This case is about Tesla and its strategy for 2020 to see if Tesla can deliver sustained profitability. Please have a look at the below information and (1)identify problems, (2) possible alternative solutions, and (3) your choice of the best solution (with your justification) for Tesla.

1-Gasoline prices across much of the world had dropped significantly from 2015 to early 2018 and were expected by many knowledgeable observers to remain permanently "low" because crude oil prices worldwide were expected to stay below $80 per barrel, in part due to the growing abundance of shale oil and the sharply-lower costs of extracting oil from shale deposits. Affordable gasoline prices made the purchase of electric vehicles less attractive, given that (1) electric vehicles were higher priced than vehicles with gasoline engines, (2) electric vehicles so far were limited to an upper range of about 300 miles on a single battery charge, and (3) new vehicles powered by gasoline engines were getting more miles per gallon (due to government-mandated mileage-efficiency requirements).

2-Tesla was facing the prospect of much more formidable competition from virtually all of the world's major motor vehicle manufacturers (BMW, Mercedes-Benz, Jaguar, Volkswagen-Audi, Toyota, Honda, Nissan, General Motors, and Ford) that were rushing to introduce affordable and high-end electric vehicles with features and engine configurations that would enable them to compete head-on with the Model S, Model X, and Model 3. Several vehicle makers were also pursuing the development of electric-powered semitrucks for commercial uses.

3- Tesla had yet to prove it could boost operating efficiency and lower costs enough to be both price competitive and attractively profitable in producing and marketing its vehicle models. It reported both a loss from operations and a net loss during 2013-2017, despite growing its automotive sales and leasing revenues from $2.61 billion in 2013 to $9.64 billion in 2017. In February 2018, the company did say it expected to generate a positive quarterly operating income before the end of 2018 (but not a positive operating income for the year). While Tesla's ongoing operating losses and net losses were partly, or perhaps largely, due to the sizable new product development costs associated with the Model X and Model 3 and to the required accounting treatments for both leased vehicles and Tesla's generous stock compensation plan, it was nonetheless disconcerting that Tesla's operating loss of $1.63 billion in 2017 was the largest in the company's history and its 2017 operating profit per vehicle sold was a negative $15,855.17