Case Analysis Of Tesla

TESLA Motors

In The Netherlands 1. Introduction

Tesla Motors Inc. is an American car manufacturer based in California. Founded in 2003, it has become one of the fastest growing companies in the electric vehicle (EV) market. In 2016, Tesla had a revenue of $2.28 billion and sold 76,230 units (Ferris, 2017). The firm is a multinational enterprise, with offices in 10 different countries and car stores in some 25 countries. Its main product line is the Tesla electric cars, currently consisting of three models: the Tesla Model S, Model X and Model 3. The Model 3 was launched in 2017 and is aimed at the lower spectrum of the EV market, whereas the model S and X are high-end cars serving the ‘premium’ segment. In this essay, I will examine Tesla’s

The buildings are leased, but all the stores are entirely owned and operated by Tesla. The retail locations double as service centres, where customers can get maintenance and repairs done. Moreover, the company operates a network of 11 of its proprietary superchargers that allow Tesla car owners to quickly charge their vehicles. To further expand its charging network, Tesla has partnered with local companies to offer additional chargers at select commercial locations.

3. Analysis of Tesla in the Dutch business environment

The following section will examine the rationale behind Tesla’s mode of business in the Netherlands using the OLI Framework proposed by John Dunning (1988). The framework covers company-specific (ownership) advantages, location-specific (locational) advantages and business mode (internalisation) advantages. According to Dunning, analysis of these 3 aspects can be used to determine whether or not a firm should engage in FDI in a specific country.

3.1 Ownership advantages

Tesla has a number of ownership advantages that it can leverage when conducting business internationally, namely: intellectual property, existing partnerships, vertical supply chain integration and availability of

The government is established after national elections held every 4 years. As the political landscape is highly fragmented, coalition governments are the norm. Moreover, the political system relies heavily on consensus-based decisions regarding important issues, working closely with labour unions and industry associations. The current government has invested heavily in infrastructure as well as tax breaks for electric vehicles (RVO, 2017), which could stimulate Tesla’s business. Moreover, the Netherlands achieves high scores across a range of indices that rank the country’s national factors in relation to other countries. Transparency International (2016) has ranked the nation #8 in the world in its Corruption Perception Index, showcasing a low amount of corruption. Furthermore, the country is ‘the most globalised’ in the world, with a score of 92.84 in the KOF Globalisation index (ETH Zurich, 2017). This signals a high degree of political openness to global economic, social and political integration. Likewise, The Heritage Foundation states that “Openness to global trade and investment is well established, and the overall regulatory environment remains transparent and efficient.” (Index of Economic Freedom, 2017). Lastly, the Dutch Ministry of Economic Affairs has established an agency that promotes and facilitates foreign direct investment (FDI) into the Netherlands. The Netherlands Foreign