Cover page

Strategic Analysis of Tesla

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Contents
1. Introduction ......................................................................................................................................... 4
2. Internal and External Analysis of Tesla ........................................................................................... 7
2.1. External Analysis of Tesla .......................................................................................................... 7
2.1.2. SWOT Analysis of Tesla ......................................................................................................... 8
2.1.3. PESTEL Analysis of Tesla ..................................................................................................... 8
2.2. Internal Analysis of Tesla ............................................................................................................... 9
2.2.1. TESLA VALUE CHAIN ANALYSIS ................................................................................... 9
Joint Problems Tesla will face in Entering Foreign Countries ........................................................... 9
3. External Environment Analysis 0f Three Countries where Tesla Penetrated ............................ 11
3.1. Tesla’s Entry into Indian Market ................................................................................................. 12
3.1.2. Challenges Faced by Tesla while Entering Indian Automobile Market .................................... 12
3.2. Tesla’s Entry into China Automobile Industry .......................................................................... 14
3.2.1. PESTEL ANALYSIS OF CHINA AUTOMOBILE MARKET ....................................... 14
3.2.2. Challenges Faced by Tesla in Entering China Automobile Market ....................................... 16
3.3. External Environment Analysis of Turkey Automobile Market .............................................. 17
3.3.1.PEST Analysis of Turkey Automobile Market ......................................................................... 17
3.3.2. Challenges Faced by Tesla in Entering Turkey Market.......................................................... 18
4. Analysis of Different Entry Decisions ............................................................................................. 18
4.1. Analysis of Competitive Forces ......................................................................................................... 19
4.2. Competitive Analysis of China Automobile Industry ..................................................................... 20
5. Analysis of Company – Product –Placement in International Market (4P’s) ............................. 21
6. Foreign Market Entry Strategies..................................................................................................... 21
6.1. Analysis of Different Entry Decisions .......................................................................................... 21
6.2. Analysis of Competitive Forces .................................................................................................... 22
7. Conclusion and Recommendations.................................................................................................. 22
REFERENCES .......................................................................................................................................... 23
APPENDIX 1................................................................................................................................................. 25
External Forces Analysis of Tesla ............................................................................................................... 25
Appendix 2:................................................................................................................................................. 27
Competitive Analysis of Tesla .................................................................................................................... 27
Appendix 3:............................................................................................................................................. 27
Porter 5 Forces Analysis of Tesla ........................................................................................................... 27

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 Appendix 4:............................................................................................................................................. 28
4P’s of Tesla ............................................................................................................................................ 28
Appendix 5:................................................................................................................................................. 29
PEST ANALYSIS OF TURKEY AUTOMOBILE MARKET ................................................................................. 29
APPENDIX 6: ............................................................................................................................................... 30
SWOT ANALYSIS OF TESLA ......................................................................................................................... 30

Figure 1 PESTEL Analysis of Tesla ............................................................................................................. 8

Figure 2 Value Chain Analysis of Tesla ....................................................................................................... 9
Figure 3 an estimate of Electric Vehicle sales in Major Countries ............................................................. 11
Figure 4 Automobile Market Situation in India .......................................................................................... 12
Figure 5 Future of Electric Vehicle Sales in India ...................................................................................... 13
Figure 6 China's future sales in EV automobile industry ............................................................................ 16
Figure 7 Turkey's roadmap for flourishing EV industry in Turkey ............................................................... 17
Figure 9 EV Sales in China ......................................................................................................................... 20
Figure 8 PORTER 5 FORCES ANALYSIS OF TESLA............................................................................ 28

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1. Introduction
Tesla was founded by ELON Musk and Marc Tarpenning in USA and since 2003, it has
been striving to contribute in the making of clean and pollution free environment through
its electric vehicles. During 2008 to 2012, Tesla manufactured its first product named Tesla
Roadster. The major factor that makes Tesla stand apart from other automobile
manufacturers is its battery operated vehicles that do not require any kind of fuel to run its
engine. These battery operated engines are the root cause behind the high price of Tesla

4
vehicles and the only reason behind its low sales. But in developed countries like China,
USA governments are taking interest in supporting the sale of these EV in order to sustain
a clean and environmental friendly atmosphere in their country.
This report has been made to elaborate the distinct marketing and market entry strategies
of Tesla and what sort of challenges it faces in entering foreign markets. A step by step
evolution of Tesla vehicles can be seen in the following drawn chart as per Andrew Greiner,
I. S. T. B., (2019)

https://www.slideshare.net/TimothyBrilhante/tesla-motors-presentation-51182461

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https://www.slideshare.net/TimothyBrilhante/tesla-motors-presentation-51182461

6
 https://www.slideshare.net/TimothyBrilhante/tesla-motors-presentation-51182461

https://www.slideshare.net/TimothyBrilhante/tesla-motors-presentation-51182461

2. Internal and External Analysis of Tesla

2.1. External Analysis of Tesla

According to 1, T. B., (2016), the future of vehicle industry rely greatly on the external forces that
affect the overall working of any company. As far as Tesla is concerned economic growth is the
major concern that has a tendency to influence the purchase behavior of target customers to a
greater extent. GDP is predicted to grow smartly and most of the future earning is detected to be
generated from penetrating into Asian countries. SWOT and PEST analysis are the key indicators
of the external forces that might affect any company’s business. The company’s strengths,

7
weaknesses, outside threats and opportunities are the factors that moderate the performance of any
company. Let us have a glance at the SWOT analysis of Tesla.

2.1.2. SWOT Analysis of Tesla

(See Appendix 6)

Further external analysis of Tesla can be done by its PEST analysis, let’s have a glance at the
following figure which will identify the external factors that may affect Tesla’s performance.

(To check deep insight of Tesla‘s external force analysis, see appendix 1 and 2)

2.1.3. PESTEL Analysis of Tesla

https://slideplayer.com/slide/12075515/

Figure 1 PESTEL Analysis of Tesla

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2.2. Internal Analysis of Tesla

As per Alice, H. C. –. P., (2017), internal analysis of Tesla can be done by going through the Value
Chain analysis of this automobile giant. This analysis will help in examining the internal resources
and capabilities of Tesla and judge that how effectively this company generate returns from these
resources. The following figure will help in understanding the Value Chain Analysis of Tesla.

2.2.1. TESLA VALUE CHAIN ANALYSIS

Logistics Out Marketing

Production bound
Inbound Unit WOM
Logistics
In-house Product quality Superchargers
productivity 18 Personal
Expertise level Stores Company CEO
Giga factory website
integration multiple
Multiple campaigns
robot usage showrooms
Supplies
reprograming online celebrities
services endorsement

Figure 2 Value Chain Analysis of Tesla

Tesla has been engaged in developing high profile products with the application of latest
technology. While improvising their value chain, Tesla always keep the customer’s services value
on the top priority. This company holds an impressive technological portfolio and introduce
technology based innovation in order to keep the vehicles at consumer friendly prices.

Joint Problems Tesla will face in Entering Foreign Countries

9
Tesla’s decision regarding entering different foreign countries is already creating much
challenges and future problems will also be the same as mentioned below;

 High Costs and Substitute’s Threats

According to Blog, T. I. B., (2017), most of the electric sports cars manufactured
by Tesla are highly expensive, though it has made a strategy of entering any new
market with relatively cheaper cost vehicles but this target has not been achieved.
Vehicles run by fuel are obviously sold with reasonably lower prices and in such
competitive environment where buyers will rely on buying low price vehicles, the
competition has become tough for Tesla. According to a survey, European buyers
are willing to pay approximately $30,700 to purchase a new fuel driven vehicle as
compared to Tesla’s Model X costs $80,000.
Besides this due to its high manufacturing costs, Tesla is still not able to establish
its plant in any of the under developed countries.

 Acquisition Issues and Creating Joint Ventures Problems

As explained by Kauerhof, A., (2017), accessing a foreign market to introduce a
product is not as simple as it seems, for getting a rapid acquisition in a foreign
market, a company has to look for joint ventures with an already flourishing
industry in that country. This kind of joint venture is not available for Tesla because
the countries it want to approach do not possess any local joint venture that deals
in electric vehicles.

 Limited Number of Stores and Scarcity of Supercharges

Tesla owns only 164 stores outside USA and the general reason behind that is lack
of people’s interest in EV companies because of their heavy price structure.
Moreover, the vehicles manufactured by Tesla require proper recharging facility to
run its batteries and installing battery recharging plant is not a low cost project.
Instead huge finances are required to establish supercharge plant and the
unavailability of these plants in most of the countries is the major challenge faced
by Tesla in expanding its span of services.

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3. External Environment Analysis 0f Three Countries where Tesla Penetrated

Figure 3 an estimate of Electric Vehicle sales in Major Countries

https://www.visualcapitalist.com/electric-vehicle-sales/

With the saturation in local markets and with an ambition to expand the span of its production
and sales in international market, Tesla has decided to switch to different markets across the
world where it can earn maximum revenue and can have an opportunity to grow. Kamkoum,
C., (2017), stated that though it is a challenging step for an innovative company like Tesla but
to attain utmost heights of success a company has to take the first plunge. Here is a brief
description of Tesla that how this multi-national company tried to enter different countries like
India, China and Turkey and tried to penetrate into the already existing automobile industry

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 where it certainly faced immense competition because the existing automobile giants were
already enjoying a large market share. Let’s have a bird’s eye view of Tesla’s expected
challenges while planning to penetrate into these markets.

3.1. Tesla’s Entry into Indian Market

Tesla CEO has decided to touch the Indian market by 2019 while keeping in view all the pros
and cons of entering this huge economy country in the continent Asia. Here are some of the
facts and figures that will depict that penetrating into India is a wise decision by this company.

7 -9% boost in
growth rate in
recent year

healthy GDP
growth rate of by india going to get
7.9% with 5.5% the 3rd largest
share made by auto market in
automobile near future
industry

INDIAN AUTOMOBILE
MARKET

8 to 10% growth in an expoected 42%

the automobile to 21% increase in
manufacturing luxury car market
industries by 2019

aiming towards
10% share in
luxury market
domain by 2020

Figure 4 Automobile Market Situation in India

3.1.2. Challenges Faced by Tesla while Entering Indian Automobile Market

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Though Indian automobile market is an interesting growth expansion option but entering Indian
market will arise various challenges for Tesla which are mentioned below;

https://chargemiles.wordpress.com/2019/01/12/future-of-electric-cars-in-india/

Figure 5 Future of Electric Vehicle Sales in India

 Kashyap, K., (2017), Declared that Indian potential automobile buyer is more concerned
with price affordability while making a purchase decision and environmental friendly
vehicle is of least interest for them. With a decline in diesel price, buyers are more attracted
towards buying diesel consuming vehicles instead of high priced electric vehicle, so need
if the day is that Tesla has to reduce its operational costs to minimum.
 The crest and troughs in the financial structure of Indian economy leaves long lasting
effects on automobile industry sales and growth.
 Expected growth in sales of electric cars in India is expected to be 35% of total vehicle
sales till 2040 which is a long period to wait for Tesla

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  Electric vehicles manufactured at Tesla require EV rechargeable stations or recharging
devices at home. So, to flourish the sales of EV in India, the driver must have access to
personal recharger or battery recharging stations which can be a great initial barrier for
Tesla. Tesla has announced to establish a Giga Factory for battery plant in India to
overcome this expected barrier
 Rough and non-carpeted roads in India are another barrier for a smooth drive of Tesla EVs
and to overcome this Tesla has to attribute its vehicles with air suspension system
 Moreover, government factors like additional tax and subsidiaries, issuance of warranty
can be another challenge for Tesla.

3.2.Tesla’s Entry into China Automobile Industry

As depicted by Engle, J., (2018), China is the second largest growing economy of the world and
the future prospects of automobile industry in this country are also very attractive. Tesla’s plan to
penetrate in this market is based upon the dynamic future of China automobile industry. Though
the automobile industry of China is completely captured by the thirteen government owned
companies but still there is much space for the outside companies to penetrate and flourish their
business there. PESTEL analysis of China automobile industry will elaborate future scope of Tesla
in this country.

3.2.1. PESTEL ANALYSIS OF CHINA AUTOMOBILE MARKET

POLITICAL ECONOMIC SOCIO-CULTURAL

 Government support  Speedy economic  China has diversified

for automobile R &D growth quite favorable culture and buying
projects for automobile trends in each culture
industry are different

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  Offers intellectual  Increase in disposable  “Guanxi”, the code of
property rights to personal income business ethics in
investors  According to CHEN, China are entirely
 But lack of democracy Q., (2001), World’s different from
that is a question mark automobile giants like Western and European
for business owner’s Ford, GM world
sustainability participation has made  Automobile industry
it a competitive market taking more interest in
 joint ventures

TECHNOLOGICAL ENVIRONMENTAL LEGAL

 Government provides  Government  Chinese government
incentive to local encouraging to non-serious attitude
automobile industry, manufacture towards implementing
thus encouraging local environmental legal allegations in
brands to flourish friendly vehicles automobile industry
 Government interest
in investing more to  Trying to reduce fuel  Foreign companies
implement latest consumption level have to face various
technology in legal offenses by the
automobile  As per government.
manufacture BREKELMANS, M.
 Every effort is made to et.al., (2014), financial
provide environmental assistance is provided
safety by producing to companies
hybrid vehicles introducing
environmental
friendly vehicles

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3.2.2. Challenges Faced by Tesla in Entering China Automobile Market

https://www.weforum.org/agenda/2018/05/china-surge-electric-vehicle-sales/

Figure 6 China's future sales in EV automobile industry

The above figure shows that China is a favorable market for electrical vehicle producers in near
future also the government is supporting local and international automobile companies to invest in
producing environmental friendly vehicles. This will create a great competitive environment for
the car manufacturing industries like Tesla. Wrong perception about battery operated vehicles is
another challenge for Tesla as it has been perceived by the open market consumers that EV are
very difficult to be recharged. Tesla has to run awareness campaigns related to easy charging of
EV batteries. Moreover, Tesla has to invest huge capital in installing battery recharging plants in
China.

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3.3.External Environment Analysis of Turkey Automobile Market

Tesla’s
Entry into
Turkey

Figure 7 Turkey's roadmap for flourishing EV industry in Turkey

http://www.frost.com/prod/servlet/market-insight-print.pag?docid=213387241

Tesla’s decision to penetrate in to Turkey automobile market created lot of challenges for this
company. To evaluate Tesla’s next strategies in Turkish market, first of all we will take a glance
at the external forces analysis of Turkey automobile market.

3.3.1.PEST Analysis of Turkey Automobile Market

(See Appendix 5)

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3.3.2. Challenges Faced by Tesla in Entering Turkey Market

Tesla has to face much challenges while entering the European market as most of the countries
lack stores and Tesla galleries. (Hurriyet, 2018) explained that Tesla has to arrange for its stores
inauguration in major cities of Turkey and also has to make arrangements for installing battery
recharging plants. As the demand for electric vehicles is much greater in Turkey as compared to
other countries, Tesla should make all arrangements to facilitate the market demand there.

As per Yuying(Amelia) et.al., ( (1, 2016)2018), Tesla also need to increase their after sales services
in this country because once becoming an owner of this EV, the users’ finds difficulty in accessing
any service stations there.

4. Analysis of Different Entry Decisions

Tesla’s entry decision in the foreign market comprises of almost the same strategies it implements
to enter in the US market. Here’s a brief about their market entry decision formula;

 Direct Selling
Tesla feels comfortable in selling directly to the potential customers and to achieve this
purpose Tesla rely on opening its stores and showrooms in different countries and selling
via its website. Okonkwo, P. A., (2016)

 Certified Pre-Owner Program (CPO)

This is the strategy Tesla applied in many foreign countries like France, Sweden, and
Canada and has decided to continue the same strategy in other countries in future.

 Diversification
According to Rrustemi, V., (2017), to enter in the foreign market, Tesla also implemented
related diversification by collaborating with some famous brands like Toyota, AG, and
Panasonic etc.

 Reducing Costs while Entering Foreign Market

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 As described by Hust,(2017), Tesla considers it as their first priority to minimize its
switching costs because while entering any foreign country, Tesla faces vague local
response. This limited response can be improved if Tesla makes every effort to minimize
the switching costs for its potential customers. Tesla also tries to practice direct to customer
distribution with the help of internet technology. It assures to maintain a customer centric
supply chain system so that its customers can benefit from multiple charging options
provided by the company.

4.1. Analysis of Competitive Forces

To analyze the external forces situation of Tesla, it is necessary to conduct its Porter Five
Forces analysis. Here’s how Tesla is facing challenges from the external competitive
forces;
(see appendix 3)

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4.2. Competitive Analysis of China Automobile Industry

Figure 8 EV Sales in China

https://www.forbes.com/sites/niallmccarthy/2018/06/01/electric-car-sales-are-surging-in-china-
infographic/#78ffbf1cd1f7

Wang, Y., (2018) stated that the position of EV sales in China has increased lot since the last few
years which shows that people of China are much into switching towards the environmental
friendly vehicles. A comparison of EV car sales in China in the year 2019 and 2018 can elaborate
the rising trend of buying EV in China.

(For viewing Tesla’s marketing strategy and competitors in China automobile market see
appendix 3).

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5. Analysis of Company – Product –Placement in International Market (4P’s)
The marketing mix of any company is the major component that helps it in standing apart
from its competitors with winning colors. A compete and [perfect marketing mix of Tesla
will help this company in presenting its product and services more diligently across the
globe. The following figure will elaborate that how Tesla formulate its product, pricing,
promotion and placement strategies.
(To see 4P’s of Tesla see appendix 4)

6. Foreign Market Entry Strategies

6.1. Analysis of Different Entry Decisions

Tesla’s entry decision in the foreign market comprises of almost the same strategies it implements
to enter in the US market. Here’s a brief about their market entry decision formula;

 Direct Selling
As depicted by Sharma, S., (2016), Tesla feels comfortable in selling directly to the
potential customers and to achieve this purpose Tesla rely on opening its stores and
showrooms in different countries and selling via its website.

 Certified Pre-Owner Program (CPO)

This is the strategy Tesla applied in many foreign countries like France, Sweden, and
Canada and has decided to continue the same strategy in other countries in future.

 Diversification
Timmer, H. R., (2009) declared that to enter in the foreign market, Tesla also implemented
related diversification by collaborating with some famous brands like Toyota, AG, and
Panasonic etc.

 Reducing Costs while Entering Foreign Market

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 As described by Hust,(2017), Tesla considers it as their first priority to minimize its
switching costs because while entering any foreign country, Tesla faces vague local
response. This limited response can be improved if Tesla makes every effort to minimize
the switching costs for its potential customers. Tesla also tries to practice direct to customer
distribution with the help of internet technology. It assures to maintain a customer centric
supply chain system so that its customers can benefit from multiple charging options
provided by the company.

6.2.Analysis of Competitive Forces

To analyze the external forces situation of Tesla, it is necessary to conduct its Porter Five
Forces analysis. Here’s how Tesla is facing challenges from the external competitive
forces;
(See appendix 4)

7. Conclusion and Recommendations

Tesla is one of those US based automobile industry that is continuously trying to serve the nature
by manufacturing environmental friendly vehicles. It has introduced innovative idea of electric
engine vehicles that do not require any fuels that are an ultimate source of creating pollution n
environment. Implementation of latest technology and extra expenses on the R & D department of
this company has added more to the ordinary costs of manufacturing the EV engines. The
operational costs have exceeded much which resulted into quite expensive electric vehicles.
Starting from the initial experiment of manufacturing electric engine, Tesla has now introduced
latest models in its product line and has approached towards the other high profile automobile
markets across the world.

China, Turkey and India are some of the examples where Tesla has stepped it and this report has
clearly depicted the entry strategies of Tesla for all three countries individually. The main
challenge Tesla is facing in capturing vast share in foreign markets is the high costs of its EV.

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More investment in the R&D department of Tesla is recommended so that it can research and
derive new solutions to elevate its sales in other countries. Introduction of latest technology is
required so that Tesla can produce competitive products that can imply an image of the best
alternate to fuel running vehicles. General public awareness about a clean environment and
government’s involvement in encouraging companies who produce environment friendly products
is a great hope for Tesla’s bright future.

REFERENCES
1. 1&Hust, J., 2017. A REPORT ON TESLA’S INTERNATIONAL EXPANSION STRATEGY.
[Online]
Available at: https://jackandhust.files.wordpress.com/2017/10/strategic-report-tesla.pdf
[Accessed 18 May 2019].
2. 1, T. B., 2016. The Internal and External Analysis of Tesla Motors' Competitiveness. Korea
circulation management time, 19(4), pp. 63-73.
3. Alice, H. C. –. P., 2017. INTERNATIONAL Business Strategy, s.l.: s.n.
4. Andrew Greiner, I. S. T. B., 2019. THE HISTORY OF TESLA AND ELON MUSK: A
RADICAL VISION FOR THE FUTURE OF AUTOS, s.l.: CNN Business.
5. Anon., 2017. INTERNATIONAL BUSINESS STRATEGY, s.l.: s.n.
6. Blog, T. I. B., 2017. THE FIVE BASIC MARKET ENTRY MODELS TO EXPAND YOUR
BUSINESS INTERNATIONALLY. [Online]
[Accessed 8 May 2019].
7. BREKELMANS, M. and CHEN, L., 2014. China's Automotive Aftermarket: A
StrategiOpportunity. China Business Review, , pp. 2-2
8. Byun, Jae-Woong, 2016. The Internal and External Analysis of Tesla Motors'
Competitiveness. Research Gate, August, pp. 3-9.
9. CHEN, Q., 2001. Review of China’s Automobile Industrial Development, draft report.
[online]. Place of pub.: Publisher.

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10. Engle, J., 2018. What Is Tesla's China Strategy?. [Online]
Available at: https://seekingalpha.com/article/4186397-teslas-china-strategy
[Accessed 19 May 2019].
11. Hurriyet, 2018. Tesla to launch in Turkey in 2018, CEO Elon Musk says. Daily News, 11
May.
12. Jie TANG, J., 2016. Battery driving green living -Mrketing Plan of Tesla in China, s.l.: s.n.
13. Kamkoum, C., 2017. TESLA International Business Strategies, s.l.: s.n.
14. Kashyap, K., 2017. Why Tesla Decided To Wait Another Year Before Entering India.
Forbes, 21 August, pp. 1-5.
15. Kashyap, K., n.d. Why Tesla Decided To Wait Another Year Before Entering India.
16. Kauerhof, A., 2017. Tesla Motors Inc. Market Entry Strategy in Germany. s.l.:Grin
Publishing.
17. Okonkwo, P. A., n.d. International Market‐Entry Decision Models: How Important are
they?. Emerald Insight, 6(2), pp. 62-68.
18. Rrustemi, V., 2017. Entry marketing strategy of SAAB car. Journal of Knowledge
Management, Economics and Information Technology, January, 7(1), pp. 13-15.
19. Sharma, S., 2016. The Tesla Phenomena: A Business Strategy Report, s.l.: s.n.
20. Timmer, H. R., 2009. Making better market entry decisions, Netherlands: s.n.
21. Wang, Y., 2018. Tesla Will Be Challenged Like Never Before In China -- Here's Why.
Forbes, 27 August.
22. Weebly, n.d. Tesla Motors. [Online]
Available at: https://teslaresearchproject.weebly.com/internal-external-analysis.html
[Accessed 19 May 2019].
23. Yuying(Amelia) and Qingrun(Raina, 2018. TESLA’S INTERNATIONAL EXPANSION
STRATEGY. Global Marketing Insights, pp. 1-4.

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APPENDIX 1

External Forces Analysis of Tesla

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26
https://www.slideshare.net/nkhattab/tesla-strategic-management-final-
30084939?next_slideshow=1

Appendix 2:

Competitive Analysis of Tesla

https://www.slideshare.net/JieTANG3/tesla-marketing-plan-in-china-by-janet-tang

Appendix 3:

Porter 5 Forces Analysis of Tesla

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 COMPETITION
lower switching costs
strong agressiveness
of existing firms
limited number of
firms

BARGAINING PIWER
OF SUPPLIERS CUSTOMER'S
adequate forward BARGAINING POWER
integration
medium sized
PORTER reduced purchase
volume
suppliers
medium supply level
FIVE FORCES low switiching costs

ANALYSIS OF
TESLA
THREAT OF NEW
Threat of substitiutes ENTERENTS
moderate presence of higher brand
substitute manufacturing costs
substitutes performance expenses in conducting
limited switching costs business
higher scale economy

Figure 9 PORTER 5 FORCES ANALYSIS OF TESLA

Appendix 4:
4P’s of Tesla

PRODUCT PRICE
 (Jie TANG, 2016) explained that  Fixing affordable pricing
Tesla experiences middle to higher  High profile market
end market situation  Affordable prices made possible by
 Model S investing on advanced technology
 Model X (Luxury car market) thus reducing operational costs
 Commercial use vehicle

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 PLACE
 Entering the metropolitan cities
 Switching towards other main
cities and foreign markets in Sets personal supply chain in China market
developing countries
Appendix 5:
PEST ANALYSIS OF TURKEY AUTOMOBILE MARKET
POLITICAL & LEGAL FACTORS
 Higher sales taxes
 Total share of sales tax ranges
from 19.2% to 117.1%
 Weak legislation on vehicles due
to technological changes
 National-income per capita and
personal car per head is below
international average
 Lack of adequate legal
background in the automobile
industry (Hurriyet, 2018).
SOCIAL & CULTURAL FACTORS
PRODUCTION
 Started with maintaining
partnership with automotive giants
to capture more share
ECONOMIC FACTORS
 Perfect environment for an automobile
company on economic and socio-cultural
basis
 Favorable market for the installation of EV
industry
 Low inflation level and easy and affordable
car loans issued by bank
 Bank offering funds to buyer and seller of
automobile industry
 Attractive labor costs
 High expertise of Turkey in automobile
industry
TECHNOLOGY FACTORS
 There is much scope for the EVs in
Turkey’s competitive automobile market
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  Environmental friendly
government is a plus point for EV
industry
 Installation of green houses to
enhance clean environment
 Public transport and taxi owners
are the best candidate for EVs
APPENDIX 6:
SWOT ANALYSIS OF TESLA
STRENGTHS
 Outsourcing secondary parts
 A strong R&D department
 Highly productive battery introduction
 Power train
 Application of Lean Management
System
 A competitive and supportive internal
environment
 Strong investors
 A well- structured distribution system
OPPORTUNITIES
 People’s growing awareness regarding
electric cars (Byun, Jae-Woong, 2016)
 Ecological supremacy of electric motor
vehicles in near future
 Investments from public sector to develop
infrastructure
 Support from government sector through
offering rewards and incentives for those
showing improvements in IT field.
WEAKNESSES
 Lacking in liquidity
 Huge debts
 Failure attempts to attain cost reduction
and lowering production costs
 Lacking in manufacturing capacity to
meet increased demand
 Lacking in developing brand
recognition
 Rely more on supplier may lead to
failure
 Still struggling to create brand image
against the competitors Ford and GM
THREATS
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 ‘peak oil pressure’ across the globe
 Government interest in infrastructure
 Global increase in petroleum prices
may enforce people to switch to
electric cars
 Awareness about global warming and
pollution in general public
 Government policies to support
environmental friendly companies
 Existing in a least touched market so
less competition
 Being new to automobile industry
makes Tesla to compete leading
automobiles
 Competitor’s investment in alternate
energy technologies like hydrogen
powered engines
 Carries certain safety and security
reservations
 Dynamic increase in usage of BEV
competitors in countries like China
 Competitor intervention in battery
technology
 Status quo attitude of customers
 Global decline in petroleum price in
near future
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