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Tesla Company’s Corporate Social Responsibility Essay


Tesla is an American company that deals with the manufacturing and sale of electric vehicles. It also manufactures and sells rechargeable batteries. The company has a Corporate Social Responsibility that is active. Although the company’s CSR has few shortcomings, the management has worked on a credible and sound policy.

Brief Overview of Tesla Company

Tesla Motors, Inc is an automotive and energy storage company in the United States of America. The company started operations in the year 2003. The founders, Martin Eberhard and Marc Tarpenning, financed the company before they could find other financiers. Elon Musk joined the company and became one of the leading investors in the enterprise (Fialka, 2015). The company makes designs, manufactures, and sells electric cars.

It is also responsible for electric vehicle powertrain components and battery products. It is a public company and has listed on the NASDAQ stock exchange as TSLA (Fialka, 2015). The listing enabled the company to find more capital for the expansion of its services. The Tesla Roadster electric sports car was the first major production that brought the company to the limelight. It was the first of its kind among electric vehicles because it was fully electric (Pohl & Tolhurst, 2010).

Tesla Company.
Tesla Company.

It helped the company to speed up with the development of its second car. The Model S. It was a luxury sedan. It continued with a series of new launches like the Model X and the Model 3. Its Model S won several awards and accolades as the best electric and most selling car by the year 2015 (Pohl & Tolhurst, 2010). Other products are the home and office battery charging equipment. Its cars use electric batteries that need charging as compared to other gasoline-fuelled cars.

As a result, Tesla has installed quite some high powered Superchargers (Visser, 2011). It has also partnered with several shops and restaurants to serve its customers with fast chargers. The company’s CEO foresees a situation where the company would become an independent automaker with affordable pricing for its models. The anticipation is that by the year 2017, they would launch the newer version of Tesla Model 3 with great features at an affordable consumer price (Visser, 2011).

The Choice of Tesla Company

The models that Tesla manufactures are already environmentally friendly. They do not emit gas in the air. They also do not pollute sound. It was one of the main goals that led to the founding of the company. It would build motor vehicles that are zero pollution to the environment. Tesla did the unthinkable thing by publicizing its patents for environmental purposes. Thus, it became the best company to use as an example of what is possible in environmental concerns.

Justification of Tesla

When it comes to technology, Tesla has invested heavily in Research and Development. Many companies rely on Tesla’s innovations to complete their manufacturing concerns. For instance, Mercedes-Benz uses Tesla’s powertrain, while Toyota uses its motor (Fialka, 2015). Other companies like General Motors are eager to know another new thing that Tesla would come up within the market (Fialka, 2015).

Tesla has been known to be in the right place at the right time. When the company came into being, there were other car companies. But it established its niche and had become the best company for electric devices. It won the Obama Administration’s cleantech initiative in 2010 and got the government’s $465 Million subsidies in the form of a loan (Pohl & Tolhurst, 2010). It has since repaid the loan and cleared it.

Tesla has also managed to overtake companies like Ford, which had also started to produce electric cars. Although the Roadster could not compare to Ford’s F-150, it enabled Tesla to establish in the market. It has since expanded this dream by launching Model S. Its third invention would-be Model 3, which would now be affordable for many people.

Below is the CSR rating of the company since the year 2014 in comparison with other companies;

CSR Rating History.

The company has also grown because of teamwork. The company’s CEO Musk has built a team in the enterprise that is eloquent at its work. The company’s staff know their limits. They have demanding tasks. With the encouragement from the CEO and the board, they work to better the business’s vision and build their careers (Pohl & Tolhurst, 2010).

Tesla has a good network of channels. It has managed to own all its distribution channels to control its flow of business (Fialka, 2015). The desire to be in charge and make the sales move has enabled these channels to become profitable. The company has moved from years of loss-making to profitability. With the development of the Gigafactory, the company would be selling fleets of cars. It would significantly improve its ratings.

The company also faced a financial crunch in its early years. It has since become profitable after getting more finance to support the business. However, the company has won the consumers’ trust. It has been through a long journey of struggle and increased pressure. Some of its cars were involved in grisly accidents. It dented the image of the company. However, most of the accidents resulted from careless driving. The cars are durable and efficient. Even the National Highway Traffic Safety Administration has given the products a clean bill of health (Simpson & Taylor, 2013).

Tesla Motors Financial Performance.
Tesla Motors Financial Performance (Simpson & Taylor, 2013).

Issues Faced and CSR Response

Many companies keep their patents private would sue for any infringement. Not so for Elon Musk and Tesla. The CEO thinks it is important for everyone to consider keeping the environment safe for future generations (Aras & Crowther, 2009). Apart from just making a profit, the CEO and chairperson of Tesla believes that the company would not solve all the world problems alone.

Therefore, the company planned the release of its valuable patents. It would be great that every major company uses or develops what Tesla has done to promote a clean environment. The CEO wants other competitors to assist in the reduction of the emission of greenhouse gasses coming from gasoline-powered cars (Okpara & Idowu, 2013). The company believes that the process would also bring down the costs of electric vehicles so everyone can afford them. Although the shareholders were not happy at first, they saw that the reasons were valid. Tesla’s stock price per share increased by about $ 30, and it showed that he made the right decision (Aras & Crowther, 2009).

Patents sometimes hinder progress. They only enrich the legal fraternity and build dominance for a few corporations in the market. It was the best decision that enabled the company to improve its CSR. It has pushed for the auto industry to think long term by investing in the battery-powered vehicles. CSR is not just about compliance. A serious organization would provide leadership in CSR (Okpara & Idowu, 2013). Tesla has provided leadership in the decision is made. It would just need to work extra hard in matters of gender. Since electric cars are expensive, its work on Model 3 would make it all-inclusive.

References

Aras, G. & Crowther, D. (2009). Global perspectives on corporate governance and CSR. Farnham: Gower. Web.

Fialka, J. (2015). Car wars. New York, NY: Thomas Dunne Books, St. Martin’s Press. Web.

Okpara, J. & Idowu, S. (2013). Corporate social responsibility. Berlin, Germany: Springer. Web.

Pohl, M. & Tolhurst, N. (2010). Responsible business. Chichester, U.K: John Wiley & Sons. Web.

Simpson, J. & Taylor, J. (2013). Corporate governance, ethics, and CSR. London, UK: Kogan Page. Web.

Visser, W. (2011). The age of responsibility. Chichester, West Sussex: John Wiley & Sons. Web.

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IvyPanda. (2020, July 11). Tesla Company's Corporate Social Responsibility. Retrieved from https://ivypanda.com/essays/tesla-companys-corporate-social-responsibility/

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"Tesla Company's Corporate Social Responsibility." IvyPanda, 11 July 2020, ivypanda.com/essays/tesla-companys-corporate-social-responsibility/.

1. IvyPanda. "Tesla Company's Corporate Social Responsibility." July 11, 2020. https://ivypanda.com/essays/tesla-companys-corporate-social-responsibility/.


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IvyPanda. "Tesla Company's Corporate Social Responsibility." July 11, 2020. https://ivypanda.com/essays/tesla-companys-corporate-social-responsibility/.

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IvyPanda. 2020. "Tesla Company's Corporate Social Responsibility." July 11, 2020. https://ivypanda.com/essays/tesla-companys-corporate-social-responsibility/.

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IvyPanda. (2020) 'Tesla Company's Corporate Social Responsibility'. 11 July.

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