SWOT Analysis of Tesla Motors

Tesla motors did stir-up a lot of excitement with its arrival in the Indian Market with its unconventionality and novelty.

But the real question still remains. Will Tesla be able to beat the prevalent competition given the unconventionality of its innovation? Will the scales tip in favour of this manufacturer? Will the world accept Electric Cars as the New Normal? 

All these questions have no definitive answer, but we can achieve a rough estimate about it by resorting to a SWOT analysis.

SWOT analysis is primarily the external and internal analysis of a business by assessing its Strengths, Weaknesses, Opportunities and Threats (SWOT).

STRENGTHS

The worldwide attention and recognition Tesla Motors has gained over the years has made its entry into the Indian Market very easy.

Moreover, the founder Elon Musk being a much-recognized individual in the business holds immense trust and goodwill amongst the masses. Elon Musk isn’t just selling cars, he sells a story, which appeals to the masses the most.

The originality and invention behind electric cars have become gained momentum and in the wake of a clean environment several people may consider buying electric motors.

Tesla motors are much ahead of their competition, all other car manufacturers are still dealing with burning fossil fuels, this makes Tesla motors a cut above the rest and may strike chords with those who really care for the environment and want to do their bit to preserve it.

WEAKNESSES

No one knows how long it will take for the world to transition into electric vehicles. Estimates state 10 years but it could also take 50 years given the huge population of the world and the cost factor.

Ever since Tesla set foot into the market, they have been functioning as a zero or low profit entity. The time for transition would further hamper the cause and creativity of the business.

The Tesla cars are of premium quality and command a higher price compared the otherwise similar petroleum run cars in the market. Therefore, some consider the brand to be overvalued.

Another aspect that commands concern is the Open Patenting of several part and functionalities of Tesla. This weakness could prove to be perilous for company in the longer run.

OPPORTUNTIES

Tesla has entered the market at a time when global warming and alarming pollution levels attract maximum attention. Tesla must capitalize on this opportunity and further its agenda of electric vehicles.

Very few manufacturers of eco-friendly cars also give a further edge to Tesla in the otherwise cut throat competition of automobiles.

Tesla must capitalize on its expansive products ranging from automobiles to re-chargeable batteries for industrial equipment. Eco-friendly equipment’s and spare parts once popular with the customers, is bound to be success.

In order to sustain themselves, Tesla must take the opportunity of an increasing electric car demand and increase their production. Increasing production by a large-scale would also help reduce cost of production which enables the company to focus on larger profits. 

THREATS

Transition from fossil fuels to battery operated cars and how much time it will take, seems to be a major threat for Tesla vehicles.

With the demand for electric vehicles growing, well-known companies like BMW and Volkswagen are also considering expanding their product range, thus posing a threat to the new entrant, Tesla.

Earlier, the government used to subsidies Electric Vehicles by allowing a certain tax deduction. The tax deduction has now been discontinued which may hamper the sale of the automobile.

Whatever be the fate of this company, it is sure to set the bar high and further attract global attention. The listing of Tesla on the stock markets have been much anticipated in the past and have proved its mettle. We, now just have to sit back or sit tight to see if the bull trend continues or does Tesla succumb to the bear market.

 

Written By - Tushna Choksey