Automotive Energy Industry: Analysis of Tesla Motors

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Many societies are sorely dependent on economies they have set up towards sustenance in the world which are in turn backed up by different kinds of industries. The Automotive Energy Industry is one of the most important among all other kinds of industries out there by revenue. Quite a number of significant features are prevalent in the successful making of the Automotive Energy Industry and these includes use of mechanically powered machines, introduction of inanimate sources of power and use of materials that do not normally occur in nature among others which will be discussed fully below. There are also a number of problems related to the industry in question and these include negative effects on the natural environment, building brand loyalty, rise of car sharing and overcapacity among other factors. The report below seeks to discuss feasible solutions to some of the problems with reference to Tesla Motors as the major example. However, even though feasible solutions are likely to be proposed, there are other inevitable factors which hinder the implementation of some of these solutions which include global warming, political interests which shall be discussed further in the paragraphs below.

To better understand the way Tesla Motors operates, it is equally important to give a brief insight of the role played by the automotive sector in the economy of The United States of America at large. It is a specialized, highly competitive and diversified branch which has a very successful role as far as exports are concerned to the international market. According to Business Insider, the sector in question accounts for roughly 10% of the GDP of USA with electric vehicles as the mainly exported automotive product. A number of energy sources have been employed by automobile manufacturers which has seen the rise of other business entities such as fuels outlets. This clearly shows how important this industry is towards the development and growth of USA’s economy.

Industrial Features, Existing Problems and Probable Solutions

Tesla Motors’ rise in the automobile industry has helped with revolutionizing the way cars are assembled. Back in the day, car manufacturing companies has to employ a great number of engineers and mechanics whose role was to work on car production plants using manual labor. The story differs in the case of Tesla Motors which heavily depends on the use to fully automated unsupervised machines which are programmed to work on developing desired vehicles. This has proved to be very efficient considering the fact that the company was founded in 2003 and as of 2020 it is now being ranked number 11 out of 33 in Consumer Reports rising eight spots from 2019. The introduction of fully automated machinery has managed to curb inevitable human errors that are likely to occur in an industry of this kind and a number of other Automobile manufacturing companies have also chosen to go down the same path.

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The industrial revolution introduces the extensive use and reliability on inanimate sources of power for the production of vehicles in the likes of fossil fuels. This points out how much energy is a significant feature of the automotive industry despite any drawbacks those kind of energy sources might have on the environment. Tesla’s self-reported emissions from its facilities reach and amount of 146,000 metric tons of carbon dioxide (CO2) which is extremely lower compared to conventional automakers like Ford Motor Co. which claims that its worldwide facility emits a rough amount of 4.4 million metric tons of carbon dioxide (CO2). This shows how much the industry is improving towards utilizing greener energy thus putting the environment at a better position as far as global warming is concerned.

In the case of problems being faced by the automotive industry, its impact on the environment is usually the main one to be raised. Most vehicles run on fossil fuels which have greater disadvantages on the environment which is raising concerns over the popular issue of global warming. Competition is quite imminent in this regard as every firm is working hard towards maintaining its reputation in the market space as to how low carbon dioxide (CO2) emissions their vehicles produce. An example can be given in respect to that in the European Union alone, carbon dioxide from the transport sector account for about 20% of the total CO2 emissions. Despite all that Tesla has managed to change the game play since the year it introduced its fully electric vehicle the Tesla Roadster in 2008 which emits zero carbon dioxide (CO2). This is one of the most realistic solution towards reducing risks posed by burning fossil fuels thus decreasing the impacts of global warming. In addition to that I personally think that all households and major industrial companies should just resort to using clean energy such as solar energy. Though it might take some time for such practices to be fully implemented, it remains the most effective solution to such a problem.

Another problem to consider is maintaining brand loyalty amongst customers. The problem applies to both those who just recently joined the industry as well as those who have been in the industry for a long time. In the case of the new comers, it is quite challenging to convince a new customer base to be attracted to a new product. This can be seen in the case of Reva G-Wiz which has sold about 4600 vehicles worldwide in 26 countries as cited on their website. The same reason can also apply to the manufacturers who have been in the business for a long time for instance, Japan is now being regarded as an aging society thus customers would choose to try other options even if it means products by new comers. In comparison to the former situation, half of new vehicle customers remain steadfast to the car brand they already own which show how lesser of a problem it is in comparison to new brands. A probable solution to this kind of problem would be to focus more on programs that build brand loyalty like the one Tesla Motors embarked on known as Informa-loyalty. Though it borrows most of techniques from its predecessor, formal loyalty, it has proved to be equally as effective if not more due to Tesla’s success.

In as much as the industry in question might want to maximize its profits by making a vast number of vehicle units in the hopes of having purchased by customers, there is also a significant problem that seems to be rampant. The rise of car sharing has proved that the general trend of individuals owning their own cars is not as popular now as it used to be thus potentially resulting in slower growth of vehicles. Since the trend is popularizing at different speeds in different countries, a few suggestions can be given in light of that in order for the automotive industry to benefit from the changing market. They may consider using shared mobility to meet fleet emission compliance by testing new technologies, introducing electric vehicles and retrieving customer data where legally allowed to learn what shape the future is likely going to take.

More so, like all other industries out there, the automotive industry is also prone to over capacitating, a problem that arises when a manufacturer invests resources (i.e. raw materials) into building a certain product, only to realize prior production that they didn’t need to produce as much as they had planned for. This is as a result of not being able to sell directly to customers which helps knowing what customers want and in what quantities like in the case of Tesla Motors. Unfortunately, it leads to an over expenditure that eventually damages the cash flow and result in waste. An effective solution might be centered around reducing the number dealerships and allow automakers to have a direct relationship with their customers to avoid such problems.

In summation, the Automotive Energy Industry is clearly one of the main economy boosters in the case of the USA. This kind of industry has proved to be similar to other types of industries out there with respect to features mentioned in the paragraphs above such as use of heavy machinery and inanimate energy sources. It has managed to improve the GDP of the USA in an effective way as well as impacting positively on the environment through introducing clean forms of energy for instance Tesla vehicles that run on full electrical energy. Despite a number of problems that are currently being faced by the Automotive Energy Industry such as difficulties in maintaining brand loyalty, the few suggestions given in the report will likely bring possible change since some of them are actually being used by Tesla Motors as clearly show in this report. 

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