SWOT and PESTLE Analysis for Tesla, Inc.

Tesla is a company based in California, America, founded in 2003. It was named after Nikola Tesla, an electrical engineer and scientist. Tesla’s products include electric vehicles and clean energy.

These products are sold worldwide through the internet and a network of Tesla stores and galleries. This has accelerated the adoption of electric vehicles all over the world.

Tesla produces different models of vehicles, with the Model X sport utility vehicle and the Model S sedan being the two main fully electric vehicles.

At Elite Academic Brokers, we can help you gain insight into Tesla and critically analyze the company. Our team of experts can help you with any queries and research on Tesla and other topics.

We will examine Tesla’s strengths, weaknesses, opportunities, and threats.
Let’s start with our Tesla SWOT Analysis with Tesla, Inc.’s strengths.

The strengths and the points below ensure Tesla’s efficiency, profitability, expansion, and popularity in the market compared to other companies and their competitors.

Tesla’s Strengths

Innovation and Quality – Tesla’s quality and innovation rate are very high considering the current two models, which are fully electric and have attractive styling.

These features are distinct from those of other automotive companies. Tesla focuses on improving the quality of its models and updating them with technological advances.

Production of quality products and innovation in Tesla have ensured increased profitability and competitiveness in the market, hence financial gains in Tesla.
Strong brand image – Technological innovations have ensured a strong brand since most customers are satisfied with Tesla’s products, hence greater trust.

Tesla has become one of the most recognized brands because it has turned innovative ideas into reality. The strong brand image has also been influenced by the personal brand of its CEO, Elon Musk, who greatly influences most people.

A strong brand image leads to high sales for Tesla. The Tesla ratio analysis has shown a significant increase in Tesla’s inventory turnover, with a higher conversion of its inventory into sales.

Substantial control over its production and manufacturing processes – Tesla, the leading automotive company, can manufacture most parts used in their vehicles, reducing their reliance on other manufacturing companies and becoming less vulnerable.

Tesla has also invested in manufacturing facilities, which is an essential aspect of the company.
Tesla dominates the US electric vehicle sales – This is where two of Tesla’s models are in the top three.

Model 3 is in the first position of the most electric cars sold, and Model S comes in the third position. The increased car sales of Tesla have increased its profitability, hence, a financial gain.

Tesla’s Weaknesses

Limited presence – The Tesla market outside the US is limited since Tesla cannot produce vehicles at the desired pace.

Its portfolio is limited compared to other automobile companies due to the limited supply chain, which hinders Tesla’s profit growth in different regions.

The US and China are the leading markets for Tesla’s products, and hence, to increase customer base and market share faster, Tesla needs to focus on these markets.

This is achieved by establishing these regions’ service stations and supercharger networks.
High operational costs – Tesla’s primary focus is on product innovation and quality. To achieve this, much money is used in research, development, and other costs.

The cost of revenue has grown over the years, increasing the total operating expenses. As the operational cost for the development and manufacturing of electric vehicles is still far higher than that of its counterpart, our Tesla industry analysis shows this as a weakness in the current scenario.

Manufacturing complications – This is brought about by the high standard of innovation set by Tesla, hence facing increased risks in production and mechanical complications. This is a significant problem as it delays the launch of their vehicles.

In our Tesla Motors case study analysis, we found that many complications are still associated with harnessing green energy to become a perfect substitute for current options.

Now we can determine how the company can manipulate these Tesla strengths and weaknesses in its best interest. Let’s dive into the opportunities and threats prevailing for Tesla by having an overview of the other two factors of Tesla Motors’ SWOT Analysis.

Tesla’s Opportunities

Market diversification – Tesla’s venture into new products like battery production will help the company avoid an economic downturn, increasing its vehicle manufacturing rate and reducing production costs.

This can become a prime Tesla organizational strategy that will lead to increased sales for Tesla in both batteries and electric vehicles.
Sales expansion in the untapped market – Tesla’s limited presence in most regions.

The automotive market in most of these regions is unsaturated and unsatisfied. Tesla tapping into these ready markets with its ready products could lead to market expansion, hence increased financial gains.

Introduction of a pick-up truck – Pick-up trucks account for more than 15 percent of the US automotive market, according to the National Automobile Dealers Association.

This is an excellent opportunity for electric vehicle growth and a massive opportunity for Tesla to venture into this with its innovative and quality vehicles.
Tesla’s Threats
Increasing Competitors – There is intense and aggressive competition in the automotive industry. Some companies like Volkswagen are now producing electric vehicles, and the competition from fuel-dependent cars is still increasing.

Most of these companies have focused on their marketing and heavily invested in research and development, hence a significant threat to Tesla, which has to improve its marketing strategy.
Regulatory threats – There are strict regulations by the government in the automotive industry, hence high compliance costs for most automotive companies.

This affects Tesla’s expansion plans, hence hindering the overall profitability growth. There are significant hurdles for Tesla Motors’ organizational structure to perform equally well in different countries, with various business rules.
Customer adaptation and adoption – Tesla’s production and sustainability in the electric vehicle market highly depend on the customers’ willingness and readiness for change.

If the customers do not adopt and adapt to electric vehicles, it will be a significant challenge for Tesla. They need to determine Tesla’s resources and capabilities to promote and convince consumers to buy their products for a better future.
Disruption of supply due to a shortage of materials – Materials used in manufacturing change with time, posing a significant threat.

The increasing prices of these materials are a cause of concern in Tesla since they can delay or hinder the production of vehicles, hence decreasing financial gains.
High-risk factor due to lithium-ion usage- Lithium use in Tesla’s battery pack has caused damage since lithium is highly reactive and has caused car fires.

This public awareness has affected Tesla’s reputation.
Given above are among the few points of Tesla’s SWOT analysis. There are many other factors, and Elite Academic Brokers can help in their discussion. We see that Tesla has strengths, weaknesses, opportunities, and threats.

If Tesla focuses on and maximizes both the opportunities and strengths and tries to work on the weaknesses and threats, there will be increased growth in most aspects of Tesla.

PESTLE Analysis for Tesla, Inc

Though there is no doubt that Tesla, Inc is one of the leading companies in automobile and power generation, many remote and macro-environment factors can prove vital for the success of its ventures.

Elite Academic Brokers have covered most of Tesla’s internal analysis in our swot. Now, by doing a brief PESTLE analysis for Tesla, we will try to figure out the Tesla external environment factors that can play a vital role in the growth and performance of this organization.

We will use this tool to analyze political, economic, social, technological, environmental, and legal factors from the company’s long-term growth perspective.

Political factors – Many political factors can affect the business of this company, and these factors keep on changing with the countries Tesla is targeting for its potential growth.

There are many positive aspects, such as favorable political policies for trade, subsidies offered by various governments for encouraging pollution-free vehicles, and the stability of the political scenario of the target country.

Tesla can use these factors to its advantage. Still, there are some other factors also, such as unstable economies, especially in the regions from where most of the raw material for the company’s products, such as the Democratic Republic of Congo, and increasing corruption have a significant adverse effect on their growth strategies.

Economic Factors – Fluctuating currency rates can be considered the most noteworthy economic factor for Tesla. There are significant ups and downs in this company’s transactional gains and interest expenses due to fluctuating rates over the past few years.

The company’s growth is also subject to the taxation policies of the government and local authorities. Increasing demand for emission-free vehicles has enabled Tesla to benefit from tax relaxations and government incentives across various countries.

Inflation, rate of interest, and factors such as unemployment are also significantly contributing to economic factors determining the success of Tesla, Inc.

Social Factors – Tesla can exploit various social factors that are prevailing these days to achieve better success. Increasing focus on using renewable energy resources, increasing purchasing power of customers in developing countries, and growing emphasis on sustainable economies have created an excellent opportunity for this company to have a better edge over its competitors.

Studies show that people from all parts of the world are focusing on Eco-friendly lifestyles with minimal carbon footprints so this makes a very good opportunity for Tesla to come up with more innovative vehicles and green power solutions to exploit these opportunities.

Technological factors – Tesla is one of the leading companies to bring technological innovations in the automobile sector.

Though it is already working on many outstanding technologies, such as self-driving capabilities and voice commands, it can work on identifying the latest innovations from its counterparts and applying the better versions to maintain its edge over those competitors.

Environmental factors – It is undeniable that Tesla, Inc. is a pioneer in producing green energy technologies, and its emphasis on it provides it with a bright future for many years.

Tesla is gaining the popularity and trust of consumers from all major economies and is a big hope for transforming the automobile sector into a zero-emission and greener perspective. Tesla’s continued efforts to develop more efficient sources of green energy are leading it to a bright future in the automobile and energy sectors.

Legal Factors – While performing our PESTLE Analysis, we found that many legal factors can affect the further growth and expansion of Tesla.

Tesla needs to consider the local governing laws related to the manufacturing and sale of its vehicles and related products, as they are vital for its success.

Every country has its different set of rules and regulations for the business. There are also many other legal factors, such as labor unions, patents, direct selling regulations, and many others, to ensure swift operation and growth. One prominent example of the company’s failure was Tesla’s safety problems at its Nevada gigafactory.

Failure to comply with these laws and regulations can bring huge penalties for the company, adversely affecting revenue.
Tesla is one of the leading companies that gives us hope for a better and greener future.

Though there is no doubt that it is the number one choice for people who opt for electric cars, PESTLE analysis by Elite Academic Brokers shows that the company has to focus on political, technological, and legal factors to make sure it complies with the different situations prevailing in the specific target markets.

The focus on self-driving abilities and AI is good, but we have many accidents due to failures in Tesla’s self-driving features. The company also needs to understand economic and political factors to gain better control of its marketing strategies. It should avoid incidents in its Nevada Gigafactory to maintain Tesla’s internal environment and image as a prominent innovator for a greener tomorrow. If you need to read more articles on SWOT analysis, please review this article.