Tesla Motors: External Analysis

Essay by jxjayUniversity, Master's October 2014

download word file, 9 pages 0.0



Prepared For:


STGY 659.65


Prepared By:

Daniel Aleksander

Andrew Beckman

Jeanette Gonzales

Jeremy Jay

September 26, 2014


Tesla Motors, headquartered in Palo Alto, California, is a United States (US) based company that designs, manufactures, and sells electric vehicles globally. The company is traded publically on the NASDAQ with a market capitalization of $30.8 billion. Under the leadership of CEO, Elon Musk, the company seeks to provide a variety of high performance electric vehicles (EVs) to consumers in the near future. The following is an external analysis of Tesla Motors.


One of Tesla's greatest strengths involves optimizing cost advantages associated with building economies of scale. Making batteries in massive volumes is a key part of Musk's plan to drive down unit costs so that electric cars can become affordable to a much larger market. Tesla plans to cut battery pack costs by 30%, which will hit the target price of $35,000 for its third-generation vehicle.

Musk is doing this by building a giant battery plant in Nevada, referred to as the "Gigafactory." In addition, Tesla is targeting to market large-scale electricity storage systems used by power companies, where low unit costs are also a key competitive factor.

Tesla has utilized its reputation in the industry as a strength and has struck deals with other strong companies to form agreeable partnerships. In June 2014, the company announced a partnership with Panasonic that involved the production of lithium ion cells inside the facility for inclusion in Tesla's battery packs. In April 2014, China Unicom (Tesla's first retail partner) agreed to install charging stations for Tesla's EVs at hundreds of retail outlets nationwide. As a part of the agreement, Tesla will provide charging points for installation at 400 China Unicom retail outlets in...