TWO COMPANIES:

a)Tesla Inc. (TSLA) posted a net loss in 2019 of USD$890 Million or USD$4.90 per share (Tesla Inc., 2019). The "Management and Analysis" section of the 2019 annual report sheds some light on the reasons forthis loss. They state the reasons as being related to significant investment in R&D, increased investment in production facilities globally, investment in increased production as well as substantial allowances for warranty expenses, guaranteed lease buy back program and contingency for adverse fluctuations in foreign currency relative to the USD (Tesla Inc., 2019).

While it may have been possible for Tesla to decrease spending to have a net gain for the year 2019, their focus on capital expenditure and research provides them an excellent base for long term growth and future profitability. Since the 2019 annual report, Tesla has shown that this strategy is working as they posted a net profit of USD$0.50 per share on their Q2 2020 earnings report (Lambert, 2020).

b)Uber Technologies, Inc., known as Uber, offers vehicles for hire, food delivery, package delivery, couriers, freight transportation, and, through a partnership with Lime, electric bicycle and motorized scooter rental.

In November 2919, Uber posts $1.2 billion loss as Growth improves. The ride-hailing company's third-quarter loss was not as wide as the record $5.2 billion in the second quarter. (Conger, K. 2019).

QUESTION: Suggest steps the company might take to reduce its losses and establish profitability. Give your reasons for each suggestion using the knowledge and insight you have learned through the course while connecting it with company specific information: