Subject category:
Strategy and General Management
Published by:
Amity Research Centers
Length: 13 pages
Data source: Published sources
Abstract
With top-notch technology and hi-tech designs, Tesla Inc (Tesla), touted to be the ultimate disruptor in the global electric car industry. However, the company reported a Net Loss of USD709.6 million and burned almost USD745.3 million cash during the first quarter of 2018. The share of the company had also fallen sharply by 16% at the end of March 2018. In such situation, investors waited eagerly for the production numbers of Model 3, a mass market electric car considered to be a crucial factor for the long-term profitability of the automaker. According to experts, production challenges for Model 3, intensifying competition from rivals such as General Motors, Fiat Chrysler and Ford Motors who had deep pockets were some of the key factors that put Tesla under crushing pressure. Addition to this, quality issues, allegations related to workplace safety at Fremont, California assembly plant and departure of three senior executives also brought Tesla under fire. However, Elon Musk (Musk), CEO of Tesla was planning to oversee the production of Model 3 under his supervision. The company was also planning to hire more workers instead of putting much emphasis on technology for production. Tesla was also planning to emphasise on the workplace safety issues. However, problems of Tesla were mounting. Critics were raising serious questions about the future of Tesla and feared that the automaker might eventually go bankrupt. With this background, would Tesla be able to overcome the production challenges under the leadership of Musk? How the company would streamline its manufacturing facility? What strategies it would take to win the investors trust?
About
Abstract
With top-notch technology and hi-tech designs, Tesla Inc (Tesla), touted to be the ultimate disruptor in the global electric car industry. However, the company reported a Net Loss of USD709.6 million and burned almost USD745.3 million cash during the first quarter of 2018. The share of the company had also fallen sharply by 16% at the end of March 2018. In such situation, investors waited eagerly for the production numbers of Model 3, a mass market electric car considered to be a crucial factor for the long-term profitability of the automaker. According to experts, production challenges for Model 3, intensifying competition from rivals such as General Motors, Fiat Chrysler and Ford Motors who had deep pockets were some of the key factors that put Tesla under crushing pressure. Addition to this, quality issues, allegations related to workplace safety at Fremont, California assembly plant and departure of three senior executives also brought Tesla under fire. However, Elon Musk (Musk), CEO of Tesla was planning to oversee the production of Model 3 under his supervision. The company was also planning to hire more workers instead of putting much emphasis on technology for production. Tesla was also planning to emphasise on the workplace safety issues. However, problems of Tesla were mounting. Critics were raising serious questions about the future of Tesla and feared that the automaker might eventually go bankrupt. With this background, would Tesla be able to overcome the production challenges under the leadership of Musk? How the company would streamline its manufacturing facility? What strategies it would take to win the investors trust?

