Tesla Motors is a company that specialises in producing electric cars and their parts, founded by Elon Musk, who was an expert in this sphere. There are also Larry Page and Sergey Brin as investors and who are as well owners of the Google. The main goal of Tesla is to make electric cars available for medium price segment users; to decrease the dependance of the gasoline engines and as a result the pollution. And the objective of Elon Musk was to prove that it is possible to ride on the electricity.
Since the beginning of car supply to Spain on April, 2010, where were just two versions available, Tesla showed an increase in performance by 10 percent up until the end of the year where it started to slow down most likely because of non improvement on the Tesla’s side. However, the situation changed when in October, 2014, the company introduced a new option of the electric engine on the each axis as well as releasing two new models of the car. The concept of self-driving also made the sales in Spain to spike up, as this feature became legal.
Tesla Motors sees a future where cars with gasoline engines will be non-existent and that is why it’s doing it best to improve every year. Each improvement increased the sales of the company greatly, and it was clearly been seen, starting in 2013 with 25000 sales where model S was released in the market to 2014 where it reached 50000 mark. In 2015, the new model was produced with a name X, and in 2016 the number of sales of this model caught up to the previous model which already had 75000 sales by that time. The next model was introduced in the same year and it is expected to reach 100000 by the year 2018 where all of the models would have more or less equal amount of sales.
However, the potential threats should be taken to the account, as Tesla might have some problems with applying the electricity to its ideas. They were already been encountered in the manufacturing part, in the battery packs specifically of the both S and X models. It was acknowledged that they were insufficient and sales dropped simnifically because of that. The company managed to resume its production after rates decreased to 40 percent below demand.
The second problem is the rise of competition, even if the concept of electrical cars is rather new to the car industry, other companies are trying to adapt and get as much market share as possible. When Volvo decided to produce electric cars, more than fifteen percent of the Tesla’s stock was lost. And there are other major organisations who are willing to start the production of electric vehicles.
Because of this competition, Tesla is considered to be of oligopoly market structure, with the main competitors as Toyota and Nissan. The profit is easily attainable within the oligopoly since the small amount of firms is involved. In the oligopoly market, one of the main benefits is the ability to provide better goods and information, and Tesla Motors used this lasts years a lot, providing new models of the car each year in order to gain more market share. It also did a lot of advertising and provided more information to the customers.
However, Tesla as an oligopolistic company faced some difficulties within the market. One of them being fixed prices staying the same, which is not good in the competitive market. It will eventually force the customers to pay more for the goods and as a result they might switch to the competitors.