Tesla Political Legal Environment Domestic Global Analysis

Detect and evaluate the political and legal limitations and barriers for the company using both the Domestic and Global environments. Describe and integrate the political and legal environments/structures of your selected company's home (domestic) country and another country in which it does business (global). What exists for your worst company in the context of the domestic and global political-legal environments?

As it relates to specifically to Tesla, political and legal limitations are varied. For one, from a political perspective, the need to encourage competition within the electronic vehicle space is very high with all developed countries. For one, governments are looking to encourage overall adoption of electric vehicles. To encourage adoptions, governments are looking to generate competition as a means to lower the overall price of purchasing electronic vehicles. Likewise, political institutions around the world have also enacted financial incentives in the form of tax breaks and other subsidies to improve the improvement of electronic vehicle technology. Each of these elements are designed to improve global competition, but also improve the overall affordability of electronic vehicle products around the world. By lowering the cost of production, many governments hope these cost savings can then be transferred to individual consumers in the form of lower purchasing price. These incentives are therefore used to align with many political mandates related to carbon emission reduction and a reduction in the reliance of fossil fuels by society. From a political perspective, the mitigation of fossil fuel reliance, improve nation security interest as countries are not dependent on fossil fuel reserves from foreign countries who could potentially become adversaries. Likewise, political initiatives related to environmentally friendly options of transportation are also a key component to the increase in adoption rates.

For Tesla, in addition to the political restraints, they are must contend with legal restraints. Many of these restraints are related to technological evolutions of electronic vehicles. For example, Tesla is currently adopting autonomous driving technology which looks to allow consumers to drive without necessarily using the steering wheel. This technology looks to be a boon for the economy as it will help to improve overall traffic conditions, improve efficiently, and increase worker productivity for various industries. From a legal standpoint however, these innovations have steep hurdles to overcome. Recent new media publications have shown that autonomous driving has led to fatal and very disastrous crashes. Likewise, Tesla vehicles have been shown to have battery issues causing the vehicle to explode harming passengers and potential pedestrians. Each of these elements ultimately increase the overall legal oversight of the industry be politicians looking to capitalize on the overall turmoil. Likewise international firms are less likely to adopt western technology due to national security concerns. Currently China and the United States are engaged in a very contentious trade war. Tesla has operation in China and is looking to China as a critical catalyst for future growth (Wang, 2009). However, the legal environment within the country could potentially hinder the ambitions of the company. For one, China will look to emphasize Chinese electric vehicle companies at the expense of Tesla. They will also look to dilute its autonomous driving solutions due to the data that can potentially be provided to American agencies or authorities. From a legal perspective this presents a national security threat to China and therefore could be eliminated (Li, 2001).