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on 15 April 2016

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Transcript of TESLA

Tesla Motors was founded on July 1, 2003 by Jeffrey B. Straubel, Elon R. Musk and Marc Tarpenning, a group of engineers in the Silicon Valley who wanted to show that electric cars can be better than standard gas-powered cars.

The company's name is inspired by Nikola Tesla, and is headquartered in Palo Alto, CA.

SWOT Analysis
Organizational Structure
Organizational Design
Tesla Motors utilizes a functional organizational structure because of the company’s small size and relative newness to the market. Tesla’s products have been developed from the various departments functioning in a knowledge sharing environment. The company encourages creative projects and team-based work, so that through coordination they can seamlessly produce industry leading products.

Their approach to product development allows the company to use a Knowledge Creation Model where the employees of their various departments- Design, Vehicle Engineering, Manufacturing, Business Development and Sales and Service- work together.

Since Tesla does not have product diversification, the company would not work as well if it tried a different organizational structure. The company’s platform of making innovative electric vehicles, which they direct market to the customers, fits with the functional structure as well.

Tesla’s choice to have direct customer marketing and sales without using dealerships helped to increase their use of the functional organizational structure. The design that Tesla’s CEO and his co-founders used within the company focused on the needs of the product as well as the needs of the teams making the product.

Globalization Affect

When Tesla Motors, a pioneer in electric-powered cars, set out to make a luxury roadster for the American market, it had the global supply chain in mind. Tesla planned to manufacture 1,000-pound battery packs in Thailand, ship them to Britain for installation, then bring the mostly assembled cars back to the United States.

But when it began production this spring, the company decided to make the batteries and assemble the cars near its home base in California, cutting more than 5,000 miles from the shipping bill for each vehicle.

“It was kind of a no-brain decision for us,” said Darryl Siry, the company’s senior vice president of global sales, marketing and service. “A major reason was to avoid the transportation costs, which are terrible.”

The world economy has become so integrated that shoppers find relatively few T-shirts and sneakers in Wal-Mart and Target carrying a “Made in the U.S.A.” label. But globalization may be losing some of the inexorable economic power it had for much of the past quarter-century, even as it faces fresh challenges as a political ideology.

Benchmarking Analysis
Rachelle Hernandez
Samantha Weisener
Nicolas Perez
Michael Lamas

Potential global sales
Demand of fuel efficient cars
People care more and more about environmental issues.
Large International Market Potential, Sales outside of the U.S., particularly Europe, Asia, and Canada: Tesla has been very successful in European markets, particularly Germany, and the company sees great potential in Asian and Canadian markets.
The growing support by governments across the globe for environmentally friendly vehicles in form of exemptions from duties
& other support.
Can use their battery technology in other areas, such as storing power from solar panels.
Whole world prepare to shift towards unconventional sources of energy.
Lowering gas prices
Gas fueled cars are cheaper
Plug-in Hybrid cars
Very Strong Competition. More and more auto manufacturers are releasing their own environmental friendly cars. Since these
companies are larger than Tesla Motors, they (not all) have more
financial resources
Electric vehicle related accidents may scare away customers. For
example, a fire in one of the batteries is generally front-page news.
Consumer behavior require changes for EV purchase.
Awareness of importance of EV is not well propagated.
High prices
Delayed premiere
Target market is small ( higher middle class business people who are environmentally friendly)
Tesla Motors are only selling electric cars, and most people still see it as a third option and are suspicious of electric cars.
Even though Tesla Motors created a chain of superchargers in North America, the infrastructure is not that much developed in other parts of the world.
Comparatively a new player in the market.

First to produce fully electric luxury car
Leading innovator
Strong brand image
Does not pollute- Unlike combustible engines, electric engines have less moving parts and are much cleaner to work with.Very quiet
Strong R&D dept., Innovation and good calibers like special forces (Since
the Special Forces are only recruiting the best, so does Tesla Motors).
Strong technological expertise in the area of electric transmissions & drive
Tesla Motors can design really good cars. The Model S won the 2013 Motor
Trend's Car of the Year award, which is a competition that began in 1949,
and the Model S might be the safest car ever according to crash tests.

Product Architect, Chairman,
JB. Straubel
J. Vijayan
D. Ahuja
CFO (Refiring)
D. O'Connell
VP Business Development
P. Carlsson
VP Supply Chain
Board of Directors
J. Guillen
VP WW Sales
Office Manager
Art Director
Country Store/
Mail Room
BMW Financial Review
Not only do Tesla cars go farther than the competition, they go much faster and also have more powerful engines than the others, which shows for the high cost.
Liquidity Ratios
Quick Ratio:
(Current assets-Inventories)/Current Liabilities
Tesla = .54
BMW = .77
Ford = 2.63
Current Ratio:
Current assets/current liabilities
Tesla = .99
BMW = .94
Ford = 2.79
(74.01M) - 2013
(294.04M) - 2014
(888.66M) - 2015
5.3B - 2013
5.03B - 2014
4.88B - 2015
7.16B - 2013
3.19B - 2014
7.37B - 2015
Financial Statement Analysis for Managers
Provides owners and managers with an understanding of the relationship between fixed and variable costs, volume of products manufactured or sold and the profit resulting from sales.
Contribution Margin
Allows managers to look at the percentage of each sales dollar remaining after payment of variable costs.
Considers the sales volume at which fixed and variable costs are even.
Operational Leverage
Compares the amount of fixed costs to sales
Financial Ratios
Expresses a mathematical relationship between two or more sets of financial statement data and commonly exhibits the relationship as a percentage.
Ford Financial Review
Tesla Profits
Greenhaus said. In the second quarter of 2013, the automaker made a profit per car of $1,941, and in 2014 it was even higher at a profit of $2,111 in 2014.

The latest figures from Q2 of 2015 show that Tesla loses exactly $4,144 per car.
Tesla Motors says it expects to be profitable on an adjusted basis in 2016, as sales of its Model S and Model X pick up steam, and says increased cash flow will enable it to invest $1.5 billion in new growth initiatives without borrowing outside capital.
Tesla's CEO, Elon Musk, also founded PayPal, SpaceX, Zip2, X.com, and the Musk Foundation.

Operational Processes and Procedures
Best Practices
Activity Ratio
Inventory Turnover
Total Sales/Average Inventory
Tesla = 2.58
BMW = 6.27
Ford = 13.89
Profitability Ratios
Profit margin on sales
Net Income/Sales
Tesla = -26.38%
BMW = 9.1%
Ford = 6.6%
Gross Margin
Gross income/Sales
Tesla = 12.9%
BMW = 18.92%
Ford = 15.9%
Return on assets (ROA)
Net Income/Total Assets
Tesla = -13.05%
BMW = 3.82%
Ford = 3.41%
Leverage Ratio
Debt Ratio
Total debts/Total assets
Tesla = 2.455
BMW = 1.374
Ford = 4.638
Chief Financial Officer
Chief Operating Officer
Chief Technical Officer
Executive Vice Presidents
Group Vice
Tesla Profile Details
Works Cited
About Tesla. (n.d.). Retrieved April 4, 2016, from https://www.teslamotors.com/about

Bayerische Motoren Werke AG BMW (Germany: Xetra). (n.d.). Retrieved April 1, 2016, from http://quotes.wsj.com/XE/BMW/financials/annual/cash-flow

Sato, K. (n.d.). The Next Ten Years Of The World In The Era Of Globalization And The Internet. Retrieved April 2, 2016, from http://www.huffingtonpost.com/katsuakisato/the-next-ten-years-of-the_b_4761714.html

Tesla Motors Inc. TSLA (U.S.: Nasdaq). (n.d.). Retrieved April 6, 2016, from http://quotes.wsj.com/TSLA/company-people

Tesla sold more than 50,000 Model S sedans in 2015, a new annual record. (2016). Retrieved April 5, 2016, from http://bgr.com/2016/01/03/tesla-model-s-sales-2015/
Tesla Motors uses exclusive technology, outstanding design and advanced manufacturing processes to create a new generation of highway capable electric vehicles.

For those of you who don't know about Tesla, we're going to show you why it was named the #1 Innovative Company by Forbes and their cars are one of the best to have.
"Our vision is to create the most compelling car company of the 21st century by driving the world's transition to electric vehicles."

"Our mission is not the safety of our vehicles, which can be easily replaced, but for the safety of our customers and the families they entrust to our cars and to accelerate the world's transition to electric mobility with a full range of increasingly affordable electric cars for all consumers."
Vision and Mission
Full transcript