The Automotive Industry Tesla

Tesla

The company that I identified in this case is Tesla. In basic terms, Tesla is U.S. company that concerns itself with not only the design and development, but also the manufacture and sale (as well as lease) of “electric vehicles and energy generation and storage systems, and offers services related to its sustainable energy products” (Reuters, 2021). The company operates in the automobile industry. In essence, the U.S. automobile industry happens to be rather competitive and comprises of a number of players – with the main players being inclusive of Ford Motor Company, General Motors Company, and Chrysler. Collectively, these are referred to as the big three automobile manufacturers in the U.S. Having been incorporated in the year 2003, Tesla has been in operation for the last 18 years. It is, however, important to note that it was not until Elon Musk’s entry (via purchase of majority stake in the company) in the year 2004 that the company’s involvement in the production of electric vehicles became pronounced.

Although the company has accomplished several major feats since its establishment, there are a number of quality concerns that have been brought to the fore. According to Higgins (2021), some of the noteworthy quality concerns are inclusive of missing or loose suspension bolts – with one commentator, as the author further points out, indicating that this was a rather concerning issue because it indicated that the company did not have in place robust quality assessment strategies. In the words of Isidore (2021), “an early 2018 engineering consultant Sandy Munro, who tears apart and reverse-engineers cars to assess quality, issued a brutal appraisal of the Tesla Model 3 citing flaws that we would see on a Kia in the \'90s.\"

There are number of industry-specific laws that impact the operations of companies in this particular industry. For instance, as Higgins (2021) points out, government regulation has an impact on not only the design of automobiles, but also on the features and components incorporated in the same. This is more so the case in relation to modern safety regulations requiring the incorporation of airbags and seatbelts. Such regulations have a cost impact on companies operating in the automotive industry – including Tesla. To ensure that they do not get in bad books with the National Highway Traffic Safety Administration (NHTSA), and risk recalls, vehicle manufacturers such as Tesla must invest in advanced safety features. Funds allocated to satisfy certain safety requirements could have been deployed in R&D efforts to promote more beneficial features. Also, it should be noted that NHTSA has pronounced itself on issues relating to autonomous vehicles. For instance, “NHTSA’s acting administrator cautioned in 2019 that all vehicles sold to the public today require a driver to be fully attentive and cognitively engaged in the driving at all times” (Congressional Research Service, 2021, p. 23). This effectively stifles technological advancement in relation to advanced driver assistance systems. It is for this reason that Tesla’s autopilot system incorporates what could be seen as a self-limiting measure in terms of requiring the driver to touch the steering wheel every 15 seconds.