Does the company have a comparative advantage over its rivals?
Tesla Motors was founded on July 1, 2003 by Elon Musk, Martin Eberhard, J. B. Straubel, Marc Tarpenning, and Ian Wright. Now Elon Musk is the CEO. Tesla Motors was created to accelerate the advent of sustainable transport (www.tesla.com ) Tesla is one of the largest, if not the largest Electric Vehicle (EV) manufacturer in the world with factories around the world that build them. At this point, their closest rivals are Lucid Group with their Pure, which Forbes Magazine says is a definite threat to Tesla that went public after a merger in July 2021 and XPeng EV a start up company in China that targets the mid-level to high-end segments of the market. The downfall both the last two EVs have is that they are not sold everywhere.
The biggest seller among Tesla’s line of cars is the Model 3 that is all wheel drive and can go 358 miles without a charge. The Lucid Pure and Touring have a range of 405 miles but for the extra mileage a customer has to part with more of their money as the Pure is $78,000.
Explain the supply and demand for its key product or service.
“We have used alternative parts and programmed software to mitigate the challenges caused by these shortages,” the company said in its third-quarter earnings report.
The performance is a stark turnaround from 2018, when Tesla’s production and supply problems made it an industry laughingstock. Many of the manufacturing snafus stemmed from Mr. Musk’s insistence that the company make many parts itself.
Other car companies have realized that they need to do some of what Mr. Musk and Tesla have been doing all along and are in the process of taking control of their onboard computer systems.
Measured by vehicles delivered globally, Tesla vaulted past Volvo and Subaru in 2021, and some analysts predicted that it could sell two million cars this year, as factories in Berlin and Austin, Texas, come online and a plant in Shanghai ramps up production. That would put Tesla in the same league as BMW and Mercedes — something few in the industry thought possible just a couple of years ago.
How do fluctuations in GDP, economic growth, investment and patents affect the company’s profitability?
Tesla is invested in the future of the world by providing EV to be deplete the carbon footprint on the environment. Tesla Motors announced on June 12, 2014 that it would not initiate patent lawsuits against anyone who, in good faith wants its technology (www.tesla.com )The policy is intended to advancement of the rapidly-evolving platform for electric vehicles.
References
Duggan, Wayne (May 12, 2022) Tesla Competitors: 7 Rival EV Stocks to Buy; U.S, New and World Report www.money.usnews.com
Kharpal, Arjun (July 19, 2021) Chinese Electric Car Maker XPeng Prices Its New Sedan at $24,000 Undercutting Tesla; www.cnbc.com
@marchaw
What a brilliant post. Tesla is one of the most interesting companies out there. I didn't see anything in your post about Rivian, what are your thoughts on them? It is certain though, that Tesla definitely set the pace and the standard for electric vehicles. Here in California, you're able to see all of the Tesla's on the roads as well as the countless amounts of charging stations. Thanks for your post!
@Marchaw,
Tesla is a fascinating company. Its decision to not initiate lawsuit patents is such a strong message that they are sincerely dedicated to the advancement of sustainable solution for the earth. However, Elon Musks recent public behavior seems to suggest that he has lost focus. His recent attempt to acquire Twitter (not related to SpaceX or Tesla or other companies) and then back out of Twitter has damaged Tesla's value in the stock market. Our textbook talked a lot about the inability of someone to actually predict what the market will do. After seeing how a single announcement from Elon can be the difference between billions of dollars lost or gained- you begin to see why! There are innumerable variables that can affect the economy and a companies role in it. This perspective gives me a brand new appreciation for the way that economists have isolated various elements of the economy, or even how the government overall has stewarded its influence over the economy through fiscal and monetary policy.