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Case Study

Tesla’s global expansion: Where to go next?

By David Bach, Niccolò Pisani and Lisa Simone Duke

13 pages

August 2021

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Reference: IMD-7-2268

Tesla set out to build “awesome” electric vehicles with a mission to accelerate the world’s transition to sustainable energy. In so doing, Tesla not only disrupted existing incumbent manufacturers but also proved that there was a market for high-end electric vehicles. By the close of 2020, Tesla’s market cap was $669 billion—nearly as much as the next five most valuable car companies combined. Despite that, its global footprint was still relatively small with production of over one million vehicles at only two sites – the US and China. While Tesla had built strong markets in these two countries, it was still lagging in Europe and elsewhere. In January 2021, Tesla was planning to build a new factory in Berlin and enter the Indian market aggressively. The stock market seemed to welcome Tesla’s current and future plans for expansion, with the stock trading at a record high value by mid-January 2021. At the same time, financial analysts and observers were wondering whether much of Tesla’s stock price growth could be viewed as part of a tech-led asset bubble. In this highly uncertain and volatile environment, with the COVID-19 pandemic still not under control in large parts of the world, Tesla had to decide where to go next in its quest for global leadership. In view of the electric car industry’s changing landscape and in the aftermath of the COVID-19 pandemic, was Tesla’s international footprint fit for the future?

Learning Objective

Analyze how cross-border expansion can contribute to Tesla’s growth and success in the marketplace
Examine the extent to which geopolitical events can have an impact on Tesla’s international footprint and ability to create value across borders
Analyze the extent to which the COVID-19 pandemic has impacted the business operations of companies such as Tesla
Explore how companies such as Tesla can create value via their international presence

Keywords

Strategy, Market Entry, Global Strategy, International Strategy, Internationalization, International Expansion, Electric Vehicle, Automotive, Manufacturing, Retail, Electrical Transportation

Settings

World/global
Tesla, Automotive
2003-2020

Type

Published Sources

Available Languages

English

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This case study is part of a series

Ducati: Adding value abroad in a post-pandemic world?
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This case study is part of a series

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