Introduction to quality management topic teslas business strategy

2003 February 2017 –Headquarters: Palo Alto, California, U.S Products: Electric Vehicles, Tesla Batteries, Panels and Roofs Solar Hình 1 : Tesla Inc... SBU Tesla''''s SBU Strategic Business

B Ộ GIÁO DỤC VÀ ĐÀO TẠO

TRƯỜNG ĐẠI HỌC SƯ PHẠM K Ỹ THUẬT TPHCM

KHOA: ĐÀO TẠO QUỐC TẾ

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TOPIC: Tesla's business strategy

INSTRUCTOR: Ths Nguy n ễ Thị ồng H

COURSE ID: IQMA220205E_22_1_01FIE

STUDENT NAME:

Lê Quốc Yên Bình……….21147101

Lê Hoàng Anh Tú……… 21147157

Tô Hoàng Chương……… 21147102

Semester 1 2022-2023

Topic: Tesla's business strategy

2 Analyze the business environment of the enterprise Lê Hoàng Anh Tú- 21147157

3 Tesla's strategic solutions Tô Hoàng Chương- 21147102

Lecturer comment

Contents

I Business overview 4

1.1 Introduction to Tesla 4

1.2 History of formation and development 5

1.3 Overview of the tesla SBU 5

II Analyze the business environment of the enterprise 7

2.1 Analysis of the microenvironment PEST 7

2.1.1 Politics (P) 7

2.1.2 Economy (E) 9

2.1.3 Social (S) 10

2.1.4 Technology (T) 11

2.2 Analysis of the industry environment- Model of 5 competitive forces 13

2.2.1 Industry competitors: 13

2.2.2 Substitute products: 15

2.2.3 New Competitors Enter: 15

2.2.4 Supplier: 16

III Tesla's strategic solutions 18

3.1 Tesla SWOT analysis 18

3.1.1 Strengths 18

3.1.2 Weaknesses 20

3.1.3 Opportunities 21

3.1.4 Threats 22

3.2 Strategic solutions 23

References 24

I Business overview

1.1 Introduction to Tesla

Company name: Tesla Inc

Career: Automotive, Energy storage, Energy development Established: July 1, 2003

Former name: Tesla Motors Inc (2003 February 2017) – Headquarters: Palo Alto, California, U.S

Products: Electric Vehicles, Tesla Batteries, Panels and Roofs Solar

Hình 1 : Tesla Inc

1.2 History of formation and development

July 1, 2003: Martin Eberhard and Marc Tarpenning founded a company with the original name Tesla Motors In it, Eberhard and Tarpenning are CEO and CFO respectively

October-November 2003: Ian Wright joins Tesla Motors

February 2004: Elon Musk joins Tesla Motors Company, becoming

Chairman of the Board of Directors, after contributing most of the capital in the Series A sponsorship

May 2004: JB Straubel joined the company

2005-2009: Developed Tesla Roadster

2010-2015: Developed IPO, Model S and Model X

November 2016: Tesla acquires SolarCity, thus entering the solar photovoltaic market

February 2017: Tesla Motors shortens its name to Tesla

2016-2018: Developing SolarCity and Model 3

2019-present: Global expansion

1.3 Overview of the tesla SBU

Tesla's SBU (Strategic Business Unit) is divided into two main parts: Vehicle Manufacturing and Renewable Energy Vehicle Manufacturing is Tesla's main SBU, primarily producing electric vehicles, including the Model S, Model X, Model 3, Model Y and Roadster models This SBU is responsible for the design, development, and manufacturing of Tesla products Renewable Energy is a subsidiary SBU of

Tesla that specializes in renewable energy-related products and services such as Powerwall energy storage batteries, Solar Roof solar systems, and other related products and services the use of renewable energy Tesla's SBU is considered very successful, producing breakthrough products in the electric vehicle and renewable energy industries, and becoming one of the leading players in the field.|

In addition to the two main SBUs mentioned above, Tesla also has other businesses such as energy supply services and smart vehicle connected services

In the energy sector, Tesla provides energy storage and distribution solutions based

on lithium-ion battery systems Tesla products include Powerwall for home, Powerpack for business, and Megapack for large projects These products have the ability to store renewable electrical energy for use when needed and ensure the continuous operation of electrical systems

In the field of smart vehicles, Tesla is developing and implementing new technologies such as navigation software, autonomous driving systems and internet connectivity of its models With the goal of becoming a multi-service technology company rather than simply a car manufacturer, Tesla is continuing to invest in new operations to scale their business

In addition, Tesla is involved in projects and partnerships with other car manufacturers, but remains focused on the development and production of its products

Overall, Tesla's SBU is considered very successful in developing breakthrough products in the electric vehicle and renewable energy industries, and has become one

of the leading players in the field Tesla strives to achieve its goal of creating a world with a better quality of life through promoting the development and use of renewable energy

II Analyze the business environment of the enterprise 2.1 Analysis of the microenvironment PEST

Tesla is continuing to expand and optimize its retail, service, and technology capabilities globally This results in the company being subject to a wide range of legal, political and regulatory requirements as well as different social and economic conditions from different countries

2.1.1 Politics ( P)

2.1.1.1 Political stability:

Political stability is one of the most important factors affecting the company The political stability of most of the countries that Tesla is present in helps the company avoid major risks that may occur

Except for the countries that are the market, Tesla must also take care of the political situation of the countries that are the company's supply For example, cobalt is the raw material for Tesla to build Model S, Model X, and Model 3 vehicles, and about 58% of the world's cobalt production comes from the Democratic Republic of Congo According to an Amnesty International report, the race to mine cobalt has increased cases of conflict, corruption and child labor abuse in Congo Accordingly, it can

be said that political instability and war in the Congo could create risks to Tesla's cobalt supply chain

2.1.1.2 Government subsidies and incentives for electric vehicles

The U.S government has shown interest in renewable energy and electric vehicles by granting Tesla a $465 million low-interest loan Despite

having paid off the loan, without it, the company might not have attracted

as many investors as it does now Due to the negative environmental impact of CO2 emissions, the US government also offers incentives to promote the production of vehicles running on clean fuels The impact of this factor is positive and so far Tesla has been able to benefit to the fullest extent For example, the U.S government offers a $7,500 credit for each new electric vehicle purchaser as an incentive, but there is a limit of 200,000 electric vehicles in the U.S per automaker Tesla was the first manufacturer to hit this threshold in 2018 Thanks to the new incentive reform, Tesla will benefit from a $7,000 support credit policy on 400,000 electric vehicles in the US

2.1.1.3 New international trade agreements

The expansion of free trade agreements creates opportunities for the company to expand its operations globally Tesla can take advantage of these agreements to enter new markets easily and smoothly

In contrast, Tesla is also subject to many international trade agreements due to its global scope of business For example, Tesla has been affected

by the US-China trade war under the Trump administration to a significant extent The company has even sued to prevent the Trump administration from collecting tariffs on parts the electric carmaker imports from China Tesla has tried to influence the political environment by engaging in lobbying in the hope that it can make its business more favorable However, the company's lobbying budget is not as large as that of some other global vehicle manufacturers, and that means it can't make the situation better

2.1.1.4 US proposes to increase corporate income tax

In early April 2021, the US Treasury Department released details of Joe Biden's tax program Accordingly, the adjusted corporate income tax is increased to 28% from the previous 21%, while increasing the global minimum tax rate and calculating this tax by country, supplementing the

"book income" tax minimum for large companies If implemented, this will not only disadvantage Tesla, but also other US businesses when having to spend an extra amount on taxes

2.1.1.5 International law

There are many laws and regulations on international business activities that are directly related to the cost of supplies Costs affect pricing, and affect the company's product sales Electric vehicle safety standards; the battery; charging stations and necessary infrastructure when using electric vehicles; These issues are different in each country's laws, requiring Tesla administrators to understand and comply with the requirements of each nation

2.1.2 Economy (E)

2.1.2.1 Global economic growth:

This is beneficial for Tesla because when the global economy grows strongly, people in other countries will be willing to pay a higher level, or they will have a greater need to pay attention to clean energy products environmental protection

According to the report of the International Energy Agency, in 2020, electric car sales will reach about 3.24 million units (up 41% compared to 2019), the supply will reach 10 million units, and the global electric vehicle market share will reach 10 million units Demand rose to a record 4.6% Among them, Europe has the latest 1.4 million electric vehicle registrations in 2020, followed by China (1.2 million) and the United States (295,000) Global electric vehicle sales increased 140% in the first quarter of 2021 with strong growth in China, Europe and the US market thanks to policies promoting electrification implemented in many regions

2.1.2.2 Cost of raw materials and batteries:

Some of the key elements in Tesla's vehicle production are lithium, cobalt, steel, aluminum, nickel, and lithium The market and prices of these elements and materials are very expensive and unstable Even a small change in the price of those supplies can have a big impact on the retail and sales prices of electric vehicles

However, technological factors are likely to help reduce battery production costs sharply in the future According to an estimate in a report

by Bloomberg New Energy Finance, the current price of $137 per kilowatt-hour for lithium-ion will drop to $100 per kWh by 2023 This helps Tesla bring to market models with With more affordable prices, making products more attractive, electric vehicles will become more popular and thereby increase the business efficiency of the company

2.1.2.3 Concerns about economic stability

The whole world is doing its best to fight the Covid 19 pandemic; Lockdowns and closures of businesses took place across most of the country and this situation continues Maybe after the pandemic, the whole world will suffer a recession; people lose their jobs, their purchasing power will be greatly reduced As a result, it will become difficult for people to buy Tesla products

2.1.2.4 Luxury goods in developing economies:

Looking at the growth and economies of developing countries, it is clear that owning a car here is still a luxury Tesla's electric car is too expensive for them to buy Corresponding infrastructure such as charging stations across the country is also a big problem

However, in many countries, consumers are investing in luxury car brands such as AUDI and BMW understood as a continuous increase in sales –This is good for Tesla because they are seen as luxury cars with the latest gadgets

Providing a car for the middle class is also a smart idea Not only because Tesla has little competition in the electric vehicle market at the moment, but also because people care and want it An option like this, for the developing world market, would be a good step for Tesla's expansion

2.1.3 Social (S)

2.1.3.1 Sustainable society:

Advances in technology and Internet connectivity have made the world a global village Besides, it has also made people realize the impact of carbon emissions and pollution on global warming This makes people

want to develop a sustainable society for both nature and people The traditional automobile industry using fossil fuels accounts for a large part

of this situation More than ever, governments are calling on automakers

to take action to completely phase out cars that generate CO2 Therefore, Tesla's electric car is a promising step towards a sustainable future and especially attracts customers with "ecofriendly-mind" when using clean energy and low carbon emissions environment during use is zero

2.1.3.2 Development trends:

Tesla has maintained an image in the public eye of launching unique and innovative models The company always keeps in mind the needs of customers and develops according to the trends Tesla's recent breakout growth numbers are proving that the electric car trend will be inevitable for the auto industry in the not-too-distant future By mid-January 2020, Tesla's total market capitalization has reached 107 billion USD, surpassing Volkswagen - the giant German car manufacturer - to become the most valuable car manufacturing company in the world second largest

in the world after Toyota

2.1.4 Technology (T)

2.1.4.1 Technology Trends

Two of the biggest factors hindering the mass adoption of BEVs are the limited range of batteries and the high cost of batteries In that respect, there are promising prospects for battery technology advancements that will continue to improve performance and reduce costs The battery is significantly lighter in weight, the same size, and has nearly twice the range

For example, Tesla's flagship advanced lithium-ion-based battery is 500 pounds lighter and has a range of up to 300 miles

Although breakthroughs in advanced battery technology have resulted in significant cost reductions, BEV batteries are still very expensive Lithium-ion batteries can account for up to 50% of the cost of a BEV,

with current battery prices estimated at around $15,000 The main concern

is high demand and lack of supply of battery components, including rare metals such as cobalt, manganese and nickel

Continued advances in research and development and predictable economies of scale will likely drive the kind of significant battery price reductions needed to make BEV pricing more competitive The U.S Department of Energy has set an achievable reduction in vehicle battery costs of 70% between 2010 and 2014 For comparison, the Gale Encyclopedia of American Economic History revealed that micro Computer processing (an equivalent new development technology) has been introduced at a relatively high price, but has steadily declined by an average of 20% per year since 1950

2.1.4.2 Performance improvement of electric vehicles

The main factor where the BEV significantly outperforms powered vehicles (apart from the obvious emissions advantages) is its high torque ratio The gasoline engine has reduced torque capacity in the low rpm range and delivers only limited horsepower in the narrow rpm range

gasoline-For comparison, the electric motor has a high torque capability that overcomes margin of error, delivering near-constant torque throughout the 6000 rpm range and continuing to deliver outstanding power well beyond 13,500 rpm / minute This means that electric vehicles are incredibly fast at any rpm In terms of performance, electric vehicles are six times more efficient and pollute less than one-tenth of the most efficient gasoline-powered vehicles

BEVs are mechanically much simpler (10x fewer moving parts, no engine, no gearbox, etc) than both petrol and hybrid electric vehicles The BEV engine has only one moving part, no clutch, and the transmission is very simple Furthermore, due to the technological advancement known

as 'regenerative braking', even friction brakes are less prone to wear Service for a well-designed electric car is limited to routine vehicle inspections, possible simple software updates, and tire maintenance in