Tesla Motors and Environment Solving

Categories: Solar Energy


Tesla Motors is an American electric automobile manufacturer and a clean energy company based in Palo Alto, California. It was founded by two American entrepreneurs Martin Ederhard and Marc Tarpenning, it was named after the Serbian American inventor and engineer Nikola Tesla whom which discovered and patented the basis of most alternating-current machinery.
Tesla motors was developed to create an electric sports car. Martin Eberhard was Tesla’s chief executive officer (CEO) and Marc Tarpenning was to be its chief financial officer (CFO).

Funding for the company was achieved from an array of nsources, most notably was Elon Musk the cofounder of PayPal, who contributed more than $30 million to the new venture and became chairman of the company at the beginning of 2004. In 2008 Tesla Motors relased its first completely electric sports car the Roadster. Further tests revealed that its performance was comparable to most petrol/diesel powered sports cars. The Roadster was powered by lithium-ion cells, the same that would be used in laptop and computer batteries, theses could be recharged from an common electric outlet.

The cost of the Roadster was $109,000 which made it a luxury item.
As in late 2007 Eberhard resigned as CEO, though he still remained a shareholder in the company and soon after in 2008 Tarpenning also left the company. Elon Musk took over as CEO and in 2010 Tesla’s initial public offering raised a some of $226 million.
In 2012 Tesla stopped producing the Roadster and focused on its new venture the Model S which was an sedan car.

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Unlike the Roadster instead of storing the batteries in the front of the its cars, the Model S stored it underneath the floor, which gave it more storage and better handling because of its low centre of gravity. In 2014 they introduced the Tesla Autopilot as a from of semiautonomas driving and was made available to the Model S. Throughout the later years Tesla expanded their range of electric cars which also all had the Autopilot feature such as the Model X which had features of a sport utility vechicle that was built on a car chassis, the Model 3 which was a four-door sedan and an inexpensive option that was priced at $35,000.
The company also branched out into solar energy products for use in homes and businesses, so decided to buy a solar panel company called SolarCity. In 2017 Tesla changed its name to Tesla, Inc as it no longer just sold electric cars.

Overview of the electric vehicle industry

Electric vehicles operate on electricity unlike other vehicles that mostly run on fuel, these vehicles use an electric motor that needs an continuous supply of energy from the battery. There are three main types of electric vehicles, hybrid, plug in hybrid and battery. These batteries include zinc air, lithium ion, molten salt and nickel-based designs.
The hybrid electric vehicle is a mix of both electrical and mechanical drive trains, the drive train is a combination of power electronics, battery and electric motor. The plug in hybrid uses an internal combustion and an electric motor for its drive. Then the battery electric vehicle chemical energy which is stored in the battery for its drive.
Electric vehicle were designed to replace normal ways of travel and to stop pollution in the air, they also have alot of technological advancements such as the smart technology that is included in the numerous range of electric vehicles, you can effortlessly connect your smart phone to your vehicle and take advantage of syncing with all of the technology that is available. Electric vehicles exceeds many fuel run vehicles because of its low carbon emission, higher fuel economy, maintenance needed on cars and the convenience of charging at home.
There are many notable key players in the electric vehicle industry that are producing electric vehicles such as BMW group, Tesla, Volkswagen AG, Toyota Motor Corporation, Nissan Motor Corporation.
Development is still constant in the industry for example in May 2019, Tesla launched two new safety features in their range of cars which are lane departure and emergency departure, features like theses prevent colliding with other vehicles and keep the vehicle in their lanes. Volkswagen launched a long range vehicle called the “ID.3” that communicates with the driver over voice control but also through an intelligent 10 light concept visible in the interior of their vehicles.



Politics play a serious role in determining the factors it can impact on Tesla, it can affect them in long term profitability in either market or country.
The U.S government has a keen interest in electric vehicles and renewable electricity because of that Tesla were granted a sum of $465 million low interest loan from the department of energy, Tesla have since paid off that loan but without it they may of never got the investors. The federal government also offers customers $7500 for the purchase of electric vehicles.
Political stability can be mentioned as one of the main factors that is affecting the company. Tesla decided to use cobalt a raw material to build its range of electric vehicles, cobalt can mainly be found in the batteries of its cars. A estimate of 58% of the worlds cobalt is mined in the Democratic Republic Of Congo, this said thousands of Congolese kids are involved in evry stage of the mining of cobalt. United Nations Children’s Fund (UNICEF) estimated that around 40,000 children are working in the congo mines as child labor.


Growth rates are currently slow in the US, because of that financing a vehicle such as a Tesla has become very popular but the realisation is the interest would be already added into the manufactures suggested retail prices, when sold this would boost the original based price. Tesla were then able to come out of the recession with increasing stock prices.
The constant change of the foreign currency exchange rates is one of Tesla’s main economic factors, this is caused by international scope of business operations of fuel vehicles manufacturers. In 2015 Tesla recored foreign currency transaction losses of USD 45.6 million, but then in 2016 and 2017 the companies gained 26.1 million of USD and then the following year 52.3 million.


As most people are intrigued of supporting the idea of investing their taxes in products using sustainable fuels. Tesla’s products offer a solution, they envision a world powered by the solar energy that run on batteries and transported by all electric cars.
The Model S and Model X SUV all electric from the ground up and most recently the Tesla Semi, an all-electric truck whichever model it is they save massive energy, performance and reliability.

Technological Advancements

Tesla is more than an automotive company, it’s a also focuses on producing technology platforms. Tesla are becoming one of the leading players in the sharing economy and energy industry, almost every function in its range if cars are controlled by software, this lets the company optimise its functioning and allows them to analyse important data. The more information they gather, the closer they will get to fulfil autonomous driving capability and could be a lot earlier than any other car manufacturers.
Elon Musk announced in July 2016 that Tesla would use this technology to enable a ride sharing platform called the Tesla Network. Owners of the cars could then rent out their cars to taxis or uber to earn money back on their investment.


At least five states in the US have banned some types of car sales directly from the manufacturer to the comsumer. Michigan being the most recent banned Tesla from soliciting sales, offering test drives to customers and hiring sale representatives. This forced Tesla to have a third-party dealership.
Tesla also face regular lawsuits relating to specific car related issues, the most recognised issue would be to do with the autopilot feature. The National Highway Traffic Safety Administration (NHTSA) and the National Transportation Safety Board (NTSB) focuses on crashes that involve the use of “auto pilot” feature. The most recent incident happened in March 2019 after a Tesla Model 3 collided with a semi truck in Florida.
In 2018 according to the Department of Justice a statement from a former employee named Salil Paruleker was indicted for embezzling $9.7 million from the company by diverting payments from the supplier to another source. The case which hasn’t surpassed the indictment could trouble the Tesla supply chain.


Tesla are one of the most impactful and innovative companies that are tackling the constant problem of climate change. Tesla’s original mission statement said “Accelerate the advent of sustainable transport by bringing compelling mass market electric cars to soon as possible” seemingly enough Tesla have most definitely stuck by this statement, every year they come up with innovating ideas for the use of sustainable energy and according to the “The verge.com” tesla have sold up to 567,000 cars in just 2019.
The sun provides a great amount of resources for generating sustainable and clean electricity that doesn’t have the toxic pollution or global warning emissions. In 2016 Tesla acquired Solar City who specialise in solar panels, solar roof tiles and battery storage. Elon Musk believes when it comes to emerging markets that being solar and battery storage you can avoid building electricity plants, instead set up self-sustaining micro grinds in small villages across the world that have no electricity.

Porter Five Forces Analysis

Porters five forces is analysis that identifies five forces to measure the competitiveness of the market or industry. These five forces looks into the external factors that affect Tesla in the automotive industry.

Level of Competitive Rivalry: Medium to High Pressure

At this current time Tesla is the main competitor in the electric vehicle industry. When it comes to high end electric vehicles, according to US News in 2020 they ranked the top 5 luxury electric vehicles were they ranked Tesla’s “Model S” and “Model 3” in the number one and two spot. No other competitor have achieved the same amount of charging station as Tesla is estimated to have over 2000 across the world.
Traditional car companies are constantly increasing their offering of electric vehicles such as the Nissan Leaf and Chevy Volt but as the market changes every year and the industry having such a high demand other companies are seemly getting involved this would include the likes of BMW, Ford and Honda etc. For example Ford originally wanted to invest $4.5 billion into the producing electric vehicles by 2020 but have now increased its planned investment to a massive $11 billion by 2022 according to CNBC News and Fords end goal is to develop 40 different ranges of fully electric and hybrid cars.

The Bargaining Power of Buyers: Medium Pressure

The influence of customers on the battery and automotive industry has to be taken accountable for the five forces analysis. Teslas customers are the only direct factor that affects the company’s sales. One of the main factors in the low switching cost, this reduces the barrier for Teslas customers to buy cars from other companies. This imposes medium pressure against Tesla as a company.
The availability of substitutes is low pressure regarding the terms of public transportation because in many cases customers may have limited access to the likes of buses, trains, etc causing the customer their drive their own car.

The Bargaining Power of Suppliers: Low to Medium Pressure

Teslas focus is to eventually achieve the worlds most automated manufacturing systems. Tesla is mostly self-contained with this being said a significant amount of Teslas supply chain is already company owned. The factor of level of supply that empowers suppliers to affect Tesla is at a low pressure.
Teslas small links of suppliers have a low level of power towards the forward integration of the company. This involves suppliers having a limited control over the sales and the distribution of their range of products.

Threat of New Entrants/Potential Competitors: Low Pressure

The way Tesla develop and innovate is hard to compete with because of the high cost of development of production in the industry. The Tesla brand is strong regarding how they heavily invest in battery manufacturing facilities, they soon plan to build a “gigafactory” in Nevada and invest as much as $5 billion throughout the year of 2020. Building scales of these sizes new entrants would find it difficult to match there investments.
Tesla also have a large network of supercharging stations and this would provide them with a major advantage towards new entrants coming into the industry. Teslas considerable amount of data collected for its self driving function would give the company an edge in the market and future.

Threat of Substitute Products: Low Pressure

The threat of substitute towards Tesla would be moderately low. As already pointed in some aspects of this porters five forces analysis, companies would have to research and develop products that are more significantly greater than Tesla to be in a chance of being a acceptable contender. Other companies may of gained some success of their electric or hybrid vehicles like, Toyota that have brought out their hybrid car the “Toyota Prius” that is currently on the market. But for example, no other company achieved the same range of 200 miles that Tesla cars can do from just its lithium ion battery. This concludes that the availability of substitute is very limited because of the low amount other low amount of companies in the market that are innovating the way Tesla are.

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Tesla Motors and Environment Solving. (2021, Oct 31). Retrieved from http://envrexperts.com/free-essays/essay-about-tesla-motors-and-environment-solving

Tesla Motors and Environment Solving
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