Research Related to Tesla Motors

Tesla Motors was founded in 2003, right after the time when oil prices rapidly increased. At that time, electric cars become very popular due to the increased cost of gasoline coupled with an increased battery mileage-range that was the result of improvement in technology (Van den Steen, 2015). These factors made an opportunity for Tesla to enter the electric car industry. After Tesla had faced production delay problems, Elon Musk took over the company and became the CEO even though Tesla in spite of the fact the company was facing difficulties (Van den Steen, 2015). He eventually led the company into a new chapter and helped to build the most innovative electric vehicle company in the world.

Tesla was successful with its first models due to its ability to collaborate and later work in-house. The first car model Tesla worked on was the Roadster. Tesla used mergers and acquisitions as its market entry strategy in order to bring this product to market. The body design of the Roadster was derived by the company Lotus and, as a result, Tesla collaborated with Lotus in the car design, which was assembled by Lotus in the UK (Van den Steen, 2015). Other than that, Tesla designed and produced the car’s powertrain in-house in California (Van den Steen, 2015). By implementing this strategy, Tesla successfully created a new market for high-end electric sports cars which had changed consumers’ perception of electric vehicles (Van den Steen, 2015). After succeeding with the Roadster, Tesla started focusing on its Model S and Model X. This time, the company changed its market entry strategy from mergers and acquisitions to building in-house.

The company took the advantage of its location in Silicon Valley where it had abundant an advanced technological resources to develop its new car models with a number of new and unique design features (Van den Steen, 2015). For example, the new features included software controlling, 17” touchscreen, a wireless fob, and so on (Van den Steen, 2015). By changing its market entry strategy, Tesla again received tremendous positive reviews for its Model S and Model X and won the highest Consumer Reports rating (Van den Steen, 2015). Tesla’s initial success was widely due to its ability to work with existing technology and eventually bring that technology in-house, helping to build its brand and expand the company.

Tesla did not, however, experience unbridled success and there were in fact several challenges the company faced. Although Tesla had successfully entered the car industry, it also had some barriers including powertrain shelf-life, high production costs for its new models, and the conflict with the dealership lobby, all of which needed to be overcome (Van den Steen, 2015). Due to building the powertrain in-house, it was not able to last as long as they desired for the Roadster. The company decided to partner with Panasonic in order to design a rechargeable battery pack and modify the design for car usage in terms of enhanced safety by developing a cooling system to keep the batteries from overheating in their cars. Tesla also realized the fact that it could save a lot of effort and costs on developing its powertrain from scratch by collaborating with Panasonic. However, some analysts thought these new features could be a cost disadvantage for the company (Van den Steen, 2015).

In order to reduce production costs for the Model S and Model X, Tesla decided to completely remain in-house for the design of the powertrain and change to assemble it by the company itself. Thus, the company purchased an idled plant in California which used to be a manufacturer of both GM and Toyota and also brought some production equipment at lower prices from struggling manufacturers due to the economic downturn in the automotive industry (Van den Steen, 2015). In order to grow the company in terms of sales, Tesla also overcame the barrier of the sales conflict of interest between electric cars and traditional cars by eliminating dealerships and building a network of company-owned stores (Van den Steen, 2015). This way, they wouldn’t have to worry about competitors undercutting the sales of Tesla cars by offering more competitive deals at ordinary car dealerships. By overcoming these barriers, Tesla finally was positioned to become profitable in 2013 and would consistently perform towards the top of the market.

Based on its net income, Tesla wasn’t profitable until 2013. Prior to 2013, the company frequently received loss in net income while its gross profits in those years were positive. This is because the company also spent a lot of money on research and development (R&D) as well as selling general and administrative (SG&A) in order to improve performance of its electric car. After deducting all the expenses, the company had been suffering losses for its expenses until 2013. According to the Tesla case (Van den Steen, 2015), the company changed strategies to build in- house for its new model S and Model X after ending the contact with Lotus in 2012. As a result, the company’s operation costs had a significant decrease which in turn generated more profits for the company by the next year in 2013.

By comparing the financial data for both Tesla and BMW, Tesla spent double the expenses of BMW on R&D and SG&A, and thus Tesla had a competitive advantage in its products’ performance and innovation which also could be seen in the comparison of the Tesla Model S, the Nissan Leaf, and the BMW 528i. To be more specific, the Tesla Model S had the highest speed, the most powerful horsepower, the largest range, and biggest volume and capacity among these three car models (Van den Steen, 2015). Tesla successfully entered the automotive industrial market which was due to the fact that it put a lot of effort and spent a lot of money on its product development in order to create a high performance electric car with many competitive market advantages and is finally now profitable.

Today, Tesla strives to gain many more market share and profit as Elon Musk has stated “he wanted to go further and build a lower end mass-production EV,” although this may be difficult to maintain in the years ahead (Van den Steen, 2015). Elon Musk gave his word, and has fulfilled his promise to customers and investors. Tesla has created a new Model 3 in 2018 and this new EV car has become the bestselling luxury car in America (Isidore, 2018). The Tesla Model 3 has been positioned and marketed as a lower-end, more affordable electric car model which is sold at starting price of $35,000. Its price is more affordable than other car models of Tesla as the company plans to target more customers by offering a lower priced car model to consumers, thereby increasing market shares and boost profits for the company.

However, it seems the companies good fortune won’t last much longer. Tesla has faced a “Delivery Logistics Hell” (Boudette, 2018) which essentially means that the company has had serious trouble getting its cars delivered to customers intact because its cars were damaged during the delivery process. Due to its poor car delivery operation, the company has had negative impacts on its brand reputation, sales volume, market share, and stock prices. Therefore, Tesla fell to number 27 out of 29 automakers according to ranking (Boudette, 2018). Tesla, aware of its own problems after this incident knows it needs to find solutions to overcome these problem in order to rebuild its brand reputation, but only time will tell of Elon Musk and his company can effectively remedy the dire situation Tesla finds itself in now.

I like the way that Tesla has been adhering to the ambitious idea of innovation to build its products and brand image and if it continues to innovate it can remedy past failures and protect itself against competitors. By the end of 2020, I expect Tesla’s position to redesign its electric cars to become even more competitive not only in terms of innovation and efficiency based on the car’s design and performance but also by making them more affordable and delivered in a safer, more reliable manner. Many car companies have tried to imitate successful companies’ strategies in order to succeed in the market. There are two ways for Tesla to prevent other companies from gaining entry into the market and outperforming Tesla.

One way is to continue innovating in order to build unique features and designs for its electric cars, powertrains, and other associated features which will help the company create a competitive advantage and set it apart from its rivals. The other way is to focus on niche markets where have inestimable wealth that the company has been exploring. By marketing these unique features that no other company possesses to high-net worth individuals, Tesla can continue to grow and expand under the guidance of Elon Musk, delivering innovated and exciting products in this new market for cars. Overall, Tesla has immeasurable potential in the electric vehicle industry based on the advantage of its location, innovative ideas, and financial competencies. 

Read more

Supply and Demand: Tesla’s Model 3

Tesla is one of the world’s most foremost companies in the realm of electric cars. Having seen unprecedented success, with some of the most reliable electric cars on the market, the company seemed unstoppable (Bartlett). Nowadays, however, they seem to be slowing down. Recently, Tesla has run into a number of troubles, including an immense disparity between units requested and units available. This disparity in supply, according to the principle of equilibrium price, ultimately affects the demand and price of a Tesla car.

As equilibrium price can be defined as “the price at which the quantity of a product offered is equal to the quantity of the product in demand” (Dictionary.com), and thus can be affected by growth or decline in either supply or demand. Tesla’s Model 3 is one of the best-selling cars in America (Cheromcha). Despite this fact – or perhaps because of it – there is an excessive demand that their current production rate cannot accommodate (DeBord). In each successive month, there are continuous sale records broken. In July, for instance, sales of Tesla’s Model 3 peaked at 14,250 units, which was later overtaken by August’s record of 17,800 units, and again by September’s 22,250 units (Loveday).

However, this level of demand is not sustainable, especially for a model whose production rate recently climaxed at 5,000 units a week and is slowly leveling out at around 4,000 units a week (Randall & Halford). Due to a low supply but increasing demand, Tesla has not been able to meet all of its customers’ needs. The order rate has exceeded the production rate, causing significant delivery delays – and these delivery delays could cost the customers thousands of dollars (Lambert). As a result, 24% of Model 3 orders have been cancelled (Valinsky). The lack of supply has influenced the demand for Tesla’s Model 3, which is consistent with the principle of equilibrium price, which suggests that the demand and the supply will eventually fall equal.

In addition to a falling demand, the Tesla’s Model 3 has seen an adjustment in cost. As stated above, nearly a quarter of demands for the Model 3 have been cancelled. This constitutes a massive change in demand, leading to a corresponding change in price. Recently, Tesla has released a cheaper version of the Model 3 with a “mid-range battery”, allowing the price to be cut by nearly 4,000 USD, with price reductions up to 14,000 USD in California (Wolverton). As demand falls, as will the price, so that the demand and the supply can be balanced. Therefore, the change in cost of Tesla’s Model 3, as it followed the change in demand, is consistent with the principle of equilibrium price.

Tesla’s experience with the Model 3 is a modern-day example of the principle of equilibrium price. Supply and demand will naturally match and create a price that leads to equality between units provided and units sold. While Tesla may not have reached that point yet, the price of the Model 3 is certainly moving towards achieving equilibrium.

Read more

The Report Related To Tesla, Inc.

Introduction

The company selected is Tesla, Inc., and the reason why I choose this company is that there is a growing concern among people about climate change and environmental protection. “As part of the historic Paris climate accord, 197 nations representing 97 percent of the world’s emissions have committed to national plans to cut carbon pollution, including from motor vehicles which account for 17 percent of global CO2 emissions” (Hwang, 89).

Tesla, Inc. is one of the famous companies who design, manufacture and sell electric cars. Their models include Model S, Model X, Model 3, and the Roadster. The company also develops and makes lithium batteries. Model 3 is one of the company’s products, and it is the product I will research about. The reason why I have selected Model 3 is that this product is the first mass-market vehicle of Tesla, but it is a challenge for the company, so Tesla needs to work harder for it. Mass productions of cars will be associated with much scrutiny from people about their conservative environmental measures taken.

Background of the Problem

The problem that is associated with Tesla and been analyzed in the report is that of the production of Model 3 cannot meet the demand of customers, which is also because of the lack of production of batteries for Model 3. In the second quarter report of Tesla in 2017, Tesla was confident in promising the company can produce over 1500 vehicles in quarter 3 and produce 5,000 cars per week by the end of 2017 (Tesla Second Quarter 2017 Update, 2017). In the third quarter report, Tesla only delivered 260 Model 3 electric cars. However, its goal was to produce 1500 Model 3 in the third quarter (Ohnsman, 2017).Also, the company expected to produce 5,000 Model 3 electric cars per week by the late first quarter of 2018 (Tesla (d)Third Quarter 2017 Update, 2017).

The reasons that caused this problem were the suppliers and the lack of production of the batteries. Tesla worked with Panasonic to produce a new type of battery for Model 3, and this battery is rumored to be 44160 lithium-ion cells, which would “allow the manufacturers to pack in more energy density with less cost in material and labor” (Spector, J., 2017). Moreover, according to Gene, the Model 3 battery is formed by packing four modules into a case. Parts of battery modules were made by other manufacturing systems suppliers, but now Tesla is doing this by itself (Gene, 2017). If the company cannot produce enough battery to support the number of production of Model 3, there will be a loss for the company and the brand. This problem could cause lack of customer satisfaction, and in the long term, it could lose revenue.

General problem statement: The problem to be addressed is Tesla, Inc. cannot meet customers’ needs with the current production levels, which could lose customer satisfaction and profits. Because increasing satisfaction could improve profitability (Hallowell, 1996).

Specific problem: The problem to be addressed in that demand in Tesla, Inc., located in Palo Alto, CA, is the unmet demand for customers because the number of production of the battery cannot support enough amount of the output of Model 3 in every period. The focus of this study is to explore why Tesla cannot deliver enough Model 3 to its customers. The focus of this study is to investigate qualitative data regarding the Model 3 production and Tesla’s error in calculating.

Purpose Statement

The purpose of this type of study is to explore the qualitative problem of one of the products of Tesla, which is Model 3. Tesla greatly overestimated its capabilities when configuring some possible Model 3 productions. This research will be focused on secondary data attempting to uncover why and how the company Tesla came to the point of overpromising and under delivering to its consumer base. This research will attempt to determine how Tesla initially came up with its promised number of produced Model 3’s within the specified time p it gave. It will then compare that number to a more realistic and time-proven timeline. It will determine how far off Tesla was as well as how and if Tesla should reestablish a realistic production level to suit public demand.

Nature of the Study

I would choose the qualitative method for this report. Because for this report, I want to know underlying reasons and motivations for the delay of Model 3. One of the reasons is Tesla cannot produce enough batteries to support the number of production of Model 3, which fails customers’ satisfaction. Many customers have reserved Model 3 for a long time, for example, according to Tesla forums, there is a customer who booked Model 3 on March 31st, 2017 prior Model 3 was introduced to the public, but he has not received his car yet.

I would choose case study as the design because case study is a type of qualitative research, and this report is related to the how and why questions versus the what, how many and when questions. This report will focus on how Model 3 has the problem of lack of production, why this problem is caused, how many cars Tesla produce each quarter, and when they will fix it.

I was thinking about descriptive research, but based on what definition says, I do not believe it is the right one. Because the study of a phenomenon, which is Tesla, is doing something now, which means it makes changes. For example, the company is about to build up four more factories to produce more batteries to support car manufacturing (Lambert, F., 2017). And I do not think other designs are right for this. Correlational research focuses on if a relationship exists between two or more variables and use a regression equation to make predictions.

References

Hwang, R. (2016). Future of Electric Vehicles Is Bright. Retrieved from
https://www.nrdc.org/experts/roland-hwang/future-electric-vehicles-bright
Hallowell, R. (1996). The relationships between customer satisfaction, customer loyalty, and profitability: an empirical study. International Journal of Service Industry Management,7(4), 27-42. doi:10.1108/09564239610129931
Spector, Julian. (2017, July 31). Battery Advances at the Heart of Tesla’s Model 3.
Retrieved from https://www.greentechmedia.com/articles/read/tesla-model- 3-
batteries-lithium- ion#gs.xyj3T7I
Tesla (b), Inc. (2018). Retrieved from https://www.tesla.com/
Tesla Gigafactory (2018). Retrieved from https://www.tesla.com/gigafactory

Read more

Elon Musk and the Tesla Company

Globalization has made way for companies across the world to enter new markets. The automotive industry has been majorly impacted by globalization. Tesla entered the U.S market at a time when tech innovations have allowed startups to enter the electric car segment, effectively circumventing high entry barriers. Some of the barriers of entry that Tesla was faced with were high start-up costs and large scale production. By targeting a certain strategic group Tesla was able to avoid some of the barriers of entry that would typically trouble standard auto manufacturers. For example the engines manufactured by Tesla are much simpler than traditional gasoline engines.

When entering the market Tesla more than likely performed multiple external analysis’ such as the Pestel and Porter’s five forces model. These models are used to analyze the environment of a market before a firm decides to enter it. The Pestel Analysis organizes the firms environment into six categories political, economic, sociocultural, technological, ecological, and legal. The categories present opportunities or threats the the new entrants will face when entering the market. The following table represents the most recent form of Tesla’s Pestel Analysis.

Tesla’s PESTEL Analysis (Information retrieved from The Panmore Institute)

Political: Tesla receives incentives from the government to sell more environmentally friendly vehicles. Consumers that purchase a Tesla Model S, Model X, or Model 3 receives Federal tax credits. The amount of tax credits range from $1,875-$7,500, individual states will add on an additional rebate or benefits. California for example provides a $2,500 and free municipal parking to all that drive an electric vehicle. These incentives pose as positives for Tesla to enter into the electric vehicle market.

Economic: As renewable energy becomes more popular and competition increases the cost of manufacturing and selling products for Tesla is becoming much smaller. CTO JT Straubel commented on the R&D of finding a sustainable and affordable battery pack for Tesla automobiles by saying “It’s a difficult topic, but we are still very confident that we have the best price and performance of anything out there in the world. If there’s anything better, I don’t know about it and we have looked as hard as we possibly can”. As Tesla continues to search for the best strategy for its battery packs, the company’s Gigafactory seems to have found success. As Tesla’s R&D continues they will continue to create more opportunities to create a larger profit.

Sociocultural: As the popularity of the low-carbon lifestyle continues to increase Tesla will eventually receive more business. According to Bloomberg’s 2018 Electric Vehicle Outlook by 2040 “55% of all new car sales and 33% of the global fleet will be electric.” (Morsy, p. 2). Considering this projection Tesla will have many years to become a mature brand and try to become a cash cow since the demand for electric cars will be much higher.

Technological: The rate of technology change can either be an opportunity or a threat for Tesla. It could be an opportunity for Tesla because EV technology is young there is a lot of room for growth. New innovations could lead to more efficient technologies for electric cars. The threat that new technology poses is that a more advanced technology can emerge. This could led to the demise of electric vehicles if the new technology turns out to be more efficient.

Ecological: As global warming continues to remain a hot topic, electric vehicles will continue to see a rise in demand. There is a possibility if global warming becomes a proven fact there could be a reform on what vehicles we are allowed to drive. This would be a major opportunity for Tesla’s demand to surge.

Legal: Regarding global warming there might be legal regulations for auto manufacturers in the future. Since Tesla is a eco-friendly car company the ramifications of regulations would impact the company minimally.

Tesla has found lots of success in the United States and does not have a large amount of competitors that can offer similar products. The company fails to find major success in the largest electric vehicle market in the world– China. Tesla faces very high barriers of entry in China due to the large amount of competition. Tesla intends on growing its brand in the far east, but must be very careful they perform an external analysis before investing more into the Chinese market.  9. Corporate Strategy: Strategic Alliance, M&A (Kendrick)

There is a point in a company’s life cycle where it must determine how does it grow. One of the ways that Tesla improved its brand is by achieving growth through strategic alliances. Firms enter a strategic alliance in order to gain knowledge, resources, or capabilities from each other. In order for Tesla to reach its full potential they had to either build, borrow, or buy resources. The most viable option was was for Tesla to create strategic alliances and borrow practices from other companies since the electric vehicle market is still young.

There four strategic alliances that have contributed to Tesla’s success in the American market. When Tesla was in its infant years of existence Tesla was uncertain of the technology that they were producing. In order to hedge against uncertainty Tesla approached two auto manufacturers, Toyota and Daimler. Both automakers acquired equity in Tesla. In return Tesla used their extensive R&D to produce powertrains on the Toyota’s electric vehicle, the RAV-4. The company also assisted Daimler create the Mercedes B-class and the Smart car. These electric vehicles that Tesla helped did not live to the expectation, resulting in losses for both Toyota and Daimler. They later sold most of their stake in Tesla and cut their ties.

Panasonic and Tesla recently became strategic alliances, Tesla mainly partnered with Panasonic to access critical complementary assets. Panasonic exchanged information regarding making the lithium batteries inside of Tesla’s cars better. As Tesla found improvements to their batteries Panasonic continued to deliver by investing over one billion dollars into Tesla’s Gigafactory. This resulted in Panasonic becoming the sole provider of all battery cells in Tesla vehicles.

When Elon Musk acquired the energy company Solar City, it was mainly to assist Tesla uncertainty regarding vehicle charging. The idea was for Tesla to innovate a charging station that is stored at home, powered by solar panels. This acquisition was a strategic on behalf of Tesla, the company infiltrated a new market and had to learn the capabilities of it. Solar City panels have been tested by Target Supermarkets, and can power the entire store off of a few panels. This alliance has created the opportunity for Tesla develop a new company asset.

Tesla’s main focus is on continuous growth. Elon Musk makes many large decisions for the company and requires that his employees must be able to face adversity. Tesla has seen a lot of backlash regarding Elon Musk’s leadership style. The company is controlled by a centralized corporate structure. Elon Musk facilitates all corporate decisions made by Tesla and SolarCity.

Tesla benefits from the centralization structure because the company worldwide will be in sync. The structure also helps Tesla implement strategies globally. A downfall of this strategy is that if Tesla experience issues it takes much longer to implement new strategies from the top down. The company is unable to function autonomously, this is a tactic that will need to change over time as Tesla begins to grow. The acquisition of SolarCity will not align with the Tesla’s structure unless it begins to phase in some sort of autonomous structure.

The involvement of Elon Musk in all aspects of the company’s decision making has been a factors to the high turnover rate of executives in the company. Many executives have chose to part ways with Tesla due to being frustrated with the organizational structure that Tesla performs under. The public attention on each executive has brought great pressure to C-level executives.

Read more

GM Says the Bolt EV Will Have a 238-Mile Range, More Than Tesla’s Model 3

General Motors Co. said on Tuesday its electric subcompact Chevrolet Bolt EV will have an average range of 238 miles on a full charge, farther than rival Tesla Motors Inc. expects for its upcoming Model 3.

The Bolt EV will be launched in a few months, nearly a year before the Tesla Model 3, with a starting price for U.S. consumers of $37,500 that is similar to the announced starting price for the Model 3.

The sale price is before ancillary charges and a federal tax credit available to U.S. buyers that could be $7,500.

The Bolt is on track to be the first fully electric car with at least 200 miles of driving range per charge and a starting price below $40,000. Tesla’s Model S and Model X offer driving ranges of more than 200 miles, but at prices that start at roughly double the Bolt’s.

The Bolt is also seen as the first affordable fully electric car.

The average selling price for a new vehicle in the United States is about $31,000, and GM reported that in August, its vehicles were sold to U.S. consumers at an average of $36,730. These prices reflect discount incentives to spur sales, which are not normally generous or even available for the newest of models.

GM’s share price was little changed following the expected announcement. In premarket trading on Tuesday, shares were at $31.17, a cent lower than Monday’s close.

GM has said that the Bolt, along with the plug-in hybrid Chevrolet Volt, will be made available to drivers of the ride-hailing service Lyft Inc., in which GM has invested half a billion dollars.

(Reporting by Bernie Woodall; Editing by Bernadette Baum)

Read more

Buying Tesla and the Social Class of Green Technology

Electric Cars are not a new concept, but are finally gaining a market share in todays car market. These cars are extremely efficient and produce the least pollution out of any other car, however they have also become a symbol of status and wealth exemplified by Tesla Motor’s fast and status-oriented automobile models.

The article “Positive and Negative spillover effects from Electric Car Purchase to usage” by Klockner states how research resulted in the understanding that individuals who buy lectric cars have no deduction in the amount of miles put on the annual mileage of their gas using cars. In other words, buying an electric car does not change Tesla owner’s consumption patterns. The ultimate green automobile is used more as a status symbol and companies such as Tesla Motors understand this and market primarily to the wealthy.

This has created a form of “Green Aesthetic” which makes some consumers believe this is the way to gain entrance into an environmentally concerned upper class if they own these electric cars. Heider defines class as an order of which society divides people into sets based on perceived social or economic status. Even though individuals may want to reduce the overall carbon footprint, they lack the necessary financial stability to purchase a fuel efficient car like a Tesla.

Owning such vehicles has become a type of “Electric Cool” where a status oriented society sees owning a tesla as being a method of exemplifying social strata. The middle and lower class have been encouraged to use much cheaper methods to educe their carbon footprint such as recycling, further confirming the previous notions of the “Green upper class. ” Tesla claims to market to all buyers to build a customer base for the next ten years, however it is quite relevant that they target the base of people who can afford such high costs.

The idea to create electric cars Is not new to the world, however the only way to make an actual Impact on consumption patterns Is to locate more affordable electric vehicles, creating a Tesla line of ffordability. Tesla Motors is a multibillion dollar corporation that has the proper tools and minds to make an actual change happen on a global scale, however due to the high cost, still only the wealthy sector can currently afford these vehicles. Cheaper electric cars will not be developed by larger car manufacturers or marketed to the middle and lower class for years to come.

Tesla is going lower In price and hopefully they will continue to do so. Buying Tesla and the Social Class of Green Technology By kiansthebest –Buying Tesla and the Social Class of Green Technology– “Positive and Negative spillover effects from Electric Car Purchase to Usage” by base of people who can afford such high costs. The idea to create electric cars is not new to the world, however the only way to make an actual impact on consumption patterns is to locate more affordable electric vehicles, creating a Tesla line of to the middle and lower class for years to come.

Read more

A Case Study on Tesla Motors

A CASE STUDY ON TESLA MOTORS

Cost/Benefit Analysis

In concern, every determination that has to be made requires thorough rating. And one of the most convenient and straightforward methods to make this is through Cost/Benefit Analysis. In CBA, an appraisal of the entire value of all the benefits of a certain undertaking is compared to that of the value of the costs that are needed in order to recognize such undertaking ( Watkins, n.d. ) . In order for the assessor to come up with a better angle of comparing, these values must be expressed into a unvarying unit of measuring. Normally, in calculating CBA, the values of the cost and benefits are converted into their pecuniary value. Once all the costs and benefits of the undertaking have been taken into consideration, comparing may be done. If the value of the benefits outweighs that of the costs, it means that the undertaking is a worthwhile enterprise. The following point of rating would be the computation of the break-even point – the clip at which the benefits of the undertaking pay off the costs ( Hill, 2012 ) . It would be most preferred to hold a shorter payback period.

By and large, CBA helps concern people to make up one’s mind whether or non to set about a peculiar undertaking. It allows them to border the best and appropriate undertaking aims. Furthermore, CBA can be used to fix the necessary resources every bit good as develop before and after steps of the project’s success. For illustration, the move to advance more ecological operations and procedures for the company may necessitate a Cost/Benefit analysis to find the chance of its realisation. As the corporate universe is going more and more aware of the effects of Climate Change, companies are looking to implement environment-friendly patterns in their offices. The same holds true for immense fabrication companies. CBA allows the companies to measure likely additions and losingss that these actions may convey.

Tesla Motors: A Case Study in Environmental Impact

Background and Operations of Tesla Motors

Leading the coming of a more sustainable transit system and its inventions, Tesla Motors has established rather a repute in the automotive industry. Since its constitution in 2003, the company has grown to be the biggest maker of electric autos in the market. It has contributed more than 50,000 autos in roads all over the universe as of today ( Tesla Motors, n.d. ) . Its chief end is to make a transit system that is more environment-friendly and sustainable.

Electric autos are charged at place and do non necessitate refuelling of gasolene unlike the autos designed by other makers. Quite expectedly, these zero-emission autos were non easy accepted in the market as they were deemed impractical, non to advert consumers were non truly impressed with their instead tacky design. Fortunately, Tesla Motors was able to toss that equation. By let go ofing their trailblazer electric athleticss auto for the high-end market, the Tesla Roadster, they were able to capture the attending of auto partisans and alter the face of the green auto market.

After let go ofing the Roadster, Tesla pushed for more infinite in the industry by let go ofing their luxury saloon, the Tesla Model S in 2012. More and more consumers are looking to purchase electric autos because of the inventions that were done by the company. In fact, reserves for their following theoretical account releases are already stacking up. There is much expectancy for the Tesla Model X and Model 3 releases.

How Green is a Tesla Green Car?

The really intent of an electric auto is to advance energy invention ; and Tesla Motors’ end is to accomplish this without doing any negative impact on the environment. However, a new engineering such as the advanced green auto production can non be made to go through without being exhaustively criticized by the populace. Green autos are, by rule, more environment-friendly than the conventional fuel-based autos. The procedure, by which it is being manufactured, on the other manus, says otherwise. Furthermore, green autos do run on electricity. But, how is electricity being processed? Does it non come from coal and crude oil excessively? All things considered, is a Tesla green auto viridity after all?

The company admits that the grade of being environment-friendly of their autos – take the Model S for illustration, largely depends on where and how frequently the auto is being driven. In the US, each province has a different mix of energy beginnings that fundamentally goes into their grid. In other words, a “cleaner” beginning of electricity makes a Model S a more environment-friendly auto. By and large, it is still cleaner than the internal-combustion design of their rivals in footings of emissions-per-mile ; sing the efficiency of battery-powered autos in change overing stored energy into a utile signifier ( Oremus, 2013 ) .

Tesla Motors and the Campaign for Environmental Sustainability

Tesla Motors have established its run to advance a greener personal conveyance system through its electric vehicles ; but how does it impact the environment in the industrial context? Are its procedures and operations considered as environment-friendly?

The company is really much aware of the fact that they are indirectly let go ofing C emanations through power workss – sing that electricity is the chief power beginning of the vehicles. This is the ground why Tesla moves to advance the absolute remotion of indirect C emanations by utilizing Supercharger Stations that merely uses grid electric power from solar panels ( Walsh, 2014 ) . Furthermore, Tesla is teaming up with SolarCity to supply electric auto proprietors an option to bear down their autos utilizing solar panels in their several places. This is like hitting two birds with one rock. By extinguishing the demand for coal-based electricity beginning, they are indirectly cut downing C emanations in the ambiance ; and they are advancing the usage of renewable energy beginning at the same clip.

Tesla is fundamentally work outing the world’s dependance on gas. Through their radical inventions in electric vehicle engineering, they have addressed an issue that has been thought as an improbableness for many old ages. By doing more convenient accommodations in their electric autos, and at the same clip turn outing that electric autos are so effectual, Tesla has convinced more consumers to sponsor their merchandise. The company is winning more and more conflicts as they advance into bigger ventures.

In order to provide to their turning consumer demands, Tesla is constructing their very foremost Gigafactory. Panasonic will be a immense investor in this undertaking, along with Tesla’s other major spouses. The best thing about this gigafactory is the company’s program to run it chiefly on air current and solar energy. Nevada is the perfect site for the mill because it is where the biggest solar power works in the universe is located.

Tesla does non merely function as a leader in electric auto engineering, it is besides going a theoretical account for other companies to see more environment-friendly procedures. Coal excavation and processing has created many environment-related issues and are still doing jobs in many topographic points around the universe. If Tesla becomes successful in extinguishing the demand for non-renewable beginnings of energy in order to bring forth electricity, it can alter the face of the car industry everlastingly. Not merely will it dramatically cut down the C emanations that are released to the ambiance, it will besides extinguish the issues that are brought about by the processing of electricity that is coming from natural resources.

Tesla Motors and the Competitive Industry

Of class, Tesla Motors is non the lone company that has entered the green auto market. Even though the industry for green autos is non that large compared to the conventional car market, it can be said that competition is non excessively slack. In fact, Toyota, Ford, Nissan, and Honda are considered as the biggest rivals for Tesla. Audi, Volkswagen, and BMW are looking to fall in the green auto industry shortly. And these are reasonably immense companies. Can Tesla maintain its topographic point in the industry without being squeezed out by elephantine auto makers? What is its competitory advantage?

Unlike the remainder of the car makers, Tesla is 100 % in the green auto industry. Therefore, their focal point is merely within that market. Research and development is entirely dedicated for this intent, leting the company to make better inventions. Besides, Tesla has about 5-year caput start over the other companies. While other companies are still constructing their green auto designs, Tesla is already smoothing its ain.

The hereafter of the automotive industry is tilting towards the use of renewable beginnings of energy. This fundamentally means that other companies who are on the other side of the industry are at a immense disadvantage. Oil is about to run out ; but solar power is limitless. Sooner or subsequently, they will hold to switch to a more sustainable beginning of energy.

Tesla Motors and the Future of Green Car Technology

At the minute, Tesla’s precedence is to maximise its production in order to run into the demands for the Model S and Model X in the market. They are holding problems in run intoing client demands with their very limited production. But the populace can rest assured that Tesla will non halt making better inventions for their merchandises. Once the gigafactory has been installed, Tesla’s following focal point will be on the development and betterment of machine-controlled driving engineering. As a affair of fact, the company’s CEO, Mr. Elon Musk has announced the release of their partially self-driving vehicle by 2017 ( Boyadjis, Rassweiler, & A ; Brinley, n.d. ) .

As the engineering for zero-emission autos advancement, the issues sing the car companies’ impact on the environment is being addressed bit by bit. Someday, there will come a clip when vehicles will entirely depend on solar power – among other renewable energy beginnings. It may non wholly work out Global heating, but it will assist the universe get at that place one measure at a clip.

Mentions

Boyadjis, M. , Rassweiler, A. , & A ; Brinley, S. ( n.d. ) . Object moved. Retrieved from hypertext transfer protocol: //www.ihs.com/articles/features/tesla-motors.html

Hill, R. ( 2012, September ) . Attention Required! | CloudFlare. Retrieved from hypertext transfer protocol: //www.mindtools.com/pages/article/newTED_08.htm

Oremus, W. ( 2013, September 9 ) . How green is a Tesla? Electric cars’ environmental impact depends on where you live. Retrieved from hypertext transfer protocol: //www.slate.com/articles/technology/technology/2013/09/how_green_is_a_tesla_electric_cars_environmental_impact_depends_on_where.html

Tesla Motors. ( n.d. ) . About Tesla | Tesla Motors. Retrieved from hypertext transfer protocol: //www.teslamotors.com/about

Walsh, T. ( 2014, November 1 ) . Investing in Socially Responsible Companies: Tesla Motors Inc. Retrieved from hypertext transfer protocol: //www.fool.com/investing/general/2014/11/01/investing-in-socially-responsible-companies-tesl-2.aspx

Watkins, T. ( n.d. ) . An Introduction to Cost Benefit Analysis. Retrieved from hypertext transfer protocol: //www.sjsu.edu/faculty/watkins/cba.htm

Read more
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat
Close

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp