Tesla Financial Analysis - Essay Example

Several reasons allowed Tesla to overcome formidable entry barriers, dealer network, service network, plant, and equipment, among other challenges in the market to be a competitor to the BMW 5- series using its Model S. One of the reasons is the focus on the market for high-performance pure electric vehicles ensured Tesla lacked direct competition from established rivals allowing Tesla to be far much ahead of electric vehicles in the electric vehicles market (Hartung, Par. 2). 

Tesla continues to decrease limitations and make them better with each new model as envisaged in the Tesla Model S. There has been the low allocation of research and development funds by established automobile companies to electric vehicles allowing Tesla a competitive advantage and success in the market (Hartung, Par. 14). Tesla has the iconic CEO and founder Elon Musk to thank for access to best engineers and access funds easily beating the established brands on this front especially access to talent.

Tesla chose a market demographic consisting of wealthy, environmentally conscious, and educated people providing it with a reputational advantage over established companies like Ford. The demographic also offers Tesla access to high margins on each car sale owing to the ability of the market segment to pay for a high-performance car that sacrifices very little for efficiency. The other benefit of innovation is that the company was in a position to produce high-performing electric cars and with innovation, it is currently continuing the provision of charging stations to meet client needs and concerns as well as develop the electric market further.