Question
Tesla recently announced that it was committed to building a new gigafactories in Austin, TX and Berlin, Germany where they will produce the Cybertruck, Model
Tesla recently announced that it was committed to building a new gigafactories in Austin, TX and Berlin, Germany where they will produce the Cybertruck, Model 3, and Model Y.While Tesla continues to be the leader in BatteryElectric Vehicles (BEVs), they also continue to face the threat of mounting competition from exiting car companies who have announced plans to develop their own lines of BEVs. Explain from an economic perspective how the commitment to these new, large production facilities in Austin and Berlin can aid Tesla in maintaining their role as market leader. Your discussion should include a relevant discussion of the Stackelberg model, how Tesla can leverage its first-mover-advantage, as well as the economic value of credible commitments in fending off competition. (Hint: think about Tesla's optimal strategy in terms of being the first mover, and what this means for its primary rivals)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started