sold that offered them a competitive advantage in their marketplace; the Tesla model 3 was the
most affordable electric car, priced at £42,500 pounds for the base model in the UK, for many
middle- to upper-income individuals, as well as some lower-income workers. The Model 3 is
reasonably priced given its excellent functionality, features, and performance. A feature of
many, such as self-driving, which Tesla refers to as autopilot. The Tesla Model 3 has several
sensors that allow it to recognise obstacles and objects utilising the highly sophisticated AI built
into the car, which enables it to steer, accelerate, and brake automatically within its lane.
Moreover The Model 3 has a good range and high efficiency, as well as a multitude of options
and the car itself had an appealing design. The interior touchscreen has internet connectivity,
Google Maps, Netflix, Hulu, and even games. Then there are the cameras inside and outside the
automobile. Thus the Tesla model 3 gave Tesla a competitive advantage, as they were seeing an
exponential growth of consumers as many prospective consumers were becoming buyers, and
they were overwhelming their competitors by their large margin of sales of the Tesla model 3.
Furthermore this led Tesla to be compelling in its marketplace as no other car manufacturer
was able to gain so many sales in mid-2017-2018 alone, they were providing high quality,
premium and high tech electric cars to consumers.
Situational analysis
A situation analysis is a business evaluation that involves examining an organisation's internal
and external environments in order to understand the organisation's capabilities, customers,
and business environment. Many types of analysis are included in the situation analysis,
including the 5Cs Analysis, SWOT Analysis, PESTLE Analysis, and Porter Five Forces Analysis.
Furthermore, situational analysis is vital for a business since it assists to identify potential
challenges to an organisation, goods and services and give a business plan as well as threats
that must be addressed, essentially situational analysis enables businesses to determine the
health of their business.
Pestle
Tesla is a PLC and an international company in which they provide their goods and services
multinationally. Tesla also has to undermine external factors that could potentially affect their
business operation. One external factor includes political factors. There are several political
factors that could have an impact on Tesla's environment/operation. Government incentives
for electric vehicles, which includes the European union in way to realise the global future; the
government's goal of increasing use of electric vehicles because they produce zero CO2
emissions, positively impacting the environment as it leads to less to no pollution in cities, and
ultimately making transportation more environmentally sustainable, are just a few political
, factors that could have an impact on Tesla's environment/operation. Furthermore, the UK
government has declared that by 2030, diesel and petrol automobiles would be outlawed
owing to the enormous amount of CO2 created, which is hazardous to the world and might or
could affect our future generations since climate change occurs as a result of large amounts of
CO2. As a result, legislation has been enacted to phase out gasoline automobiles in favour of
electric vehicles, with the objective of having all cars in the UK run on electricity by 2050 as it is
much more sustainable for the global future transaction. Moreover Fiscal policy is another
political factor that has directly affected Tesla business, as the government provides support.
The US government grants a tax credit of USD 7500.00 to every buyer of a new electric car as an
incentive, however each automaker is limited to 200,000 electric vehicle sales in the US. Tesla
was the first company to cross and break the limit in 2018. This positivity impacted Tesla, as
they would be able to reclaim a tax credit of USD 7,000 on 400,000 additional electric cars in
the US as a result of the new incentive change. This factor ultimately enabled Tesla to spend
more, in improving their electric cars in so increasing sales volumes will be at a greater level.
Another external factor that affects Tesla is economic factors. Exchange rates, economic
growth, supplier-side policy, and lastly monetary and other government policies are all
economic factors that could influence leverage costs, demand, profitability, and pricing for
Tesla. Exchange rates can dramatically impact Tesla profits from sale volumes. One of the most
significant economic factors for Tesla is changes in foreign currency exchange rates. This is due
to the alternative fuel car manufacturer's foreign business operations. Despite the fact that the
United States remains the largest market for electric vehicles, sales from other countries are
steadily expanding. In 2020, Tesla generated USD 6.66 billion in sales in China, accounting for
21% of overall revenues of USD 31.54 billion. Tesla made USD 334 million in foreign currency
transaction profits in 2020 due to changes in exchange rates. This ultimately had a negative
effect on Tesla revenue, as they generated less revenue from sales. Furthermore, Economic
growth is another economic factor that might impact Tesla. The main economic factor would be
the recession, where the general public lose interest and ultimately there is less demand for the
product negatively impacting its profit from sales, however this is unlikely to occur due to
Tesla's large growth of loyal consumers, large market share in the EV market, market leader and
the highest-gained market capitalization company in the word. If a recession does occur Tesla,
this is likely due to spending a high amount of income generated on expenses such as materials
for their electric car in a period where they aren't gaining sufficient sales revenue, thus Tesla
may see a loss in profit. However Tesla can resolve this by increasing its workforce and
production, implementing productivity schemes, and decreasing expenditure until sufficient
profit is generated. In conclusion Tesla should be kept informed of any economic policy
changes, such as tax adjustments, economic growth, exchange rates and other factors that
