Introduction
Elon Musk was the person that has made electric cars popular and Inspired many people to get an
electric car. Tesla is one of the most successful car brands now. Tesla has a U-form organisational
structure the structure consists of Function-based hierarchy which then separates into, Chairman &
Chief Executive Officer, Finance, Technology, Global, Sales and Service, Engineering, Legal. Then you
have the Centralization, which basically means that Tesla has a group of people that makes all the
final/important decisions like the central headquarters which control all operations as well as for
overseas operations. Tesla as a company was founded 1 st July 2003 but the brand was popular since
Elon Musk took over as CEO in October 2008. The cheapest Tesla model is priced at $38,190 with
the Model 3. Right now, there are 4 current models of Tesla’s with a number of different versions to
choose from.
Tesla PESTEL Analysis
P5 Political
The government gives out a grant to electric car dealerships and manufacturers on new low
emission vehicles, this can even be up to 35% of the car model’s value or a maximum of £3,000. The
government has done this to encourage start-up dealerships to make low emission vehicles since
that is the better alternative for the fossil fuels because of the global warming problem going on
now. This way the government helps Tesla sell more cars and expanding the electric car market.
Tesla has now benefited since the increase of sales allowed the company to help and grow the
electric car market. Tesla could also benefit from the new Gigafactory that is being built for Tesla in
Germany, this will overall increase Tesla’s supply helping Tesla to increase their overall profit margin.
The government has recently implemented a new tax release for company electric cars, this means
that cars that have CO2 emissions of less than 50g/km the cars are eligible for 100% first year capital
allowance. This can be a very big factor for potential customers deciding if to buy a Tesla or not since
they save up some money straight away when buying the car since a Tesla qualifies for that policy.
This will help Tesla as the tax break will be a large factor when potential customers deciding on
whether to buy a Tesla. On a car which costs £40,000 like Tesla’s Model 3 (£42,500) it is a tax release
of £7,600 in the first year (Company car tax on electric cars, 2021). This will largely reduce the costs
of company cars for companies such as tesla, this will help those employees who use company cars
when travelling to meetings, reducing their costs and therefore improving their profit. Tesla can
continue to utilize this by getting more company cars and ensuring that all their cars are compliant.
Trading post Brexit will also be an important political factor since Elon Musk the CEO of Tesla, was
planning on building a Tesla Gigafactory which would be worth £1 billion, however Elon Musk
decided to go with Germany instead since he recognised the Brexit deal as unreliable for his
business. The £1 billion the factory would contribute to the UK economy would be huge if that
happened, offering many jobs as well as improving the UK’s car industry changing the game with
more new Tesla models making more people convert to electrical cars. The factory in Germany is so
big that a lot of places get to have cheaper shipment between two companies. This will overall
improve Tesla’s financial situation and will improve Tesla’s influence in the car industry, making
Germany a better choice than the UK.
Economical
Because of Covid-19 all the money was forced to into paying the expenses caused by the pandemic,
this has overall cost the government £280 billion, including £73 billion to support the furlough
scheme. During the pandemic people are paying less taxes since they are out of the house less and
but less, this has unfortunately led to the economy not improving. This could be a factor for Tesla
since the business knows that the UK is not doing well economically now meaning people will save
up instead of spending money on expensive cars.
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