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6 (a) State one impact to Tesla of continuing to make a loss - Edexcel - GCSE Business - Question 6 - 2021 - Paper 1
Question 6
6 (a) State one impact to Tesla of continuing to make a loss. (b) Outline one drawback to Tesla of a government introducing tariffs on imports from the US.
Worked Solution & Example Answer:6 (a) State one impact to Tesla of continuing to make a loss - Edexcel - GCSE Business - Question 6 - 2021 - Paper 1
Step 1
State one impact to Tesla of continuing to make a loss.
Answer
One significant impact of Tesla continuing to make a loss is that it may not be able to build the new factory in Shanghai. This is due to restrictions on cash flow, which can fall below $2.4 billion, consequently hindering expansion plans.
Step 2
Outline one drawback to Tesla of a government introducing tariffs on imports from the US.
Answer
A notable drawback for Tesla with the introduction of tariffs on imports from the US is that it may need to lower the price of its cars to remain competitive, specifically below $35,000. This necessity arises because the tariffs would increase the overall prices, affecting the company's ability to meet its target pricing.