Tesla Motors is a new age automotive company which manufactures alternative energy vehicles like solar-powered cars, hybrid vehicles, and battery operated vehicles. A pioneer of sustainable energy options Tesla Motors is backed by a very strong research and development team and is considered to be a benchmark in green technologies.
The company was first established in the year 2003 by a group of engineers who wanted to break the conventional mindset that driving in electric cars required a compromise. The company is also credited with a number of firsts and has motivated a number of competitors to try out new designs in alternative energy vehicle technologies. Tesla Motors makes cars in almost all categories like sedans, hatchbacks, and convertibles that run on alternative energy.
Tesla manufactures its vehicles in its factory in Freemont California and in order to ensure that they create a completely sustainable energy ecosystem. Tesla makes a number of other products which help homeowners manufacture and store sustainable energy options. Owned by Elon Musk Tesla recorded an annual turnover of USD 29 billion and have around 38,000 employees.
Strengths in the SWOT analysis of Tesla Motors
The following are the strengths of Tesla :
- Technology: Tesla has always been associated with cutting-edge technologies and many companies have adopted the technologies introduced by Tesla. Some examples of top brands which have used Tesla technologies include Daimler which uses Tesla’s battery packs; Mercedes-Benz a user of Tesla powertrain; Toyota with Tesla motor. In fact, pioneers like GE have set up trackers which keep track of Tesla’s innovations.
- Political and government support: The company has ample support from the government. The company had obtained a USD 465 billion for energy management projects under the US Department of Energy. Tesla started its operations at the right time when Obama had launched the clean tech initiative and this resulted in the company gaining a lot of advantages from the government.
- Monopoly: Tesla Motors started off targeting a very niche segment which was electric and alternate energy cars. The strategy was to move deeper into the existing segment and it would not be wrong to say that the company operates in a monopoly market. This has helped it gain steeper growth than most of its counterparts.
- Great leadership and team spirit: The CEO of the company Elon Musk is extremely passionate about engineering and an astute salesman. This makes equally proficient in the engineering as well as the commercial side of the business. The CEO is backed by a team that is highly spirited and as passionate about the cause as their leader. The leadership style of Musk which is motivating and inspirational along with a highly self-driven team is a success factor for Tesla.
- Distribution channel: Tesla understand how critical distribution may be for the business and this makes Tesla own their own distribution channel. The company also owns their own distribution channel There are also some capacity expansion plans from Tesla which has been triggered by Giga factory.
Weaknesses in the SWOT analysis of Tesla Motors
Some of the key weaknesses of Tesla Motors are:
- Poor liquidity: In comparison to competitors like Ford which has USD 20 billion, General Motors with USD 25billion or Fiat Chrysler Automobiles USD 40 billion which are cash rich from years and years of operations. In comparison to this Tesla has only USD 3 billion which will not be sufficient for it to survive the
- Capacity Issues: Tesla manufactures cars in just one plant which is located in Fremont, California. The plant has a capacity to make 500,000 vehicles and the maximum production of the company is limited to this figure making it difficult for the company to target higher volumes.
- Poor customer awareness: Tesla makes very specialized products which are essential for the environment because of their sustainability angle. But these products are highly futuristic and most customers are still not sure about whether or not they need to invest in these technologies which are expensive as well,
Opportunities in the SWOT analysis of Tesla Motors
Some of the opportunities include:
- Preference for new technologies: Vehicle technology is taking a whole new turn and there are a host of new technologies like hybrid vehicles, green cars, electric cars, battery operated cars and self-driven autonomous cars. Tesla has researched and launched many products in these emerging technology areas.
Threats in the SWOT analysis of Tesla Motors
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Competition: Tesla faces a lot of competition from various car companies like Ford, General Motors, Fiat Chrysler Automobiles, as well as technology companies like Google.