Global Team Assignment (gta)
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EconomicStable economic conditions inspire consumer confidence, particularly in the realm of large purchases such as home and auto. The auto industry expects another year of growth in 2014, with new car sales in excess of 16 million. Consumer demand will partly come from delayed purchases of the previous years as the American (and other) economy has recovered. The federal and state tax incentives will certainly bring the price range of Tesla vehicles into consideration for more consumers, especially given the consistent rising gasoline and diesel prices. Tesla’s current market capitalization is $26.16B dollars, second only to GM. The company’s stock has price estimates as high as $350 per share in 2016 (a 33% increase), a debt-to-equity ratio of .91 (below industry average) and gross profit margin of 31.56%. While these numbers sound impressive, their net profit margin for 2013 was actually -2.64%, causing some investors to consider the company overvalued [Owu14]. However, given the auto manufacturers potential for future cash flows, their market valuations continue to rise. Additionally, Morgan Stanley has joined forces with Tesla as their major creditor, placing significant value that should help make leading producer of low-cost energy storage. Morgan Stanley analyst Adam Jonas wrote, “Tesla’s quest to disrupt a trillion $ car industry offers an adjacent opportunity to disrupt a trillion $ electric utility industry. If it can be a leader in commercializing battery packs, investors may never look at Tesla the same way again” [Sha14]. LegalSeveral laws in different states do not allow Tesla to sell directly to the consumer. During the second week in March 2014, the motor vehicle commission in New Jersey voted to prohibit carmakers from selling directly to the public, effectively keeping New Jersey residents from being able to purchase Tesla vehicles in that state. Consumers can go to Tesla showrooms in other nearby states if desired. Tesla vehicles can also be purchased online directly from the company.[Bro14]Overall, that makes 5 states with bans on selling direct to consumer (DTC), 2 with significant restrictions, 2 with pending legislation. The population of those states is 57 million (bans), 15 million (restrictions), 31 million (pending). If Ohio and New York go through with their rules, Tesla will have problems in 9 states representing more than 100 million people — close to 1/3 of the U.S. And there’s no reason to believe that dealers associations in other states won’t be emboldened by what happened in New Jersey. [Rog14]. 
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