Performance, Challenges And Projections : Tesla's Success

In this paper I intend to provide a sound financial analysis of Tesla Motors Incorporated. I will do so by calculating and providing liquidity, profitability, and solvency ratios and then evaluating those results. Assessment of these ratios will more or less define Tesla Motors’ abilities to meet its short-term debts and obligations (liquidity), performance in relation to sales, assets, and profits or losses (profitability), and the resulting income amount, after tax deductions, against the company’s liabilities (solvency). Additionally I will compare

Two parameters define Tesla’s industry competitive environment: what Tesla is today and what Tesla hopes to become in the near future. Today Tesla delivers an EV in the high-end luxury market ($70k+), but plans to deliver an affordable ($35K) small sized sedan in the next few years (Kaufman, 2015). The differences between Tesla’s current and future plans affect the threats and opportunities for potential entrants, industry competitors, and buyers in the near term and long term.

Tesla Motors is a global enterprise specializing in the design, production, and marketing of electric powered vehicles founded in 2003 by the young businessman, Elon Musk. Elon is well known for co-founding paypal, and now he amazes the world again with his incredible vision of Tesla Motors, and being the main product architect. Tesla Motors appeals to the environmentally friendly market, by currently being the only company to sell a zero-emission sports car. Tesla’s fundamental motive and selling point is producing only electric vehicles, as opposed to competing companies, producing a combination hybrid, or diesel car.

Tesla is working on implementing a self driving feature to all three of their models. This will allow Tesla's vehicles to be safer than a human driver and increase the amount of buyers. Tesla has plans to introduce a fourth car to the line, at a cost so low, almost everyone will have the ability to afford it. This will help increase market share and generate a higher profit. Tesla's earnings are expected to grow at a 30% annual rate over the next five

Opportunity: For the overall electric automotive industry and Tesla, they should improve its financial performance through government incentives to alleviate the problem of carbon emissions from its car models.

The paper provides a summary of Tesla Motors, the company outlined. Explaining the relationship between cost-volume-profit analysis is discussed as well as how the company is using this tool to maximize production and profit.

Tesla is one of the newest car companies around, but they have had a long road to where they are today. Martin Eberhard and Marc Tarpenning founded Tesla Motors in July 2003

Tesla Motors Inc is one of the leading companies for designs, develops, manufactures, and  selling electric cars and energy storage products. Founded in 2003 the major specialization of the company is software for automated cars, cars powered by electric energy and solar for home power.

Appealing to the mass market indicates something of a shift in Tesla’s strategy. Prior to the introduction of the Model 3, Tesla’s lineup consisted of the Model S and the Model X, both with a MSRP in excess of $70,000 (Arata, 2017). These vehicles were marketed toward wealthy consumers willing to be the first adopter of an all-electric vehicle, representing more of a focused differentiation strategy; with the Model 3, Tesla is still differentiating itself from

Tesla Motors are noted to have personnel with a unique expertise in their field of work. These individuals help in carrying out activities that lead to the great performance of the company. The various innovations applied by these people is what led to the better performance of the company. Elon Musk along with taking over the leadership of the company brought about his experience in the firm and this was to influence the future performance of the company. Elon masterminded the designing of the Roadster and also included the marketing of the ordinary vehicle in the goals of the company (Hunger, 2010). This was something which had not been done by those who were there before him and thus his

Tesla has become the first automaker to implement a direct sales business model, they don’t rely on middlemen to get their product to the masses, instead they go directly from the factory to the future owners via online sales. The people who are already costumers are satisfied and this makes their user base grow via word of mouth.

Founded in 2003, Tesla is an electric car manufacture company that started in California, they are considered leader in its category. Tesla electric cars not only outsold Nissan Leaf and GM electric cars in US. Their latest Model S had also outsold BMW 7, Audi 8. Tesla is also targeting SUV consumers with their Model X.

Between 2003 and 2013 Tesla was arguably one of the most controversial companies. An innovative company with a breakdown idea, had no financial success in its first decade. With the addition of Elon Musk in 2008, Tesla had a fresh new face at the stern of its company and was poised to make big strides into the future. Those strides finally broke through in 2013 with its first truly positive financial year. However, this year was not without trouble as Tesla found itself in the news for the wrong reasons. On several occasions their Model S design had issues with car fires. Though this did not cause a complete catastrophe, it cased questions to the true safety of their vehicles. Tesla would fight back by arguing the safety of their vehicles saved the drivers lives in addition to unforeseen circumstances that caused the fires. Because of these incidents, investors did get spooked and expectation for the remainder of 2013 and projected 2014 were lowered, yet once again Tesla powered through and had their best year of existence. With these above factors, Tesla is at a true crossroads: do they continue the uphill climb that 2013 presented, or do they falter and fall pretty to its competitors.

The purpose of this memo is to compare the financial performance of Tesla Motors Inc. to the Bayerische Motoren Werke AG. BMW AG was selected because they are in direct competition with each other in the fully electric power motor vehicles. BMW has been chosen because they currently offer the most fully vehicles on the market compared to any other automotive manufacturer. BMW is also one of the only manufacturers that has invested resources into developing its electronic drive system (I-Drive) instead of buying an existing model of electronic drive system like other car manufacturers such as Mercedes(TechCrunch). After completing a financial analysis of the two companies it can be concluded that Tesla Motors Inc. is in a weaker financial position compared to BMW AG.

The literature reviewed for this assignment comes from information resources ranging from academic journals, internal reports, financial statements, and Tesla’s Form 10-K 2016. The information ranges in date from 2015 – 2017.