Tesla SWOT Analysis

Strengths

Tesla's collection of strengths allows the company to stand above the competition, which can be a long-term driver for their success.

  • Strong brand image - a brand that consumers aspire to.
  • EVs with longer range capabilities as compared to the competition (some of Tesla's models can achieve over 300 miles on a single charge, while the Nissan Leaf gets 150 miles to 226 miles, the Chevy Bolt gets 238 miles, the Jaguar i-Pace gets 234 miles.

Tesla and Electric Vehicle Competitor Comparison
source: insideevs.com

  • Eco-friendly product - appeals to environmentally-sensitive consumers.
  • Leader in EVs - Tesla has the highest revenue growth as compared to other automakers.
  • Supercharger network of charging stations makes charging easier and more convenient for Tesla owners.
  • Elon Musks' engineering expertise and vision keeps the company's technology on the cutting edge.
  • The company's strong engineering and vision for innovative earth-friendly products with high performance appeals to environmentally-conscious consumers.

Tesla Car Miles Range Comparison

source: insideevs.com

Weaknesses

Tesla's stock should be considered risky and speculative as a result of some of the company's weaknesses, which can have a large impact on their ability to remain solvent.

  • Tesla spends large quantities of money for research & development [R&D] and production, leading to net losses.
  • Weak balance sheet: negative working capital (current liabilities are higher than current assets) - could slow growth and puts the company at risk of default.
  • Elon Musk's unpredictable behavior (questionable tweets, questionable company claims) could be a turn-off for some investors and puts the company at risk of SEC scrutiny.
  • The company is challenged to profitably produce EVs that price-conscience consumers can afford.
  • Tesla lost its recommendation from Consumer Reports for the Model 3 as a result of issues with door handles, cracked windows, loose interior trim/ molding, and paint defects.
  • Supply chain limitations - had to use employees to volunteer to deliver vehicles to their customers.
  • Production challenges - Model 3s were built in a tent to reach production goals in 2018.
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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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