Tesla Inc. is an American based multinational company dealing with clean energy and electric vehicles to transition the world into exploiting sustainable energy. The dream of developing an electric car was realized because the engineers involved purposed to prove to consumers that they are better and efficient. Elon Musk, the founder of the company, has been vital in creating a corporate culture that supports the organization's mission. Some core values characterizing the corporate culture include being straightforward in their operations by avoiding shortcuts, exercising integrity, and encouraging employees to respect each other despite their company's status. Tesla has been successful as the first independent electric vehicle manufacturer and has acquired a significant market share among luxury vehicle automakers.
The number of competitors against Tesla has increased because the electric vehicle industry has new entrants, and the company also competes with auto motor manufacturers using the traditional models. Examples of entrants in the electric vehicle sector include Canoo Holdings, Lordstown Motors, Nio, Li Auto, and Nikola Corp. However, Tesla has the upper hand among electric vehicle manufacturers since the company focuses on producing luxury vehicles since its competitors in the sector focus on a different target market. Similarly, the major traditional carmakers' competitors include Honda and Ford due to their ability to manufacture luxury vehicles. However, Tesla's ability to produce vehicles that align with the global sustainability agenda is critical in promoting the global sustainability agenda by manufacturing vehicles that utilize sustainable energy.
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Tesla's business model emphasizes three practices, including selling, servicing, and charging electric vehicles. Unlike other car manufacturers, Tesla sells its cars directly to consumers without using a franchise. The company created a network across the globe with showrooms and galleries involved in selling motor vehicles. Direct involvement with the customers enables the company to capitalize on and enhance the customer experience to achieve maximum customer satisfaction (Chen & Perez, 2018) . The company ensures that it has service centers in the majority of showrooms where their vehicles are available. The company also has a group of technicians known as Tesla rangers that service vehicles at home. Furthermore, Tesla has substantially invested in charging networks where drivers can charge their vehicles for at least 30 minutes without incurring any charges. The company aims to increase the charging stations to increase the effectiveness of the organization. However, business analysts argue that Tesla's business strategy is unsustainable in the long-term, even though it increases the profit margin.
Tesla's financial position in 2020 demonstrates the success of the organization in the global electric vehicle market. During the second quarter of 2020, Tesla reported having made up to $104 billion for its net income. The total revenue generated after creating the sales summed up to $6 billion (Wieczner, 2020) . It was essential for the company to generate profit in the last quarter because it was the first time the company would consistently have a positive margin in four quarters. The record had a favorable financial implication for the company because it attracted investors who purchased shares. After declaring its quarterly financial statement, the company claims that the purchase of shares rose by 4% (Wieczner, 2020) . That means that if the company makes losses in the future, it will cut across the investors and prevent the business from bearing the burden alone. The company should focus in growing its financial generation more in future by diversifying its product line and manufacture vehicles affordable by the middle-income earners.
References
Chen, Y., & Perez, Y. (2018). Business Model Design: Lessons Learned from Tesla Motors . https://hal.archives-ouvertes.fr/hal-01655959/document
Wieczner, J. (2020). Tesla is poised to join the S&P 500 after turning another profit . Fortune. https://fortune.com/2020/07/22/tesla-earnings-q2-2020-profit-tsla-stock-sp-500/
