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STRATEGIC ANALYSIS OF TESLA

By :- Abhinav Mishra SECTION :- “E” ROLL NO. :- 52 MBA (GENERAL)

Table of Contents Contents STRATEGIC ANALYSIS OF TESLA....................................................................................................................1

Introduction.................................................................................................................................................2 Mission and Vision Statement Analysis.......................................................................................................3 Vision Statement.....................................................................................................................................3 Mission Statement...................................................................................................................................3 Organisational Structure Analysis................................................................................................................4 Features of Tesla Motors, Inc.’s Organizational Structure...................................................................4 Global Hierarchy.................................................................................................................................5 Global Centralization...........................................................................................................................5 Minimal Regional Divisions................................................................................................................5 Tesla’s Organizational Structure Implications, Advantages & Disadvantages.....................................6 External Environment Analysis....................................................................................................................7 PESTAL Analysis........................................................................................................................................7 Political................................................................................................................................................7 Legal....................................................................................................................................................7 Technological......................................................................................................................................7 Social...................................................................................................................................................8 Economic.............................................................................................................................................8 Ecological............................................................................................................................................8 Industry Analysis - POTERS 5 Force Model...............................................................................................9 Government.......................................................................................................................................10 Threat of substitution.........................................................................................................................10 Supplier power...................................................................................................................................10 Buyer power......................................................................................................................................10 Threat of new entry............................................................................................................................11 External Factor Evaluation.........................................................................................................................12 Competitive Analysis.................................................................................................................................13 By Company...........................................................................................................................................13 General Motors..................................................................................................................................14 Competitor Response Profile:............................................................................................................14 Actions:.............................................................................................................................................14 Toyota................................................................................................................................................14 Competitor Response Profile:............................................................................................................14

Actions:.............................................................................................................................................15 BMW.................................................................................................................................................15 Competitor Response Profile:............................................................................................................15 Actions:.............................................................................................................................................16 Daimler AG.......................................................................................................................................16 Competitor Response Profile:............................................................................................................16 Internal Environment analysis...................................................................................................................17 Tesla performances................................................................................................................................17 Organization’s resources........................................................................................................................17 Tesla Motors Financial/Physical resources:.......................................................................................17 Tesla Motors Technological Resources:.............................................................................................18 General competences and capabilities..................................................................................................18 Electric Vehicle Manufacturing.........................................................................................................18 High Performance Battery manufacturing.........................................................................................19 Capability to draw a consistent future...................................................................................................20 Transformational leadership..............................................................................................................20 Internal Factor Evaluation..........................................................................................................................21 SWOT Analysis...........................................................................................................................................22 Strength.................................................................................................................................................22 Opportunity...........................................................................................................................................22 Weakness..............................................................................................................................................22 Threat....................................................................................................................................................23 TOWS Matrix.............................................................................................................................................23

Introduction Tesla Motors Inc is a relatively young public company which build electric vehicles and provide services for personal and professional energy management. Founded in July 2003 by Martin Ederhard, Marc Tarpening, JB Straubel, Ian Wright and Elon Musk – Current CEO – the company is based in Palo Alto California and went public in 2010. The manufacturer whose name pays tribute to the scientist Nikola Tesla is specialized in commercializing high quality

electric cars empowered by high performing battery packs. Moreover, Tesla sells powertrain components and produce battery charging equipments to complete its offer. Tesla Motors started its business by launching its electric sport car called the Tesla Roadster in 2008 which is known to be the first car using lithium-ions for its battery instead of classic fuels; The Tesla Roadster shined in the competition of Monte-Carlo (competition for the alternative energy) where it arouses interest of some powerful individuals. Since, Tesla has expanded its vehicle offer with tree additional models, the S, the X and the III, whose deliveries began respectively in 2012, 2015 and 2017. On the long term, Elon Musk’s goals is to produce a large range of models, counting more affordable cars (the Tesla Roader is worth €84 000) although keep producing luxury ones. Furthermore, a highly transformational leadership from Musk consists in making Tesla not only a car maker but more widely a sustainable lifestyle provider. Emphasizing the move toward ecologic solutions using solar electric energy, which is today considered as the more reachable sustainable solution, Tesla thus plans to be able from now to 2020 to produce a complete sustainable package including electric cars, smart batteries and efficient solar cells technologies. To achieve its transformational vision while remaining financially reliable, the company is facing many opportunities. Whether by the sales expansion of its cars from a B2C to B2B, by selling patented electric powertrain components to automakers just entering the electric car market or by developing self-driving software making customer experience improved, Tesla electric car manufacturing know-how is a huge asset in a market still very young. On top of that, Tesla has applied diversification to its business and has settled some partnership to produce battery power packs for domestic and professional applications (Panasonic) as well as highly competitive solar s with Solar city next acquisition.

Mission and Vision Statement Analysis

Vision Statement

“Our vision is to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.” The statement clearly enables us to understand the company’s desired future state, dream, aspiration, where does it want to go and see it self in years ahead. The vision statement of an organization should tell one how the org. wants to be perceived in the future and what success looks like, which this statement clearly does. This statement clearly is an expression of the desire end state and challenges everyone, their employees and other related people, to reach for the significant envision. The long term focus provided here for the entire organization is the “creation of the most compelling car company of the 21st century” and the guiding philosophy is “by driving the world’s transition to electric vehicles”.

Mission Statement “Our mission is not the safety of our vehicles, which can be easily replaced, but for the safety of our customers and the families they entrust to our cars and to accelerate the world’s transition to electric mobility with a full range of increasingly affordable electric cars for all consumers. Our mission is to accelerate the world’s transition to sustainable energy.”

The mission statement of the company is short and to the point clearly explaining what type of organization it is, about its product, services and the needs they are going to fill. It clearly explains their direction, purpose, and reason for being that is to be focused towards “the safety of their customers so that they entrust to their cars and to accelerate the world’s transition to sustainable energy and electric mobility with a full range of increasingly affordable electric cars for all consumers”.

Organisational Structure Analysis Tesla Motors, Inc. has an organizational structure that s continuous business growth. A company’s organizational or corporate structure is the design and system that defines the patterns

of interactions among the company’s components. In the case of Tesla, the organizational structure takes a traditional form, considering the company’s limited approach to its production facility development. As a major producer of fully electric automobiles, Tesla uses its corporate structure to facilitate extensive control of the organization. The company also maximizes its ability to implement new strategies and manage its operational activities through its organizational structure. Tesla’s organizational structure creates business capabilities that enable strong managerial control despite growing international operations. Thus, this organizational structure s Tesla’s mission and vision statement, which emphasize global leadership for electric products in the automotive market.

Features of Tesla Motors, Inc.’s Organizational Structure Tesla has a functional organizational structure. This structure involves organizational function as the main defining factor. Other characteristics observable in other types of organizational structure are also present in the firm’s structure, although at a less significant extent. The following characteristics are significant in Tesla’s organizational structure: 1.

Global hierarchy (most important)

2.

Global centralization

3.

Minimal regional divisions

Global Hierarchy: The most significant characteristic of Tesla’s corporate structure is global hierarchy. Global hierarchy involves functional teams or offices that oversee domestic and international operations. This feature is typically observed in traditional organizational structures, where companies aim to maintain strict control of their operations. In Tesla’s organizational structure, the following functional offices direct and represent the global hierarchy:-

1.

Chairman & Chief Executive Officer

2.

Chief Financial Officer

3.

Chief Technology Officer

4.

Vice President – Vehicle Engineering

5.

Vice President – Powertrain Operations

6.

Vice President – North America Sales

7.

Chief Designer

8.

Vice President – Manufacturing

9.

Vice President – Autopilot Hardware Engineering

10.

Vice President – Worldwide Services & Deliveries

11.

General Counsel

Global Centralization: Tesla Motors, Inc. uses global centralization in its organizational structure. The emphasis of global centralization is control on the entire organization through decisions that a central group or team generates. In this case, the head of each office of the global hierarchy form Tesla’s central headquarters, which directly control all operations. In this organizational structure, the company does not autonomy of its regional or overseas offices. Instead, Tesla’s headquarters make most of the decisions for overseas operations.

Minimal Regional Divisions: This characteristic of the corporate structure focuses on the extent of divisions in Tesla’s automotive business. These divisions are used to implement different strategies and marketing campaigns, and to organize financial records and reports. Tesla’s organizational structure has the following divisions mainly used for financial reporting: 1.

United States

2.

China

3.

Norway

4.

Other

Tesla’s Organizational Structure Implications, Advantages & Disadvantages

Tesla Motors, Inc. benefits from its organizational structure in of effective control of global operations. Another advantage is the ease of implementing new strategies throughout the organization. Also, the minimal regional divisions not just financial reporting and analysis, but also possible future regionalization of strategies and tactics in the automotive business. These advantages empower Tesla to use its organizational structure for further international growth. However, a disadvantage of Tesla’s corporate structure is the rigidity that limits rapid adjustment in the organization. For example, global centralization is a structural characteristic that limits the ability of overseas offices to readily respond to issues they experience in their respective regional markets. To address this disadvantage, Tesla can reform its organizational structure to increase the level of autonomy of overseas offices. Also, an organizational structure with a higher degree of decentralization tends to be more effective in creating competitiveness against local firms in overseas markets.

External Environment Analysis PESTAL Analysis Political Many governments today are looking for reducing CO2 emissions and consequently are setting up public subvention policies to their citizens in buying zero emissions vehicles. In , there are fiscal advantages and even discounts on the buy price if the products are ecologically responsible. In the US, car makers must distribute a minimum of ZEV credits which encourage them to produce zero emissions vehicles. These ZEV have however been recently threatened by Donald Trump, US elected president, but

Musk says it could even have positive impacts on Tesla’s activity. Remain the Border question which is a threat for most of US car makers disposing plant in Mexico in contrast to tesla which has plant only into the US territory.

Legal The risk of Lawsuits engaged by patent trolls is still present. The development of new products by Tesla must be conducted carefully being aware of intellectual property barriers. Nevertheless, Tesla opensource shift can discourage most of these dangers. Another legal involvement for Tesla is an important lack of legislation in artificial intelligence decision making which is yet used in tesla auto-pilot. If problems related to self-driving decisions would become too much frequent, it could be a bad new for tesla which could see its deliveries postponed.

Technological The general cost for lithium-ions cells is decreasing which allow Tesla to build for lower cost and increase its profit margin. The demand for solar s is rising around the world and the market is astronomic (78,2% of the global energy is from fuel, 19% is from renewable, including only 0,7% of solar). Tesla Electric Vehicles need charging stations which must spread proportionally to car sales. On top of that, Tesla self-driving software as well as various uses of artificial intelligence always more autonomous raise ethical issues concerning decisions making, and Microsoft, Amazon, Google and IBM just gather within “Partnership for AI” to discuss about these problematics.

Social Advertising campaigns and attacks against fuel energies begin to affect people and the Millennials generation is deeply engaged in this problematic. Energetic transition is accepted as “must happen as soon as possible” by citizens and plenty companies, not by Trump. A general distrust in the current system and especially in finance creates a large will to become autonomous as well on energy than on finance or commodities.

Economic A global uncertainty leads the market around the world although US recently show historically high result on stocks indexes (S&P 500 break up its highest records). Oil prices are low, since their major fall in 2014 West Texas Crude oil and Brent didn’t break their $60 resistances, which means that when oil prices will surge again, certain people could be economically constraint to transit toward renewable.

Ecological Ecological findings make a global consensus symbolized by the cop 21 agreements signed by 183 countries. These agreements engage countries to do their maximum to limit the global warming under 2°C in 2100. On the shorter term, the 20,20,20 goal is the common objective. Meaning minus 20% in fuel consumption, 20% of global energy being renewable from here to 2020. Ecological consequences of human activities are numerous and each day a scientist review alert about effects far more irreversible than what we can think of

Industry Analysis - POTERS 5 Force Model

Government

Safety norms for electronic products empower the government to legally delay deliveries. Ethical issues concerning Self-driving decision making empower the government to sue tesla for AI problematic decisions. Financial participation and help provided by governments make tesla's activities leveraged by public decisions.

Threat of substitution Considering electric car market (no matter H2, biofuel, biogas), medium potential of substitution driven by commun transports, bicycle trends or low cost car subscription programs (Automobile'). Considering widely sustainable life-style market (a relatively young market), low potential of substitution evidenced by small amount of available alternatives in providing intelligent energy management services to individual and professionals.

Supplier power Engineering are produced by tesla and Lithium ions cells are supplied by Panasonic with which tesla conclude a partnership to build a Giga factory in Nevada decreasing battery final cost by 30% from here to 2018. Solar for Solar Roof are provided by solar city which will soon merge with Tesla. - demand is growing with the accessible model 3 (35 000$) and tesla forecast a production growth from 100 000 in 2015 to 500 000 in 2020. Competition is important in various car engine supplier but a necessity to shift could cost tesla a lot in delivery postponing.

Buyer power Buyers are spreading around the world in several countries with different jurisdictions. Collective actions in order to push price down have consequently low probability to occur. In case of important defaults, they could gather their miscontent to force tesla decrease its prices. - Due to an aggressive price strategy, arguments to push prices even lower are rare. -Delivery processes are long and deadline often delayed what could make customers clamming for discount.

Threat of new entry High financial barriers for new entrants in the car industry making new entrant very occasional. Traditional car manufacturer will entry the electric car market as soon as 2017 or already did. They embody a high short-term threat on electric car market.

External Factor Evaluation Opportunities External Factors The world is running out of oil. Electricity is a renewable energy. People care more about environmental

Wgt.

Rating

Wgt. Score

0.35

5

2

0.05

2

0.2

Comment

issues. Can use their battery technology in other areas, such as storing power from

0.1

4

0.6

0.1

3

0.3

0.2

4

1

solar s. The growing by governments across the globe for environmentally friendly vehicles Large International Market Potential Particularly Europe, Asia, and Canada.

Threats External Factors Very Strong competition with less operating Costs

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Rating

Wgt. Score

0.3

2

0.6

Comment Like BMW, Mercedes, and Lexus expected to the market soon Electric cars are still expensive and

Economic slowdown

0.15

2

0.3

a new recession, like the one in 2008, may limit the demand

Limited supply for raw materials Limited Experienced resource pool Awareness of importance of EV is not well propagated

0.3

2

0.6

0.15

4

0.6

0.1

3

0.3

Large Segment of the market is not aware of the importance of the EV

Competitive Analysis

By Company Market Cap:

21.98B

61.33B

49.41B

202.81B

276044

213000

333498

51.57B 2964

106870

Employees: Revenue (ttm):

1.32B

76.45B

114.20B

152.84B

289.95B

EBITDA -156.36M (ttm):

10.48B

13.32B

7.90B

36.35B

Operating -16.38% Margin (ttm):

10.34

5.51%

1.39%

7.54%

Net Income (ttm):

-219.99M

5.17B

6.64B

4.53B

15.68B

EPS (ttm):

-1.95

7.88

6.22

2.79

9.90

P/E (ttm):

N/A

9.97

9.22

12.79

12.93

PEG (5 yr expected):

16.13

2.26

N/A

0.60

0.34

P/S (ttm):

16.61

0.68

0.54

0.32

0.70

General Motors Competitor Response Profile: • GM represents a significant future threat to Tesla, if, as planned, Tesla decides to enter the small market near the $30,000 price point

• The current development of the Volt, although it is not a true electric car, indicates that GM remains interested in the electric/hybrid car market, and will continue to pursue the market in the foreseeable future • Designed for approximately 40 miles of battery powered driving before the 1.0L turbocharged gas engine automatically begins to recharge the battery, thus extending the range of the Volt to up to 640 miles of highway driving

Actions: • The only way for Tesla to compete effectively would be through differentiation, which would focus mainly on technology

Toyota Competitor Response Profile: • Toyota Motor Company’s has a longstanding hybrid technology and possible entry into the plug-in hybrid and fully electric car market • Toyota’s Prius first took the road in Japan in 1997, arrived in America in 2000, making it the most prevalent hybrid car • Tesla should be wary of Toyota offering a larger battery pack and a home charging station as options for the Prius, as this could eventually lead to Toyota offering a full electric version of the Prius. • This would cut into Tesla’s plans to offer fully electric sedans at different price points

Actions:

• Tesla should focus on improving their technological advantage in fully electric cars so that by the time Toyota enters the electric car market, Tesla has a technological advantage.

BMW Competitor Response Profile: • Tesla’s one of the potential competitor is BMW, which continues to put effort into entering the luxury, highperformance, low-emissions, low-consumption auto market • In August it unveiled the production version of the i3 • The company’s first all-electric series production vehicle will be available next year some time before June and at a seriously competitive price. • Moreover, the i3 is not merely but the first of a line of EVs planned to deliver “individual mobility” – that’s what the “i” brand stands for • BMW has designed and built its own electric motors for its models

Actions: • Tesla should improve brand awareness and Global expansion before the most serious threats vehicles from European companies enter the game

Daimler AG Competitor Response Profile: • The Mercedes-Benz B-Class Electric Drive will go on sale in the US and Europe from early next year • Most of the systems that charge and run the little B-Class will be shared with the SLS AMG Coupe E-Cell. • Mercedes-Benz product R&D manager Dr Thomas Weber says electric vehicle technology will move quickly enough to make dedicated electric vehicles viable even for those who want to travel longer distances and not pay a over a traditional petrol or diesel car. • Mercedes-Benz has partnered with Tesla for its electric motor and battery technology

Internal Environment analysis Tesla performances Tesla Motors’ performances are quiet encouraging. A steady growth in revenues comes to balance a negative net income what suggests a future ability to create value. Moreover, investments in R&D, Capital expenditure and operating expenses have steadily increased since 2010 to pick in 2015 explaining an important decrease in cash flows this precise year. By and large, Tesla performance are significantly related to its position relative to the general industry life cycle. Indeed, according data, Tesla is slipping

from its Birth phase to its Growth phase meaning that ultimate investments required to face substantial growth and then profit just happened and require a few years to show sufficient returns. Tesla is therefore in transition and need more than ever to build a consistent and long-term strategy for its growth and maturity phase.

Organization’s resources

Tesla Motors Financial/Physical resources:

According the Tesla Balance Sheet, Tesla Motors has $1.2 billion in cash reserve for a total $8 billion in total assets. The company owns its factory, the Tesla Factory which is in South Fremont California and can produce 2000 cars per week for a total of 100 000 per year. Another factory located in Nevada, the Gigafactory which has been financed by Tesla and some of its partners including Panasonic, is currently operational and should reach its optimal activity by 2018 thus pushing down batteries costs by 30%. The 17th of November 2016, the merger with the solar cells manufacturer Solar city – a firm whose board of director is close to Tesla – has been validated by both executives. This merger should allow Tesla to become a leader in solar cells market. Ultimately, Tesla is discussing with the German automated manufacturer Grohmann Engineering for an eventual acquisition which should allow Tesla to reach a 500 000-annual production and meet the current 300 000 demand.

Tesla Motors Technological Resources: What we consider as intangible asset for Tesla Motors is mostly Intellectual Property, Brand Valuation and Valuable Know-How. Concerning Intellectual Property, Tesla policy is clear and consistent with Elon Musk’s long term vision; “All our patent are belong to you” titles an official tesla publication from the July 12 of 2014. This open source shift means $0 will be made on tesla numerous patents. The brand value question is far more complex. A HEC study conducted in 2016 compute the Tesla Motors brand value by combining Benchmark, Costbased, Market-based and Income-based methods. Results expose an average Brand value of 14 634 million, with a minimum of 2 823 million and a maximum of 28 517

million. These important variations depending on the computation methodology highlight something especially relevant concerning Tesla Brand Value; those who are long on TSLA stock are especially more optimistic than the short side and claim that Tesla Motors has an incredible value as a brand, embodied by a high visionary strategy led by its CEO Elon Musk. In addition, the tesla know-how concerning electric car and energy storage is critically useful knowing almost every traditional car makers will produce electric car as soon as 2018.

General competences and capabilities We can split Tesla Motors competences and capabilities in tree sub categories. The two firsts, Electric Vehicle Manufacturing (EVM) and High Performance Battery Manufacturing (HPBM) are proper competences which materialize in concrete Strategic Business Units, while the third one is one intangible capability involving a more abstract Tesla power; The capability to draw a consistent future.

Electric Vehicle Manufacturing • Tesla Model S • Tesla Model X • Tesla Model III Tesla Motors’ offer in electric vehicles consists in tree high quality models all equipped by last high technologies; self-driving, smart decision making, High interaction with the car through beautiful screen. On top of that, each model has a high-level design and an exceptional traction power ed by an ultra-efficient electric propulsion. The Model S is the luxury sport model of Tesla which has the highest acceleration on the current car market (0 to 100 in 2,7 seconds) and which is sold between $70 000 and $150 000. The Model X is a luxury SUV equipped with the same technology than the model S with a higher autonomy and a lower acceleration than its sister S (3,1 seconds against 2,7) although this feature is still exceptionally high on a SUV. The Model III has been unveiled on march the 31 of 2016 and should start to be delivered in early 2017. Unlike his two luxury sisters, the model III is targeting middle classes. Starting from $35 000, it is positioned on top of the range rather than in luxury. Design and quality are impeccable but the main sacrifices are made on the proper performances.

High Performance Battery manufacturing • Tesla Power Wall • Tesla Power Pack • Tesla Solar Roof At the same time, Tesla Motors diversifies its activity and have chosen to use its know-how in battery manufacturing to develop smart energy management services. Combining its high efficient batteries to smart software built by American best engineers, the firm extends its offer by proposing Smart Power tools. The Powerwall (currently in version 2) consists in a compact box available for $6 000 to $7 000 which allows household to manage its energy consumption; stock the electricity produced by renewable energies, make it usable for domestic applications, smartly manage flux to sell surplus in low-need period and keep reserve for periods especially voracious in energy. Tesla also makes available the professional version of its Power Wall; the Tesla Power Pack. Especially designed for companies’ needs, the Power Pack consists broadly in the same utilization than the Power Wall but is built for being integrated in every company with multiple configurations and flexible options. Tesla Solar Roof has been announced on last October before the confirmation of an eventual merger with Solar City. Despite that we don’t have much information now, ones we have are quite attractive; Solar Roof should consist in real like tiles based on a technology that allow us to see transparency – to reach solar cells – only if we are under a certain angle with the tile. Otherwise, we see the colour originally applied to the raw material replicating classic tile colours from Slate Black to Tile Orange. Elon Musk evoked that their tiles should cost even less than traditional one, we will remain cautious on this information.

Capability to draw a consistent future

Transformational leadership Tesla Motors’ CEO Elon Musk is a brilliant entrepreneur involved in many successful tech companies (Zip2, PayPal, Space X, Tesla Motors, Hyperloop, Powerwall, Open AI). Through these projects, Musk engaged himself in Financial autonomy, Space exploration and especially Mars conquest, Ultra-speed transportation technology, Sustainable life-style and Artificial Intelligence. These problematics are all critical for the next future and the fact to be involved in each of them is for Tesla’s CEO an incredible source of world-wide influence. Dubai recently signed with Hyperloop to build a high-speed network in

its growing capital what suggest financial shouldn’t be an issue for Musk outlooks. By drawing this future through its engagements, Musk creates a long term optimistic scenario within which every business he has developed have a high-potential to broadly improve the world-wide situation. This transformational leadership could be the hidden feature of Musk’s businesses; it may be the hidden Brand value of Tesla, the reason why investors invest in hyperloop or even the only path toward an interplanetary transportation system. Who knows up to where a great mind can change a world?

Internal Factor Evaluation Strengths Internal Factors Strong R&D department Calibers Strong Management Team

Excellent Designs

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Rating

0.45

4

Wgt.

Comment

Score 1.8

The CEO Elon Musk has earlier founded 0.3

4

1.2

companies like PayPal and SpaceX, so he has a good track record

0.1

3

0.3

The Model S won the 2013 Motor Trend's Car of the Year award

They are building their cars in California .

Great Location, close to

0.05

best calibers in the US

3

0.1

They can find many computer- and electrical engineers in California

Large Production

0.1

Capacity

2

0.3

Ability to develop vehicles completely in house including the sub-assemblies required

Weaknesses Internal Factors Relatively High Priced compared to fuel cars

Wgt.

Rating

0.25

3

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Comment

Score 0.75

Tesla Motors are doing their best to change this Few Charging stations

0.2

2

0.4

by building Superchargers, which are like gas stations but for electric vehicles only.

Low Battery Range

0.3

2

0.6

Slow Charging Process

0.3

1

0.3

0.05

3

0.15

Lack of Brand Recognition &Limited operating history

Battery Charging could take around 30 mins/170 mile The company is just ten years old ,Compared to fuel cars manufacturers

SWOT Analysis

Strength •

Product: fastest and most energy-efficient electric car on the market

•

Innovative technology

•

Brand image

•

Positive strategic partnerships

Opportunity •

Growing market

•

Increasing oil & gas prices

•

Rising consumers sentiment

•

Government

•

Young industry with no set standards

•

Large International market potential

•

Increasing awareness and for environmentalist

Weakness •

Scale of operations, no economies of scales, low sales volume

•

Dependent on continuing innovation

•

Financial profile

•

Deep pocket competition

Threat •

Large motor companies devoting more resources to developing electric cars and cars

fuelled by other alternatives •

Increasing Internal Combustion Engine efficiency

•

Limited EV Infrastructure

•

Concentrated industry

•

Auto buying dynamics

•

Loss of government subsidies

TOWS Matrix External Factors EFAS

Internal Factors IFAS

Strengths S1: Strong R&D department

Weaknesses W1:Relatively High Priced

Calibers

compared to fuel cars

S2: Strong Management Team

W2: Few Charging stations

S3: Excellent Designs

W3: Low Battery Range

S4: Great Location, close to best W4: Slow Charging Process calibers in the US

S5: Large Production Capacity SO Strategies: Focus on new product development with new renewable energy. technologies and be ahead of the market (S1,3,5+O1,2) O2: People care more about environmental issues Expand in new O3: Can use their battery technology in other areas, markets(S1,3,5+O5) Develop new products in an such as storing power from solar s. industry different than the O4: The growing by governments across company's core operation (S1,S5+O3) the globe for environmentally friendly vehicles Opportunities O1: The world is running out of oil. Electricity is a

W5: Limited operating history WO Strategies: Outsourcing some operational activities to a low Cost (O5,W1) Promote the awareness of environmental friendly cars(O1,O4,W1)

O5: Large International Market Potential. Particularly Europe, Asia, and Canada. Threats T1: Very Strong competition with less operating Costs T2: Economic slowdown T3: Limited supply for raw materials T4: Limited Experienced resource pool T5: Awareness of importance of EV is not well propagated

ST Strategies: WT Strategies: Develop new products attracting Follow Cost reduction strategy to the different segments (S1,5+T5) decrease costs(T1,W3) Develop new technologies to Sell the company with a good decrease overall operating costs bargain (T1,T2+W3,W2,W1) (S1,5+T1)