south korea & tesla presentation
TRANSCRIPT
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Tesla looks to South
Korea
November 3rd, 2016
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Meet Our Team
Elise Cather, Asia Specialist
Emma Junk, Tesla Team Expert
Christina Clewlow, Marketing Expert
Myriam El Mouniri, Financial
Expert
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Tesla MotorsMission: Help accelerate the world’s transition to sustainable transport
Limited Models: Model S, Model 3, Model X
Renewable Energy Storage: PowerWall, PowerPack
Tesla Factory in Fremont, California expanded - 100,000 cars per year
Tesla Gigafactory in Sparks, Nevada - world’s largest manufacturer of lithium ion batteries
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Tesla Car Models
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Saving the World One Car at a Time- Social Responsibility
- Fulfilling our mission
- Pollution in Asia
- Tax Incentives - PowerWall
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International Presence - Australia, China, Hong Kong, Japan, Macau, Andorra, United Kingdom, Switzerland,
Sweden, Spain, Slovenia, Serbia, Norway, Luxembourg, The Netherlands, Austria,
Belgium, Croatia, Denmark, Finland, France, Germany, Italy, Liechtenstein, Canada,
Mexico, Slovakia, Poland, Czech Republic, and Taiwan.
- These countries currently hold one or more of Tesla’s facilities including a variety of
Tesla stores and galleries, Service Centers, Superchargers, and destination charging.
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Tesla’s International IssuesEntering the Chinese market: Miscommunication between managers and customers
- Not enough research about consumer’s needs: space availability problem
- Very difficult to install private charging infrastructure: Not enough garages
- Why should we not give up the chinese market? Part of best emerging markets in the world!
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Production CapacitiesRecent Expansion ● New factory will expand production from 50 000 vehicles to 500
000.
● Update on Tesla’s partnership with SolarCity:
Financing - Model 3 (large quantities)● Raise more capital to finance Tesla’s Model 3, Sedan(marketed at $
35,000).
● How: Potential equity and debt offerings by selling short term bonds.
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Tesla’s Finances Continued.
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Tesla’s Current Marketing
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Marketing - United StatesProduct: Models, Energy Services
Place: Sold only online, Stores are for display
Promotion: Minimal advertising
Price: Set price, High
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Tesla is positioned as a high end green
electric car company positioned in a luxury market
with a unique customer
experience
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Understanding the Foreign Market
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Korea’s Market
Demand
Population 50.6 million
Median age 41 years
82% are urban residents
Life expectancy is 82 years
Increasing market growth
Nominal GDP $1.38 Trillion
GDP per capita $36,600 (2015)
GDP consumption 38% industry
Old Age Dependency Ratio 18%
CIA World Fact Book
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Market Comparison United States50.9% Dependency
Ratio
#8 on the Ease of doing business scale
Japan 64.5% Dependency
Ratio
#24 on the Ease of doing business scale
Korea 37.2% Dependency
Ratio
#5 on the Ease of doing business scale
Economic growth is above Japan’s and the United State’s
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South Korea is ranked #1 in the World for access to electricity
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Why South Korea should
be Next?
Japan and Korea are similar cultures
Japan has 28% of the current income for Tesla
Economics and Demographics seem more promising than Japan
A “greener” economy
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Competitive Analysis in South Korea Hyundai
4th largest automaker in world market
2nd largest Asian Market
Plug in Hybrids
Kia
Soul EV
- Rechargeable batteries
- 34% owned by Hyundai
General MotorsBolt EV electric car (2017)
Existing market presence
- Manufacturing facilities
- Media
- Brand awareness
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Contd. Competition● Nissan Motors- Leaf EV 2017- “Best Competition for GM’s
Bolt And Teslas Model 3 in
Korea”Scientific American
● BMW- I3 “Luxury Electric Sports
Car”- Expected Korean Market
2017
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The 3 Largest Challenges facing Tesla’s Entry in S. Korea
The Korean Brand Loyalty85% of cars driven
are korean brand
Not many outside brands “excel”
Lack of Supercharging Stations
China’s Similar Problems
Hard to implement a lot at one time
Our Competitors’ Cars
Hyundai, Kia, and GM have electric cars coming out
OLEV
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South Korea’s Business Environment
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Methods of EntryJoint Venture
Korean Government
- OLEV
- Market presence
- Charging stations
Wholly Owned Subsidiary
Japanese model
- Exclusively model 3
- Korean team
Wait for Entry
R&D
- China
- New technology
- Customer needs
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Our Recommendation
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Wholly Owned SubsidiaryJapanese model
Exclusively model 3Korean team
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Marketing Strategy in South Korea
Product Model 3Model X
Price Set Price - Model 3: $35,000Pre-Order Fee: $1,000
Place SeoulDestination Stations
Promotion Display StoresGreen Initiative
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Expansion Model 3 - Affordable, Higher Demand
Model X - Condensed parking
South Korea
- Maintain demand for luxury models
Social Responsibility - Corporate Mission
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Works Cited "CIA: The World Factbook." The Central Intelligence Agency. N.p., n.d. Web. 31 Oct. 2016.
Ahn, Sung-mi. "Chevy Bolt EV to Debut in Korea." The Korean Herald. The Herald Business, 26 Oct. 2016. Web. 31 Oct. 2016.
Ahn, Sung-mi. "South Korea Clears Way for Tesla's Entry." The Korean Herald. The Herald Business, 1 Sept. 016. Web. 31 Oct. 2016.
"America's Global Image." Pew Research Center. Pew Research Center, 23 June 2015. Web. 31 Oct. 2016.
Hyundai Motor Group. N.p., n.d. Web. 31 Oct. 2016.
Ruch, William V. "South Korea." International Handbook of Corporate Communication. Jefferson: McFarland &, 1989. 392-97. Print.
By Phalguni Soni - Disclosure | Jan 27, 2016 3:42 Pm EDT. "What Are Lowe's Strengths and Weaknesses?" - Market Realist. N.p., n.d. Web. 19 Oct. 2016.
South Korea: A Nation to Watch. The History Channel, 2011. Youtube. Korean Pop. Web. 20 Oct. 2016.
Korosec, Kirsten. "Tesla’s China Problem." Fortune Tesla’s China Problem Comments. Fortune, 09 Mar. 2015. Web. 19 Oct. 2016.
"World Ranking of Manufacturers." OICA. The International Organization of Motor Vehicle Manufacturers, 2015. Web. 31 Oct. 2016.
Cho, Chung-un. "Tesla Begins Pre-orders in Korea." The Korean Herald. The Herald Business, 21 July 2016. Web. 31 Oct. 2016.
http://www.koreaherald.com/view.php?ud=20161026000601
http://www.forbes.com/sites/greatspeculations/2016/05/20/heres-how-tesla-plans-to-meet-its-model-3-production-demand/#3ce6615a5f0b