Founded by Martin Eberhard and Marc Tarpenning on July 1st of 2003 in Texas, Tesla Motors, later renamed to Tesla, Inc. has become one of the most valuable companies in the world, currently possessing a net worth of over 800 billion dollars. The company was created in the hopes of someday creating a car that ran on nothing but electricity, a dream that was eventually accomplished. In 2008, the company was acquired by now billionaire Elon Musk, having been the company’s biggest shareholder for four years by that time, with about 30 million dollars invested in the company. In the very same year, the company produced its first car. Since then, Tesla became a company in the automotive field, as its purpose is the designing, creation, and selling of automobiles (Tesla Inc Company Profile - Overview). In addition, it is also in the energy field, as, as stated before, it specializes in the creation of electric vehicles instead of gas vehicles. In fact, Tesla even began the production and sale of solar panels in 2017. The company puts an emphasis on their products’ environmental friendliness- unlike regular vehicles that emit around 70 tons of Carbon Dioxide throughout its usable lifetime, Tesla vehicles are powered completely by electricity, which allows for much less waste.(2020 Impact Report) Tesla’s many eco-friendly products that it is known for allowed it to become one of the most valuable companies in the world.
In the present, Tesla is doing quite well, but seemingly has some decline in business; market summaries show that the company’s stocks have generally been on the decline since November of 2021, where the price of a Tesla stock had been at its peak at 407.36 dollars. This is likely due to the fact that other companies globally, and even in the United States, have begun putting up strong competition against Tesla. Nonetheless, it is still a very successful company overall, considering its humble origins.
Tesla is an oligopoly- its business takes up a very significant portion of the electric car market, but it is not completely unrivaled- as shown by the graph above, it shares the market with many other automobile companies that produce the same product, its biggest competitors being SAIC, BYD, Volkswagen. One other factor of being an oligopoly that Tesla shows would be the barriers for entry into the industry, and in the electric car company, this holds true in that the companies currently on top of the industry are really big companies already, and are renowned for their vehicles. The lack of buyers of those smaller firms would cause them to remain small, and the bigger firms to remain big.. There is, then, the question of how Tesla is able to maintain its lead as the most successful seller of electric cars? Unlike some competitors in both the electric and gas automobile industries, Tesla understands how to best please customers. It is much more convenient to buy their product using their online system than to have to go to a dealership and haggle for one. Another factor is that Tesla’s product simply has excellent technology- indeed, the cars don’t require as many touch ups- oil changes and such- as its hardware allows otherwise. Lastly, Tesla’s product is extremely environmentally friendly- something that the company prides itself on. This eco-friendliness attracts a multitude of consumers as currently, global warming is a big and growing issue that affects everyone. (How Tesla Sets Itself Apart)
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