TESLA COMPANY BUSINESS PLAN 12 1 Tesla Business Plan Nia Cunningham Eastern



Tesla Business Plan

Nia Cunningham

Eastern Gateway Community College

BUS101 Introduction to Business

Professor Robert Kollin

November 7, 2021

Vision/Mission Statement and Goals

Vision Statement

The company vision statement is “to establish the most advanced car firm of the current era through facilitation of the world towards the uses of electric vehicles” (Tesla, 2021). However, the visual emphasis is to promote the use of renewable energy in society. Therefore, the company considers the development of electric cars as one of the strategies towards the realization of renewable energy advancement, including market development. The vision statement implies that tesla aims to be competitive in the market through indulging excellent leadership business skills in technology integration into automobile production to produce electric cars and promote environmental conservation.

The company’s mission statement is “to hasten the world’s transformation towards application of sustainable energy and efficient transport” (Tesla, 2021). However, the mission statement creates insight into the company’s recognition of new market opportunities based on renewable energy. Also, the firm understands the relevance of the existing energy storage equipment and aims to add some elements to the electric car to enhance its competitive advantage in the market. Sustainable energy and efficient transport indicate that the company is compatible with the current market demands of a different car since the product uses electricity rather than fossil energy which will be the main section of the business scope.

Goals and Objectives

The main goal and objective of the company in terms of financial performance include: increasing the company’s profit rate at the rate of 20 percent per three months which will be realized through the production of low-capacity cars consisting of luxury components. Also, the company will apply the capital generated from the first car that will be used in the production of a medium-capacity vehicle which is cheaper than the first car (Tesla, 2021). Therefore, the financial performance will be enhanced through continuous advancement of the automobile products until production of an affordable and high volume capacity is achieved. This will increase the number of market share meaning the company will experience increased profit-enhancing the financial performances.

In terms of resource commitments, the company aims to initiate storage and generation of energy integration, including the advancement of the battery system. However, the company aims to produce 40GWH of cells and 60GWh packs per annum by mid-2022 to boost the use of renewable energy. Mass production of these battery cells will be sufficient in transforming the world towards the use of renewable energy. Second, the firm aims to incorporate all the available resources and indulge in all natures of ground transportation. Therefore, electric vehicles will include heavy commercial vehicles. Third, the company aims to establish vehicle autonomy and ensure safety is paramount at all times to create a positive brand reputation.

The company aims to integrate Enterprise Risk Management to ensure the operations are more profitable than costly through evaluation of non-operational and operational company aspects. Also, the risk management contingency plan will address indirect and direct, external and internal risks that are viable to compromise the company performances. Also, one of the main objectives in risk management is to establish integral strategies to realize evidence-based behaviors which lead to risk-taking. The company aims to realize the set objective within one year which will progress the firm to the second phase. if the company achieves 75 percent of the set goals and objectives the company will realize increased market share which will lead to environmental conservation realization.

Keys to Success

Some of the required company keys to success include; technology, for the company to succeed sufficient technological innovations are essential to come up with products that can serve other car-producing companies, including battery packs. Second, the company development timing. The current population has a greater interest for cheaper electric vehicles than the use of fossil energy vehicles. Therefore, electric cars will gain increased demand in the market (Alghalith, 2018). Also, the world is experiencing a climate change crisis due to the use of non-renewable energy therefore most customers will embrace the electric car to reduce the severity of climate change impacts in the environment to reduce detrimental health and economic effects of climate change.

Third, reduced competition. Currently, there exist reduced competitors in terms of the production of an electric vehicle since other companies, including Ford and Toyota, produce fossil gas-consuming vehicles. Therefore, due to reduced competition, the company will have quick sales advancement and increased brand popularity which equals increased company profit. Fourth, the company team. Highly skilled salesmen and engineers will be incorporated into the organization’s operations to ensure product development, marketing, and sales are successful. Having enough experts ensures that the company will experience reduced risks of eruption.

Fifth, distribution. The company will focus on a unique product distribution chain by ensuring the stores are available in most regions to enhance customer contact. Sixth, product durability. The company will focus on ensuring the products are durable to gain customer trust and increase customer retention and referrals. Seventh, the company secrets. The management will ensure the strategies are unique and difficult to imitate to avoid the presence of similar products in the market.

Company Summary

Company Background

Tesla Company was established in 2003 by engineers Marc Tarpenning and Martin Eberhard intending to facilitate electric vehicles by creating awareness that electric vehicles were better than gasoline vehicles. In the current era, the company produces electric vehicles and clean energy storage equipment and products, including batteries, solar panels, and automobiles. The company was named after inventor Nicola Tesla. When the company launched in 2008, Tesla developed the world’s first electric car model S which was embraced due to its efficiency in class and category performance (Tesla, 2021). Also, due to the cars efficiency, performance, and safety, it increased worlds expectations in transforming from gasoline vehicles to electric cars.

In 2012, the company stopped production of its Roadster model and focused on the production of the Model S sedan which consisted of three varying battery options supporting a distance of 240 to 310 miles. However, the model contained a high-performing battery offering an acceleration of 95 kilometers per hour which is a distance of up to 60 miles. Also, in early 2012 the company established a superchargers station in Europe and United States to provide electric car charging services at no cost to tesla model owners. Thereafter, the superchargers were replaced with a battery pack referred to as Model S. Tesla has also produced other models, including model X in 2015, model 3 in 2017, and model Y in 2020.

Resources, Facilities, and Equipment

Tesla uses an electric powertrain consisting of control software, power electronics, gearbox, motor, and battery pack, and intellectual property as the primary resources. However, the company relies on its engineering human power to design, manufacture, and develop its products at the same time involving experienced salesmen and efficient customer services which offer customer support. Tesla encompasses cost structures to ensure the provision of premium preposition via product and personal service enhancement (Hettich & Müller, 2017). One of the main cost drivers is variable expenses, including shipping cost, manufacturing, direct parts, and labor cost. The second driver is the revenues, including service revenues. Other drivers include fixed costs, research, and administration.

Tesla operates under four operational facilities, one located in China and three in the United States. Giga Nevada is the first Gigafactory where the assembling and production are done. Second, Giga New York is the second Gigafactory that is focused on solar energy. Third, Giga Shanghai is the second facility that conducts assembling. Forth, Giga Berlin which conducts various model production including model Y. Tesla Company has more than 70,000 employees which are managed through frequent training programs. However, Tesla raises funds through equity sales and bank loans. Also, the business is financed through bond sales, stock offering, and sales income. The employees are rewarded through salaries while stock options are used to reward other resource providers.

Marketing Methods

In 2020 Tesla achieved $ 31.5 billion as the total revenue. However, the biggest sales percentage was from automotive sales which produced a total of $26 billion. Therefore, the company is the biggest electric vehicle selling brand globally. The total revenue resulted in sales of over 500,000 cars in 2020 with model Y and model 3 accounting for 90 percent of the total sales. The company has worked with other automobiles to ensure sufficient technological innovation to transform the product and market idea (Alghalith, 2018). Also, the company works with environmentalists through cooperative social responsibility to ensure reduced environmental pollution which boosts the company’s reputation.

Tesla uses forward contracts as the derivative instrument which are in the form of cash flow sections with 12 months maturity. However, the company agrees with the buyer to offer products at a later date and ensures the price setting is during the contract drawing up. Therefore, the contracts don’t have trading during the exchange. The company uses an average of $29, 000 for the production of one product unit, including labor, and material. The delivery cost of one unit is $1,000 to $ 1,200 in Canada and U.S although the price can vary when delivery is to other locations in different continents. Tesla Company is keen when it comes to contracting and it requires high-efficiency contractors and a prolonged positive reputation. Therefore, the company has reduced its dependency on contractors.

Management and Organization

The company’s current management team consists of Elon musk as the CEO, chairman, spokesman, and product architect. Zachary Inkhorn is the CFO. Drew Baglino who heads energy engineering, powertrain, and SVP. Jerome Guillen is the president and head of heavy-duty trucking. Vaibhav Taneja is the chief accounting officer (Akakpo et al., 2019). Lars Moravia is the vice president and head of vehicle engineering. Franz Von Holzhausen as the senior design executive. Robyn Denholm, Antonio J. Gracias, Hiro Mizuno, James Murdoch, Kathleen Wilson Thompson, and Ira Ehrenpreis as the directors. Laura Woolford determines employees’ salaries and conducts performance reviews as the senior head of human resources.

Tesla management encompasses experts from different fields, an aspect that creates a positive reputation of the management members within the society. Some of the qualities depicted by the company team include entrepreneurial commitment which eliminated disappointments. Second, positive energy motivates employees and customers. Third, increased innovation passion which increases the urge to incorporate technology in the business operations. Fourth, strategic strengths convert visions to entrepreneurial realities. Fifth, high integrity influences the team towards maintaining personal values. The management is required to ensure constant training to add and update the existing team knowledge. However, the source of advice should be from various business consultants outside the organizational premises.

Chief Executive Officer

Chief Executive Officer

Chief Financial officer

Chief Financial officer

Energy: 1 VPs and SVP

Energy: 1 VPs and SVP

Production and Engineering: 9 VPs

Production and Engineering: 9 VPs

Chief Technology Officer

Chief Technology Officer

Communication and HR: 3 PVs and Chief People Officer

Communication and HR: 3 PVs and Chief People Officer

Chief Designer

Chief Designer

Finance and legal: 4 VPs and General Counsel

Finance and legal: 4 VPs and General Counsel

Software: 1VP and director of Artificial intelligence

Software: 1VP and director of Artificial intelligence

Sales: 2 VPs

Sales: 2 VPs

Ownership Structure

Tesla’s key stakeholders consists of directors, investors, partners, shareholders, suppliers, the public, financial institute, and the government. However, some of the legal forms include partnerships, including the Tesla and Panasonic partnership in the United States where the two companies run Gigafactory in Nevada (Almeida, 2017). The company requires permits and licenses to run for automobile manufacturing, sales, and state manufacturing. Besides, some environmental conservation permits are required to ensure the company organizations will not result in environmental pollution which is a major issue under control. Also, the company needs financial paperwork to ensure accountability in profit sharing among all the stakeholders. Therefore, the requirements entail both permits and licenses.

Social Responsibility

Tesla has robust cooperate social responsibilities since the company has impacts in the community through designing and production of ecologically friendly products, including solar panels, batteries, and vehicles. The major role of the management in the community is to show the world that through unity climate change prevention can be realized while at the same time satisfying the stakeholder’s interest. Therefore, the strategy and policies are based on the business products and nature to ensure reduced pollution. The company requires in-depth training concerning the connection between the business scope and environmental conservation.

Internal Analysis

Tesla’s company strengths consist of experienced CEOs with various records. Second, the company uses its stores instead of traditional distribution methods. Third, it is the first world company to produce an electric car. Forth, have increased young generation increasing its chances of technological innovations. Also, it is based on technology advancements which are rapid in the current era. Some of the weaknesses include inadequate infrastructure development (Alghalith, 2018). Second, the customer still fears the use of the electric vehicle. Price regulation is also a challenge. The major company core competencies consist of the unique design of the electric vehicle with the help of an innovative CEO. Also, the company maintains efficient customer connections via its customer service system.

Some of the things to build up in the company are work, knowledge, and productivity. Focusing on work and knowledge will lead to the introduction of new products which increases productivity by expanding the number of sales. Also, the knowledge variation will produce a cheaper vehicle by maximizing the output and minimizing the input. The business unit to exit is energy storage and generation and focus on the automobile segments which have depicted increased return by forming the biggest percentage of the total revenues. Therefore, the automobile is the promising business segment of the company.


Akakpo, A., Gyasi, E. A., Oduro, B., & Akpabot, S. (2019). Foresight, organization policies and management strategies in electric vehicle technology advances at tesla. In Futures Thinking and Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham.

Alghalith, N. (2018). Tesla: innovation with information technology. International Journal of Business Research and Information Technology, 5(1), 37-51.

Almeida, J. R. S. D. (2017). Tesla, Inc.: equity valuation (Doctoral dissertation).

Hettich, E., & Müller-Stewens, G. (2017). Tesla Motors. Business Model Configuration.

Tesla. (2021). Electric Cars, Solar & Clean Energy | Tesla. Tesla. Retrieved 5 November 2021, from https://www.tesla.com/.