Netaji Subhash Engineering College

TOPIC - SWOT analysis of TESLA

Name –SANDIP HALDER

Dept. – IT(B)
University Roll -10900221120
Reg. No. – 211090100210050 of 2021-22
Class Roll-113 Sem – 7th
Paper Code-OEC_IT701C
 ➢ Company type: Public

➢ Owner: Elon Musk

➢ Industry: Automotive, Renewable energy

➢ Founded: July 1, 2003; 20 years ago in San Carlos, California, U.S.

➢ Headquarters: Gigafactory Texas, Austin, Texas, U.S.

➢ Number of locations: 1,208 sales, service and delivery centers

➢ Area served: East Asia, Europe, Middle East, North America, Oceania, Southeast Asia

➢ Key people: Elon Musk (CEO), Robyn Denholm (chair)

➢ Products: Model S, Model X, Model 3, Model Y, Semi, Cybertruck, Powerwall, Megapack,

Solar Panels, Solar Roof

➢ Production output: 1,845,985 vehicles (2023)

➢ Revenue: US$96.8 billion (2023)

➢ Operating income: US$8.9 billion (2023)

➢ Net income: US$15.0 billion (2023)

➢ Total assets: US$106.6 billion (2023)

➢ Total equity: US$62.6 billion (2023)

➢ Number of employees: 140,473 (2023)

➢ Website: tesla.com

Products & Services: Tesla Motor Vehicles | Auto service | Financial Services | Energy Storage
(Power battery packs) | Solar panels | Lifestyle products | Retail merchandise

Competitors: Mercedes-Benz | BYD| Volkswagen | AION | SGMW| BMW | Hyundai | Kia | Ford
 ➢ SWOT Analysis of TESLA Company –
Strengths of Tesla Motors:
1. Innovative Technology – Tesla is a pioneer in electric vehicle technology. Their vehicles,
known for their cutting-edge technology, have revolutionized the concept of driving. Tesla is
known for its advanced features like Autopilot and over-the-air software updates. As a result,
the market believes in the company and anticipates that it will create profitable, competitive
products, which will inevitably result in significant financial advantages.

2. Strong Brand Image and Value – Tesla has established itself as a leading brand in the Electric
Vehicle Market, associated with innovation, sustainability, and luxury. It is a brand that
everyone in the world is familiar with. It has strong brand recognition. It is the world’s most
well-known manufacturer of electric vehicles. Elon Musk, Tesla’s iconic CEO and major
shareholder is one of the world’s most renowned, influential, and appealing businessmen. In
addition to that, Tesla was the leading luxury carmaker in the financial year 2019, delivering
367,500 automobiles. Its extraordinarily high sales growth has been credited with the
company’s unrivaled rise in luxury and innovation. In June 2020, Toyota was surpassed
by Tesla as the most valued automotive manufacturer.
 3. Vertical Integration – Tesla’s vertical integration strategy allows it to control key aspects of
production, ensuring quality and efficiency.

4. Supercharger Network – One of the significant barriers to EV adoption has been the battery
range barrier. The batteries of electric cars were not strong enough to be suitable for long
rides. With innovation in lithium-ion batteries, things have improved but Tesla has already
found an alternative solution for it using its supercharger network service.
Tesla’s extensive supercharger network provides a competitive advantage by offering fast
and convenient charging options for its customers.

5. Strong Leadership – Elon Musk, the creative and charismatic CEO of Tesla, has played a key
role in the company’s success. In the tech sector, Musk is well-liked and has a proven track
record of innovation and a visionary entrepreneur like him further amplifies the innovative
image of Tesla Motors.

6. Sustainability – Tesla’s commitment to environmental sustainability, combined with its

luxury appeal, has created a unique brand positioning. This has resulted in a fervent fan
base, with many Tesla owners becoming brand evangelists, promoting the company’s vision
and products.

Weaknesses of Tesla Motors:

1. Dependence on a Single Market – Tesla is mostly dependent on the market for electric
vehicles, which currently make up a small share of the total automobile market. Because of
this, the business is susceptible to shifts in the market and customer preferences.

2. Too expensive – Tesla’s electric vehicles are expensive compared to traditional gasoline-
powered vehicles, which limits their appeal to mainstream consumers. The company’s focus
on luxury and performance makes its products less accessible to a broader segment of
people.

3. Dependence on Government Incentives – Government subsidies and tax breaks have

benefited Tesla and increased demand for its products. These incentives could alter, though,
and that could affect the company’s ability to thrive in the future.

4. Limited Production Expertise – In comparison to its more seasoned rivals, Tesla is a relative
newcomer to the automobile business and has little production expertise. Due to this, the
business can find it challenging to compete on price and efficiency.

5. Manufacturing Issues – In the past, Tesla has experienced production issues, especially with
its Model 3 sedan. Due to challenges in increasing production to meet demand, the company
has experienced delays and lower profitability.

6. Concerns about Employee Safety – For erecting a tent production line without permission or
safety assessment, Tesla was recently fined. Additionally, the business failed to inform
employees of the dangers of spending extended amounts of time in a tent in the intense
heat of California. The intense heat inside the tent might have made it difficult for some
workers to breathe.
Opportunities for Tesla Motors:
1. Diversification of Product Line – Renewable energy items such as energy storage devices
and solar panels are already part of Tesla’s product diversification. In addition to expanding
into new areas like electric boats and airplanes, the corporation may continue to diversify
the products it offers.

2. Global Expansion – Although Tesla is well-established in developed markets around the

world, there are still a lot of undiscovered markets for its products, especially in developing
nations. In these markets, the business can grow its networks of sales and distribution and
attract new clients.

3. Technological Advancements – With its reputation for cutting-edge technology, Tesla has the
chance to keep pushing the envelope in the fields of electric cars and renewable energy
technology. The business might advance battery technology, enhance its capacity for self-
driving, or produce brand-new, energy-efficient goods.

4. Growing Awareness of Climate Change – As more people become aware of how climate
change is affecting the world, there is an increasing need for sustainable goods and
solutions. Tesla has the chance to establish itself as a pioneer in the sustainability movement
and draw in customers who care about the environment.

5. Production of in-House Batteries – By creating its battery cells, Tesla will be less dependent
on Panasonic, which is currently its main source of batteries. This move might significantly
alter Tesla’s future if it is implemented.

6. Financial considerations – Tesla is a high-end car company with ultra-modern technologies,

thus its products are extremely expensive. To reach a larger audience, there is, nevertheless,
ample opportunity to provide fewer features and a larger range of models. Starting with the
less expensive, slightly-feature-limited Model S, the Tesla Model 3 is an excellent option.
Threats for Tesla Motors:
1. Growing Competition – Both newcomers to the electric vehicle market and established
automakers are posing a growing threat to Tesla. It could be harder for Tesla to hold onto its
market share if these rivals have environmental brands, more resources, and cheaper prices.

2. Disruptions in Supply Chain – Disruptions to the supply chain could affect Tesla’s production
and profitability because the company’s supply chain is intricate and depends on a network
of partners and suppliers. Examples of these disruptions include shortages of components or
raw materials.

3. Cybersecurity concerns – Since Tesla depends largely on software and technology for its
goods and services, there are cybersecurity concerns for the business. The company’s
reputation and sales could be negatively impacted by cyberattacks or data leaks.

4. Economic Conditions – Recessions and interest rate fluctuations are two examples of events
that could influence Tesla’s sales and profitability. These circumstances can lessen customer
demand for the company’s goods and affect its bottom line.

5. Pedestrians Are Still Concerned About Self-Driving Cars – US adults still feel unsafe walking
around self-driving cars, according to a YouGov survey. The most fearful group of people to
be around self-driving cars is those over 55.

6. Absence of Self-Driving Regulations – Since many nations, including the US, lack appropriate
laws governing self-driving cars, these limitations have an impact on Tesla’s sales.
Uncertainty about the future of Tesla’s self-driving initiative is heightened by this perplexing
and complex legal predicament.
Recommendations:
Tesla has the strengths to remain successful in the business in the years to come. However, as
identified in this SWOT analysis, there are various issues that the vehicle and energy company must
address to maintain its competitiveness and improve its profitability. For example, the automaker
needs to improve its multinational presence. New or additional sales operations in high-growth
countries can enhance business growth to satisfy Tesla’s corporate mission statement and corporate
vision statement. Also, the company must continue its investments in research and development to
produce technologically advanced and competitive automotive and energy products. This SWOT
analysis shows that Tesla has the potential to grow in the global automotive market despite
aggressive competition.

With the goal of improving business competitiveness, growth, and development, this SWOT analysis
shows a number of ways that Tesla can use to enhance its performance. The company can:

1. Expand or add to existing operations in foreign markets to exploit the growth of global
demand for electric vehicles and renewable energy solutions.

2. Continue or increase its investments for product innovation to ensure competitiveness

despite aggressive competition with other automakers.

3. Diversify its supply chain to reduce supply-side risks.

References:
• Olabi, A. G., Wilberforce, T., Sayed, E. T., Abo-Khalil, A. G., Maghrabie, H. M., Elsaid, K., &
Abdelkareem, M. A. (2022). Battery energy storage systems and SWOT (strengths, weakness,
opportunities, and threats) analysis of batteries in power transmission. Energy, 254, 123987.

• Piromalis, D., & Kantaros, A. (2022). Digital twins in the automotive industry: The road
toward physical-digital convergence. Applied System Innovation, 5(4), 65.

• Tesla, Inc. – Form 10-K.

• Tesla, Inc. – Product Impact.

• U.S. Department of Commerce – International Trade Administration – Automotive Industry.

• U.S. Department of Commerce – International Trade Administration – Energy Industry.