Tesla SWOT Analysis

Our SWOT analysis are meant to serve as a baseline for doing research on companies that we might invest in at certain prices. As Warren Buffett has repeated many times, only by getting to know a company's business, can we start to understand whether or not to invest our hard earned money.

Tesla (TSLA) operates as a popular and unpopular designer, manufacturer, and seller of high-performance fully electric vehicles [EVs]. The company also produces, installs, and maintains energy generation and storage systems (rechargeable lithium-ion battery systems, solar energy systems, and sales of renewable energy.

Tesla is credited as being the world's first vertically integrated sustainable energy company

Tesla sells the high-end Model S [sports sedan] and Model X [SUV] EVs. These appeal to wealthy consumers as these models can cost over $100,000 with certain options added-on. The company produced the lower-priced Model 3 to be affordable to more consumers. However, Tesla is only recently selling the Model 3 at the $35,000 price. The Model 3 was previously selling at $40,000 and higher when it was first launched in 2016. The average selling price of the the Model 3 was over $55,000 in 2018.

Tesla is the automaker with the highest revenue growth. However, the company only had two quarters of profitability in Q3 and Q4 of 2018. So, Tesla is challenged with getting costs down while selling a lower-priced EV that is affordable to a wider number of consumers.

Tesla is a company with a lot of future potential. Tesla's business 5 to 10 years from now could be very different from how the business looks today. Tesla could evolve into more of an energy company if they are able to increase sales of solar panels and possibly sell batteries or license their technology to other companies and consumers.  

However, the stock must be considered risky and speculative as the company struggles to become profitable while trying to grow at a strong pace. If Tesla executes effectively, the stock can be a winning investment over the long-term.

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Disclosure: I'm long the ARKW ETF which currently has a 10.8% position in Tesla. 

I contribute to Kirk Spano's 


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