Why Tesla Is Considered A Bad Company Essay

Why is Tesla listed as the "Worst" Corporate company? Briefly describe why this is a "worst" company, evaluate the business environments and practices, why it is not successful.

Tesla is essentially is widely regarded a clean energy and electric vehicle manufacturer. It is led by one of the most recognizable and charismatic CEOs in the world and has largely been a Wall Street darling. As of this writing, the company has a market cap of over $1.21 Trillion. Unfortunately, Tesla is listed as one of the worst companies as much of this valuation is related to hype with little substance. For one, the company attributes much of it success to government subsidies as both the state and local level. For example, the government provides a $7,500 tax credit for each electric vehicle sold. In addition, the company receives additional credits for complying various emissions and fuel-efficiency standards that have been imposed by the government on the auto industry. These credits can then be sold between auto manufacturers that fail to meet these emission standards due to various reasons. Tesla, as a pure play electric company has amassed millions of these credits and have sold them to other auto manufactures, booking these gains as profit. According to recent financial filings, these credits amount to roughly $150 million to $200 million a year. This company is considered the worst corporate company as its profitability is being heavily subsidized by the tax payer, irrespective if they purchase an electric vehicle or not. This tax ultimately undermines the market viability of Teslas products. If the vehicle is demanded by the market, then conventional wisdom believes that it should not require a $7500 subsidy. The subsidies dont end with the electric vehicle segment. Its battery segment also has received numerous breaks that many other companies have not had access to (Acemoglu, 2012).

For example, the state of Nevada provided Tesla with nearly $1.3 Billion in tax incentives over 20 years to building the Giga factory in its state. This again is public subsidy that may not impact a large amount of the...…of the business on a long-term basis.

Identify, compare, and contrast socio-cultural factors of the domestic and global environments of the company.

From a social- cultural perspective, consumers are now much more environmental savvy. Governments are also instituting new ESG standards designed to help protect the planet for future generations. This occurring both globally and domestically and bodes well for the future of Tesla and its battery and electric vehicle operations.

Compare and contrast two economic theories for both the domestic and global environments of the company.

Keynesian economics is first economic theory that impacts Tesla both domestic and international. The central idea of Keynesian thought is that aggregate demand doesn't inherently equate to the productive capacity of an economy, but rather that a variety of factors, both public and private, determine it (Minsky, 1975). Here, both the public sector through subsidies and credits have incentivized production. The second economic theory is that of supply and demand, here again both domestic and international governments are attempted to create demand by creating low cost alternatives to gas powered vehicles…

Sources Used in Documents:

References

1. Acemoglu, Daron, and James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity and Poverty, 1st ed. New York, NY: Crown Publishers.

2. Acemoglu, Daron, and James A. Robinson. 2013. ‘Economics versus politics: Pitfalls of policy advice’. The Journal of Economic Perspectives 27 (2): pp. 173–1923. Minsky, Hyman P. 1975. John Maynard Keynes. New York, NY: McGraw-Hill4. Mokyr, Joel. 2004. The Gifts of Athena: Historical Origins of the Knowledge Economy, 5th ed. Princeton, NJ: Princeton University Press2


Cite this Document:

"Why Tesla Is Considered A Bad Company" (2021, November 07) Retrieved April 25, 2024, from
https://www.paperdue.com/essay/tesla-considered-bad-company-essay-2176777

"Why Tesla Is Considered A Bad Company" 07 November 2021. Web.25 April. 2024. <
https://www.paperdue.com/essay/tesla-considered-bad-company-essay-2176777>

"Why Tesla Is Considered A Bad Company", 07 November 2021, Accessed.25 April. 2024,
https://www.paperdue.com/essay/tesla-considered-bad-company-essay-2176777

Related Documents

Tesla Motors became a public traded company, (NASDAQ stock quote code: TSLA), earlier this year. You are the Channels Manager for Tesla Motors. How do you think Tesla has developed its distribution strategy, i.e. what were the most important things to have been considered? With the launch of the model S. sedan due in 2012, how would you further develop the distribution strategy over the next five years, and why? Tesla

Tesla Motors Strategy
PAGES 9 WORDS 2991

Tesla Motors has a cash flow problem, which makes it vulnerable to the many larger competitors who want into the electric vehicle business. The advantage Tesla has is with its battery technology, which is vastly superior to anybody else's, and in its brand name and leadership. The in-house distribution is unique to the industry but it might be too early to determine whether this is helping Tesla or hurting it.

Tesla Basic Info
PAGES 2 WORDS 608

Tesla Motors was founded in 2003 "by a group of engineers in Silicon Valley who wanted to prove that electric cars could be better than gasoline-powered cars." The company's first car, the Roadster, was launched in 2008 and the second car, the Model S, was launched in 2012. The company has been a major success since its inception, and while it still is not turning a profit, its revenues are

Tesla
PAGES 11 WORDS 3438

Tesla Case Analysis General Environment/Industry Analysis The automobile industry is changing quickly with more and more competitors entering into the EV market. Jaguar is introducing its I-Pace, a premium EV with a base model price under $70k. Audi is introducing its E-Tron Quattro E-SUV this year and an E-Tron Sportback next year. Porsche is bringing its Mission E Cross as its second EV. Mercedes plans a 2018 EQC Electric SUV. And then

Summary There are certain aspects of Tesla' s business model that distinguish it from other automakers. These manifest either in its accounting policies, or in the ways in which those policies will affect Tesla (but maybe not its competitors, even if they utilize the same policies). The direct-to-consumer sales model in particular holds influence over some policies, while the company's youth handcuffs it with respect to how it handles things like

Tesla Motors Analysis
PAGES 4 WORDS 1365

SWOT Analysis: Tesla Motors Tesla Motors was founded in 2003 and it specializes in high-end electric vehicles. The company operates out of Palo Alto California and it has over 2000 employees. It was founded by Elon Musk who has prior success in SpaceX and PayPal. The company's goals is to accelerate the transition to electric mobility with a full range of increasingly Despite the fact that it has received loans from