Response Required For External Factors Discussion

Please read and provide response to below discussion in 50 to 75 words.


External factors:

An active organization has its own culture. Any organization that must grow successfully has to overcome from their external factors. External elements are affecting factors outside and under no control of the company. Considering the outside environment allows an organization to make suitable adjustments to its marketing plan to make it more adaptable to the external environment. External factors to an organization can be like political, legal, economics, social, technology, and environmental, and it is also called PESTEL analysis.


Telsa, Inc (formerly Tesla Motors, Inc) succeeds as an innovative automotive and energy solutions business.

Political Factor: Tesla initially has had its success and failures at the hands of politicians. Since the US government has shown interest in renewable energy and electric vehicles, Tesla can avail the opportunity for strengthening its financial performance through various incentives offered by the government. According to the federal government, customers can qualify for a tax credit up to $7500 for purchasing an electric vehicle.

Economic Factor: Electric cars gain popularity day by day. Global economic growth is expected to remain at 3% in the year 2019 and 2020. In 2018 the electric vehicle market was $39.8 billion, which is expected to reach $1.5 trillion by 2025. Another economic factor is decreasing costs.

Social Factor: The idea of an electric car is fascinating for most people, and this is rapidly true for those who are eco-friendlier. An electric car eliminates the use of fuel, which is better for the environment also.

Technological Factor: Rapid change in technology can affect tesla positively or negatively as well. Technology gives Tesla both opportunities and threats. For example, technology helps Tesla to manage its competitive edge in the marketplace. The company effectively used technology to enhance its product portfolio. Over time, every technology can become obsolete.

Environmental factor: Focusing more on the environment, Tesla got a sharp brand image and got recognized among industry leaders. From electric vehicles to that of other energy-saving Tesla has maintained its focus on sustainability as well as saving energy.

Legal Factor: Two crashes occurred in 2019, and the National Highway Traffic Safety Administration and Transportation Safety Board are investigating the leading cause of these crashes. The many States temporarily blocked Tesla sales directly from the manufacturer to consumers. According to these states manufactured are required the engage third part dealership

Internal factors addressed by Tesla

Tesla faced many issues and challenges, as well. The most important being a lack of experience. Model 3 is released in a high-profile manner in March 2016. Despite over 3,25,000 reservations being made in the first week as claimed by the company (Hull, 2016), the production and delivery of this model did not start until the last quarter of 2017, well over a year later. Many analysts attribute this problem to slow development and shipping of the battery module assembly line. The slow productions caused widespread concerns of the creditability of Tesla, and the stock price fell 22 percent in March 2018 as the doubt of Tesla not being able to deliver their promise (Hull, 2018). Tesla facing much pressure gave a positive response in the Q1 report of 2018. The production rate increased as Tesla reported over 9,700 Model 3 produced in the first quarter of 2018(Solar, 2018). Another is that a massive amount of capital spending by Tesla not being able to be covered by its revenue and outside investment. Tesla has been reporting net loss since 2008(Tesla’s net loss 2008-2017). However, Tesla started making a profit in vast as it started ramping up production.

In my opinion, any business cannot succeed just on success; there will be failures as well, and when you overcome those failures, then you own a successful organization as we say failure is a steppingstone to success. One of the external factor issues is a third-party dealership, which is required in some states, according to legality. I would suggest going with a third-party dealership only in the states that the legal issue that would increase their brand value more by getting more customers as Tesla in mainly focused on the manufacturer to consumer relationship. And would suggest increasing their brand value worldwide depending upon the complexity, where they can find a lot of customers in other parts of the world. This would increase their net worth.


Tesla Pestle Analysis – Umar Farooq, April 22, 2019 –

Internal factors- Zitong Li, Apr 16, 2018 –

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