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Tesla Strategic Analysis

In: Business and Management

Submitted By tontonkelebek
Words 8262
Pages 34
SECTION I: Introduction/Executive Summary
Tesla Motors, Inc. is an American company that designs, manufactures and sells electric cars and electric vehicle powertrain components. Named after the scientist Nikola Tesla, Tesla Motors ($TSLA) was founded in 2003. Exactly who founded Tesla Motors can be discussed, but it was probably by a group of intrepid Silicon Valley engineers Martin Eberhard, Marc Tarpenning, and Ian Wright. Their goal was to build an electric vehicle with the same performance as a Porsche and more environmental friendly than a Toyota Prius. The problem was that the founders didn't have the money needed to realize their idea, so they contacted Elon Musk, who decided to invest in the company. Elon Musk had earlier founded the companies Zip2, PayPal, and SpaceX. The difference between Elon Musk and the founders was that Elon Musk wanted Tesla Motors to become an improved General Motors with several car models, while the original founders wanted to design only a sports car. Elon Musk became interested in electric cars because he is well aware of peak oil. The idea behind peak oil is that oil is a finite resource we will run out of. Elon Musk believes the production of oil will begin to decrease after year 2020. As the production of oil decreases, the price of oil will increase and more people will buy electric cars
SECTION II: Current Situation
Tesla Motors headquarters is in Palo Alto, California. Its goal is to speed up this transition from gasoline cars to electric cars, thus their vision is

"Create the most compelling car company of the 21st century by driving the world's transition to electric vehicles."

To create this improved car, they couldn't begin with an inexpensive electric car - it would have been too expensive. So they had to begin with an expensive sports car: the Roadster. The idea behind this decision was that the profits...

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