Tesla Motors Case Study Tesla Motors is a new car manufacturer company that offers electric cars to customers. It is well known and appreciated by many people. Some people like the company, but some others do not. The company has been well established in the market; however, some financial specialists say the company is not. Therefore, to agree or disagree with them, it is crucial to focus on its history, development, growth, external environment, SWOT analysis, corporate level strategy, business-level strategy, and do an analysis of the financial ratios.
History
Tesla Motors Company is almost a new American company. Tesla is a public company with TSLA as its symbol in the NASDAQ stock exchange (Liu, Kang, Wu, Chen & Hon, 2014). The founder
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On September 2013, the company recuperated from the net loss (more than $708 million of cash) acquired in the previous year (Liu, Kang, Wu, Chen & Hon, 2014). Ferris (2016) points it out that, for September, Tesla got more than $ 2.2 billion in revenue and more than $69 cents per share. This shows how well the company did it on revenue. In fact, Model X got more than 5% of the U.S. large luxury SUV market (Ferris, 2016). This was very good for the financial health of the company. Ferris (2016) points out that, in the same month the company got more than $3.0 billion in cash and invested more than $247 million to increase production capacity and infrastructure; the company could also pay more than $590 million in obligations, which improved …show more content…
Tesla’s are for people with high annual incomes, so the ones with low salaries do not spend too much money on luxury cars as Tesla’s; however, people afford Tesla’s because of the electric system and because the government encourage them with a pack in purchasing electric vehicles, and it also provides electrical charging infrastructure (Liu, Kang, Wu, Chen & Hon, 2014). There is no doubt that Tesla has studies very well its external environment to continue with its
From 2010 to 2011 there has been a 23.8% increase in gross fixed assets value. The raised funds through long term debts would have been used to enhance assets base of Speedster. This is a very positive sigh of future profitability and capacity of the company. Higher assets should be able to generate more cash inflow...
The first observation from the financial data in appendix one is that General Motors has a low profit margin and is generally less than the industry average each year. The firm is able to keep a low profit margin because they have such high sales volumes throughout the world. This strategy can be both an asset and liability in business planning. The plus side of the strategy is that GM is able to sell a large number of vehicles in the marketplace due to the lower selling price as compared to the competitor. However, the down side of the strategy is that there is a possibility that if sales volumes decrease, the firm can incur a significant decline in the EPS because the profit margin on each item sold is very low. If the global economy sours, GM can have a very difficult time meeting shareholder expectations.
Another correlation between the management’s discussion within Fords 10-k and the financial analysis within this essay is Ford’s market expansion into the Pacific Asia Africa segment (SEC, 2015). Because ford is entering into new markets, their costs are increasing for selling and administration. The costs include hiring new salespeople and promoting their new products in new market segments. Thus causing the increase of selling and administrate costs in the horizontal income statement analysis. Furthermore, Ford’s fixed assets are also increasing because they are investing in new land and equipment to manufacture their new
The contraposition for Tesla Motors is the rapid service received. Despite not having a traditional infrastructure, the company beats it opponents in its operational expeditiousness. The Palo Alto automaker’s response time for issues is often overnight, and always beyond convention. One customer with some play in his gears had his entire drivetrain replaced.
Tesla motors is a company that produces and sells automobiles. Tesla is not any old automobile company. Tesla specializes in all electric cars that run 100 percent on battery and focuses on the future. Tesla is looking into the future and realizes that fossil fuels will eventually run out. Tesla is moving toward a zero-emission future for the better. A tesla is a vehicle, an all-electric vehicle that combines safety, performance, and efficiency. In 2016 Tesla’s annual revenue totaled to 7 billion dollars. Tesla is a profitable company. Tesla has seen potential growth in annual gross income, since 2012 from earning 30 million dollars to 2016 earning 1.5 billion in annual gross income. (1) The Tesla factory is located
In 2006, Musk coined what would soon be held to represent Tesla Motors overall long-term corporate strategy (Tesla Motors, 2015). It is to “build a wide range of models, including affordably priced family cars” (Tesla Motors, 2015). Musk explains the primary reason for building out Tesla Motor’s spectrum of pricing and vehicles as being environmentally concerned. Musk (2006) continues by expressing “the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution” (para
However, despite Tesla’s internal competencies and a reputation of building exquisite products, it still encounters lack of major resources and capabilities that its competitors own. Building a car takes years or
BMW and Audi, two German automobile manufacturers, have a reputation for making some of the best cars in the industry. Not only are both companies superior in their production, but their financial statements also indicate stability and efficiency. Looking at financial ratios, we will compare both companies on a basis of management efficiency and debt status. As a bank analyst, we will make a recommendation as to which company would be better to approve a loan for. A recommendation will also be made regarding management effectiveness and which company would make a better investment.
The first analysis will be on Verizon. The current ratio and the debt to equity ratio both improved in 2006 when compared to 2005. However, the net profit margin dropped from 9.8% to 7.0%. What does this tell us as investors...
Tesla will help improve the environment by reducing air pollution and by reducing fossil fuel usage by using electricity instead of gasoline. This will make the world a safer and more efficient environment. This will further improve how our future
This has resulted in exposing many automobile users to unpredictable prices of fuel. These issues were, however, the reason for the inception of Tesla Motors so as to bring into existence another set of automotive which serves the similar purpose but uses another form of energy that is electricity to drive them instead of the disadvantageous gasoline-powered engine. This invention was influenced by a number of factors in terms of its planning and performance (Hunger, 2010). Factors affecting Tesla’s planning and performance. The success of any organization, just like the Tesla Motor, largely depends on the planning of the activities by the management team in the company.
Tesla offers adults who want a luxury car without paying a fortune in gas prices with future generation electric cars, that where style, performance, and the environment are never sacrificed.
In this case study I will be discussing advantages and disadvantages of electric cars. Electric cars are cars that are powered by electricity. Electric vehicles are an important part of cutting emissions and reducing global warming. The battery of an electric car stores electrical energy. The electric motor is coupled to the wheels through gears; it converts 59-60% of electrical energy into the wheels. The battery runs the motor which allows the car to move. Electric cars are necessary as they will save money, because electricity is cheaper than gas. Also electric vehicles will help reduce global warming and pollution. However, some people say that electric cars still have environmental costs. The electricity used to recharge EV batteries has to come from somewhere in the world, and now, most electricity is generated by burning fossil fuels. Although electric vehicles are classified as green cars, purists will not appreciate the toxicity of the batteries.
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
Tesla is highly recognized for its excellent lead in the enhancement of a sustainable future. In summary, there is a need for protecting the environment to become cleaner, greener and sustainable one. With the number of vehicles that operate globally on petroleum and diesel, the environment will be wasted and totally degraded in a short time. It is important to apply such new technologies for the better of the future. Tesla been a pioneer in this industry has brought about changes that can be applied to change the world. For this reason, as many companies as possible should embrace the strategy of Tesla in the development of a sustainable future.