How can Tesla Motor Company continue profitibility through innovations and changes in its product portfolio?

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How can Tesla Motor Company continue profitability through innovations and changes in its product portfolio?
Tesla Motors, company. Incorporated on 1st July 2003, designs, develops, and produces together with selling electric automobiles, electric vehicle powertrain machinery and static energy storage systems. Furthermore the Company designs, develops, produces as well as selling electric automobiles powertrain machinery to other motor vehicle manufacturers. The Corporation utilizes energy management machinery and manufacturing methods created for its automobile powertrain systems and also develops static energy storage products for utilization in homes, commercial areas and utilities. It creates its battery packs. The corporates technology includes safety systems, charge balancing systems, cooling systems, battery engineering used for robotic manufacturing processes, vibration, and environmental sustenance, customized the motor design together with the software and electronics management framework essential to managing battery as well as the performance of the vehicle. Its manufacturing includes Model S and The Tesla Roadster.
The recent reports display Tesla Company is a successful- automotive company that is- specialized in manufacturing vehicle and other machinery. .however, there are risks that Tesla Company may encounter– in future as it tries to expand its annual production of the unit. The expansion may have a big impact- on Tesla Company financial states, and for that reasons there are some -of the measures– that the company has to take notice and employ in its operation.

This essay has the focus on the main approaches that seem to be- effective to help Tesla Company to maintain the profitability while; manufacturing automotive components. The approaches have to be applicable but this measure.
Steps Tesla Motors Companies may use to Maximize Profit
Tesla Motors may take diverse strategies to maximize profit or minimize loss depending on their strength of their company. Product differentiation together with low price can be significant in maximizing profit, controlling cost, as well as maintaining of market share, might be more essential to minimizing loss. Irrespective of assets owned by Tesla Motors and how much cash it retains, loss over extensive periods of time will finally deteriorate the company’s asset positions together with decreasing the amount of its cash retaining.
Low-Price Strategy
In the market customers are not the same. When the customer seeks for the products or service with common functions at a cheaper price, corporates that are handling, such clients may implement the low-price approach. When the demand for products and services is very elastic, the lower the price becomes, the greater the demand will be. As the company expects to earn less income per unit at a low price, the greater increased in volume of sales, leading too much overall profit. The capacity to have mass production together with wide distribution is the vital to the success of a low-price strategy (Ditchek).
Control Cost
The corporate can suffer losses sometimes not because of lack of sales revenue, but cost overruns. Cost controls a key step in minimizing loss. While Tesla Motors can work at a steady low-cost level, it will be in a suitable position to attract market downturn or any price decline and maintain being profitable. The lower the cost, the larger the profit margin. When the cost rises to an extent that leads to a thin profit margin, the company becomes weak to any price shock or deterioration of sales. Therefore, it can withstand significant losses. Tesla Motors should create an approach to mitigate the excess use of operational cost. Tesla Motors may reduce operational cost may b reduced by reducing the unnecessary excess labor, seeking materials that are cheaper but of the required standards. For instance, the company sucking off the staffs due to the poor,(Marketrealist.com).
Maintain Market Share
If the Tesla Motors experiences weak sales, it is unlikely to attain profitability. While income from every unit of sale that may be enough to reimburse unit variable cost then earns the certain unit profit, the company may be relying on the increased unit profit from several units of sales to completely covering fixed costs and break-even. Without sufficient sales volume for sustaining the general size of market share, the Tesla Motors could not be capable of covering both the fixed and overhead costs fully. To reduce loss, Tesla Motors must target to accomplish the break-even sales volume through maintaining a suitable market share level (Marketrealist.com).
Product Differentiation
The Tesla Company ought to distinguish itself by giving high-quality products and services to their client so that it could regularly be able to dominate greater prices within the market. However, price alone does not assure the profit; it only gives the company the chance to maximize profit. All being even, the more the price which Tesla Motors price for their products’ and services’ better the quality, the higher the profit Tesla Motors can expect. The differentiation approach operates only if the company has a market in that clients are not sensitive regarding pricing, however, extra quality- mindful than customers of the other markets. Tesla Company should reduce the costs of after sales services and spare parts to their customers.
Lithium price is expected to Skyrocket
Because of the likelihood of an increase in car production from 35.000 to 500,000, Tesla Company is likely to invest billions in a huge battery factory. It may seem to be a significant step though it would not completely resolve Tesla’s battery predicament. According to Friedman (p.60), if Tesla Company succeeds in manufacturing nearly 500,000 vehicles, this is from about 35,000 they will need to to increase the cost by two times of lithium ion batteries manufactured and it will be required to double the cost of lithium mined out from the ground. “Lithium is not silicon; silicon is sand since lithium is complicated. There’s a limited amount of it. It is estimated that the price of lithium won’t respond to high demand. For this reason, the price of lithium may well triple or quadruple, together with it’s the main component. Additionally, Bolivia is the world’s key supplier of lithium producing nearly half of it in the market; Bolivia seeks to create an OPEC due to the declining supply of lithium. It is advisable for Tesla Company to stop spending a lot in lithium as it will be so costly with the expected increase in market price. Instead, they should seek its substitute (NP).
A wonderful Fourth or Fifth Car
According to Thompson, the Model S is the best vehicle. However, he doubts if it will ever work as a completely replacement for the traditional, gas-powered automobiles.in his opinion, he contemplates that it is a noble fourth or fifth vehicle for rich people produced by Tesla. And they have found a vast niche. The niche is setting an either 40,000 or 50,000 dollars in a battery for a car that will make it travel at 280 miles; it is amazingly adorable, beautiful, stylish and fashionable. Though, the tincture of the marketplace is the Honda, Accord, Subaru, and a Toyota Camry. Many analysts confirm that there is no way that thy will be capable of producing a car as the battery price goes down. The company may say that it would only require a small part of a piece of a battery. However, the main commodity is rare due to its huge demand in the market which will consequently have an impact on the price of the commodity. Thus if the lithium’s price triples, how could it be that the price of a lithium-ion battery go to reduce from 45,000 to 15,000 dollars for the average individual can purchase the car?” Thompson also warns against the idea that battery power rises to the same degree as the processing power of either a PC or smartphone.
Conclusively
Tesla Company has to learn its competitors in the market. They should watch out their operational activities of their competitors. Also, it must learn the plan in their existence in the market. Tesla Company has for formulating a strategy that would make it flexible in its activities- and adoptable. To be able to this is by analyzing their main competitors such as Suzuki future prospectors. From the paper, we could learn that Tesla Company investment in lithium lion is a good idea, though very costly.
Work Cited
Ascd.Org, ‘Educational Leadership: Technology-Rich Learning: Flip Your Students’ Learning.’ N.P., 2015. Web. 6 Nov. 2015. v
Ditchek, Brian. ‘Tesla: A Valuation Model For A High Gross Profit Automaker.’ Seeking Alpha. N.P., 2015. Web. 8 Nov. 2015. Http://Economics-Files.Pomona.Edu/Jlikens/Seniorseminars/Likens2014/Reports/Tesla.PdfFriedman, Milton. The Social Responsibility Of Business Is To Increase Its Profits. Springer Berlin Heidelberg, 20
Http://Www.Autonews.Com/Article/20140113/OEM/301139981/Audacious-Growth-Plans-Will-Stretch-Tesla-Beyond-Its-Comfort-ZoneMarketrealist.Com, ‘An Investor’S Guide To Tesla Motors – Market Realist.’ N.P., 2015. Web. 8 Nov. 2015. Http://Marketrealist.Com/2015/08/Investors-Guide-Tesla-Motors/N.P., 2015. Web. 8 Nov. 2015.