Tesla - Statement of Key Issues PDF

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Statement of Key Issues...

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ORAL PRESENTATION: STATEMENT OF KEY ISSUES

China US Trade War: China and the United States have been in a trade war since July 2018, this has been a problem affecting cost for Tesla and the auto market, due to taxes and tariffs on imports from both ends. China has the world’s largest automobile and electric vehicle market and in a response to the trade war Tesla started absorbing the tariff cost to ensure they could provide their cars at better prices for consumers. Lithium and the EV Market: With the significant rise in competition in the Electric Vehicle market and the importance of Lithium-Ion Batteries, finding the right supplier is important for Tesla. The price of lithium, which is the main component in rechargeable batteries has been on the rise for years causing companies like Tesla to seek out more cost-effective methods of acquiring it. China is also where most of the processing of lithium occurs, making it an attractive place to do business. Entry Strategy: Tesla wants to open a Gigafactory in China, this would be the third and largest of them all. The aim of the Gigafactory 3 is to become Tesla’s first overseas production plant and with its strategic location in China, it’ll be able to sell cheaper in that market, because they can by-pass the tariffs and taxes placed on imports from the US. Tesla was reportedly looking for a Chinese based partner to supply battery cells for the new factory, but no deal has been struck. Tesla has got to decide on the best way to enter this well-established car market. These are the key issues....