The purpose of this document is to present the current competitive position that Tesla Motor is in. The analysis covers environmental, industry, competitor, and finally recommends key areas that the firm must focus on to ensure future success. Clearly the electric car industry is in its emergent phase and has not reached the annealing point in the product life cycle yet. This is evidenced by the small number of competitors and the fast developing technology that the product requires.
As the result, environmental plays a large role in how quickly the industry will take off and consequently the key determinate of the firm’s success. Environmental Analysis Political Influence Tesla’s initial funding is largely supported by US federal government with a loan of 462 million. Even though the company paid off the entire loan value in 2013, the company is still Along with the federal loan, Tesla also relies on support from politicians through a complex series of federal and state subsidies.
For each purchase of a new Tesla acquired for personal use, the federal government offers a $7,500 federal tax credit. In addition, various states offer additional income-tax credits, including $6,000 in Colorado and $7,500 in West Virginia. These subsidies have become so central to Tesla’s business model that it advertises them to customers as a way to cover the cost of a down payment. Even with the support of federal and state politicians, Tesla would still be reporting losses were it not for its ability to profit off of other auto manufacturers in California.
The Essay on The US Federal Government and state governments
The government of the United States is constantly changing. From the moment the country was born until today, there have been many eras and concepts that have transpired over the years. The United States federal government and state and local governments have gone through periods for transition from 1781 to the present day in which their relationships where continuously changing. In order to ...
In the first quarter of 2013, Tesla reported its first-ever quarterly profit by using special credits from California’s Air Resources Board, which rewards auto manufacturers for the production of “zero-emission” vehicles. So far this year, Tesla was able to turn what would have been a $57 million loss into an $11 million gain by selling $68 million worth of these credits to other auto manufacturers in California.
It is evident that continued government support plays a large role in the future success of Tesla. The company needs to take steps to ensure, or at least attempt to maintain and strengthen the relationship with US government to continue to enjoy such benefits. It should also spend effort to reduce reliance on government subsidies and make the products competitive without such. Reliance on government subsidies also presents a risk that the company bears.
