Group 6 - The Competitive Landscape of EVs and the Risks to Tesla’s Stock Price

Question 1

How did the EV change over time?

Answer 1

1. In the 2000’s General Motors created the EV1 which was one of the first revoluntary electric vehicles.
2. Then Tesla entered this indsutry and created the Roadstar in 2008 bringing the first lithium-ion battery powered EV
3. In 2010 Governments started providing incentives to make EV’s more affortable and encourage people to buy them
4. In 2015 , Tesla launched the Model 3 that was more affordable

Essentially what the history shows is that EV’s were more niche products and because Tesla entered early on it became a Monopoly in this market however because EVs are popular and profitable now, more companies are getting into the industry, making it harder for Tesla to stay on top.

Question 2

Who are Tesla’s competitors and how are they challenging Tesla?

Answer 2

Traditional automakers:

• GM
• Ford
• Volkswagen

(These are reputable car companies that are now creating EV cars)

Advantage:

1. Brand Loyalty - These companies have been around for such a long time
2. Production scale: As these companies have been around for such a long time they can better produce EV’s
3. Affordable models: As they have the money and influence they can offer a range of EV models.

Disadvantages:

1. Higher production costs: EV’s are more expensive to make reducing profit
2. Dependency on suppliers: A lot of traditional automakers are heavily reliant on external companies key parts, which can disrupt production if there are supply issues.

Question 3

What are some new entrants in the EV industry?

Answer 3

+ Rivian

+ BYD

These newer companies are focused entirely on EV’s and have unique approaches to the market

Question 4

What is Rivian and BYD doing?

Answer 4

+ BYD focuses on affordability

+ Rivian focuses on high-end EV models

Question 5

How does Rivian and BYD beenfit from government incentives?

Answer 5

+ They benefits such as the Inflation reduction act as it provides tax credits to the company when consumers buy EV’s

Question 6

How is poltical polciies affecting Tesla’s Stock Price?

Answer 6

+ Essentially the Republican party is uspoortive of EV which could lead to a lower demand for Tesla and other EVs

Question 7

What happned to Tesla stock price after Trump winning?

Answer 7

+ It rose by 30%

Question 8

What will happen to Tesla’s imports with if Trump imposes tarrifs?

Answer 8

+ Trump plans to impose tariffs on 60% of imports from China and 20% on other imports.

+ Because of these Tarrifs Tesla imports alot of its material from china and beciase of these tarrifs it can increase production costs

Question 9

What does Trump plan to remove (EV indsutry)?

Answer 9

+ He wants to remove all subsidies (tax credits and support) even though they make EV’s mrore affordable which might make EV’s more expensive reducing demand