Why Tesla is Considered a Bad Company Essay

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Why is Tesla listed as the \"Worst\" Corporate company? Briefly describe why this is a \"worst\" company, evaluate the business environments and practices, why it is not successful.Tesla is essentially is widely regarded a clean energy and electric vehicle manufacturer. It is led by one of the most recognizable and charismatic CEO’s in the world and has largely been a Wall Street darling. As of this writing, the company has a market cap of over $1.21 Trillion. Unfortunately, Tesla is listed as one of the worst companies as much of this valuation is related to hype with little substance. For one, the company attributes much of it success to government subsidies as both the state and local level. For example, the government provides a $7,500 tax credit for each electric vehicle sold. In addition, the company receives additional credits for complying various emissions and fuel-efficiency standards that have been imposed by the government on the auto industry. These credits can then be sold between auto manufacturers that fail to meet these emission standards due to various reasons. Tesla, as a pure play electric company has amassed millions of these credits and have sold them to other auto manufactures, booking these gains as profit. According to recent financial filings, these credits amount to roughly $150 million to $200 million a year. This company is considered the worst corporate company as its profitability is being heavily subsidized by the tax payer, irrespective if they purchase an electric vehicle or not. This tax ultimately undermines the market viability of Tesla’s products. If the vehicle is demanded by the market, then conventional wisdom believes that it should not require a $7500 subsidy. The subsidies don’t end with the electric vehicle segment. Its battery segment also has received numerous breaks that many other companies have not had access to (Acemoglu, 2012).

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For example, the state of Nevada provided Tesla with nearly $1.3 Billion in tax incentives over 20 years to building the Giga factory in its state. This again is public subsidy that may not impact a large amount of the…

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…of the business on a long-term basis.Identify, compare, and contrast socio-cultural factors of the domestic and global environments of the company.From a social- cultural perspective, consumers are now much more environmental savvy. Governments are also instituting new ESG standards designed to help protect the planet for future generations. This occurring both globally and domestically and bodes well for the future of Tesla and its battery and electric vehicle operations.Compare and contrast two economic theories for both the domestic and global environments of the company.Keynesian economics is first economic theory that impacts Tesla both domestic and international. The central idea of Keynesian thought is that aggregate demand doesn\'t inherently equate to the productive capacity of an economy, but rather that a variety of factors, both public and private, determine it (Minsky, 1975). Here, both the public sector through subsidies and credits have incentivized production. The second economic theory is that of supply and demand, here again both domestic and international governments are attempted to create demand by creating low cost alternatives to gas powered vehicles….....

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