C A S E $30$ Tesla Motors, Inc: Do SWOT analysis

THE FIRST U$.$S$.$ CAR COMPANY IPO SINCE $1956$

Alan N$.$ Hoffman

Bentley University

sla Motors, Inc. is in the business of developing, manufacturing, and selling technol ogy for high$-$performance electric automotives and power train components. Hoping to develop a greater worldwide acceptance of electric vehicles as an alternative to the traditional internal combustion, petroleum$-$based vehicles that dominate the market, Tesla is the first company that commercially produced a federally compliant electric vehicle with the design styling and performance characteristics of a high$-$end performance automobile. Tesla currently offers one vehicle, the Roadster for sale, as well as supplying electric power train components to Daimler for use in its Smart EV automobile. Additionally, Tesla has a partnership with Toyota Motor to develop and supply an electric power train for Toyota's Rav$4$ SUV.

Company Background

Tesla Motors was founded in Silicon Valley in $2003$ by Martin Eberhard and Maro Tarpenning to create efficient electric cars for driving aficionados. The founders acquired their first round of financing from PayPal and SpaceX founder Elon Musk who subse quently took over as CEO in $2008.$ The company unveiled its first car, a two$-$seat sports car named the Roadster, in $2006$ after raising $$150$ million and going through four years of technological and internal struggles. ${?}^1$ Powered by a three$-$phase, four$-$pole AC induction motor, the Roadster has a top speed of $130mph$ and accelerates from $0$ to $60mph$ in under four seconds, all completely silent ${?}^2$ Production of the Roadster began in March of $2008$ with a first$-$year production run of $600$ vehicles. ${?}^3$ In June $2008,$ Tesla announced that it would be building a four$-$door, five$-$passenger sedan called the Model $S$ to be

This teaching case was compiled from published sources. The author would like to thank Lindsay Pacheco Patrick Toomey, Ned Coffee, William Gormly, and Will Hoffman for their research. Please address all correspondence to Dr$.$ Alan N$.$ Hoffmnn, Dept. of Management, Bentley University, $175$ Forest Street, Waltham, MA $02452$;

ahoffman@bentley.edu. Printed by permission of Dr$.$ Alan N$.$ Hoffman.

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$30-2$ CASE $30$ Tesla Motors, Inc.

built in California and be available for sale in ${20122}^4$ The Model $S$ is slated to retail for approximately $$57,400$ and be offered with battery options for $160-,230-,$ or $300-$mile ranges per charge. The company went public in June $2010$ with an initial public offering at $$17$ a share, raising about $$226\mathrm{.}1$ million in the first stock debut of a car maker since the Ford Motor Company held its initial public offering in ${1956}^5$

Tesla has also used its innovative technology to partner with traditional automobile manufacturers on their electric vehicle offerings. In $2009,$ Tesla signed a deal to provide Daimler with the battery technology to power $1000$ electric Smart city cars. ${?}^6$ Tesla will supply battery packs and electric power trains to Daimler and in return it will receive auto manufacturing and clesign expertise in areas including safety requirements and mass production of vehicles. ${?}^7$ Later in that same year, Daimler announced that it had acquired a "nearly $10$ percent" stake in Tesla, ${?}^8$ On October $6,2010.$ Tesla entered into a Phase $1$ Contract Services Agreement with Toyota Motor Corporation for the development of a validated power train system, including a battery, power electronics module, motor, gearbox, and associated software, which will bo integrated into an electric vehicle version of the RAV$4$ for which Tesla received US$ $60$ million."

In May $2010,$ Tesla purchasod the former NUMMl factory in Fremont, California. one of the largest, most advanced and cleanest atutomotive production plants in the