Introduction
Tesla Motors is an American electric vehicle manufacturer famous worldwide because of the innovations it continuously brings to the market. Since the company’s foundation in 2003, more than five models of electric cars have been produced, along with self-driving technology, solar battery solutions for houses, and energy-saving devices (Tesla, n. d.). Tesla has a history of huge manufactural successes and technological failures and strives to make automobiles driverless and increase sustainable energy affordability. This company overview aims to explore Tesla’s mission, stakeholders, finances, business activities, impact on markets, society, and the environment, and discuss the current challenges. Researching these aspects of the company’s operations is essential for investment-related decision-making and its future growth prognosis.
Discuss Tesla’s business and purpose
Tesla is the pioneer of electric vehicle production, and it aims to make sustainable energy-driven automobiles affordable by optimized manufacturing. In 2003, when electricity in motors was rather an idea than a real power, Martin Eberhard and Marc Tarpenning founded the company to build innovative sports cars (Tesla, n.d.). Today Tesla’s chief executive is Elon Musk, who was one of the most significant investors in Eberhard and Tarpenning’s initiative. The first product was introduced in 2008: the Roadster sports car had a rechargeable electric motor powered by a lithium battery and could outperform gasoline-based vehicles (Tesla, n. d.). Soon after the Roadster’s release, the founders left their positions, making Elon Musk the CEO and pivoting Tesla towards building affordable electricity-driven automobiles for a broader audience.
Today, Tesla’s product range includes diverse cars with self-driving software, charging stations, and solar energy panels for houses. The famous Model S (2012), Model X (2015), Model 3 (2017), and Model Y (2020) are different in their design, and each vehicle has more optimized manufacturing than the previous to maintain affordability (United States Securities and Exchange Commission [SEC], 2022). The company’s purpose is reflected in the mission statement “Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better” (Tesla, n. d.). Indeed, the American economy benefits from having a car manufacturer that drives innovation and competitiveness by enabling other companies to address sustainability issues.
Identify Tesla’s stakeholders
Tesla is a public company; thus, it has a broad range of stakeholders, yet the most significant are related to electric motors and automobile production. If the scope is viewed more broadly, the sustainability-conscious communities, customers, workers, shareholders, and regulators are involved (Jose et al., 2022). Indeed, Tesla’s innovations are driven by environmental concerns raised by the relevant organizations and customers’ adaptation to new technologies.
Moreover, the company’s employees are the stakeholders whose satisfaction with the workflow and mission determines the delivery of vehicles and operations optimization. Many Tesla customers pre-order their cars before they are manufactured, enabling the workers to address high quality and affordability requirements (Tesla, n. d.). Shareholders’ role is also considerable for all business operations and strategies the manufacturer develops to maintain growth and address the challenges. The top 5 stockholders in Tesla are The Vanguard Group (5.98%), Capital Research & Management (3.51%), BlackRock Fund Advisors (3.46%), SSgA Funds Management, Inc (3.14%), and Geode Capital Management LLC (1.39%) (CNN Business, 2022). The pivotal decisions and initiatives that require significant funding cannot be made without these companies’ approval and consideration.
The government’s role is also significant because the automobile market, wages, and sustainability initiatives are strictly regulated in the United States. For instance, Tesla develops technologies set to meet the emissions standards established by the Department of Energy (Tesla, n. d.). Furthermore, Tesla receives financial subsidies from the government, and the company’s decisions should align with the administration’s expectations (Levin, 2021). Stakeholders influence Tesla’s decision-making at most stages, from design to selling and supply chain organization to environmental protection responsibilities.
Discuss the shaping of Tesla’s business activities
Tesla’s business activities are widely discussed in society because of its impact, uncommon strategies, self-driving technology implementation and consequences, and the charismatic figure of its CEO Elon Musk. Since the company released Model S with its unique design, operational software, and rechargeable electric lithium battery, different situations appeared to increase the interest in the company’s initiatives and decisions. For instance, Tesla’s self-driving technology misuse resulted in several accidents where people were harmed (Gupta et al., 2021). Furthermore, the company’s mission to speed up the replacement of fossil-based motors helped it gain millions of ecology-conscious supporters worldwide (Jose et al., 2022). Consequently, each business activity must be evaluated based on how it represents Tesla’s social image and if it addresses the purpose of driving humanity toward sustainability. Today, consciousness about the environmental footprint people leave with the rapidly increasing population and production is at its peak; thus, corporations with missions to decrease the damage receive additional support from the regulators and society.
Explain how the business, government, and societal environment has shaped Tesla’s business activities in the past year
The past year shaped Tesla’s business activities as it needed to address the post-pandemic challenges, such as the decrease in demand in the automobile market and difficulties in supply and manufacturing. The business environment enabled Tesla to prioritize the improvement of its current Model Y configurations rather than announcing or releasing new vehicles (Tesla, 2021). The company’s values are reflected in its annual reports, and the 2021 edition lists the achievements and performed activities. Indeed, Tesla (2021) states that “in 2021, the global fleet of Tesla vehicles, energy storage, and solar panels enabled our customers to avoid emitting 8.4 million metric tons of CO2e” (p. 3). The government has the environmental, social, and governance (ESG) system to assess the impact of businesses on these factors, and Tesla relies on its requirements in priorities for business activities.
During the past year, large corporations such as Porsche, Audi, and Volkswagen released their electric cars and environment protection statements, becoming significant competitors for Tesla. For instance, Porsche Taycan has similar characteristics to Tesla Model S yet can be ordered and delivered faster (GreenCars, 2021). The increasing number of electric cars built by other companies is a good sign for the industry and innovators and a space for improvement for Tesla.
Moreover, its solar panels are developed to help people decrease their energy consumption, and Tesla factories installed them, resulting in more than 70% use of electricity from sunlight to build their vehicles (Tesla, 2021). The societal environment of the past year shaped Tesla’s striving to achieve diversity among employees, human rights equity, and openness in communication with their customers.
Explain Tesla’s financial position
As an American public company, Tesla must share its finances in the 10-K form report, where its TSLA stocks are used, and statistics are collected. Electric cars manufacturer was founded as a private organization with a percentage of investments from business people and loans from the government, yet it had an IPO in 2010 and raised more than $200 million (Chen & Perez, 2018). Tesla’s latest report stated that the total revenue was $53,823 million, and $22,287 million more than the previous year (SEC, 2022). Aside from taxes, salaries, marketing, and manufacturing, Tesla distributes 5% of its finances to research and development to drive innovation (SEC, 2022). The company grows through customer base expansion as its electric cars with customizable configurations fill the market and become more affordable than its key competitors.
Explain Tesla’s international trade issues
Tesla uses Chinese raw materials for production, and its main international trade issue is related to the tariff regulations established by the country’s governments. For instance, lithium-ion batteries require graphite shipped only from China, and the absence of which will delay manufacturing (Levin, 2021). Several big companies, together with Tesla, asked the administration to waive tariffs at the end of 2021. However, with the current political situation in Europe and the United States’ involvement, the process of addressing the issue was slowed. The risk of raw materials shortage can lead to the alternatives’ implementation, negatively affecting the price of Tesla cars that affordability is crucial.
Conclusion
Tesla is a modern company that combines innovative technology with a socially important mission and optimizes its operations to popularize the use of electric energy by making it affordable. Most of its business activities and novelties are shaped by social requests, competition, and governmental regulations regarding sustainability and the vehicle manufacturing industry. Automobile markets in the United States and worldwide faced massive challenges, such as the pandemic; however, Tesla is dealing with it through innovations, implementation, and improvement of already existing models. The increasing revenues submit that the company remains profitable; however, international trade problems, such as Chinese and American tariffs, threaten the cost efficiency of Tesla electric cars.
References
Chen, Y., & Perez, Y. (2018). Business model design: Lessons learned from Tesla Motors. In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
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Gupta, A., Anpalagan, A., Guan, L., & Khwaja, A. S. (2021). Deep learning for object detection and scene perception in self-driving cars: Survey, challenges, and open issues. Array, 10, 100057.
Jose, P. S., Jose, P., Wessley, G., & Rajalakshmy, P. (2022). Environmental impact of electric vehicles. In E-Mobility (pp. 31-42). Springer, Cham.
Levin, T. (2021). The auto industry is begging the US government to make it easier to import critical parts from China. Business Insider.
Tesla. (2021). Tesla 2021 impact report.
Tesla. (n. d.). About Tesla.
United States Securities and Exchange Commission. (2022). Form 10-K annual report: Tesla, Inc. Web.