Key strategic issues for Tesla are various factors that, in one way or another, affect its development and product sales not only in the future but even now. The most important ones are the political factor, the competitive aspect, the technological aspect, and the solvency of the manufacturers, along with the purchasing power. Each feature is worthy of individual attention and explanation of the cause, together with possible consequences and methods of solving the problem. As can be seen, despite its relatively short history of Tesla, it already has a number of difficulties that do not allow it to fully conquer the automotive production market and expand its sphere of influence to other countries, where their cars can be a novelty (Hess and Andiola). However, as has already been said, each side should be considered further and analyzed to solve the problems.
The problem on the side of political influence, although not the most obvious, has a significant impact on the overall development of Tesla. As it is already known, this company is private, i.e., it does not depend on state funding, which is a significant disadvantage for the manufacturer, who decides the main concepts of development, directions, design, and production capacity. Therefore, you can trace the trend to the fact that the appearance, power and running gear of Tesla cars, is significantly different from its analogs, as it brings new features and is not afraid to experiment (Hess and Andiola). On the other hand, the need to regulate Tesla production plays an essential role for the government, as it directly affects a significant part of the U.S. auto industry. Since it is a private company, it has the right to regulate the price of its product itself, which is not beneficial for the government as it creates a monopoly in this market. The solution to this problem is relatively straightforward, namely to provide evidence that the government receives interest on each unit sold, which effectively adds to the country’s overall economy. Thus, the rise in the price of models, although it will have an impact on the market, will not become an obstacle for government agencies, bringing them a substantial profit.
Another, no less critical indicator by which to assess the sales and production capabilities of Tesla products is the competitiveness and the ability to fight it. It is no secret that the cars produced by this company are very different from those of other manufacturers. Primarily it concerns not only the design, which according to many, is ahead of its time but also the power of the product itself. In addition, Tesla was one of the first companies which have developed and were able to start the production of cars powered by electricity. Not only was it able to improve the planet’s ecology, but it also set a precedent, which directly raised the rating among other car manufacturers and served as a good booster for the advertising campaign. In this way, Elon Musk’s company was able not only to create a new product that distinguishes it from others but also to influence its sales by significantly improving them.
However, it is worth understanding that by demonstrating their car’s capabilities in this way, other companies have caught this trend and started their own development. Thus, in many ways improving the ability of their vehicles and reducing the lag from Tesla. At the moment, it still leads in all major indicators and is in demand among customers, but it cannot be like this forever. The solution to this problem must be grounded in the company’s ability to adapt to the automotive manufacturing market. Tesla has already shown that it is an entirely different company in terms of level and production capabilities. Therefore, it is worth constantly bringing in new, innovative ideas. This should not be a hardship for a company that is engaged in the production of modern technologies for the new generation of rockets.
Despite this, the technological aspect is still quite a significant challenge for Tesla. So many ideas within this division of the company, namely mechanical engineering, are up-and-coming. You can already see how revolutionary this company is in its approach to realizing its product and that the world of automotive engineering has already managed to change since Tesla entered this market. On the other hand, it is essential to note that some of these technologies are not yet fully ready and need time to refine and implement. One of the most prominent examples was the Cybertruck demonstration, which was conducted with some sort of scandal. Throughout the presentation, people were assured that the windows in it were powerful and impossible to break. However, the window was shattered during the demonstration of their abilities, bringing Tesla’s stock down considerably and casting doubt on their reputation. The way out of such a situation could be to refine the product for the sake of assurances. It is crucial to find your speed and work at a certain pace, supplementing the product with more and more perfect components, which will show their effectiveness over time. It is essential to take your time and be able to sell your product even without unique details.
The last problem people encountered when buying Tesla products was their price. It is too high, not only for the customers themselves but also for those who sell it. Thus, there are dynamics judging by which the sales of Tesla, contrary to predictions, are not growing, but on the contrary, are decreasing. The problem is in the production of the vehicle since some of the innovative technologies are too expensive and rarely used but are included in the cost of the car itself. Since the price is too high, fewer buyers are willing to buy it, which leads to a decrease in demand and, consequently, the inability to sell the car. This puts the product sellers in a wrong position since there is no sale. The solution to this problem is the most obvious: to expand the list of features of the car, which the customer can exclude from the value due to personal uselessness. In this way, it is possible to reduce the cost of production and produce more car models.
In conclusion, it must be said that despite having such a long list of problems, Tesla is still one of the fastest-growing companies in the world. Its shortcomings in some details, although significant, are setting a vector for the future of the automobile industry. We can be sure that, over time, this company will become a benchmark for other manufacturers, but for now, the potential and capabilities of Tesla are already apparent.
Reference
Hess, Megan F., and Lindsay M. Andiola. “Fraud Risk Brainstorming at Tesla Motors.”Issues in Accounting Education, vol. 33, no. 2, 2018, pp. 19–34.