Tesla incorporation report
Introduction:
Tesla incorporation is known for its electrical vehicles all around the world. The company has been producing automated automobiles at a cheaper and economical price for the people to fulfill their dreams of buying an electrical car. Elon Musk has been working hard to successfully accomplish the goals of the company and he was successful in doing so. Tesla is at the forefront of technological advancement and has been always ahead of its competitors. This young company has changed the face of the automobile industry through its electrical automobiles. Tesla has established its stores all around the world especially in major countries like China, India and countries in Europe (Vynakov, Savolova & Skrynnyk, 2016). This report will analyze the external impacts of Tesla in China. The report will include political, economic, social and technological impacts of the company.
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Background:
The company Tesla came was established in 2003 by two engineers namely, Martin Eberhard and Marc Tarpenning. However, the company when started its functions wasn’t about selling automobiles but these two had an idea about selling electrical controllers and power generation. Eberhard and Tarpenning unified these two to produce an advanced air-conditioned drive train and batteries known as tzero. Moreover, they wanted to do something more to this company, in other words they wanted to expand. They both had interest in automobiles especially electrically powered ones, they explored different investors for their company. After hearing a speech from Elon Musk, they were fascinated by his words and wanted him to be a part of Tesla as soon as possible. These three clicked at once and started to come up with a design for their first car (Dzialo, 2018). Musk in the company invested a total of 6.5 million dollars to produce the first ever electrical automobile and also rented a huge warehouse in Silicon Valley that was sufficient to accumulate a few of prototype automobiles (Vance, 2015 as cited in Perkins & Murmann, 2018). In 2005, Tesla produced their first automobile that was created based on Lotus Elise that was altered by Tesla, powered by battery produced by Tesla and using the earlier products that the company was selling (Esto, 2017).
Challenges Faced by Tesla after Elon Musk:
When Tesla was taken over by Elon Musk in 2003, new issues came forward. Elon Must after a couple of years was not considered the “Tesla man” that he was when he came on board with the company. Musk was replaced by Eberhard and the latter was praised by many customers, magazines and other colleagues. Musk and Eberhard had previously been not on one page but they always resolved it professionally however, this time Eberhard was hurt when Musk sent an email about the situation. This was affecting the business because Musk wasn’t paying attention to Tesla as he did previously. Moreover, the company was expanding rapidly as customers were giving orders for Tesla cars and the company couldn’t deliver the customers their desired car on the required date. That led to the decision of hiring a CEO for the company that’s what the company needed at that time. In the starting 2007 Musk was able to found a new CEO for the company, Michael Marks (Dzialo, 2018). However, the new CEO was out of his line and gave bad remarks to the former CEO, Eberhard. In the end of 2007 Marks was replaced by Ze’ev Drori who was responsible for frequent production, final assemblage of the automobiles and arrangements for client delivery (Aden & Barray, 2008).
External Analysis of Tesla in China:
This part of the report will include an analysis of external forces that are impacting Tesla’s functions in China in terms of political, social, technological and economical. Tesla has been expanding its functions to other countries like nations in Europe, India, China and other major developing countries. More specifically, Tesla has started to develop a R&D department in China with other big showrooms, China is an emerging country around the world and have been developing itself in every field. Chinese car market is the second-best sales country for Tesla regardless of the import tax, China is doing great in selling automobile cars to the Chinese citizens (Pederson, 2012). The external impacts on Tesla in China would be analysed below:
- Political: The Chinese government is supporting the cause of electronic vehicle industry for the manufacturers. The government has introduced policies and invested a total of hundred and fifty billion dollars to help the manufacturers. This can help the company to set up its operations in China more easily as mentioned above that China is the second-best selling country of Tesla’s automobile (Mangram, 2012). This will encourage the company to set up more stores in the country.
- Economical: Through setting up additional stores in China, it will give an opportunity to the labour force in the country to get employed. The establishment of additional stores will create more jobs in the economy and through this the standard of living of the people will rapidly increase. The labour force will become experienced and skilled in automobile industry that will increase their chances to get a more suitable job.
- Technological: The introduction of incentives and policies by the Chinese government provides a chance to the local manufacturers to develop electrical vehicles. However, the company will face competition in China is now emerging in technological advancements in almost every field. A major competitor of Tesla in China is BYD, this company has an array of electrical vehicles on low prices (Perkins & Murmann, 2018).
- Social: Tesla has been producing cars that are low in prices and easy for the individuals to buy who cannot buy these types of automobiles. The enhancement in automobiles’ performance and the reduction in cost will attract more buyers (Mangram, 2012). If this means that Tesla is producing cars at a lower price then Chinese individuals will also be able to purchase these vehicles easily. The individuals who can just dream of buying electronic vehicles can now actually buy it.
Conclusion:
Tesla is a young company among its other competitors like Honda, Toyota, Deloitte and many other. When Tesla was first established, the founders didn’t first sell an electronic automobile but they sold tzero. The founders of Tesla were Martin Eberhard and Marc Tarpenning. The founders took Musk on board after a year. The company has expanded to other countries, one specific is China that generates huge revenue for Tesla after USA. The external analysis of Tesla is explained under four headings that are political, economic, social and technological. Every element has different impact on the company. In terms of political impact, the Chinese government has supported the country to increase the development of the industry. This gives an incentive to Telsa to sell its product more easily to the Chinese individuals. This will create jobs for the labours that is an economic impact, the individuals will than be able to buy their desired automobile due to increase in standard of living because of an increase in employment. The support by the government provides incentives to local manufacturers to produce electrical cars but they will be one of the major competitors of the company. Tesla is a young company that is doing wonders in the automobile industry.
References:
Adén, E., & Barray, A. (2008). Go Green in the Automotive Industry: Open and Networked Innovation applied by Tesla Motors and Renault, 1-170, Reviewed on 26 March 2020 <https://www.diva-portal.org/smash/get/diva2:1139/FULLTEXT01.pdf>
Dzialo, B. (2018). Charging down the Road: A Historical Analysis of the American Auto Industry and Tesla Inc, 1-80, Reviewed on 26 March 2020 < https://scholarworks.uvm.edu/cgi/viewcontent.cgi?article=1257&context=hcoltheses>
Easto, J. (2017). Rocket Man, Elon Musk in His Own Words: Agate Publishing
Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20(4), 289-312.
Pedersen, T (2012). Tesla’s Position in the Chinese Market.
Perkins, G., & Murmann, J. P. (2018). What does the success of Tesla mean for the future dynamics in the global automobile sector?. Management and Organization Review, 14(3), 471-480.
Vynakov, O. F., Savolova, E. V., & Skrynnyk, A. I. (2016). Modern electric cars of Tesla Motors company. Автоматизація технологічних і бізнес-процесів, 8(2), 9-18.
