Peeking Under the Hood: SWOT Analysis of Tesla⚡
We have previously written an outright SWOT analysis of Hyundai. This time we are back with another article on the SWOT analysis of Tesla.
Tesla Inc. was a Silicon Valley-based American start-up. Tesla was named after Nikola Tesla, a well-known inventor, and scientist of the period. He was a pioneer in radio technology and electrical engineering.
Tesla, Inc., formerly Tesla Inc., has risen to the pinnacle of success as a dynamic automotive and energy solutions company. Because of its strong position in the market, it is known for its creative approach. Tesla has become one of the most talked-about and studied businesses among business aficionados.
Digital marketing has played a major role in the success of Tesla. And keeping yourself upgraded with the latest digital marketing trends by attending the Free MasterClass on Digital Marketing 101, hosted by Karan Shah, CEO and Founder of IIDE is very important. Book your seat now.
Now, right before we delve into the SWOT Analysis of Tesla, let’s look at the background of the company, its founders, financial status, competitors and products.
Nicolai Tesla, a prominent scientist and inventor, was the inspiration for Tesla Inc., which was created in 2003. Tesla has become one of the top vehicle businesses in the world because of its energy-saving technique and luxury-focused designs. In February 2004, Elon Musk met with Martin Eberhard and Marc Tarpenning, the original creators of Tesla, and provided US$6.5 million to the initial US$7.5 million round of funding.
Tesla’s renewable energy approach transformed the vehicle industry and had a tremendous worldwide influence. The Roadster, Tesla’s first car, was the first automobile to employ lithium battery cells. Tesla, based in California, has grown in popularity among the American public as a high-end electric vehicle with an original design.
|Founder||Martin Eberhard & Marc Tarpenning|
|No. of Employees||70,757|
|Market Cap||$388.97 billion (2022)|
|Annual Revenue||$81.46 billion (2022)|
|Net Income/ Profit||$12.56 billion (2022)|
Products by Tesla
- Model S
- Model X
- Model 3
- Model Y
- Powerwall, Powerpack, and Megapack
- Solar panels and Solar Roof
- Tesla Energy Software
Competitors of Tesla
- Toyota Motor Corporation
- Ford Motors Company
Now that we understand the company’s key business, let’s look after the SWOT Analysis of Tesla.
SWOT Analysis of Tesla
SWOT Analysis of Tesla can show how a well-established company uses its opportunities to ensure its growth. It can show how the company takes advantage of its strengths to use the opportunities while working on its weaknesses. SWOT Analysis of Tesla will also reveal its expansion plans.
To better understand the SWOT analysis of Tesla, refer to the infographic below:
Now first let’s begin with the strengths of the company from the SWOT analysis of Tesla.
Strengths of Tesla
- An Employer of Choice: Any company is only as good as the people it hires. In the case of Tesla Inc., it is one of the most important aspects contributing to the company’s extraordinary success.Tesla has emerged as an excellent firm for employees, thanks to its diversity and innovation-friendly culture.
- The Most Valuable Automobile Firm: Tesla’s sales on global scale were 9,50,000 units in 2021 which is 87% increase over the previous year. The company’s market capitalization increased to approximately $208 billion, surpassing Toyota’s $202 market capitalization to become the world’s most valuable carmaker by market value.
- Strong Organization: There are the characteristics of a corporation that assist it in achieving its objective. For instance, substantial financial resources, personnel expertise, brand loyalty, products and services, and so on.
- Positioning: Tesla positions their cars as vehicles that can provide driving experiences that exceed customer expectations. Their cars are also exceptional in terms of styling and achievement. Also, the kilometer range of its cars are extremely impressive which is 600 kilometers on a single battery charge.
- Effective Marketing Strategies: Tesla is worldwide famous for its 0$ marketing strategy. That’s right. Tesla does spend any funds for its marketing other than its launches. This sounds very strange but this is true. Tesla has leveraged multiple benefits from its operations and directed those leverages into its marketing strategies.
- Innovation: Tesla has not just been creative in the design and styling of their cars but has also been involved in a lot of research on alternative energy vehicle options such as hybrid cars, hydrogen cell power-powered electric cars, and plug-in hybrids.
- Market Dominator: Tesla is one of the biggest dominaters in the US in terms of electric vehicle sales. Along with Ford and GM, Tesla is recognised as one of the “Big Three” players in the electric car market.
Weaknesses of Tesla
- Mechanical Complications: Due to their higher standard of innovation causes certain production and mechanical delay in terms of launching product such as the manufacturing of their Model X got delayed due to frequent innovative changes.
- Battery Shortage: As Tesla’s most of the business depend upon battery electric vehicles and plug-in electric vehicles which sometimes cause shortage of the supply of batteries. This directly affects the sales of electric vehicles and energy storage systems.
- Employee Turnover Rate: It has a high employee turnover rate, with low employee enthusiasm and working confidence. Recently, Tesla got fined to follow unethical working system which caused impact on workers safety.
Opportunities for Tesla
- Untapped Markets: The most important opportunity of Tesla right now is to tap into Asian market which is India where the market of EV, automation and renewable energy is growing rapidly.
- Affordable Cars: Tesla is working on launching its affordable cars so that people of every class can access the innovation of Tesla. Such as it recently launched Model 3 which is a more affordable version of Model S.
- In-house Battery Production: Tesla can launch its own battery cells which will reduce the dependency of Tesla on Panasonic who is its primary supplier of batteries. This move could be a big game changer for Tesla if implemented.
- Technological Developments: Technology succeeds with numerous advantages among many departments. Operations can be automated to diminish costs. Technology enables better data to be obtained from customers and improves trading accomplishments.
- Autonomous Driving Technology: Tesla’s autopilot technology has gained it fame for its safety and convenience. Making it trustworthy by consumers and the share market. Tesla’s work in autopilot is constantly evolving.
- Environment-friendly Cars: As consumers are becoming more environmentally conscious, the need for more electric vehicles is growing along with the need to minimize fuel-driven cars.
Threats to Tesla
- Technological Developments by Competitors: New technological developments by a few competitors within the industry pose a threat to Tesla. Buyers attracted to this new technology can be lost to competitors, reducing Tesla’ overall market share.
- New Entrants: There have been various players that have entered the market and are gaining market share by gaining the existing company’s market share. This is a threat to Tesla as it can lose its buyers to these new entrants.
- Controversies: Tesla has been the subject of several lawsuits and controversies arising from statements and acts of CEO Elon Musk and from allegations of creative accounting, whistleblower retaliation, worker rights violations, and unresolved and dangerous technical problems with their products.
- Increasing Competition: There has been an increase in competition within the industry putting downward pressure on rates. This could lead to reduced earnings for Tesla if it adjusts to the price differences, or loss of market share if it doesn’t.
- Exchange Rate: The exchange rate maintains a varying rate and this affects a company like Tesla that has sales internationally, while its suppliers are regional.
This ends our complete SWOT analysis of Tesla. Let us conclude our learning below.
The motor production organisation of Tesla has developed several elements to increase its commercial enterprise horizon. They made numerous improvements in layout, styling in addition to capabilities to offer the most reliable first-rate of offerings to their clients internationally.
Tesla has a strong grasp over traditional marketing and digital marketing, the scope to utilise the big umbrella of digital marketing is even bigger. As we said in the middle of the article, gaining the requisite skills in this field and completing certified courses may lead to employment opportunities with famous corporations such as Tesla.
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We hope this blog on the SWOT analysis of Tesla has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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