Tesla PESTLE Analysis - The Growth of Eco-Friendly Automobile Industry

26 Mar 2022 1513
The PESTLE Analysis of Tesla

TeslaInc or also known as Tesla Motors is an electric car manufacturer that originated in America. It was founded in the year 2003 and has seen phenomenal growth globally within the span of 15 years. This blog finds out exactly that with the help of Teslapestle analysis.

 “Don’t downgrade your dreams just to fit your reality. Upgrade your conviction to match your destiny.”

—Stuart W. Scott

Dreaming big is always a good idea. Even Stuart W. Scott would agree to it, when he said if you dream big, then you become big. If you begin with a small or minimal goal, you will completely exhaust yourself in achieving it and will be less excited about the larger goals. Set your goals higher than what is expected of you. This way, you will always be motivated and will definitely achieve the expectations, if not supersede them. It will also relieve you of the stress of not knowing what to do if you fail to meet the expectations of others.

Introducing Tesla: Sustainable Energy Enthusiast!

Tesla needs no introduction to be very honest. Who on this earth doesn’t know about TESLA? If it were up to Elon Musk, even the aliens would know about it. But still to paint the larger picture, here is what one cannot know!

Tesla is an innovative company that has been creating huge waves in the automobile industry. Since its beginning years, it has been this way. Every little detail about Tesla makes it to the headlines. The American manufacturer of electric automobiles, solar panels, and batteries for cars and home power storage has a very strong hold over the market. Here are some interesting facts about Tesla:

  • Tesla's market capitalization reached 641 billion U.S. dollars at the end of March 2021, over six times its market cap as of March 2020, at 96 billion U.S.dollars.
  • Tesla cars have the best software installed in them. This software makes them resemble and work like the electronics devices we usually see and use in our daily life(laptops, smartphones, tablets,etc.). that is the reason why these cars also have regular software updates and also come with sleep mode.
  • Tesla’s care model “ The Tesla Roadster (2020)” holds the record for being the fastest electric car in the world. It can go from 0 to 60 mph in just 1.9 seconds and0 to 100 mph in 4.2 seconds!
  • The National Highway Traffic Safety Administration (NHTSA)has awarded the Tesla models as the lowest injury probabilities. Those models are
  1. Model S: has the lowest injury probabilities
  2. Model X: has second-lowest injury probabilities

Not only that the Model 3 holds the record for being the safest car ever built.

  • The features and records of Tesla cars are not just limited to the automobile industry standards but they have transcended them all. Tesla has a car Model X that has a defensive mechanism installed inside to protect the passengers from any bio-warfare. Tesla has another Model S hat has the ability to keep any bacteria, allergens, or viruses present in the air away from itself.

These are a few things that make the company worth all the hype that has been created around it. It is not just any automobile company, but a futuristic one.

Here goes the Teslapestle analysis......

Exploring Tesla with the Help of PESTLE Analysis

  • Political Factors:

When one talks about political factors that can influence the working structure of any organization, it is how the government can influence them. The government holds power over these firms as it has the veto to create and pass regulations that these firms cannot override or ignore. Irrespective of the scale at which the organisation is operating, the government can externally influence them. It could be through tax policy, environmental regulations, trade restrictions and reform, tariffs, and also political stability. Because if any political insatiability occurs, the operations of every organization get interrupted, so, no one can think of operating smoothly with political unrest going on in their surroundings.

For Teslapestle analysis, political factors have been very favourable to its overall growth. As the U.S. government showed interest in renewable energy and electric vehicles. It wants to make a shift from traditional fuel vehicles to better and renewable energy vehicles. For the same reasons, Tesla was granted a $465 million low-interest loan from the Department of Energy.

Currently, Tesla is at the forefront of electric vehicle technology. It uses both electricity and gas to fuel its machines. They offer electric gas stations and the cars don’t use as much gas as other cars. In certain states, the government is also promoting the purchase of an electric car by giving incentives to buyers. Political factors for Teslapestle analysis seem like more opportunities.

  • Economic Factors:

Like Marx said, money is the base, and everything that is there is the superstructure that stands on the base of the economy. So if the base is unstable, the superstructure is sure to fall. Economic factors include economic growth or economic decline, interest, exchange, inflation and wage rates, minimum wage, working hours, unemployment (local and national), credit availability, and cost of living. All of these factors directly affect the health of an economy which in turn will affect the performance and working of a company. For example, an economic depression will definitely affect the finances of a company and its product pricing.

The economy has been bending its course towards boosting the growth of Tesla. In accordance with Teslapestle analysis, there has been a significant increase in the purchase of electric cars globally. In the US alone, they have become a trend. And the European and Asian markets are also showing promise. But there are certain fields on which they can work that are:

  1. working on decreasing the cost of its battery.
  2. decreasing the cost of renewable energy costs

They have been targeting the market that shows an interest in luxury cars, but targeting the middle class market would be a great idea too.

  • Social Factors:

Society plays a big part in any company’s success or failure. It is as huge as an economic factor or a political factor, because, in the end, the company stands on the same ground as a society and will have an effect on society. So, social or cultural factors like cultural norms and expectations, health consciousness, population growth rates, age distribution, career attitudes, health, and safety are major determinants for a company. If they want to target any specific customer group, they become more crucial from the marketing perspective. And the workforce for a company also originates from the members of society.

Society is comprised of people, and people today are way too interested in the idea of an electric car. This is a win-win situation for Tesla. Because people are emotionally invested in finding ways to be better. And Tesla pestle analysis discovers that the company fits right in. It is new, fashionable, high-tech, and environmentally sustainable.

  • Technological Factors:

Since the beginning of the human race, technology has been constantly developing. What was in style a month ago might change overnight with a tiny technological advancement. Innovation in technology influences the operations of a company in either a positive or negative way. Because it is not certain that technological advancement will definitely be favourable to the company, it can often turn out to be unfavorable too. Technological advancements refer to Artificial Intelligence, IoT, Machine Learning, Deep Learning, etc.

There is no competition for the level of technology that Tesla employs for its cars. It holds the records for being the safest cars to drive, the fastest cars, and the software with the most user-friendly interface.Technology helps it be on top and keep being on top. But that is not always true. Technology can prove to be a foe too. Because it doesn’t take time for technology to turn on humans, Teslapestle analysisgenerates concern for the same and mentions that the company has to keep track of it.

  • Legal Factors:

Legal factors can be both internal and external. From internal legal factors, one understands the new policies or regulations introduced by the company itself. External legal factors might include changes to legislation impacting employment, access to materials, quotas, resources, imports and exports, taxation, etc. There are also certain industry specific organizations that develop internal or in-industry trends and rules. just like the trade syndicates.

According to Teslapestle analysis, the rate at which company is expanding globally, it has to trade carefully with the legal systems across the globe. It can become a huge success globally if done the right way. Tesla has the following opportunity:

  1. Expanding international patent protection
  2. Energy consumption regulations

Tesla should move forward with full caution in the legal department or else it will create legal issues and take more time to expend globally.

  • Environmental Factors:

This is a factor that is very important given the condition of planet Earth. It is something that a morally responsible company chooses to adopt on its own and others have to do in the fear of environmental-friendly organizations. Environmental factors involve the way a company affects the environment, or ecosystem, and its surroundings. Waste disposal rules, environmental protection legislation, and energy consumption regulations are among them.

Some industries have to be, and actually should be, more careful with these factors because of their operational fields. These industries include tourism, farming, agriculture, etc.

This is the best selling point for the company according to Teslapestle analysis. Its entire mission is in favor of being eco-friendly. The cars are marketed as eco-friendly and environmentally sustainable. The only concern here is that the company should make sure that it abides by all the international environmental regulations and has the intent of reducing the carbon footprint further.

Get the Help of an Expert to Further Understand the Tesla PESTLE Analysis

Why is pestle analysis considered the best method of analysis for Tesla? Because like Yoko Ono said. "A dream you dream alone is only a dream. A dream you dream together is reality." PESTLE focuses on it . The togetherness of the external environment is the key. Even after going through this blog, if you face any problem with the Teslapestle analysis, you can reach out to the experts at Assignment Desk and they will help you with it. Not only that these experts can help you with a number of other academic problems of yours. Here is why you should consider taking help from these experts:

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