1. Tesla Motors Risk Management

2. Outline Background information Risk management system
Types or risk : market and sector risks
: firm specific risks
: financial risks
: legal risks
Solutions to risks
Conclusion

3. Back ground information
Founded in 2003 by Martin Eberhard
First car was released in 2006
Current CEO of tesla is Elon mask

4. General information Share price is currently trading at $225.26
They took a loan in 2009 of $465million and paid it back in 2013, 9 years early
They made their first IPO IN 2010 and raised $226million

5. General information
Growth sales have increased by over 100% in the past 9 years
The are producing an average of cars a year with an average of 1000 per week and over 200 power service stations around the world.

7. Risk Management
A risk management plan is a document that a project manager prepares to foresee risks, estimate impacts, and define responses to issues
This is a process of identifying , managing and monitoring as to reduce all possible losses.
The main risks tesla faces are firm specific risk, financial risk and legal risk.

8. Identifying Firm Specific Risks
Production Risks
Product Launch e.g cars, batteries
Expenditure
Failure of Manufacturing Plant
Production Stalls (Bottlenecks )
Warranty and Goodwill Claims
Claims associated with guarantees on goods and all other contingent liabilities

9. Managing Firm Specific Risks Continued…
Technological Risks
Creating taskforces to work on diversifying technical risks associated with Tesla Motors
Personnel Risks
Creating Personal Training Workshops for our workers
Providing incentives through awards, bonuses and the likes

10. What is Financial Risk?
The probability of loss inherent in financing methods which impair the ability to provide adequate returns'.-BusinessDictionary.com
Firms have Financial Risk management contingencies in place to help reduce its exposure to losses.
Financial Risk Management is therefore the practise of the firms economic value by using instruments to manage its exposure. These include:
1. Credit Risk
2. Market Risk
3. Foreign Exchange Risk
4. Interest Rate Risk
5. Currency Risk
6. Liquidity Risk

11. Market and Sector Risks
Supplier Related Risks Sales Risks

12. Supplier Related Risks
Dependency and Price Fluctuations of raw materials
Failure of suppliers to deliver goods on time

13. Sales Risks Declining market condition
Increased competition and price pressure

15. Identify legal risk
Step one-find sources of legal risks(contracts, regulations , litigation and structural changes. Second step-recognize potential and actual risk. Third step-record risk in risk register.

16. Analyze legal risk
Risk analysis is about understanding the risk in the risk register .To analyze risk begin with an assessment of controls. Risk controls can take several forms depending on the risk, industry and organization.

17. Managing the risks Tesla faces

18. Identifying Firm Specific Risks continued…
Technology Risks
Technological Demands of the modern day
Carbon Emissions from vehicles
Fuel Consumptions
Scandals
Safety Requirements
Personnel Risks
Personnel risk that is separate from those associated with our legal risks

19. Managing Firm Specific Risks
Production Risks
Servicing our production equipment regularly
Producing only A-Grade products
Keeping back up equipment
Warranty and Goodwill Claims
Improving Customer Relationships to boost loyalty .
Providing a platform for customers to voice their opinions
Creating an allowance for all these unexpected contingencies

20. Tesla's Financial Risk Management Plan
Main Focus... Financial Risks:
1. Exchange Rate Risk
2. Interest Rate Risk
3. Liquidity Risk
1. Exchange Rate Risk- Hedged with the use of Derivative Instruments like: Options, Currency Futures, and Swaps
2. Interest Rate Risk- Hedged Using Treasury Futures contracts or Interest Rate Swaps
3. Liquidity Risk is risk of not having enough cash assets to run the business.

23. Six steps to legal management
Select framework
Legal framework should meet four main objectives
Simple but not simplistic
Scalable but not overbearing
Adaptable but with clear guidance
Practical but not regimented

24. Evaluate legal risks
To evaluate a legal risk is to prioritize the response to the risk . At the core of risk evaluation is your organization's risk tolerance . Legal risk that are above the line are intolerable and need risk treatment . The idea behind risk treatment is simple modify the risk to make it tolerable. Once legal risks are inventoried and analyzed in the risk register , it is important to communicate the results to the broader enterprise.

25. Conclusion
Tesla continues to monitor its operations and alters its risk management tools to the changing world
Tesla is seemingly a blooming company and shows a good investment platform as it is based on futuristic trends and is playing a key role in the car manufacturing industry.
The risk they face seem to be out weighed and manageable as and this is proven by their continues growth in the market.

26. Questions