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After reading the case study Tesla Motors, Inc., prepare a report on the current and future attractiveness of the alternative-fuel car industry from the perspective of Tesla Motors, Inc., a US-based...

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  1. After reading the case study Tesla Motors, Inc., prepare a report on the current and future attractiveness of the alternative-fuel car industry from the perspective of Tesla Motors, Inc., a US-based automobile company specialising in the development of electric vehicles, that now faces the challenges of increased competition and the need to lower production costs. You should prepare your answer in a report format and comment on: • the strategic issues facing Tesla Motors, Inc. • the effect of macroenvironmental factors in shaping the current alternative-fuel industry and the likely impact of current macroenvironmental factors upon the future attractiveness of the industry • the attractiveness of the alternative-fuel car industry based upon an analysis of the current industry structure and competition • the potential impact of the 4‘pressures’ (Industry dynamics, Globalization, Degree of Risk, Ethics & CSR) on the future attractiveness of the alternative-fuel car industry.
Answered Same Day Dec 12, 2019 MH0032


David answered on Dec 24 2019
147 Votes
Tesla Motors: Case Study analysis
Course Name
Student’ Name
Tesla Motors
Task one
Tesla was founded in the year 2003, which emphasized on producing and developing electric vehicles. Tesla Motors is one of the biggest global company which designs, produces and markets electric powered vehicles. It is the only company across the globe which manufactures and sells zero emission vehicle. This has been advantageous for the company as the company strongly believes in innovation which has led the company to manufacture the electric cars considering the cu
ent global environment in which the company operates. The business model of Tesla often reflects the strategy and the business model of Apple Inc which focuses on producing and designing innovative sleek and eco-friendly designs which are sold at high margin. The company works on design and innovative parts, with its new designs and new introduction of the products, the company gets advance booking and reservation of its products to have the vehicles. Elon Musk the CEO of Tesla, with its highly transformational nature, emphasize on manufacturing the vehicles which are cost effective and sustainable. For this it is important for the company to be financially viable so as to cope up with the competition as well as the external environment where it operates. Tesla has been successful in creating a niche market with its electric model vehicles. Though the market share of the company is quite low because of the segment it caters to, the sales of the electric vehicles are expected to soar up with the changing environmental conditions with the increase in the recharging stations. The viability of the electric cars have not been successful and has been criticized because of the lack of the electronic vehicle infrastructure.
Us Automobile Industry
The three major players of US Automobile are GM, Ford and Chryler since the inception. With the globalization, there is a stiff competition from the foreign countries which has made a strong presence in the US industry. The major foreign players that rules the automobile industry in US is Toyota and Honda from Japan, which are considered to be producing the high quality fuel efficient cars. The US market is also governed by Daimler, BMW and Volkswagen which are the three largest German carmakers.
One of the Chinese company BYD Motors which is selling the plug in electric hy
id car is one of the biggest competitor of Tesla Motors in US. BYD works on lithium iron phosphate battery which helps the car to run around 250 miles in a three hours battery charge.
In 1990, the California Air Resource Board, passed a law for the introduction of the Zero-emission vehicle. By 2003, only 5% of the total vehicle production accounted for zero emission vehicle because of the increased research and development required for the electric cars. There are two basic types of electric vehicles which includes the “pure” electric vehicle and the hy
id electric vehicle.
Macro-environment factors shaping the cu
ent and future of the alternative fuel industry
With the increased environmental concerns, the new generation vehicle which run on electricity has emerged. It is expected that by the end of 2020, the battery electric vehicle will account for around 53% of total vehicle sales. Some of the key drivers which is expected to affect the market is technological development, governmental policies and prices of electricity and gasoline.
PESTLE Analysis
PESTLE Analysis is analysis of the macro-environment from different perspectives that might impact the firm.
Political Factor:
Political factors includes different processes in which the government body affects the decisions of the firm. Considering the case of the automobile industry, the traditional car dealers are challenging Telsa’s model by giving the consumers different options for the delivery of the car across the US. As the other automobile manufacturers has the strong geographical presence, they are not much concerned about Tesla because of its niche and innovative characteristics. The auto dealers have the strong lo
ying forces which affects and influences the political process to stay on the traditional rules or build new rules. The traditional rules will affect Telsa’s decision to sell the product directly to the customers.
Economic Factors:
There are several economic factors which affects the company and its working. Some of the key factors which affects the working includes the level of employment, interest rates, price stability, and cu
ency exchange rates. These are the economic factors which affects the working of the company. If there is an increase in the credit rate then the consumers will not be buying automobile much whereas if the interest rate decreases, the sales of the automobile is expected to increase. Considering the cu
ent scenario we can say that the interest rate is a little high which is affecting the sales of the automobiles.
The prices of the crude oil has decreased significantly from $110 in 2014 to $40 in 2015 because of which the prices of gas decreased from $8 to less than $4. With this the preferences of the consumers has switched to the large SUV’s instead of the sedan and other luxury cars.
Sociological factors:
The demand of electric vehicles are significantly increasing because of the government initiatives as well as the changing perception of the consumers to switch to the fuel efficient vehicles.
Technological factors:
Technology factors and innovation drives the automobile industry. The application of new technology and process technology helps in the manufacturing of the products. Tesla has just introduced the high performing electric car which is an innovative drive. Considering the technological aspects, Tesla has been innovative since beginning and thinks out of the box to produce innovative products.
Ecological Factors:
Ecological factors or the environmental factors high effect the Automobile industry. Tesla highly emphasizes and takes high consideration of the environment and...

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