Tesla Case International Business

[pic 1][pic 2][pic 3]

[pic 4][pic 5]

Table of Contents

1        Executive Summary        

2        Introduction        

3        Issues        

3.1        Issues of Capital        

3.2        The issues of Tesla’s battery-related issues        

3.3        Technical and consumer issues        

4        Recommendation        

4.1        Recommendations for Capital issues        

4.2        Recommendation for Battery issues        

4.3        Recommendations for Technical and consumers issues        

5        References        

Table of Tables

Table 1 Potential factors from Porter’s five forces analysis. Tesla within the green car industry        

Table 2 Capital related issues        

Table 3 Battery related issues        

Table 4 Technical related issues        

Table 5 Consumers related issues        

Table 6 Recommendations on lithium battery-related issues        

Table 7 Recommendations for technical and consumer related issues        

Table of Figures

Figure 1 Porter's five forces analysis – Source: self-made        

Figure 2 Recommendation strategy to solve lithium battery-related issues        

Executive Summary

This report aims to provide Tesla Motor’s Board of Director and CEO an in-depth analysis on the company’s current issues. Issues are categorised into three different areas of Capital, Lithium Battery, and Technical – Consumer.

In the area of Capital, the burning issue of capital shortage has created issues and barriers in mass production, sale distribution, post-sale service and financing. Furthermore, the threat of competitors joining the EV industry is detected as Tesla’s insufficient capital may slow down its competition against other EV makers. To solve these issues, raising more capital is crucial. It is highly recommended that Tesla should generate more shares. It will finance the mass production and help the company cope with increasing competition. R&D needs to be financed in order to continue developing EV technology. Tesla should also consider using the capital invested to organizing its own sales dealership and maintenance networks to enhance consumer experience.

In the area of Lithium Battery, the issues are inefficient proprietary right, environmental damage of using lithium, scarcity of current natural lithium reserve, and outsourcing challenge. The issue of inefficient proprietary right can be solved at the moment while the rest might need Tesla’s action in the near future. To solve the issue of inefficient proprietary right, Tesla should go patent free on its current battery technology. It helps the company save cost of amortisation and patent expense annually. In longer term, Tesla should look for an alternative technology that can replace lithium usage to align with its green principle. Issues of outsourcing can also be tackled by widening the search for new potential battery cell contractors.

In the area of Technical – Consumer, Tesla is facing the issues of consumer perception on EV and online car purchase; in longer term, the issue of payback value is going to arise. Moreover, the technical issues of product range and performance also threatens the success of Tesla’s EVs. To solve consumer issues, online purchase needs to be simplified and the awareness of Tesla products needs to be raised in the market. In technical wise, range and performance issues can be solved by focusing on R&D and human resource. These recommendations will help Tesla succeed in mass EV production.

Introduction

---

Issues

Tesla Motors is currently in a transition face, while being the only company with a 100% portfolio of EV cars, it needs to decide how to expand its operations and sustain its position as leader in the EV market. In this sections it’s analysed its current issues. Later, recommendations will be discussed proposing strategies to follow, commenting on its impacts, a proper timeline to implement, and how to implement it.

To properly develop a business strategy for Tesla, it’s needed to understand its level of competition within the EV car industry. It’s proposed a Porter’s five forces analysis to understand the industry on which Tesla competes. Tesla competes in the EV market, which can be broaden to the green car industry. For the analysis purpose the industry chosen is the green car industry. Figure 1 shows an overview of the Porter’s five forces analysis.

[pic 7]

[pic 8]

Details from Porter’s five forces analysis are detailed in table 1.

Table 1 Potential factors from Porter’s five forces analysis. Tesla within the green car industry

This analysis gives a proper overview of the competition that Tesla faces. For a deeper analysis, the following issues are presented and discussed, in order to develop better strategies for Tesla to implement.