Tesla Motorc, Inc – Macro Environment

Mariam Bariashvili

International Black Sea University


“Tesla”, founded in 2003, is a Silicon Valley company which offers eco-friendly vehicles with electric energy, solar panels, and battery energy storage . The company went public in 2010 and quickly gained popularity.

Analyzing “Tesla”-s macro environment implicates learning more about how the company is going to survive in the automotive industry. In order to do so, we should examine its PESTLE ( Political, Economical, Social, Technological, Legal, Environmental) analysis, which lets us understand more about company’s challenges, threats, opportunities and external factors.

In regards to the first, Political Environment and political factors affecting Tesla, (it identifies governmental impacts on businesses), it can be claimed that Tesla has political and government support in the United States, and the government has taken a number of measures to produce large amounts of electric vehicles. External political factors that are significant to Tesla include the opportunities the government provides to the company at present. These are: Governmental incentives for electric automobiles, which means that the federal government provides a tax credit of up to $7,500 which is spread among all-electric and plug-in hybrid cars purchased after 2010; New global trade agreements, which implies that Tesla no longer needs to worry about the US-China trade war. Broadening free trade agreements gives Tesla the opportunity to expand internationally. Despite the trade war and tension, Tesla has entered China and is in an attempt to produce 500,000 vehicles annually.
In regards to the Economical Environment ( it includes factors like market growth, trade levels, currencies..), economic external factors that Tesla faces are increased fuel prices, which badly affects the automobile industry, has a good impact and provide an opportunity for e-cars, as consumers are more likely to increase their demand for e-cars. The same applies to decreased battery prices and decreased renewable energy costs. The more popular Tesla becomes to the general public, the lower the prices of materials.

Social conditions must be mentioned as well while reviewing macro environment. The biggest strenght of Tesla lies in Ecological environment, as its products meet new environmental-friendly regulations and environmental standards.As renewable energy solutions are trending more and more and the awareness is raised in view of becoming ecologically friendly, this industry becomes more and more popular. Society gradually prefers using renewable energies and living low-carbon lives, and since a Tesla boasts power and luxury at the same time, it becomes vastly attractive to the community. That being said, Tesla can reap the benefits of social and ecological environment, improve brand image and make us of raising people’s awareness and perceptions.

Concerning Technological Environment, it goes without saying that technology development is an enemy and a friend at the same time. High rate of technological change gives tesla a chance to improve and strenghten products’ technology, be efficient, adopt new technologies, which, on the other hand, implies that its products might become obsolete. In that case, Tesla must ensure that it stays updated and becomes aware of newest opportunities, so that their cars are ready for adopting technological advancements.

In addition, Tesla must follow all laws and regulations in order to run its business smoothly. Expanding international patent protection is a good macro opportunity for Tesla. To expand in other countries, tesla must keep up to date on all worldwide patents and copyrights. That being said, in some countries, Tesla might have to create a chain of suppliers, since some countries do not allow direct selling and involve different dealers. Despite Tesla’s high quality assurance and manufacturing standards, the automotive industry especially is used to dealing with major lawsuits, thus several manufacturing-related laws and other laws must be considered as well, such as employment law, health and safety law, consumer protection and e-commerce laws, antitrust laws, etc. Tesla has released a number of autopilot cars, but not all of them have proven to be safe, lawsuits and claims have been filed against the company due to technological failures in their products. If these liability claims continue, Tesla may face even more financial difficulties.

Last but not least, Extensive competitions might be a threat for Tesla, as many popular automotive brands are getting ready for a competition in this environmental-friendly industry. In addition, there is a lack of regulations for self-driving, which still is a concern for pedestrians, especially for elderly and is not trustworthy enough at present.