BUSI201 - Business Communication: CSR Report on Tesla

This report analyzes Tesla's corporate social responsibility (CSR) program, examining its benefits and limitations within the context of the automotive industry. The report begins with an introduction to Tesla, its mission, and its focus on sustainable practices. It then explores the advantages of CSR, such as enhanced brand recognition, a positive public image, and increased investor attraction, supported by examples from Tesla's operations. The report also addresses the limitations of CSR, including potential damage to the company's image, shifts in business vision, and impacts on profitability, again using Tesla as a case study. Furthermore, the report details specific CSR activities undertaken by Tesla, such as initiatives in electric vehicle manufacturing, supercharging networks, and renewable energy projects. The conclusion emphasizes the crucial role of CSR in business, highlighting how Tesla's implementation of CSR policies benefits both the company and society, while also acknowledging the challenges involved. The report is well-structured, including an introduction, analysis of benefits and limitations, specific CSR activities, and a conclusion, all supported by relevant references.

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Business Communication

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Table of Contents
Introduction......................................................................................................................................2
CSR benefits....................................................................................................................................2
CSR limitations................................................................................................................................3
CSR activities of Tesla....................................................................................................................5
Conclusion.......................................................................................................................................6

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Introduction
Tesla is an America multinational company that operates in automotive industry and offers
electric vehicle across the world (Bruijl). Tesla has many manufacturing plants mainly in Nevada
and Gigafactories in New York and China. Tesla is a leading player in the market because of its
innovative designs under the leadership of Elon Musk. At present, along with transforming
automotive industry the company is focusing on clean energy production and taking initiatives
towards zero emission future. The mission of the company is “a world powered by solar energy,
running on batteries and transported by all electric vehicles” (Bruijl).Tesla is a sustainable
organization as the company focus mainly on its corporate social responsibility by aligning its
business objectives with creation of social value. This report highlights the benefits and
limitation of corporate social responsibility and includes CSR activities conducted by Tesla.
CSR benefits
Adoption of corporate social responsibility is increasing across the world. Businesses have great
impact on the society and on stakeholders and in order to reduce the negative impact businesses
are using the concept of CSR (Salman). Some of benefits of implementing CSR policies are:
1. High brand recognition
The CSR practices directly impact on the brand image as when a company implement
CSR policies and contribute in development of society and people, all these activities
enhance goodwill of the firm. With that more customers get attracted because of the clean
image of the company (Crane and Matten). This can be justified with the help of Tesla, as
the company invested huge amount in CSR practices as in 2019 over 550k electric

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vehicles was sold by Tesla that leads to saving of over 4M metric tons of CO2 (Carlson,
2015). Hence, these initiatives improved sales of Tesla as in 2015 the revenue of the
company was $4.05 billion and in 2019 sales was 24.58 billion (Tesla).
2. Positive image or getting into good books
The CSR activities lead the company always in a good track record as regulatory
authorities scrutinize companies operations and award them on the basis of CSR activities
conducted (Crane and Matten). The sustainable organizations have strong CSR policies
and practices that help the organization to gain many benefits (Carlson). In the context of
tesla, the company ranked 17th amongst 19,184 companies across 143 countries (Tesla).
Due to that Tesla’s CSR activities are recognized across the world and the company
comes in the good books.
3. Attracting more investors
The goodwill of the company in the market determines whether the company will get
investments or not. By using CSR activities, company image can be boosted in the
market and this also attract more investors (Crane and Matten). In the context of Tesla,
the company was running in losses but its shareholders equity increased from 131,000
shares in 2015 to 173,000 shares in 2019 (Tesla). This indicates that CSR activities
impact on image and that resultant in attracting more investors.
CSR limitations
Along with the benefits the concept of CSR has some limitations or has some challenges. Some
of limitations of implementing CSR activities in the organization are:

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1. Hamper the company’s image
CSR activities implemented by companies reveal shortcomings of their products that hit
the image of the company negatively (Crane and Matten). If the customers get to know
about the defects and flaws in products the sales of the company decrease and resultant in
loss of market share (Cooper). In the context of Tesla, when the company introduced
Model S there was many defects in batteries and assembly of products and that resultant
in return of 5000 models from the market (Tesla). As because of CSR activities the
company cannot harm the society. Hence, Tesla image got hit negatively.
2. Shift in vision
One of the limitations of implementing CSR activities is shift in actual vision of the
company. As the main focus of the company is to maximize its wealth but many
companies start focusing on development of society (Crane and Matten).This resultant in
shift of vision or business objectives. In the context of Tesla, earlier the business
objective was “to be the leader in the market by offering innovative cars” and at present
the business objective of the company is “to create the most compelling car company of
the 21st century by driving the world’s transition to electric vehicles” (Tesla). Hence, it is
justified that implementing CSR concepts shifted the Tesla objectives.
3. Impact on profitability status
The CSR activities require huge amount and this amount kept aside from profits of the
company. Stakeholders mainly shareholders and employees feel that their right get
exploited and if profits of the firm decreases that impact on the earning per share and

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shareholders value (Chen and Perez). Due to that stakeholders interest get exploited. In
the context of Tesla, the company was operating in losses from past few years as in 2015
the loss incurred was $888.66 million and in 2019 loss was $862 million (Tesla). This
showed that the financial position of the company not improved to the greater extent even
after high sales. This impact on the interest of shareholders as well as because of low
profits earning per share is negative.
CSR activities of Tesla
Tesla corporate social responsibility focuses on the nature of the businesses and its products. The
initiatives taken by Tesla are the answer to the negative impacts of traditional cars and use of
high combustion engines (Valentin). The company’s manufacturing of electric cars using
ecofriendly and sustainable sources resultant in reduction in CO2 in the environment (Tesla
impact). That leads to positive impact on the community and the society. The practices and
innovations of Tesla is helping to transform the automotive industry.
Further, Tesla took many initiatives to provide best services to its customers and for that the
company invested huge amount in supercharging networks and with that the company delivered
595 GWhs of energy saving over 75M gallons of gasoline (Tesla impact). This leads to
improvement in the infrastructure and improve standard of living of people. Moreover, the
company took initiatives to provide electricity to 1B people across the world with 1.4MW of
solar generation using solar panel (Tesla impact). Tesla investment in gigafactories and Nevada
resultant in reduction in cost of production. As the company invested huge amount in low cost
batteries production that help the company to offer products to customers at the affordable
prices.

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At last, it is identified that Tesla is a sustainable organization as the company adopted the
concept of creation of shared value. This concept included the creation of economic value and
shared value at the same time. This leads to economic benefits as well as social value.
Conclusion
It is concluded from the above analysis that CSR activities playing vital role in the organization.
The CSR activities are beneficial for companies as it improve the brand image in the market,
attract more investors and helpful in attracting more customers. But this concept has drawbacks
to that included shift of vision, impact on profitability and exploitation of shareholders interest.
In a nutshell, the concept of CSR understood with practical scenario and for that Tesla CSR
activities are analyzed that included adoption of creation of shared value concept, initiatives to
reduce climate change and CO2 and investment in improving standard of living of people.
Hence, it is concluded that Tesla is an organization that positively impact on the society and
satisfy its stakeholders by implementing appropriate CSR policies and practices.

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References
Bruijl, Gerard H. Th. "Tesla Motors, Inc.: Driving Digital Transformation and the Digital
Ecosystem." Inc.: Driving Digital Transformation and the Digital Ecosystem (October 14,
2017) (2017).
Carlson, W. Bernard. Tesla: Inventor of the electrical age. Princeton University Press, 2015.
Chen, Yurong, and Yannick Perez. "Business model design: lessons learned from Tesla
Motors." Towards a Sustainable Economy. Springer, Cham, 2018. 53-69.
Cooper, Christopher. The Truth about Tesla: The Myth of the Lone Genius in the History of
Innovation. Race Point Publishing, 2018.
Crane, Andrew, Dirk Matten, and Laura Spence, eds. Corporate social responsibility: Readings
and cases in a global context. Routledge, 2019.
Salman, Doaa M. "An insight for the market driving forces: Case of Tesla Model-
S." International Journal of Business Ecosystem & Strategy (2687-2293) 1.2 (2019): 25-30.
Tesla Impact. Impact report of Tesla 2019. Accessed From:
https://www.tesla.com/ns_videos/tesla-impact-report-2019.pdf
Tesla. About the company. Accessed From:
https://www.marketwatch.com/investing/stock/tsla/financials
Valentin, Michael. The Tesla Way: The disruptive strategies and models of Teslism. Kogan Page
Publishers, 2019.