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Company Analysis
1
Situation Analysis
Hybrid sales was noted torepresented 1.2% of the market in 2005, 1.6% in 2006.
Forecasts estimate 5% of car sales will be hybrids by 2013 (Yahoo Finance, n.p).
The High End Segment
Tesla is primarily focused on the high-end market. The main factors determining
competition in the high-end segment of the automotive industry are brand image, quality, and
environmental sensitivity. Despite the high levels of competition in the market, the market has
not been fully explored.
The Electric Vehicle Market
The Electric Vehicle market commonly denoted as EV have moved past the infant stage
with a number of companies entering the market and gainfully commercializing their electric car
products (Tovey 1). The industry has reached profitability levels and competition in the industry
is intense. Governments are increasingly recognizing the importance of regulation in boosting
the industry and a number of incentive programs have been developed with the intention of
augmenting adoption of EV vehicles as the green option of automotive products.
A green vehicle: Within the green vehicle market, there are four types:
Electric Vehicles
Flexible-Fuel Vehicles
Hydrogen Vehicles
Hybrid Vehicles
research capability
Able to raise large amounts of capital
First mover advantage; the first
increases
The Tesla Roadster hasnt been on the
Jay Leno
Designs and builds many of the
components in its cars, including the
WEAKNESSES
increase
Poor return on invested capital and
equity
Higher CAPEX requirements over the
next years
High long-term liquidity risk
THREATS
market
Price of oil and gasoline skyrocketing,
especially in China
Stricter emission policies
Currently low interest rates
product
Large automobile companies entering
ethanol
Higher raw material prices
EV incentives phase out
Lithium supply constraint
Lower oil prices short term
WEAKNESSES
recognition
image
Development
Brand loyalty
industry
OPPORTUNITIES
networks
THREATS
Intense competition
WEAKNESSES
Global presence
Brand dilution
Bureaucratic culture
Car recalls
THREATS
vehicles
Intense competition
Exchange rates
GMs Competitiveness in the EV industry
General Motors is a significantly formidable force in the industry that poses a major
challenge to Tesla. The company has invested a large amount of its capital in the development of
alternative vehicles for EVs. The current development of Volt, which is not true EV, indicates
that GM is highly interested in hybrid care market and will continue to pursue the goal to achieve
EV capabilities in the future. A preorder of 20,000 Volt as the care got into product indicates that
the market for Volt is formidable (IEDC 6). The car is designed approximately forty miles on
battery power and then the care engages 1.0L turbocharged gas engine automatically to recharge
the battery solves that main challenges facing EV vehicles. Furthermore, the main challenge
facing purely EVs is battery recharge. Consequently, the option provided by GM can run on both
biodiesel and gasoline. The company E-Flex system adopted in the production of Volt represents
a significant force in standardizing EV components making it an added advantage for the
company. The companys alternative model for Model S is relatively cheap. It will definitely
WEAKNESSES
Brand reputation
Quality products
partnerships
THREATS
Intense competition
vehicles
innovate and produce low consumption automobiles, high performance luxury products. BMW
has major advantages due to its ability to its ability to manufacture efficient Dynamics, such as
Mild hybrid technologies. The company has sole patents in start-stop systems which shuts engine
off when not needed, regenerative breaking system, and small 4-cylinder gas and diesel engine.
Period Ending
Dec 31,
Sep 30,
2015
2014
2014
954,976
939,880
956,661
851,804
Cost of Revenue
741,606
679,807
694,964
599,953
Gross Profit
213,370
260,073
261,697
251,851
181,712
167,154
139,565
135,873
201,846
195,365
196,970
155,107
Non Recurring
Others
Operating Expenses
Research Development
Selling General and
Administrative
(170,188) (102,446)
(74,838)
(39,129)
(22,121)
(369)
(2,792)
(156,708) (124,567)
(75,207)
(41,921)
28,703
29,061
(103,910)
(70,982)
24,352
26,574
(181,060) (151,141)
3,167
3,040
3,719
3,727
(107,629)
(74,709)
Ops
Non-recurring Events
Discontinued Operations
Extraordinary Items
Other Items
Net Income
Preferred Stock And Other
(184,227) (154,181)
-
(107,629)
-
(74,709)
-
Adjustments
Net Income Applicable To
(184,227) (154,181)
Common Shares
(107,629)
(74,709)