Tesla: Peeking under the (electric) hood

Why hello again, ladies & lady lads 👋🏼

Welcome back to Monarch!

Bailey here, coming at you with overflowing excitement as I finally have the perfect reason to use this image:

Without further delay, let’s jump into the electric powerhouse of a company that was NOT created by Elon Musk 🙄👀 …. TESLA 🚗

Today's Monarch Menu:

• Tesla overview & origin

• Strengths: What makes Tesla a market leader?

• Weaknesses: The hurdles on the road to success

• Q2 2023 earnings and outlook: what's in the pipeline?

• Quiz Q 4 u

🚨Quick Reminder: Why does this info matter? 🚨

If you're interested in the stock market, it's essential to understand the makeup of companies you might invest in, and what factors make their stock prices go up or down.

Today, we’ll be looking at Tesla’s overall makeup 👄💄 to understand why people buy, sell, and hold (ie: don’t buy or sell, but keep 🧘🏼‍♀️) this company every day.

Tesla: A Glimpse into the Electric Revolution

Tesla = an amazing innovator in the automotive industry.

Tesla also = much more than just an electric car maker.

Beyond electric vehicles, Tesla has a complete energy system with solar panels and home power storage solutions. ☀️🪴

Broad & mushy goal: Tesla aspires to be an agent of change in how society perceives transportation and energy.

When was Tesla founded?

In 2003, entrepreneurs Martin Eberhard and Marc Tarpenning brought their dream to life - and named it after Serbian-American inventor, Nikola Tesla.

The duo initially focused on creating an electric sports car, which drew a lot of big-name attention. This includes attention from the (in?)famous co-founder of PayPal, Elon Musk.

Elon invested over $30 million into the company, became the company’s earliest investor, and assumed the role of chairman in 2004.

With the unveiling of their first electric Roadster in 2008, Tesla broke old paradigms in 2008 by releasing the Roadster, their first electric car.

Not only could this car hold its own against gasoline-powered sports cars, but it was able to do so with zero emissions! Love!

Financial hurdles soon followed (not helped by the housing collapse ofc), which caused some leadership shifts & ended in Musk taking the CEO throne in October of 2008.

IPO - No Problemo

Tesla's groundbreaking IPO in 2010 raised an astounding $226 million.

This further solidified their position as a leader in both the automotive and sustainable energy industries (which shouldn’t come as a surprise, given their current household name).

In the sections to follow, we’ll take a look at Tesla through a lens that highlights the driving forces behind their market leadership, the challenges they face, and the opportunities that lay ahead.

As a lil bonus, we'll peek at their Q2 2023 earnings as we ponder what the future holds. 🤔

First up: 💪🏼💪🏼💪🏼💪🏼💪🏼💪🏼💪🏼💪🏼 (strengths)

Tesla's S3XY Strengths

1. Electrifying the Auto World 🚗🔌

Tesla is the flag bearer of the electric vehicle revolution. Its elite lineup (featuring the likes of Model S, Model 3, Model X, and Model Y 👀🔥) has received admiration for their use of futuristic tech and solid performance.

The company's speedy pace of innovation keeps it a hot pick for eco-conscious motorists 🏃🏼‍♀️💨

2. A Brand That's Worth Its Weight in Gold 🥇

A 🍃potent blend🍃 of brand equity and robust market capitalization positions Tesla as the epitome of automotive futurology. While share prices may fluctuate in the short term, investor faith in Tesla's growth trajectory remains Solid Gold.🍺

3. A Management Style That Breaks the Mold 👀

Tesla's ~eclectic~ organizational architecture fosters adaptability and fluid communication. CEO Elon Musk champions a very hands-on ethos that eliminates red tape and empowers employees to be creative problem solvers.

(*Or so the sources & reports say … we’ve all been watching the latest Twitter saga unfold, yeah?)

(**OKAY FINE NOT TWITTER I MEAN ‘X’ … ❌)

4. Pioneering a New Automotive Narrative 💬

Tesla doesn't just sell cars; it markets a clear vision for sustainable future transportation. With minimal reliance on traditional advertising, Tesla has built a legion of loyal customers who serve as brand evangelists.

Think about it, when’s the last time you saw a Tesla commercial? 🤔 

5. Innovation as a Habit ☑️

From fast-charging Superchargers to the semi-autonomous Autopilot system, Tesla continually pushes the envelope of what's possible, establishing new industry benchmarks along the way.

6. The King of the Electric Jungle 👑

Tesla's huge share in the electric vehicle market, particularly with its Model 3, makes it a formidable force that competitors struggle to challenge.

7. The Elon Musk Factor 😬

In attempting to keep as objective as possible, it must be noted that the magnetic charm and visionary ambition that comes with Elon as CEO is a definite pro.

His quirky communication with the “every day” (🙄) people of the world through social platforms is unique to him, and has worked wonders in spreading Tesla’s brand messaging.

The Challenges Tesla Can't Ignore

1. The Uphill Battle of Manufacturing 🪓

High-tech sophistication comes with its own set of manufacturing intricacies, causing occasional hiccups in production timelines and customer deliveries.

2. The Price of Affordability 💰

As Tesla aims to democratize electric vehicles, it grapples with margin pressures—striving to maintain profitability while offering competitive pricing.

3. Battery Bottlenecks 🔋

Supply chain limitations, especially with batteries, can stall production gears, posing an ongoing challenge for the company.

More info in this Fortune Article from late 2022

4. Policy Pitfalls 👎🏼

Tesla's fortune is interlinked with governmental incentives for electric vehicles.

Why this matters: one change in government policy can have extreme ripple effects on the company's bottom line.

5. A Crowded Playing Field ⚽

As legacy automakers and newcomers join the electric race, Tesla must fend off increasing competition to maintain its market stronghold.

Tesla's Financial Roadmap: Q2 2023 Earnings and Beyond

Positive: Tesla's Q2 2023 financial statements flaunted an impressive $24.93 billion in revenue

Negative: Highlighted diminishing margins due to price cuts.

Elon’s performance: Musk's lack of specificity on upcoming products led to a dip in share prices during the earnings call.

Looking ahead: Tesla aims to deliver 1.8 million vehicles in 2023 (👍🏼), but anticipates a temporary decrease in production due to the aforementioned factory upgrades (👎🏼).

The company remains focused on advancing autonomy and plans to make significant investments in its Dojo supercomputer (aimed at AI development).

Tesla's outlook (super success vs. flip flop fail) is mainly tied to its ability to scale production, improve margins, and maintain its position as a market leader in electric vehicles and sustainable technology.

Looking ahead (in one sentence): While Tesla gears up for factory upgrades, it aims to navigate production setbacks, ramp up delivery targets, and pioneer AI technology with its Dojo supercomputer.

It’s time to go 😕 (for now)

Tesla's combination of innovative prowess (ie: first in the field), brand magnetism (ie: attention-grabbing brand), and a charismatic leader (X-Ash-A-12’s father) positions it as an absolute giant in the automotive world.

However, its journey is not free of speed bumps: it will be interesting to see how production issues, supply chain limitations, and increased competition affect this giant’s future.

🎉Onwards, business baddies🎉

TTYL & c u soon (I hope),

Bailey

Sources:

1. CNBC: Tesla Q2 2023 Earnings

2. Business Strategy Hub: Tesla SWOT analysis

3. Global Data: Tesla Company Profile

4. Business Model Analyst: Tesla SWOT analysis

5. Tesla: Company and Product Overview

6. Forbes: Tesla had Five Founders