Scenario B

SWOT Analysis of Tesla

Tesla Motors is an upstart automaker founded by X$.$com $($eventually Paypal$)$ founder Elon Musk, who also founded SpaceX and is the chairman of SolarCity. Tesla makes electric cars that have received a number of glowing reviews from traditional auto industry reviewers.

Their first model, the two$-$door Roadster, had a base price of US$$109,000.$ Currently, the company line$-$up includes the Model S$,$ launched in $2012,$ that has a base price of $$119,900,$ although it scales up rather quickly to more expensive versions. The Model S is in the same price and size range as the BMW $7$ Series or the Porsche Taycan.

In addition, Tesla introduced an SUV to its line in $2015,$ the Model X$,$ as well as what its CEO called the most important vehicle in the line$-$up$,$ Model Y$.$ In $2017,$ the company added Model $3.$ The sedan price starts at $$35,000$ base price but its standard price is around $$54,900.$ Tax incentives used to make a material difference in Tesla$$s prices. However, tax breaks started to phase out, and as of January $1,2020,$ no federal tax credits are available to Tesla buyers $($they might still qualify for local, utility, and state tax incentives$).$

Complete a SWOT analysis of Tesla$$s business. Though I have given you a brief introduction here$$and you may be familiar with Tesla$$feel free to use the internet to do some quick research in constructing your analysis.

Answer the following questions as a framework for developing your analysis.

$1.$ In contrast to other automakers, Tesla sells directly to consumers. How is that a strength? What characteristics of Tesla cars help make that feasible?

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$2.$ How does Tesla fund their capital improvements? Is this a weakness for Tesla?

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$3.$ How does electricity as a fuel help hedge against any price changes in particular energy commodity?

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$4.$ Which firms are bigger threats to Tesla: traditional automakers or new entrants? Why?

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$5.$ Aside from product competition, how are traditional automakers and dealers threatening Tesla$$s business model?