily rely on efficient batteries, Tesla intends to make their own cells. This initiative can turn out to be a game-changer for Tesla. It can reduce production costs and can increase the manufacturing rate of production.
Bringing Cheap Cars
There is an urge in the market to go Tesla because of its unique designs and features. However, the restraint is the price of the car for many people. Tesla’s high cost is linked to the aggressive, innovative nature of the process, which burns resources. Anyhow, Tesla’s launch of Model 3 with relatively low-cost and limited features can swell the marketplace audience.
Bridging the Air-Taxi Market
Tesla’s quest for innovation would open many new doors to explore. Increased demand for Air-Taxi is expected by 2025 due to increasing unease in conventional traffic. Tesla’s approved electric vertical takeoff and landing (eVTOL) technology aim to serve this market.
Growth of Electric Pickup Truck
Tesla has an opportunity to explore potential buyers of pick-up trucks. They are relatively less explored by electric cars. The data shared by US National Automobile Dealer Association that 17.6% accounts for trucks in the US automobile market. Tesla can exploit this massive market opportunity to increase its sales and revenues.
Sales expansion in untapped market
The huge consumption markets around the developing countries are another opportunity for Tesla to expand the company’s operations. These markets are easy to target due to the unsaturation of cars there. This would lead to Tesla brand recognition worldwide and an increase in revenue and market share.
TESLA’S THREATS
These are the external factors that are hindering a company’s growth and financial gains. These threats must be addressed in an earnest way to increase the company’s worth and stability. Few threats that Tesla faces in the maintenance of business are exposed below.
Endless Competition
Arising competition in the automotive industry is a challenge for Tesla. The two technologies, alternative fuel vehicles, and self-driving technology, are facing fierce competition. Luxury and economic brands are preparing themselves for the competition. Moreover, they are offering cheaper cars with updated technology and innovation. Tesla, on the other hand, sells its products at a high cost.
Disruptive Supply Chain
Tesla has faced shortages in the supply of materials like aluminum, steel, nickel, etc. These materials are required in the manufacture of products. Disruptive supplies and volatile prices can affect a company’s production and price determinants.
Product Liability Claims
Product liability claims arise from unwanted incidents. Many people claim their liability after product failure or fault in court. These are the reputational and financial blows. Tesla’s autopilot vehicles met many unfortunate events which were sued in court, and the company suffered many setbacks.
Elon Musk’s Unpredictable Conduct Distressing Tesla’s Status
Tesla’s real face is Elon Must. This ‘one-man shows’ earned disrespect when Musk smoked marijuana on Joe Rogan’s podcast. The stock value dropped to 9% by this professional misconduct of such a visionary man. Elon Musk must control his strange behavior and impulsive reactions in order to enrich his organization’s reputation.
Customer Adaptation and Satiation
Any business is successful as long as its consumer base is healthy. Without buyers, the company would run out of resources and urge to move on. Tesla’s robust, innovative strategy can be listed as a long-term policy if customer adaptation to new technology is realized. Change is difficult to bring, but it is easy to retain. The process may be burdensome, but it will bear excessive results in the future. The organization’s dependence on electric cars is yet to be adopted by the customers.
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