...For the exclusive use of T. Song, 2015. 9-714-413 REV: JANUARY 24, 2014 ERIC VAN DEN STEEN Tesla Motors “Tesla is in California, so it is not April Fool’s yet!” tweeted Elon Musk, CEO of Tesla Motors, around 10 PM PT on March 31, 2013. “First profitable Q for Tesla thanks to awesome customers & hard work by a super dedicated team”1 he had tweeted a few minutes earlier. And indeed, on May 8, Tesla announced a net income of more than $10mln on $560 mln in sales.2 Tesla had outsold both Nissan and GM in electric cars in the U.S.3 Its Model S had sold more than the BMW 7 and Audi A8 combined.4 Tesla raised its Model S sales target for its first full year from 20,000 to 21,000 cars.5 Over the next three months, its stock price almost tripled.6 In its 10 years since founding, Tesla had launched both a high-end limited edition “Tesla Roadster” and its “Model S” production car, and was now taking reservations on its upcoming “Model X” electric crossover SUV. Despite a public controversy about its range, the Model S had received the coveted Car of the Year award and earned the highest rating that Consumer Reports ever gave to a car, an astonishing feat for a company that was only at its second car. While some of its most visible EV competitors went bankrupt or halted production,7 Tesla became profitable. Elon Musk wanted Tesla to be a mass manufacturer of electric cars.8 Becoming profitable meant that that goal was within reach. Or was it not? The Car Business ...
Words: 11859 - Pages: 48
...Tesla Motors - Challenges in International Management. 1. Introductions Today, it is difficult to find anyone who is interested in cars, environmental protection, or IT technologies and who has never heard about Tesla Motors, the company which was found in 2003 by Elon Musk. He developed a person-to-person payment platform known as PayPal, which made him a billionaire. And after that he decided to focus on realization of his long-standing dreams: one is Space X – the company, the main purpose of which is the design of launch vehicles and the cargo delivery to the Space. This is the first commercial company to launch and dock a vehicle to the International Space Station. The second is Tesla Motors – the company, which pushes cars into the “New Age” - the age of the clean electric cars. Which wants put an end to uneconomical and low-tech cars of the past1.(http://ru.wikipedia.org/wiki/%D0%9C%D0%B0%D1%81%D0%BA,_%D0%AD%D0%BB%D0%BE%D0%BD) Internal combustion engine efficiency - though continuously improving over time - still causes criticism by the "clean energy" crowd. It is argued that in our time of innovation the slow increase in efficiency is not sufficient, and an alternative is needed. That is why the "green" energy adopters see Tesla Motors' Model S as a messiah of sorts. We should keep in mind that the ecological impact of internal combustion vehicles is often overlooked in pursuit of power, luxury factor, or comfort. IC engines produce carbon monoxide that has environmental...
Words: 5324 - Pages: 22
...radically new marketing strategies? In this paper I am going to explore Tesla’s innovative marketing strategy for motor cars. Don't set up a traditional car yard in the cheap rentals along highways. Set up in the shoppings malls! Increase consumer volume through segmentation and targeting! Capitalize off it by strategic positioning! Provide great service and a top-notch product, along with nifty little trinkets, and create customer value. What is Tesla? - Tesla Motors Inc is a public, California based electric car manufacturer. They have recently introduced the Tesla Model S. This was their second car, a fully electric luxury sedan. Tesla are a relatively new company with little market share, although this has increased due to the Model S’s explosive sales. What problems do Tesla face? - As they are relatively new (founded in 2003), they have little control over market direction. Customers are likely to be less familiar with the brand as they would with competitors such as Audi, Toyota or Mercedes. Also, the product itself is foreign; as Paul J. Darcy (n.d.) states ‘they must sell an entirely new model of buying and owning a car’. The technology and application of that technology are unknown to the general population. What is Tesla’s solution? - The conventional method of selling cars would be to set up a dealership on a highway. Rather than do this, Tesla have opted to base their stores and showrooms in malls. Small shops, with often only one car on display, allow customers...
Words: 1856 - Pages: 8
...Tesla Motors is a relatively new company in which case it must find a way to inform the public about its product. Tesla’s main focus is on its technological advancements in 100% electric cars. The company promotes its products through the use of articles in magazines such as Wired Magazine. Wired Magazine is a magazine that does reports about new products in the technological industry and how these products affect our culture, the environment, and certain political aspects. Tesla wants the public to be informed about its new revolutionary products. If the company only promoted in magazines however, it wouldn’t be able to attract a very wide audience; for this reason, Tesla uses other means of communications such as short promotional videos. These videos interview owners to talk about their experiences with the cars, talk about products themselves, and others show the execution of activities to demonstrate the products and their features. The short videos of Tesla focus on promoting the quality of their products in a more attractive way for potential clients. In the videos you can see a person driving the vehicle showing its efficiency and style. The videos stress certain characteristics of the car through the use of multiple words such as “design”, “performance”, “100% electric”, and “style” which look attractive to the target audience. After the public sees these videos, Tesla has to find a way for the potential client to view the car and give a more thought out opinion. Tesla...
Words: 470 - Pages: 2
...STRATEGY / SECTION: D300 Tesla Motors Inc. Case Synopsis Date: March 17, 2014 [Edited] Yafeng(Elsie) Liu Yingying Kang Hao Wu Chan Chen Edith Hon Firm history Background Tesla Motors, Inc. is an American company that was founded in 2003 by a group of brilliant and innovative Silicon Valley engineers. These engineers proved that electric vehicles could be awesome substitute of the gasoline powered cars. Tesla not only designs, produces and markets electric cars, but it also provides advance electric vehicle powertrain components to other automakers including Daimler and Toyota. (Tesla Motors) Tesla headquarters is located in Palo Alto, California, and it has wholly-owned subsidiaries in North America, Europe and Asia. At present, Tesla has more than 2000 employees. It has 31 stores and service locations spread worldwide, and more stores are expected to be opened in the future. In 2012, Tesla opened its first store in Toronto as the first step to enter the Canadian market (Tesla Motors). Tesla aims to offer high-performance and electrically powered vehicle at a price affordable to the average consumer. In 2008, Tesla first gained widespread attention by producing the Tesla Roadster, a solely electric operated sports car. Tesla then expanded its technological advantage to the luxury sedan market. Model S, a zero emission and sustainable luxury sedan, was then introduced as their second vehicle to the electric vehicle in 2012. The third model named Tesla model X is scheduled...
Words: 3201 - Pages: 13
...actually formats and also implements the plans which espouse the objectives and goals of that organization (Diana Wicks, 2011). The process of the strategic management is continuous and it changes with the evolution of the organizational goals and objectives. 1. Considering the 3 updated news, the following can be definitely mentioned. Tesla model Y is going to be an absolutely new lower cost electric SUV. This one is said to have falcon doors as one of the future products. At the same time Elon Musk has also mentioned that “there will be a model 3 and a model Y, one of the two will”. This version is going to have 70 kilowatt power pack (John Voelcker, 2014). Tesla Roadster 3.0 is going to have a $29000 battery upgrade which will have a range of 300 miles or more. The previous version of the roadster was rated about 245 miles and this new version will have 330 miles. The complete roadster kit announced recently comprised of two additional sets of changes, which is the body kit that reduces the aerodynamic drag and the replacement tires which offers lower rolling assistance. This would add a boost up to 400 miles (John Voelcker, 2014). The Tesla model X, known to be the brand new safest SUV, because these cars co-relate directly in case of any probability of an accident or injury, according to the federal test. For the frontal crashes, the lack of an engine block will allow the engineers for having a much longer distance for the crumple zone. Also the low set battery pack and...
Words: 833 - Pages: 4
...Budget…………………………………………………………………………...Page 12 Overall Communication Objectives………………………………………………………..Page 13 Overall Creative Strategy…………………………………………………………………..Page 13 Creative Execution………………………………………………………………………....Page 15 Media Strategies……………………………………………………………………………Page 18 Activity Schedule…………………………………………………………………………..Page 21 Plan Assessment and Evaluation…………………………………………………………...Page 22 Bibliography………………………………………………………………………………..Page 23 Introduction Tesla was created in 2003 in the Silicon Valley by a group of engineers including current CEO, Elon Musk. They created the first fully electric vehicle and then released the Model S in 2012 which came to market as the first fully electric luxury vehicle. The Model S can drive 426 kilometers on a single charge. Tesla tapped into a market that is still expanding and growing with more and more competitors entering the market every day. Tesla is a young and innovative company with many new ideas and are planning to launch a new vehicle in 2015. Right now because Tesla is such a new company they are only able to produce 22,000 vehicles internationally, which means there is currently a greater demand than there is supply. The IMC plan our company has developed will help solve this...
Words: 6531 - Pages: 27
...Tesla Motors Norbert Binkiewicz Justin Chen June 4, 2008 Matt Czubakowski 1 SWOT Analysis Strengths • • • • Good engineering and technology research capability Able to raise large amounts of capital First mover advantage; the first company to offer a relatively practical fully electric car, customers include high-profile figures like Arnold Schwarzenegger, George Clooney, and Jay Leno Designs and builds many of the components in its cars, including the power electronics, motor and battery packs Weaknesses • • • • Doesn’t have much brand recognition among the general public A very small company with small sales volume, so no economies of scale Possible supply problems with components, especially if demand increases The Tesla Roadster hasn’t been on the market for very long, the longevity of fully electric cars remains to be proven Opportunities • • • Threats • • • • Wrightspeed X1, a prototype high performance electric car that caters to the same market; the only direct competitor to Tesla that offers a similar product Large automobile companies entering the market with full and hybrid electric cars, the GM Volt and Toyota Prius The price of oil falling dramatically in the short run A competitor having a breakthrough in related energy technologies, like hydrogen powered cars, natural gas, or ethanol Moving towards the family sedan market and making a product that is meant for more of the automotive market Price of oil and gasoline skyrocketing, making the price...
Words: 1766 - Pages: 8
...St. John’s University Graduate Student Managed Investment Fund Presents: Tesla Motors, Inc.: TSLA Analysts: Rutvig Bhatt (rutvig@gmail.com) Yanchen Liu (yanchen.liu12@stjohns.edu) Gaoting Liu (liugaoting@gmail.com) Kevin Shanker (kevin.shanker05@stjohns.edu) Share Data: Fundamentals: Price 5/7/14: $201.35 GAAP EPS (FY Dec’13): -0.62 Market Cap: $24.80B E[EPS2015]: 1.83 52 Week Range: $63.69 – $265.00 Beta: 1.10 1 Contents 1. Executive Summary……………………………………………………3 2. Company Overview……………………………………………………3 3. Industry Analysis………………………………………………………8 3.1 Industry Overview…………………………………………………9 3.2 Analysis of Competitive Forces – Porter’s 5 Forces………………9 4. Fundamental Analysis………………………………………………..11 5. EPS Forecast………………………………………………………….24 6. Relative Valuation Model…………………………………………….29 7. Absolute Valuation…………………………………………………...32 8. Risk Factors…………………………………………………………..35 9. Conclusion and Recommendation……………………………………38 Reference………………………………………………………………..39 2 1. Executive Summary BUY recommendation based on our relative valuation model, EPS forecast, and absolute valuation model (for 7% or higher constant growth rate) : The average price estimate is $294.98，compared to the current stock price of $189 as of 5/13/14 . It shows that Tesla is undervalued. According to our result of absolute valuation model, Tesla can be priced between $92.88 and $304.87, depending upon the constant growth rate of free cash flows after...
Words: 9501 - Pages: 39
...Tesla Motors 3500 Deer Creek Palo Alto, CA 94304 650-681-5000 650-681-5101 I. I. Background and Introduction The focus of this analysis is on Tesla Motors and the electric vehicles they design, develop, and manufacture. Tesla Motors was incorporated in 2003 and using technology developed at the headquarters in California the company introduced the Tesla Roadster in 2008 (Tesla Motors, 2010b). On June 28, 2010 the company filed an initial public offering that was accepted by the SEC. They have also become business partners with Toyota Motor Corporation to develop an electronic version of the Toyota RAV4 to be sold in 2012 (Tesla Motors, 2010b). The importance of this analysis is two-fold. First, if a company can successfully develop a fully electric vehicle that is affordable and has mass market appeal it would mark a realistic solution to the diminishing worldwide oil supplies. Second, the technology that would be developed could be used as a springboard for the entire automotive industry. As with any business that is being hinged on new technology, there are significant risks and issues that could potentially be detrimental to the company. Being a new company, there is a very limited operating history for potential investors to go by (Tesla Motors, 2010b). Therefore, future earnings cannot be predicted based on past earnings. The company is losing money and in the SEC filing for the last quarter they state that they expect to keep losing money for...
Words: 15318 - Pages: 62
...Primary Research Method Entering a Japan market, our company, Tesla Motors has decided on using the primary research approaches which is one of the popular market research techniques to obtain the research results that is useful for us. The research area that we are going to concentrate on is the customer in Japan. We will conduct this primary research by formulating a questionnaire as well as face-to-face interview to our respondents. The series of questions in the questionnaire will be created as simple as possible in terms of no double-barreled question, and the language used in our question will be in easy form in order to make sure our precious Japanese respondents are easily understandable. During conducting the face-to-face interview, those respondents do not understand or do not know how to answer the question, our interviewer will explain to the respondent step by step to gain more effective and clearly data from the particular respondents. First of all, the purpose we are using primary research on customer because it provides control each type of questions we will ask to the respondents and the information we gather. Yet, the first-hand information we gather is directly for only our company purpose ("Market Research Methods | Queensland Government"). Our company want to go through this research to understand and capture the Japanese customers’ purchasing behavior like what, when, why, how and where they will purchase the premium electric vehicle in Japan. Although...
Words: 2063 - Pages: 9
...TESLA MOTORS’ DISRUPTIVE INNOVATION Ushnik Dasgupta New York University Global Innovation April 26, 2016 ABSTRACT Tesla Motor’s journey since its foundation in 2003 to being ranked third among the most innovative companies in the world in 2015 according to Fortune (Murray, 2015) and the third most innovative company in the automotive sector in 2016 according to Fast Company (The Most Innovative Companies of 2016: Top Companies by Sector, 2016), demonstrates their ability and determination to upset the status quo and eagerness to disrupt the automotive market by trying to change the global preference towards greener electric vehicles. However, is Tesla’s approach towards this niche market by manufacturing models...
Words: 1961 - Pages: 8
...TESLA MOTORS SWOT Analysis Anandita Jindal Tesla Motors is a car company that designs, manufactures and sells electric vehicles. Ian Wright, JB Straubel, Marc Tarpenning, Martin Eberhard and most notably Elon Musk founded this public company in 2003. Its headquarters is located in Palo Alto, California, with its main production plant in Fremont, California. The company was named after Nikola Tesla, a renowned electrical engineer and physicist. Its goal is to increase the number of EV’s (Electric Vehicles) available to the market to help make it more mainstream. Currently, Tesla motors have produced two models, the Tesla Roadster and the Model S, and has unveiled a third, the Model X. In the Future, the company plans to produce family-sized minivans, electric SUV crossovers, and electric fleet vans for municipal governments. Other business includes collaborations with other companies such as Toyota, Daimler, Freightliner Trucks and Panasonic. Although the company has earned much success, it has hit its share of bumps along the way such as lawsuits, recalls and founder disputes. The current CEO, Elon Musk, also holds the title of Product Architect. Musk is also a co-founder of PayPal and Space Exploration Technologies as well as the chairman/CEO of SpaceX and chairman of SolarCity. It’s hard to say if Elon Musk is firstly an entrepreneur or an engineer. Musk has had great success and became a multimillionaire in his late twenties when he sold his first startup company,...
Words: 3107 - Pages: 13
...Tesla Motors Strategic Analysis Prepared by: Lexen Beran Brenna Hayes Travis Heidemen Jenna Hughes Jake Latimer In Partial Fulfillment Of the Requirements For: MANGT 595: Business Strategy M/W/F at 12:30pm 1 Table of Contents Table of Contents…………………………………………………………………...……2 Executive Summary……………………………………………………………………...3 Introduction………………………………………………………………………………4 External Analysis………………………………………………………………………...5 Internal Analysis…………………………………………………………………………8 Strategic Challenges………………………………………………………………….…10 Strategic Recommendation……………………………………………………….……11 Implementation Plan……………………………………………………………...……13 Conclusion………………………………………………………………………………14 Bibliography……………………………………………………………….……………15 Appendices………………………………………………………………………………16 2 Executive Summary Tesla’s uniqueness and innovative products has served as a catalyst to an entire industry seeking an alternative to the complacent market of gas-powered only vehicles. But what strategies where utilized in their great success? How will the firm continue to innovate after the growth stage? This report will introduce you to Tesla and its current operating environment by examining the industry in which it operates via internal and external analysis. The report will tell of how Tesla pioneered technologies that were mostly untapped and unavailable to the masses. By examining the resources and capabilities of the firm, it will better help to delineate the...
Words: 4466 - Pages: 18
...Corporate Finance SS 2014 Case Study : “Tesla Motors” by Univ. Prof. Dr. D. Hess Universität zu Köln Maite Barreneche Matrikelnummer : Mónica Cabello Mera Matrikelnummer : 5760380 Irene García Cutillas Matrikelnummer : 5758718 Fernanda Sottil De Aguinaga Matrikelnummer : 5760828 TABLE OF CONTENTS 1. Tesla´s business model 3 2. Percentage of sales method 4 3. Valuation 5 i. Growth rate determination for the terminal value period 6 ii. Payout determination for the terminal value period 6 iii. Market risk premium and risk free rate determination 6 iv. Equity beta determination 6 v. Required rate of return determination 7 vi. Flow to Equity 8 vii. Company valuation 8 4. Robustness check 8 5. Reflection 1. Tesla’s business model Tesla Motors Inc. is a company that focuses on designing, developing and manufacturing fully electric cars and advanced electric vehicle powertrain components. The enterprise also provides development services for the powertrain systems and components it produces by selling them afterwards to other automotive manufacturers. Among the products Tesla offers the market are the sedan Model S, the Tesla Roadster sports car, the Model X minivan and other stationary energy storage products the company has developed. Because of environmental consciousness, the impact of rising oil and gasoline prices, the new government...
Words: 2960 - Pages: 12
