Quantitative Analysis in Management Essay

EVALUATING THE VIABILITY OF TESLA’S ENGAGEMENT WITH INDONESIAN PARTNERS FOR EV BATTERY MATERIALS Name of Student Course Name of Professor University Date Evaluating the Viability of Tesla’s Engagement with Indonesian Partners for EV Battery Materials Tesla, a world-renowned value chain lead multi-national enterprise (MNE), proposes to acquire electric vehicle (EV) battery materials like nickel from Indonesia. The report provides an in-depth evaluation of this strategic project’s positive and negative aspects, opportunities, and threats. The report will provide sound recommendations supported by an analysis based on the GBE framework and credible evidence. The decision of Tesla to source EV battery materials from Indonesia demonstrates how crucial sustainable supply chain management is and how environmental issues will increase in the automotive industry in the later years. This report seeks to achieve this goal by delivering strategic introspection that can be used to continue Tesla as a leader in the marketplace. Overview of Tesla Tesla Key Businesses Tesla is well known as a trendsetter in the electric vehicle industry and proudly holds its place among the leading global automobile manufacturers. Established by Elon Musk in 2003, Tesla has transformed the market based on the simple concept of a sustainable and innovative approach (Wu, 2023). The main idea here is to create a dedicated organization that would spearhead the development of ultra-modern electric vehicles, which set new benchmarks in performance and focus on environmental sustainability. Tesla’s product range is vast, from the compact Model 3 to the luxurious Model S and Model X to the new Cybertruck and Model Y (Wu, 2023). All of these illustrate the company’s dedication to creating high-performing, environment-friendly substitutes for gasoline-powered conventional cars. Overview of the EV Battery Sector The core of the auto industry’s transition towards electrification lies in the EV battery industry, a key factor sparking the spread of electric vehicles globally. EV batteries are the core of electric vehicles, and they manage to power the vehicles on the roads (Carreon, 2023). Governments, along with the consumers’ focus on sustainability and environmental conservation, are fast rising; this has led to the growth in the number of people buying electric vehicle batteries. Tesla’s remission to sustainable energy assurance makes battery material sourcing more consequential. The EV battery is equipped with Lithium-ion cells and nickel, cobalt, and manganese as raw materials, which are crucial for an electric vehicle’s lifespan, performance, and environmental impact (Carreon, 2023). It, in turn, will have far-reaching consequences on the brand image, supply chain stability, and the ecological cost of Tesla in terms of EV battery sourcing. Tesla's Global Activities The company has a well-established global presence, operating plants, research centers, and sales networks on different continents. With its headquarters in Palo Alto, Calif, Tesla runs a global network of branches extending from North America and Europe to Asia and beyond (Ding and Lee, 2023). The first and most recognizable of those are the Gigafactories in Nevada, Shanghai, and Berlin, considered to be the flagships of Tesla’s efforts to scale up production and stay ahead of the technical curve on a global level (Ding and Lee, 2023). The company also goes beyond the primary area of automobile research and development by making significant strides in battery technology, autonomous driving systems, and renewable energy solutions. Tesla’s mission goes beyond electric cars, so it has established its own Tesla Energy division, which centers on solar energy generation and storage (Ding and Lee, 2023). The company thus remains at the forefront of sustainable innovation. Tesla’s operations are globalized and diversified. Thus, the strategic choice in sourcing EV battery materials is crucial (Ding and Lee, 2023). The ability of the company to manage the supply chain dynamics, eliminate the risks, and keep its green and sustainable mission over time will define its leadership in the sustainable automotive future. Describing the Issue Tesla’s Need for EV Battery Materials With the growing demand for EVs worldwide, Tesla must ensure they can get sufficient and sustainable battery materials. At the heart of this challenge are issues like scalability, affordability, and environmental friendliness (Lipman and Maier, 2021). The sourcing of high-quality battery materials that can match Tesla’s ambitious EV production targets and pledge to advance clean energy solutions is the element that verifies the critical role of EV battery materials in replenishing market demand (Lipman and Maier, 2021). EVs are considered the core product for Tesla, so the company’s capability to obtain materials for its batteries affects its ability to design automobiles that are produced in a highly efficient and competitive manner (Lipman and Maier, 2021). Elements, including the accessibility of raw materials, extraction prices, and geopolitical elements, impact how Tesla resolves its purchasing strategies and supply chain stability. Indonesia’s Potential as a Sourcing Destination Due to its rich natural resources and strategic geographical placement, Indonesia is a prominent choice for Tesla’s electric vehicle (EV) battery material procurement projects. The nation has some of the largest reserves of these valuable EV battery materials, including nickel, manganese, cobalt, aluminum, copper, gold, and silver (Lipman and Maier, 2021). These resources are distributed within specific regions of Indonesia, such as West Java, Irian Jaya, and East Kalimantan, which is beneficial for local sourcing. The nation’s vast amount of nickel reserves categorizes it as having the most prominent suppliers worldwide. Nickel, especially, is a critical element in making high-quality lithium-ion batteries, thus making it a key factor in the production of Tesla vehicles (Lipman and Maier, 2021). Alongside that, Indonesia has raw material availability and potential for its destination as a source. The country’s pledge to adopt eco-friendly mining standards and its commitment to environmental protection align with Tesla’s core values and the company’s sustainability goals. With the joint work of all Indonesian stakeholders and using Indonesia’s abundant natural resources, Tesla can maintain a stable supply chain of EV battery materials and promote responsible mining standards and environmental protection in Indonesia. Global Business Environment Analytical Dimensions Technological and Human Capital In Indonesia, the digital landscape and workers’ capacity are the key factors that help Tesla decide where to source its materials. While the EV sector is in constant development and has notched up a few wins in the field of battery technology, the availability of skilled labor and a robust technological infrastructure remains essential to enable the industry’s sustainable growth (Bawono, 2021). Tesla’s assessment should accordingly discern Indonesia’s actions to fulfill technological development and invest in human capital to cope with the rising demands of the industry (Bawono, 2021). The sophistication of skills coverage in manufacturing battery technology and research and investments in infrastructure, such as research institutions and industrial parks, are crucial in making Indonesia an attractive sourcing point for Tesla. Environmental Tesla is entirely in accord with Indonesia’s sustainable procurement strategy for EV battery materials, which emphasizes environmental protection first. The country’s need to explore its diversified natural resources inevitably asks for a strict framework of extraction regulations to avoid adverse environmental effects beforehand (Hidayat et al., 2015). To comply with all environmental protection, sustainability, and conservation regulations in Indonesia, Tesla has to set auditing campaigns to measure identical criteria practiced by other automobile industries and local community service providers (Hidayat et al., 2015). Tesla can be a reasonable basis for the region’s social and economic development, which comes hand-in-hand with preserving the Indonesian environment by ensuring responsible procurement policies and environmental regulations. Institutional/Legal The Institutional and legal framework in Indonesia is a critical element of the elective procurement strategy that connects the company to the materials required for battery manufacturing for electric vehicles. Compliance with regulations, protection of property interests, and provision of an efficient contract execution system should be prioritized when talking about business functioning (Mahy, 2013). The rating assessment for Tesla should encompass the board of a law system, which should be based on transparency, stability, and international law compliance (Mahy, 2013). The company will reduce legal risks and create a business-friendly environment, ensuring compliance with the Indonesian government’s prescribed rules and maintaining the company...