Tesla’s Commitment To Sustainability And Social Responsibility

Tesla’s Mission to Accelerate the Transition to Sustainable Energy

Ethics in business refers to a company’s behaviour regarding fraud, discrimination and fiduciary responsibilities. It also includes social responsibility, and it is due to this last point, that Tesla is recognized worldwide as an ethical company. Tesla’s primary mission is to accelerate the transition to sustainable energy. This is why the company is dedicated to manufacturing fully electric cars. In addition, it produces state-of-the-art solar panels to generate the least possible consumption in homes. Currently, the company manufactures only four different types of cars, two Sedans and two SUVs, which makes it quite limited when competing in the market. However, the company has already stated that they want to expand its market, in 2023 a semi-truck and a supercar.

Producing only electric vehicles already shows Tesla’s commitment to the environment. However, this company’s mission was reinforced when Elon Musk, the company’s CEO, published through the Twitter platform a statement stating that Tesla would stop accepting the Bitcoin cryptocurrency as a payment method because the ecosystem of this digital currency generated a significant amount of pollution to the environment.

Regardless, the issue of cryptocurrencies generates controversy since Musk has hinted many times that they could accept this payment system again, which confuses people. It has been said that perhaps it was a tactic by Musk to decrease the value of the cryptocurrency to make his investments and clearly, these actions would not reflect the supposed Ethics that Tesla is talking about.

Nonetheless, Tesla’s controversies do not end here, and it is known that the company does not share any information about the emissions it generates when producing its vehicles. Moreover, according to studies like Arabesque, Tesla appears within 15% of the largest companies that do not report their emissions.

On the other hand, competing companies such as Ford or General Motors share their statistics, highlighting the controversy that Elon Musk’s company faces by hiding crucial information for the care of the environment.

Tesla is “a leader in providing innovative resources and tools for businesses that seek to improve their environmental performance.” (Likoko & Kini, 2017).

The CEO of the organisation has prioritised the manufacture of electric vehicles. The ability of Tesla to produce a considerable amount of electric cars has offered it one of the best possibilities to evolve more sustainably by lowering the emission of greenhouse gasses. Furthermore, electric-powered vehicles are environmentally friendly; hence they are not capable of compromising the needs of the forthcoming generation.

 On the other hand, the electric vehicles that are produced by Tesla have emerged to be more sustainable when compared to the traditional vehicles that are known to be linked to different types of combustion engines. This level of sustainability that has been embraced by the organization is at a higher level and on most occasions, there are several other available organizations that are also looking forward to following this path for them to be able to take into consideration a competitive mode of sustainability level.

Business is a true ecosystem — a system in which every part influences every other. It is quite interesting that TESLA Company has been socially sustainable as far as its business-related operations are concerned. This mode of sustainability from a social point of view has been able to take place from a vast range of directions and as a result, quite a number of positive impacts have always been brought on board. On the other hand, its social responsibility strategies have also been reported to be putting much concentration on the nature of the whole business alongside various products that the company has been able to manufacture for the purposes of addressing different needs (Perkins & Murmann, 2018). A good example is found in the electric vehicles that are being manufactured by the company that are widely viewed to be the major answer to the negative impacts of the cars that operate by using various types of internal combustion engines. As far as this is concerned, issues related to corporate citizenship are therefore essential to the entire business (MacDuffie, 2018). This is a condition that ends up facilitating the organization’s level of achievement of its types of corporate responsibilities. Moreover, the corporate social responsibility interests that are linked to the employees within the organization majorly entails things like high compensation together with quite a number of significant career opportunities. The organization’s approach to CSR has been able to fully satisfy all these interests by coming up with compensation strategy that is very competitive together with quite aa number of human resource related programs that are meant for the development of various skills and leadership that are being encountered at the internal part of the organization. On the other hand, the corporate social responsibility strategy that belongs to the entire organization offers some of the most advanced learning experiences by taking into consideration various forms of collaborative programs with a variety of partner firms that are also available within the business platform. interestingly, all these forms of CSR Programs have been able to adequately satisfy various interests of the employees who are also recognized to be among the major stakeholders within the organizational environment. On the other hand, the kind of organizational culture that is being implemented within the boundaries of Tesla have greatly helped in scaling up the entire employee morale across different departments hence trying as much as possible to eradicate a variety of issues that might exist within the whole workforce. It is therefore appropriate to acknowledge the fact that Tesla Company has been able to play a good number of fundamental roles across the business platform and as a result of this, different individuals across different parts of the world have needed up benefiting positively as a result of the existence and the operational model of the organization. Nearly all the mentioned factors clearly define whey the organization is very competitive in terms of how it handles business.

Tesla’s Production of Fully Electric Cars and State-of-the-Art Solar Panels

When talking about economic sustainability, this majorly refers to a series of various practices that are taken into consideration with an intention of fully supporting long-term economic growth without impacting negatively to the surrounding society, environment or even different forms of cultural aspects that are likely to be embraced within the boundaries of a specific community (Teece, 2018). TESLA Company is known to be having one of the best forms of economic sustainability that has ended up attracting different individuals or even organizations that are known to be spread across different parts of the world. It is quite interesting that TESLA is also economically sustainable and, in most occasions, it has gone an extra mile to embrace various techniques that have greatly propelled its economic sustainability levels when it comes to conducting different types of operations.

 In order to come up with a whole energy ecosystem that is very sustainable, TESLA Company has been on the verge of manufacturing quite a number of unique energy products that provides one of the best opportunities for different types of home owners across the world, various types of businesses and even utilities to be able to carry out a perfect production and even manage the generation of renewable energy in an appropriate and realistic manner, alongside its storage and even consumption that is likely to take place from a vast range of perspectives.

This mode of economic sustainability that has been taken into consideration by the organization has been among the major pillars that has offered it with one of the best opportunities of being able to explore most of its business-related goals and objectives with much ease and efficiency.

Tesla is one of the most rapidly growing companies globally, starting out as a small electric vehicle company to now, a highly sophisticated car company taking on the most significant competition and nearly tripling in revenue for electric cars to its counterpart Volkswagon Motor Group or general motors. Tesla makes just over 95% of revenue from automotive sales which in the last fiscal year which ended on December 31st, 2021, saw a typical shareholding increase to a whopping 665.5% and revenue expanding to 53.8 Billion (up 70.7% the previous year) which is the fastest increase of profits year on year compared to any automotive company throughout history.

The company is rapidly looking to increase its capacity as quickly as possible using its profits generated from the 2021 year to expand and open new Giga factories in easily accessible locations on primary continents to gain entry to the leading countries. This provides future sustainability for the company, ensuring it deliver s vehicles in the most environmentally efficient way. To overcome its supply chain issues in newly established factories, it looks to maximize its output in its Shanghai and Fremont factories.

Tesla looks to maximize production and efficiency by recently introducing energy generation and storage stations which it looks to commercialize as a part of its sustainability goals. It accounted for approximately 5% of its total revenue for 2021, including the design, leasing, and manufacturing of solar energy generation and storage products that Tesla believes are vital to every household in America. By 2021, Tesla reports they had a significant loss of $129Million.

Controversies and Challenges for Tesla: Cryptocurrencies and Emissions Reporting

Tesla’s segmentation approach includes behavioural and psychographic segmentation. It is aimed at dedicated and aspirational middle and upper-class buyers desiring prestige, the impression of being environmentally conscious, and the long-term cost-effectiveness of the car. It employs a varied marketing strategy by providing items to distinct market segments. This diversified marketing strategy allows Tesla to understand its consumers and discover each target market’s tastes and expectations, allowing Tesla to boost satisfaction and brand loyalty (Cagle, 2019). Tesla goods are deemed pricey for typical consumers; hence the firm’s target client demographic is rich people and households. Tesla targets men (83.9 percent) and business leaders. The bulk is between the ages of 45 and 64. 77.3 percent have a $100,000 or more salary and are classified as wealthy or upper-middle-class (Thomas & Maine, 2019). They are much less price-sensitive, viewing Tesla’s automobiles as a status symbol and part of their lifestyle, and choose luxury premium cars that are quick, economical, and environmentally friendly. Exceptional service, efficiency, and strong brand image are significant considerations for these customers.

Tesla also employs predictive positioning. The enterprise has the best degree of consumer satisfaction of any automobile manufacturer. Tesla consumers are incredibly loyal, with 91 percent planning to buy or rent another Tesla for their future vehicle. Customers are so devoted to the company that they frequently wait decades for the new Model. Clients who want to decrease their carbon footprint are also more inclined to purchase Tesla (Li, Lin & Xu, 2021). Buyers who care about the environment can choose pure electric or hybrid gas/electric vehicles. This consumption is less elastic, which means it does not alter in response to changes in fuel prices. The motivating urge to cut emissions influences eco-friendly purchasing. Below is presented an analysis of the market segmentation for Telsa:

a) Geographic Segmentation

Tesla Motors and its products are only present in the markets with good infrastructures and the developing or developed markets. Also, according to LaMonaca and Ryan (2022), Tesla operates in countries where the consumer spendings on charging networks are quite high.

b) Demographic Segmentation

The size of a family influences the manufacturing and production of electric vehicles and the kind of market segments in this sector.

c) Socioeconomic Segmentation

Customers have a high degree of affluence and are generally well-informed about climate change and contamination (Grandin, Boon-Falleur & Chevallier, 2021).

d) Psychographic Segmentation

The desire to be environmentally friendly and use sustainable transportation is crucial. Customers are prepared to pay extra for environmentally friendly automobiles to minimize pollution.

e) Behavioural Segmentation

Modern customers are price-sensitive, and they perceive benefits regarding quality, safety, and efficiency before buying cars. It is very prevalent in this industry and influences Tesla’s R&D and client service.

Tesla has many competitors despite being one of the leading players in the Electric Vehicle (EV) sector. Its primary opponents include Honda, Nissan, Toyota, Volkswagen, Mercedes, and Ford Motors. However, the company’s competitive advantages originate from its focus on environmental sustainability, including technological innovations, cost leadership, and product differentiation. It has managed to become successful by focusing on premium EVs.

Tesla as a Leader in Providing Innovative Resources and Tools for Businesses Seeking to Improve Their Environmental Performance

Furthermore, it is mentioned that there are two primary revenue segments for Tesla, and they are- a) development services and b) automotive sales. As per Adler, Peer, and Sinozic (2019), the automotive sales of Tesla account for the lion’s share of the revenue. Its EVs has boosted its global standing since they consume cleaner energy instead of gasoline related to harmful emissions of greenhouse gases. Many industry players have offered models that directly compete with Tesla’s models. These competing models include the Honda Fit, Nissan Leaf, Chevy Volt, Ford Focus, Toyota Prius, Volkswagen Gold, Smart Car, Mercedes Benz B-Class EV, and BMW i3. However, it is to note that Elon Musk does not consider these offerings as competition for Tesla. With only one percent of the total sales of the vehicles going to the non-hydrocarbon burning cars, he has identified that the actual competition of the company, which is the gasoline cars that have a production rate of 100 million a year.

Compared to any other EV cars in the market, the most significant opportunity for Tesla is its unique product. It leaves other car brands behind with the Model S, which covers about 320 miles per vehicle charge. None of the EVs from other brands could even travel 100 miles per charge. They travel 67 to 94 miles on a maximum. However, it is to mention that the price range of Tesla cars is relatively high. In a recent survey conducted by Cox Automotive, more respondents said they would purchase an all-electric Ford F-150 instead of buying the Cybertruck of Tesla (Ferro, 2020). The key reasons behind their decision are based on pricing, design, driving performance, and car size. Similarly, Volkswagen group has also started to spend billions for pushing its target of achieving 50% of its UK sales by the end of 2030 as it has predicted that the future will be electric vehicles. The company is also aiming towards producing 1.5 million EVs by the end of 2025.

To attract and expand the market share to other segmentatiions, includes different income levels, ages and preferable.

Rather of focusing only on competitive advantage via ethical norms, product innovation should be emphasised through distinctive sustainable goods.

To “accelerate the world’s transition to sustainable energy” by focusing on renewable sources of energy.

Conclusion

All in all, Tesla is able to create a new image towards electric cars while being able to adapt within society’s shoes. Despite their major competitors, Tesla is able to win the market due to its uniqueness and their services. Their motto of always improving their quality  and focusing on adding value to their customers, has created customer’s loyalty and trust in their brand. Thus, it can be concluded that Tesla is a unique yet innovative company whose mission is to create more sustainable car options in the long term.

• Grow operations in outside markets to misuse the worldwide development of the renewable vitality industry.
• Proceed or increase speculations for item innovation.
• Expand the supply chain to decrease supply-side dangers.

Reference List

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