Written Work 1

Solutions Production Problems The first marketing challenge that Tesla faces is their problem with production. The amount of vehicles originally promised by Elon Musk was upwards of 5,000 cars per week, but due to these following management factors production is currently down to 3,500 cars per week. The first of many issues that contribute to this lack of production are the issues they are facing within their factories. Hostile work environments, poor communication inside of the factories, and the long working hours of factory employees are all leading causes to the inefficiencies in the production chain. One big reason why Tesla is having these problems “are a result of the company being a little too confident in its ability to make batteries” (Thompson, 2018). Finding a solution to these battery problems and dealing with the fact that the factory production lines are 95% automated are all massive setbacks. Just a single setback in any system of the production line will result in factory delays. Our first solution is to change the way that Tesla operates within their factories. Creating a new method of handling employees needs to be implemented to get the most out of the factory staff working on the floor. If the employees are operating at a one hundred percent, then the production of vehicles will increase. Second, in order for Tesla to eliminate these battery problems we suggest that they create a new assembly line in their factories specifically focused on battery production. Making sure that each car has the battery to match is a big step forward to meeting their standards. Finally, regarding the issue with their automation systems, we suggest cutting back on the amount of automation used in the factory production line. “Tesla says the Model 3 body line is now 95 percent automated, including the transfer, loading, and welding of parts” (Lambert, 2018). By listening to our solution of reducing the amount of automation, Tesla can decrease their number of problems within that complicated system that generally leads to the halt of production. Fixing these current issues that are a constant occurrence in their factories seems like a logical step in increasing their rates of production. Autopilot Malfunctions Another marketing challenge that Tesla is facing is their autopilot malfunctions. Once one of their biggest marketing features, their autopilot has now caused two fatal accidents that raised significant concern over their revolutionary innovation. While these unfortunate accidents have been taking place, competitors like General Motors are overtaking Tesla as industry leaders and becoming the main innovators in hands free technology. Our first solution to combat these issues of fatal accidents and loss of the autopilot market share is to have Tesla put more money into the autopilot program. Allocating more resources to fix the technological problem and regain their innovative ways would be one of the best methods of combating this marketing challenge. It is no secret that this will be the more pain staking and expensive route, but to put Tesla back on the map as the premier autopilot car manufacture could change a lot of these problems. Another solution we have to these most recent autopilot malfunctions is to scrap the feature all together. Tesla is already considered one of the best electric car on the market, focusing on that aspect might be the ideal way to eliminate the negative press of having your system resulting in fatalities. As well as, it would allow Tesla as a company to put more effort and resources on dealing with other production issues. The final solution we have for Tesla’s autopilot malfunctions is to modify the autopilot service as more of a lane/driver assistant. The name autopilot carries the misconception of not needing to be paying full attention to the road, while the feature itself is meant to be used by a driver that is paying attention and has two hands on the wheel. To continuously promote this feature can “have the potential to create false impressions about autopilot” (Matousek, 2018). Finding solutions to these malfunction problems needs to be a high priority for Tesla, as a company they cannot afford to have more accidents occur due to the current state of their autopilot feature. Disappointing Earnings The final marketing challenge that Tesla faces is their disappointing earnings. There has been a lot of concern recently over Tesla’s lower than expected 2018 profits and the amount of loss the company endured. Tesla has been on track to lose about a billion dollars every year. In 2019, the biggest concern is their “$920 million in convertible senior notes expiring on March 1, which Tesla will have to pay the debt in cash and it could wipe out nearly a third of the company’s cash” (Salinas, 2019). Tesla has reported cash equivalents of $3 billion dollars at the end of its September quarter, with this billion-dollar debt coming soon Tesla would be forced to cut around nine percent of its workforce. Eliminating these people will be necessary for Tesla to be profitable and reach their goals. The desire to make a profit is very high since they haven’t made an annual profit in the 15 years, but it is commonly known that for Elon Musk “profit is obviously not what motivates them” (Kim, 2018). Even though their focus is not making money and instead focusing on staying true to their mission statement, making a profit and having some kind of annual return is necessary for Tesla to continue as a company. Our first solution to combat these earning problems

starts with simply using their remaining cash and pay off the debt. The pressure will be on to increase profitability, but with the combined actions of increasing the numbers of production the likelihood of seeing a return will increase. Another solution we recommend would be to eliminate any non-essential personal, Tesla needs to manage their current debt situation and what results from that consists of layoffs. Ideas have recently surfaced regarding their shift in sales strategy, an announcement has been made that hints of a complete shift “to online-only sales which was combined with expected store closings and reduction in sales staff” (Melloy, 2019). The last solution we have for Tesla is to modify their marketing strategy, currently the public’s perception of Tesla is being influenced by these most recent issues of production and incidents with the autopilot. We suggest that they change that perception by spending money to create an advertisement campaign. Tesla have never actually run a campaign to promote their models ever before, but by running a commercial they could directly speak to the segment of their customers and change how people view Tesla. Changing the perception on Tesla vehicles as being consistent in their production and having a safer autopilot can generate an increasing number of model purchases which will lead to creating an actual return. Becoming profitable needs to be a focus for Tesla, by implementing any of our solutions can help achieve that.