COVID-19 Update

1. Tesla Motors
Responding to COVID-19: WHO raises alert level to global pandemic
Thomas Tsao
March 20, 2020

2. Tesla did well in the final quarters of 2019, but 2020 proves to be a challenge as COVID-19 was
raised from caution to global pandemic and the Saudi-Russian price war threatens the economy.
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In response to this global crisis, Tesla needs to shut down major operations
and limit potential travel for their employees. Virus has been said to be
asymptomatic for 2 weeks, which means that anyone can have it without
knowing. This death tolls are rising extremely fast as well despite
desperate measures taken by countries such as China, Iran, and Italy to
limit the impact. This will not bode well for Tesla if there is failure to
cooperate with the greater good of the world, their employees, and their
customers by ceasing operations.
• The final quarters of 2019 were amazing as Tesla sold record numbers of cars and solar panels.
• This time also saw stocks rise up due to consumer confidence in Elon Musk, founder and CEO of Tesla.
• COVID-19 was discovered in Wuhan, China in December 2019 though its origins are still unknown so many assume it was
the epicentre.
• Due to the inaction of the local governments and corruption of the communist style regime in trying to isolate and
downplay the situation, COVID-19 was allowed to spread outside of the province and eventually to other parts of the
world.
• The main places affected as of March 20, 2020 are China, Italy, Iran, and South Korea. It has begun rapidly spreading across
Europe and North America as well, though measures such as lockdowns, travel bans, and curfews have been implemented
and social distancing has been recommended.

3. Tesla should consider three steps to combating this deadly virus to ensure the livelihood of the
world (global economy and infection rate), their employees, and their customers: Online service
delivery, shifting production focus, and incentivizing touchless purchase and promotions.
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Online and touchless service
delivery:
This will tackle the issue of
employees potentially coming
into contact with the disease.
The last thing anyone wants to
do is to find out someone in their
floor or building has come into
contact with the deadly virus.
By allowing employees to provide
the same great service online
through email or enhanced chat
bot systems on their website,
they can continue to serve the
needs of their customers best
while ensuring the safety of
everyone.
Shifting production focus:
As Tesla has a multitude of production
and supply chain lines, it simply isn’t
feasible to shut all of them down. Instead
they should limit production on many of
their factories and help alleviate the
impact of this crisis by producing health
care products such as masks and
sanitizers.
They may even be able to leverage their
technological prowess to develop
sanitation technology to aid nurses and
doctors in this time of need. This can be
used as a substitute for loss of revenues
while helping the global cause which can
help raise consumer confidence and their
stocks.
Incentivizing touchless purchase and
promotions:
The global economy has taken a huge
hit due to the spread of the virus and
changing consumer behaviours. This
combined with the Saudi-Russian
price war for oil has led to
plummeted gas prices, incentivizing
fueled cars.
Tesla has the opportunity to combat
this threat by reducing the prices of
their cars to make up for unsold cars
to meet reduced profit goals for 2020.
Of course, the entire purchase
journey for the customer will be
completely digital to ensure safety
amongst employees and customers.

4. These steps can help Tesla break through the barriers that COVID-19 have placed on the global
economy and stand strong as a future and customer oriented company.
Customer
Traditional
Future -Oriented
Tesla
Competitors
Product
During this time of need, companies need to band together with governments to tackle a common threat. This
isn’t about stealing market share or developing a new profitable product. This is about survival of the human race
and combating threats. The last thing anyone should be worried about is meeting the projected 10% profit goals
for the fiscal year.
Instead, Tesla and other companies should strive to become future-oriented and customer centric compared to
traditional and product-centric. The three steps mentioned earlier will help Tesla break through the 2020 crisis as
strong as ever and in better public favour than their competitors.
Perceptual map comparing
industry competitors with
Tesla if they follow the
aforementioned steps.
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To conclude, Tesla needs to
follow these steps to stay
current and in good faith
with the global economy and
their stakeholders.

5. SWOT Analysis/PESTLE in relation to COVID-19
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Strengths
• Diverse set of companies with huge supply chain network. Will not suffer as much from companies that only have factories in hubs like China and India.
• Extremely positive brand equity allows safer levels of consumer confidence compared to other stocks
• Strong research capability through businesses in many categories on the global stage including AI, transportation, and space travel
• Huge balance sheet and cash flows capable of withstanding poor quarters, perhaps even until 2021
Weaknesses
• Leadership hasn’t done much to respond to pandemic yet
• Is not involved in finding a cure and has not publicly shown support
Opportunities
• Sell cars/products for cheaper amidst growing worldwide recession to spur economic activity and meet updated profit goals
• Shift factory production of non-essential products to help with global crisis (e.g face masks, sanitizers, cleaning technology)
• Shift to online and touchless delivery of service, including purchasing and customer service for customers and employees
Threats
• Consumer confidence is lowered throughout all industries. Stocks will plummet
• Consumer spending down for non-essential goods
• Lowered gasoline prices due to the virus and Saudi-Russian price wars make gas prices more of an incentive for fueled cars