Hoffman, A.N. (Alan)
- Author
Citation Note
Based on published sources; 27 pages.
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description
The electric vehicles maker Tesla Motors was earning low margins due to high product costs and a lack of economies of scale. If oil prices continued to climb, and electric cars by big manufacturers caught on with consumers, could Tesla Motors ride the wave and achieve a tipping point?
Abstract
Silicon Valley based automotive technology company, Tesla Motors, aims to develop a greater worldwide acceptance of electric vehicles as an alternative to the traditional internal combustion, petroleum-based vehicles that currently dominate the automotive market. Although its innovation to reduce gas emissions has won high acclaims, Tesla has limited sales in a limited market, and is making low margins due to high product costs and a lack of economies of scale. However, if oil prices continue to climb toward $200 a barrel and new electric cars, such as the Chevy Volt and Nissan Leaf, catch on with consumers, the upside for Tesla could be enormous. Can Tesla reach the tipping point?
usage
This case is written in a way that complex strategic decisions can easily be analyzed during limited classroom discussion time. Professors have commented that the case has worked well in their classrooms.
Type
Case Study