Electrifying the Market

Transcription

1 Electrifying the Market Maximizing Tesla s Profits by 2020 MOSAIC NOVEMBER 7 TH, 2014 Antonio Spina /// Kush Gupta /// Anshul Subramanya

2 Strong EV Market Growth # of EV units sold per year

3 Our Strategy for Tesla 1. Demographic targeting toward lower-income markets 2. Expansion into public transportation market 3. Shift revenue focus towards battery & credit sales 4. Continue expansion into European markets

4 Demographic Tiering to Increase Sales 2013 Tesla sales: 8 of the 24 wealthiest ZIP codes Population Data (2013): Atherton: 7,159 Los Altos: 30,010 Woodside: 5,481 (Source: U.S. Census Bureau)

5 Locking Down Luxury Markets First Quarter 2013 Sales

6 Supercharger Stations in Wealthy Areas come_2012.png

7 3-Tier Model 1. Demographic Strategy Recommendation Increase sales in lower-income markets, suburban charging stations Keep Model S pricing and increase additional options Drop Model X pricing toward more affordable SUV standards Market Model 3 as affordable green car Begin advertisement campaign to target markets

8 1. Demographic Strategy Impact Assumptions: 3.8 Million EV WORLDWIDE sales 2020 US will be 47% of new sales Tesla market share approaches 25% w/ Giga Factory Logarithmic Sales growth model Linear growth from 2015 to 2020 Prices Until 2017 Until 2020 Model S % 22.00% Model X % 33.00% Model % 45.00%

9 2. Entrance to Public Bus Sector U.S. bus systems: 5.36 Billion passengers annually Proterra, Inc. has 58 full-ev buses across the U.S. CEO Ryan Popple: former Tesla finance executive Recommendation: Partnership with Proterra for exclusive electric bus battery supply

10 3a. Battery Sales to Manufacturers (2017) Domestic Gigafactory Location Advanced battery market: $5 billion in 2010 to $50 billion in 2020 DOE grants: $2 billion in 2012 Tesla batteries: Toyota RAV-4 and Mercedes B class hatchback Recommendation: Exclusive partnerships with U.S. EV manufacturers for battery sales

11 3b. Zero Energy Vehicle (ZEV) Credit Sales 1311 ZEV credits sold in 2013, 650 in 2014 (approx. $51,868 each) Mercedes, Honda, and GM are major buyers Tesla sold $68 million in credits in 2013 (12% of Tesla sales revenue) CA regulation stringency rising 16-fold by 2015 Recommendation: Sell all ZEV credits. Demand for ZEV will increase, and Tesla will have a larger surplus over the next 5 years (2 new models) Total ZEV Credit Sales = 0.36 x 0.25 x 791,650 cars x $51,868/car = $3.69 Billion in revenue by

12 4. European Market Expansion # of EV units sold per year

13 Our Strategy for Tesla 1. Demographic targeting toward lower-income markets 2. Expansion into public transportation market 3. Shift revenue focus towards battery & credit sales 4. Continue expansion into European markets

14 Possible Risks Associated Competition from Nissan Leaf & other EV s Poor reception of Model X and Model 3 Stress on infrastructure & distribution (in Europe & U.S.) Improved battery technology by competitors Unpredictable market for ZEV credits

15 Next Steps for Tesla 1. Partnerships with Proterra, Inc. and U.S. auto manufacturers 2. Market research into middle-class demographic, begin advertisement campaign 3. Analyze demographics vs. geography for strategic Supercharger station placement 4. Project other manufacturers EV sales in CA, predict ZEV market from