One of the hardest parts for Tesla's production line is producing both the Model S and Model X simultaneously on the same general assembly line. Both cars are very complex to build but it has been said that the Model X's challenging and difficult design is the main contributor to slowing down the production. Another problem for Tesla is that their suppliers cannot produce parts fast enough to keep up with demand. Tesla believes that their suppliers were never expecting the company to be successful so the suppliers were not prepared to produce parts in large batches which contributes to the delays and limited production numbers.
Porter's Five Forces Framework.
Concerns regarding global warming and greenhouse effects are becoming major topics of interests among consumers. By analyzing using the five forces model, we will determine the profit potential attractiveness of the alternative fuel vehicles industry. .
Threat of New Entrants .
In the future, it's possible more companies will attempt to enter the industry due to government regulations for more fuel efficient cars and our society begins to enforce a development of a more eco-friendly ecosystem. However, significant capital resources are required for creating a sustainable eco-friendly automobile brand, and the large investments needed for extensive research and development in order to create a fuel-efficient infrastructure creates a high entry of barriers for new entrants. .
Threat of Substitutes .
Today, there are also several kinds of energy sources that can be used in vehicles. Toyota and Hyundai both manufactured automobiles that run on hydrogen fuel. Consumers also have choices between Toyota and General Motors hybrid EV cars or electric battery cars from Chevy, Nissan, and Tesla. There is a medium-high threat of substitutes, because there are different types of options for consumers to choose from, however, this type of industry is still slowly growing.
