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An Analysis of Tesla’s Market Position and Future Prospects

In: Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)

Author

Listed:
  • Zeling Lu

    (Nanjing University of Aeronautics and Astronautics, College of Economics and Management)

Abstract

This paper analyses Tesla’s position and performance in the new energy vehicle industry. Tesla’s leadership in electric vehicle technology and brand influence has contributed to the popularity and marketability of electric vehicles, driving the automotive industry towards sustainable energy. Global market performance highlights Tesla’s strong sales in the U.S. and China, with Elon Musk’s personal charisma adding to the brand’s appeal. The operating model focuses on direct sales, user experience and customised production, complemented by ongoing feedback and data collection. Future trends include expanding Gigafactories, advancing self-driving technology, and exploring new business models. Financial analysis from 2020 to 2023 shows gross margins rising to 25.60% in 2022 before declining to 18.25% in 2023 due to price reductions and rising costs. Debt to net worth ratio decreases from 76.36% in 2019 to 40.34% in 2023 indicating improved financial stability. ROCE increases from 28.04% in 2021 to 38.78% in 2022 reflecting improved asset utilisation and profitability. Current ratios are trending upwards, but caution is still required with respect to debt covenant restrictions and access to capital. Risks include fluctuations in market demand, supply chain disruptions, policy subsidy rollbacks and financial risks. Forecasts indicate continued growth in vehicle sales, leasing, services, and energy production and storage, with revenues reaching $125.5 billion in 2024, $125.5 billion in 2024, $153.7 billion in 2025, and $199.9 billion in 2026. Looking ahead, Tesla will expand market share, introduce innovative products, strengthen supply chain management, and invest in social responsibility to maintain strong growth momentum and industry leadership.

Suggested Citation

  • Zeling Lu, 2025. "An Analysis of Tesla’s Market Position and Future Prospects," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin (ed.), Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025), pages 919-928, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-748-9_100
    DOI: 10.2991/978-94-6463-748-9_100
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