1.Question: Read the case study and answer the flowing question.

A. In a numbered list, name and describe the four types of market structures.

B. In which type would tesla be competing and why? Provide support from the case for your answer.

Elon Musk breaks out the dance moves as he opens new Tesla factory in

Germany

Mar 22, 2022

Sam Shead

KEY POINTS

The Tesla CEO is set to cut a red ribbon at the new Giga Berlin (or Gigafactory Berlin) plant in

Grnheide.

Tesla sees the Berlin factory producing up to 500,000 vehicles annually.

In recent quarters, Tesla has been exporting cars from China to customers in Europe.

Click here for Tesla Inc Stock Quotes: https://www.cnbc.com/quotes/TSLA

Elon Musk officially opened Teslas first manufacturing facility in Europe on Tuesday as the company

looks to take pressure off its other factories in the U.S. and China.

Musk was seen dancing as he presided over the delivery of Teslas first German-made cars to 30 clients

and their families at the carmakers 5 billion euro ($5.5 billion) plant.

This is a great day for the factory, Musk said, before hailing the launch as another step in the

direction of a sustainable future, according to Reuters. The Tesla CEO revived memories of the launch

of the firms Shanghai factory in January 2020 where he also showed off some of his dance moves.

Musk is expected to cut a red ribbon at the new Giga Berlin (or Gigafactory Berlin-Brandenburg) factory,

which is in Grnheide, a coal town in Brandenburg, Germany, within commuting distance of the capital.

Not everyone is in favor of Giga Berlin. Several protesters gathered outside the facility on Tuesday to

raise their concerns, according to Reuters. Theyre worried that the plant will use too much water and

theyre unhappy with the number of trees that have been sacrificed to build it.

High demand

Tesla sees the Berlin factory producing up to 500,000 vehicles annually. The Auto Motor Und Sport

publication in Germany reported that the Tesla plant is targeting output of 2,000 vehicles in its first few

weeks of serial production.

Troy Teslike, an independent Tesla researcher, tweeted that the firm is then hoping that vehicle output

will hit 1,000 per week at the six week-mark following the start of commercial production, and then

5,000 per week by the end of 2022.

The U.S. EV maker has been struggling to keep up with demand and there are reportedly lengthy delays

for Model Ys and certain Model 3s in different parts of the world.

Last week, Tesla had to temporarily shut production at its Shanghai plant due to Covid-19 cases

resurgent in China. That limited production of made-in-China Model 3 and Model Y vehicles there for at

least two days.

In recent quarters, Tesla has been exporting cars from China to customers in Europe.

Demand for EVs remains very high in Europe, and now Tesla can rely on some production on the

continent, not solely to be shipped from China.

Giga Berlin has been several years in the making. It is extremely important to Teslas plans to expand

globally following the opening of its Gigafactory 3 plant in Shanghai in late 2019. The company has also

started production for the Model Y at another plant in Austin, Texas, recently, but Tesla is yet to hold a

grand opening for the site.

In November 2019, when Musk announced plans to build a car plant in Germany, he lauded German

engineering.

He said: Everyone knows that German engineering is outstanding, for sure. Thats part of the reason

why we are locating our Gigafactory Europe in Germany. We are also going to create an engineering and

design center in Berlin, because Berlin has some of the best art in the world.

German authorities gave Tesla conditional approval to start production on March 4.

The conditional license for the vehicle and battery plants in Brandenburg was expected following

months of delays. Tesla had intended to start production of vehicles by early summer of 2021, but the

Covid pandemic, supply chain complications and clashes with environmentalists slowed its progress.

Thirsty factory?

While the plant is up and running, water usage at the facility remains an issue.

The impact on the local water supply continues to be a concern for the future of the plant, Deutsche

Banke autos sector analysts said in a research note Monday. They added that Tesla will need to provide

evidence of appropriate water usage and air pollution control in order to truly ramp up volume.

Sources indicated that the company may completely exhaust the water reserve in the region with the

first stage of the plant build out, and will need additional extraction permits in order to expand its

capacity any further in the future, the note said.

As such, Tesla will reportedly have enough supply to support the initial 500,000 volume target, but may

face additional hurdles as it plans to expand each of its Gigafactories to ~1 million units of annual

production.

Additional reporting by CNBCs Lora Kolodny.

References

Shead, Sam. "Elon Musk breaks out the dance moves as he opens new Tesla factory in Germany." 22 03

2022. CNBC. Web. 28 04 2022. .