SWOT Analysis: Tesla Model 3
Tesla is one of the most widely recognized companies in the motor vehicle industry, although it also offers services such as solar panels, power battery packs, and financial services. The company as founded in 2003 by current CEO Elon Musk along with four other cofounders. Since its inception, the company has grown exponentially, reaching annual revenues of $24.5 billion in 2019. Because of its dominant position despite being a relatively new energy solutions company, Tesla has become the subject of multiple SWOT analysis. Companies use the SWOT analysis to examine how efficient its business model is based on both internal and external factors. Companies rely on the objective results of this analysis in making important decisions. The 2020 Tesla model 3 brings innovation into the motor vehicle industry as it is powered by electricity and has various other features not available in other companies. Just like any other motor vehicle model, Tesla Model 3 has different strengths and weaknesses, as well as external opportunities and threats.
Tesla Model 3 has several strengths that position it as a top choice for customers. The first strength is the fact that it powered by electricity, which means car owners will spend less money. This model needs 34kWh per 100 miles, and the average cost of electricity is $0.12/kWh. This is a much cheaper option compared to, say, a Toyota Camry that consumes 30 MPG at an approximate cost of $2.40 per gallon of gas (Eisler 39). Tesla Model 3 users will cut down on their gas bills significantly. A second strength of the Tesla Model 3 it the fact that it is an electric model. With the current levels of concern and awareness about climate change, the Tesla Model 3 is definitely the best choice for environmentally-conscious customers. The world is trying to cut down on emissions from fossil fuels, and electric vehicles are a step in the right direction. The Tesla Model 3 also features impressive acceleration speeds from 0-60 mph in 3.5 seconds. The car’s battery is located under the floor, allowing for more stability. The car also has a driver-assist mode, which is not found in other cars in the industry. The Tesla Model 3 is the cheapest Tesla model available, with the Standard Long Range selling from $41,190 (Mas 11). One weakness of the Tesla Model 3 is that it is quite expensive compared to other cars available in the market. Although its high price tag is due to the fact that it is an electric model, many prospective customers still find it to be out of their price range.
Tesla Model 3 has a wide range of opportunities that it can take advantage of. The first opportunity is that Tesla is already the world’s leading seller of electric cars, and it should capitalize on its popularity to advertise even more. The company should also expand into other markets such as Asia to gain a wider customer base, given the fact that it is already quite popular around the world. Because it is the cheapest Tesla yet, model 3 should advertise its lower price tag to include customers who might not afford the other high priced models. As a company, Tesla has a lot of confidence in the market, as indicated by its stock price more than doubling since the start of 2020 (Eisler 41). As a highly innovative company, Tesla attracts customers on the lookout for something new and something modern.
Tesla Model 3 also faces threats from outside the company. One of these is about its driver-assist features. The company has been the subject of multiple lawsuits where the autopilot features failed in case of an accident. If the number of cases continue, the company could face financial setbacks. Tesla Model 3 is electric, and it faces threats from other competitors, such as alternative fuel vehicles (McCain 4). For example, a hybrid vehicle is more affordable and allows users to choose which type of fuel they want to use. The self-driving mode is still a cause for concern to the public, as well as the lack of regulations for autopilot modes in vehicles such as the Tesla Model 3.
Tesla should work towards converting weaknesses into strengths and threats into opportunities. One of Tesla’s Model 3’s weaknesses is its high price point compared to its competitors and other market players. To change this into a strength, Tesla should leverage the advantages of the model, such as cheap fuel, as it is powered by electricity. It should also focus on the innovative and environmental-friendly features in advertising. Tesla faces stiff competition from other manufacturers of electric vehicles which are much cheaper than the model 3. To convert this threat into an opportunity, Tesla should focus on increasing efficiency in its models. For example, the company should perfect its driver-assist technology to eliminate any malfunctions and gain public confidence. As innovation is Tesla’s main selling point, the elimination of such issues will position it as one of the most reliable electric vehicles in the market.
In conclusion, Tesla model 3 is an exciting entrant into the electric-vehicle market. The main point of attraction for the model is the fact that it is cheaper than other Tesla models, along with environmental-friendliness. As an electric car, the Tesla Model 3 is the top choice for consumers looking to play a part in reducing climate change. Although Tesla model 3 is quite pricy, its unique and innovative measures live up to the expectations.
Eisler, Matthew N. “A Tesla in every garage?.” IEEE Spectrum 53.2 (2016): 34-55.
Mas, Santiago Mas. Tesla Motors. SWOT analysis and corporate strategy. GRIN Verlag, 2018.
McCain, Cody. “A Strategic Audit of Tesla, Inc.” (2019).