Introduction
The given paper will primarily focus on key business data elements of Tesla, Inc. The comprehensive outline is presented on the slide. The paper will conduct a brief business overview with a more detailed look at the core aspect of Tesla. These include segmentation information, products and services, manufacturing, and supply chain. In addition, it is important to analyze the competition affecting the business, its financial performance, and various business risks. The remaining slides will contain a conclusion as well as sources of data.
Overview
Tesla, Inc. is a company that designs, manufactures, develops, leases, and sells fully electric vehicles with high-performance indicators. In addition, it offers energy generation and storage systems in order to promote sustainable energy usage. The company sells its products directly to its customers via online platforms or specifically allocated retail spots. The company also invests and continuously works on creating a favorable infrastructure for the use of its products, such as Supercharger stations. One of the main goals of the company is to ensure a lower cost of ownership of such technologically advanced vehicles. It also seeks to provide a high level of safety, appealing styling, and excellent performance. The company’s mission: is “to accelerate the world’s transition to sustainable energy, engineering expertise, vertically integrated business model and focus on user experience differentiate us from other companies” (Tesla, 2021, p. 4).
Segment Information
Although most people know Tesla as an automotive company, it is important to note that the business operates in two distinct segments or markets. These include the more-known automotive industry as well as the lesser-known energy generation and storage market. The former primarily focuses on production, leasing, selling, developing, and designing high-performance fully electric vehicles. It also contains additional elements, such as vehicle maintenance services, retail merchandise, used vehicle selling, and non-warranty sales. In the case of energy storage and generation, Tesla leases sells, installs, manufactures, and designs energy generators and storage cells.
Products and Services
Regarding products in the automotive segment, there are four main vehicles: Model 3, Model Y, Model S, and Model X. The former is a sedan, the next one is SUV, and the latter two are high-performance mid-size SUVs. In the case of energy storage and generation, the products are lithium-ion batteries, such as Megapack, Powerpack, and Powerwall. The latter is designed for home energy storage, whereas the former two are developed for larger facilities with commercial or industrial purposes. Solar Roof is an energy generation solution that integrates natural design with solar energy systems.
Manufacturing
The business is highly involved in the development and manufacturing of the majority of its own products. When it comes to Model X, Model S, and lithium-ion batteries, these products are built and assembled in manufacturing facilities in the Bay Area, California. In order to save on transportation from the United States to Asia, gigafactory Shanghai in China
was built due to high consumer demand matching the required investment. Gigafactory New York in Buffalo, New York, is mainly used to manufacture Supercharger components, Solar Roof, and other energy generation products. Lastly, gigafactory Nevada, near Reno, Nevada, primarily manufactures Model 3 and Model Y, which require cheaper production costs in order to ensure their affordability.
Supply Chain
The supply chain of Tesla, Inc. is vast and complex due to the fact that the “products use thousands of purchased parts that are sourced from hundreds of suppliers across the world” (Tesla, 2021, p. 9). The company purchases cost-efficient parts from large suppliers of the automotive industry in order to benefit from their economies of scale. Since supply chain disruptions are a major risk, Tesla maintains a large safety stock in the case of such disturbances. Such an approach was partly the reason why the company did not lose its performance significantly during the COVID-19-related disruptions. For energy storage and generation products, the key raw materials include “aluminum, steel, cobalt, lithium, nickel and copper” (Tesla, 2021, p. 9).
Competition
It is important to note that the automotive market is international and highly competitive. The position of Tesla in the given competition is multifaceted since the “vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology” (Tesla, 2021, p. 12). For instance, Model X and Model S compete with premium internal combustion engine sedans and SUVs, whereas Model Y and Model 3 compete with more affordable vehicles. The competition is also intense when it comes to other fully electric vehicle manufacturers. In the case of the energy segment, the competition is also high due to a heavy reliance on technological advancements alongside economies of scale.
Financial Performance
The financial data of the company is presented in the Table of the slide. By looking at the revenue data, it is evident that sales of Tesla have been steadily increasing in recent years. However, the net income data shows that only in 2020 the company becomes profitable, and similar information is observable from the EPS data. In addition, the company issued more shares in the year 2020.]
Business Risks
When it comes to the business risk factors of Tesla company, these influences are manifested in a multitude of business’s external and internal elements. The most obvious hindrance to higher growth is evidently was COVID-19 pandemic, which still impairs the company’s potential for growth. Another risk factor is an inability to adjust the management style in accordance with growth since the demand for Tesla vehicles is increasing. The suppliers’ failure to deliver a wide range of essential components can also be a potential pitfall. New competitors, especially in the fully electric vehicle markets, are becoming more common and significant, where Tesla might lose its first-mover advantage when it comes to high-performance vehicles.
Conclusion
In conclusion, the presentation provided valuable business data and information on Tesla, Inc. The overview revealed the core aspects of the business and how it operates. The segments of its products and services include automotive and energy storage fields. The manufacturing is split in accordance with the demand as well as product differences. The financial performance indicators showcase that Tesla recently became a profitable company. However, the business is still vulnerable to a number of risk factors, some of which are unmanageable.
Reference
Tesla. (2021). Form 10-k. Web.