Competitive Advantages of Tesla

The purpose of this paper is to answer questions about Tesla’s new electric car. The questions pertain to how Tesla can create competitive advantages by bringing battery production in-house, how producing its own batteries impact management, and how buying SolarCity impacts the business strategies.

By creating battery in-house, this will cut down the middle man, meaning that the company will be building all of the batteries on its own and through its private company, so they will not have to purchase it from other suppliers.

In return will cut down costs and make the electric car more affordable. Also, if they are creating their batteries, then they do not have to compete with any other companies. This can also lead to a monopoly, which is when a company has complete control and trade is in their hands.

The company plans to create an establishment as Henry Ford did in the 1900’s. Henry Ford built his assembly line, which made the Model T more affordable to the customers.

This was because they were made in the states and they did not have to pay the middleman because everything was being made by one person and in one place. Another advantage of the assembly line is that it would cut the time it takes to build this car because you are not waiting for parts to be shipped from other places; everything is being built in one place. This will make it possible for the mass production of electric cars to take place because they can produce more in a shorter time frame.

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When you do not have a supplier, then you do not have to pay an extra fee to have someone else make the product.

Furthermore, this would help to cut cost by mining all the elements within the United States, which would reduce shipping costs and allow the United States to use its elements. This in return would increase jobs. Buying SolarCity is a good strategy because it will open up other opportunities and jobs as well as more supporters of the building of the car. Additionally, having a battery operated car along with solar powered objects leads to less pollution, and in return, they are more likely to get funding from environmentally friendly organizations to help with trial and error projects. This would also give them more money to work with the car. In contrast, the only disadvantage I see is the current SolarCity debt. According to Danielle Muoio, ” Tesla will acquire SolarCity’s $3+ billion in debt.” (Muoio, D. (2016).

In conclusion, creating their batteries, cutting out the middleman, mining their elements, creating the assembly line, and buying SolarCity have an array of advantages, yet still poses a risk because it takes a lot of elements to build a battery. According to Contemporary Management,” it takes 7,000 batteries cells to make the Model 3 to have enough density to gain enough power to reach the miles needed to run the car properly.” (Jones & George, 2011/2018, p. 300). Even though there are still bugs that need to be worked out, I cannot see them manufacturing enough of these cars by the deadline. There are too many variables affecting the result, and it needs more research, time, and trials.