Tesla Strategic Models: Issues and Challenges faced by Tesla Company (Research Paper Sample)

Tesla Strategic Models
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Issues and Challenges faced by Tesla Company
Tesla being one of the first electric car company in the history of the US in the early 1950’s which not only manufactures electric cars but also builds integrated charging cars which is first of its kind. It has changed the whole perception of how people view electric cars. Being founded in the year 2003, tesla’s main mission was to hasten the global transition to renewable energy. It has been on the path to maintaining a better kind of sustainable environment for the past decade. The company has then expanded its market to battery storage and even introduced solar panels. The company vision according to the CEO Elon Musk is “to accelerate the move for a sustainable transport system by bringing a high volume of electric vehicles into the market quickly” (2013, p 12). The merge for the solarcity also increased the company’s course of a fully electric future.
Despite all the benefits and ambitions the company had for the future of electric cars, it also faced many threatening issues and challenges. The most ideal one was lack of experience, in that they had the challenge of making a car with better performance for long distances and the survival of the product if it failed as they had no prior experience this being the first of its kind. The slow production rate, for example the model 3 which was profiled to be released on March, 2016. The production and delivery of this model did not start until the final quarter of year 2017, as they were uncertain of the possibilities and shortcomings that might unfold from its release. This problem was attributed to slow development and battery shipping assembly line due to inexperience (Hull, 2016, p 28).
Also the hefty amount of capital that was spent by tesla which had not been covered by its financing, operating costs and outside investments. And in the process it has been recording a huge amount of losses since 2008. It’s not as profitable as the other brands. In the year 2019 the company’s net loss was 847million dollars from the previous year which was 970 million dollars. But it has also seen a growth serge in its production, whereby I spent over 3 billion dollars in the year2017, 1.2 in the year 2016 and 2.4 in 2015 on its capital expenditure. Since the release of Tesla model 3 its sales rose steadily and so did the cost of revenue and other expenditure. 2019 its operating expense was 4.2 billion dollars compared to 4.4 billion dollar in 2018. The company also has limited customer base having a higher market value for its products. Even the cheapest one of them all the model 3 which