Case Study: Tesla in China. Background of the Study

Tesla in China
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Case Study: Tesla in China
Introduction
Tesla made its first international move by entering the Chinese market. The leading high-tech automobile company of United States anticipated considerable opportunities in the most significant global vehicle market. Although the first Tesla store in China opened in 2013, but the company entered the Chinese market in 2018 with the establishment of its production unit. Tesla faced colossal competition and challenges in the new market (Tesla 2019). Being a leader in automobile manufacturing, market share in the Chinese automobile industry was already held by local automobile companies. Tesla faced competition from both luxury car brands and economical auto firms in China.
The subsequent report presents a brief introduction and history of Tesla Motors. It assesses the challenges faced by Tesla under the leadership of Elon Musk. The paper also provides an external environmental analysis of Tesla in China.
Background of the Study
Tesla is a relatively new startup company as compared to other tech giants. Tesla’s move in the Chinese market is viewed as highly prospective and challenging at the same time because China is the largest market for Electric Vehicles (EVs) in the world also experience huge local competition, control of automobile market by policymakers (Lopez 2019).
Government policies and regulations imposed strict laws for foreign firms operating in China. The largest economy of the world made it necessary for international investors to form a partnership with local companies while sharing profits and technology transfer. But Tesla is the first wholly-owned overseas auto firm in the country (Isidore and Jiang 2018) with the objective of mutual benefits to both the parties.
History of Tesla
Tesla, Inc. was established in the year 2003 in California. The leading American high-tech automobile manufacturer produced electric vehicles with an objective of sustainable energy consumption. The technology company is focused on driving global transition to electric vehicles which ensure sustainability and a fast way in comparison to the fuel-run automobile ( HYPERLINK "/sites/panosmourdoukoutas/" Mourdoukoutas 2020). Tesla takes pride in innovative manufacturing, creative motor engineering, extensive R & D investment and high technology business model. The company is known for its modern designed cars and latest technology vehicles. The company has enormous growth potential due to the shift of economies towards sustainable and environmentally friendly automobiles. Tesla’s electric vehicles are fuel-efficient, contemporary and built on ‘Going Green model’.
Challenges Faced by Tesla Since its Founding by Elon Musk
Elon Musk is the co-founder and current CEO of Tesla Inc. He was appointed for an executive position in the year 2008, and since then the company has been facing severe challenges along with profits and success. Musk has been dealing successfully with the challenges due to his leadership skills which keep him motivated to look for the opportunities, make tough decisions and set high targets. The challenges faced by Elon Musk since he joined Tesla are explained below;
Layoff
The company continually follows the dismissal of its employees. 9% of its staff faced dismissal in 2018, and again in early 2019, 7% of the employees were suspended ( HYPERLINK "/author/mark-matousek" Matousek 2019). According to leadership, the decision was necessary to ensure the profitability of the company with a shift towards a low-priced model of automobiles. Employee layoff results in low motivation and performance efficiency of the firm.
Executive Departures
The executive turnover rate is high than usual in Tesla. The company experienced several events where senior leadership resigned from their job for several years now (DeBord 2016). In 2018 alone, the CFO of the high-tech automobile manufacturer along with Vice President international recruitment and general counsel, left the company. The departure of senior executive leadership has a severe consequence and affect overall business performance.
Legal Lawsuits and Investigations
Tesla has a regular encounter with lawsuits and legal charges filed against the company for several reasons ranging from the car crash events to violation of agreements. Other includes violation of labor laws and functioning of the vehicle (Kolodny 2019). These lawsuits cost a substantial financial burden over the company, which is already struggling for profits and revenues. In recent years, the accidents and product malfunctioning were attributed to its design defects and cost millions of dollars to the company instead of lawsuit payments.
Charging Problems with the Vehicles
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