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Slide 9 Tesla are very dependent upon suppliers, of which many are single source suppliers. Tesla had a lot of supply chain issues due to these single source suppliers. This was seen through “the inability of these suppliers to deliver necessary components of their products in a timely manner at prices, quality levels and volumes acceptable to Tesla, or their inability to efficiently manage these components from these suppliers, could have a material adverse effect on Tesla’s business, prospects, financial condition and operating results”. This caused Tesla to have increased lead time associated with gathering certain parts to finalise production in a single factory in which all vehicles are shipped globally. However, Tesla now sources many of their own materials, and no longer uses Panasonic to source their batteries, which decreased lead times and wait times for materials needed in production.

Slide 10 Tesla have now decreased the number of suppliers they use and started producing their own parts. Tesla have acquired a battery manufacturing and engineering company based in Canada called ‘Hibar Systems’ in a push to start making its own battery cells. Hibar also manufactures automated assembly systems including vacuum filling systems for Lithium-ion battery applications. The acquisition also comes at a time when it’s becoming obvious that Tesla is working to establish its own battery cell manufacturing capacity. Also, with Tesla making its own battery cells it reduces the reliance on Panasonic and reduces the lead times for the product supply and wait times for the customers. Also, Tesla have started opening more factories. These include reopening the factory in California, and opening factories in Nevada, China, and Berlin. These new factories will decrease the wait times for customers in countries all around the world, and boost the market in these countries also.

Slide 11 Tesla has tried to achieve greater production levels than what they are actually capable of. This was seen through the production delays for model 3 sedan. In 2018 Tesla promised 5000 cars per week however they were only able to do 2000 cars per week. This caused an unwanted increase in customer wait time, in which customers were waiting for longer periods of time because Tesla did not know how many vehicles they could produce. Tesla “may be unable to meet their growing vehicle production, sales and delivery plans and servicing needs, any of which could harm the business and prospects”. This issue can be related to the supply chain as it exposes Tesla to multiple potential sources of delivery failure and component shortages. Also, “The loss of any single- or limited-source supplier or the disruption in the supply of components from these suppliers could lead to product design changes and delays in product deliveries to our customers, which could hurt our relationships with our customers and result in negative publicity”....