Tesla Case Analysis

 Tesla Motors is a well-known world brand famous in its high-quality and innovation vehicle. The fuel Tesla use makes it different from traditional cars which is electricity- completely zero emission and environmentally friendly and sustainable fuel. The engine Tesla using is the electrical machinery, not the conventional engine, this engine can accelerate from zero to 60 miles per in 3,7 seconds even faster than Porsche 911. Also, the 2-cycle EPA test procedure that used with the Tesla Model S can deliver a range greater than 300 miles; this is the achievement that never had in the EV history. Tesla is a new player in the traditional auto industry since 2003, and there are already three giant automakers in the US market which are GM, CHRYSLER, and FORD. These three automakers dominated the US auto markets for decades, so it is challenging Tesla’s market share and provide barriers to enter the market. Also, the foreign competition can’t be ignored, since 1974 the international car company has become another steady power in the US market. The car manufactures from German, Japanese and Korean provide higher quality, advanced and better fuel efficiency engine vehicles but in lower price compare to US vehicle manufactures. The reason they have this competitive advantage is labor in their country don’t have high health care and pension as labor in the US; it dismisses a lot of costs. After Toyota and Honda occupied a massive amount of the market, the Nissan, Hyundai, and Kia have also become strong competitors in the US market.

External analysis: the PESTEL model is a framework that can help analyst the critical external factors in a more comprehensive way. In the political perspective, the American Congress voted to append Title V, “Improving Automotive Efficiency,” to the Motor Vehicle Act because of the 1970s oil embargoes. This is the beginning of the US government began to pay attention to new energy vehicles. In 2003, the government even invested $1.3 billion in research hydrogen-powered vehicles; this is the vast improvement for the new energy vehicle with the government’s positive help.

Tesla also needs to face the price pressure, although 72 percent of the people said they had considered buying an EV, but 65 percent of Americans won’t purchase the EV with a higher price than the traditional car models, also the oil price in the US per gallon is cheaper than the price in Europe, thus Tesla needs to lower its price to attract more customers. In US society, people are more likely to purchase a large vehicle rather than a small one due to so many different reasons, for example, largest parking lots, lower oil price and people’s personality, etc. In a technological perspective and ecological perspective, the advantage of the pure electric vehicle is seeming. EV using the regenerative braking system can save a large amount of energy during the acceleration. Also, the pure electric vehicles have a high torque over a larger range of speeds compared to the traditional model vehicles. That’s the reason why only 288 HP vehicle can faster than the more top house power 911 Porsche GT. The engine it uses can have zero emission which can benefit our society and better describe the sustainable concepts. But the battery is the majority problem of the EV, it is the most expensive part of the car and offers a limited energy-to-weight ratio, this ratio can restrict the driving range of the EV. As the legal, there is no overall alternative fuel industry standard has emerged, the no standard environment slows the pace of progress tremendous influenced Tesla’s future development.

In the internal analysis, the most critical part is the core competencies. Tesla Motel’s core competencies are its unique, unique technology and unique product. These unique strengths allow Tesla to differentiate its products from those of its rivals. The VRIO framework explains and predicts the firm-level competitive advantage. I would say the energy Tesla using it the most valuable resource which can help exploit an external opportunity and offset an external threat; this value creates Tesla’s economic value. Also, the engine it uses, and the design of the outlook is rare and costly to imitate.