Group members:

Tesla Enters to China

CHEN LIYUAN 5921489 LIU TIANCHANG 5973422LI RUOYU 5921364 XIE JIALIANG 5916924 MAI NGAN PHAM 5971255 CAO WENBO 5931411 LI YANG 5915042

Content

Current business

environment analysis

New market analysis

Competitive analysis (SWOT

analysis tool)

Entry strategies

Conclusion and

recommendation

Industry and company overview

1.USA company, established in 20032. Provide electric vehicles and technical support3. Current target customers is upper-middle class

Tesla Compan

y

1. New industry - High cost of battery- Require Charging stations2. Support from the States3. Main competitors: BMV, Nissan, BYD

Electric Cars

Industry

Long-term Strategies

Source: Tesla Blog

Step 1 •Produce high-end products for the niche market, build reputation and make the brand well- known.

Step 2 •Produce mid-priced cars to attract more customers

Step 3 •Produce economically priced cars in mass production

Why Moving?

Market saturation in USA Cheaper petrol price in USA (0.83 US

Dollar per liter) Potential markets in emerging countries

Gasoline Prices 2014-December

Lit

er,

US D

ollar

Factors to consider

Volume of Sales

Market characteristi

cs

Incentives from

Government

Infrastructure

Options

Norway •Generous incentive system•3rd largest market of Tesla •Tiny population ( 5 mil)•Remote, mountainous location•Tesla factory in Holland

China•Largest luxury vehicle market, 2nd in Tesla sales•Expanding middle class•The Government’s support•Large population •Lacks of infrastructure•Fierce competition•Government bias

Business environment in China

Features

• Large demand for cars• Relativel stable and balance

market • Government control

Advantage

• More open• Marketpotential(global)• Cheap lobour• Rapiad economic growth

Disadvantage

• Cultural differences (guanxi,face)

• Increasing competition of FDI

• Corruption

SWOT analysis

1. A low electricity costs, reduced fuel and maintenance costs2.Free charging network construction3.online customer experience4.Focusing on the development of a small number of classic brands

1.Cost and price2. The electric field has not been developed3. Increasing selling expenses

1. China have huge population and market demand2. Environment protect awareness3. Cheaper labor and human resources

1. Other brand electric car2. land resources 3. Chinese policy support issues

Threats

Weaknesses

Opportunities

Strengths

Entry Strategy In China

Set up local partnership to build a Chinese plant for local

production (Changan

Automobile Group)

Build charging stations across the

country

Produce both high-priced and

medium-priced products

Conclusion and recommendations

China

Thank you for listening!

Car per capita saturation in USA

Source from : (Dargay, 2007)

Tesla's selling Expenses

Tesla's selling Expenses

Thousand U

S D

ollars

Source from: Tesla annual financial statement

Internal problem ( working affiance, etc)

External problem (resources fees etc.)

Logistics costs ( American to China)

Changan Automobile Group

Chinese state-owned automotive manufacturing company

One of the “Big Four” Chinese automakers

18 production bases throughout China Introduced a hybrid automobile in 2007

Reference List

Dargay, J. (2007) Vehicle Ownership and Income Growth, Worldwide: 1960-2030. University of Leeds: Institute for Transport Studies

TESLA MOTORS, INC. ANNUAL REPORT. (2013). Tesla motors, inc. annual report on form 10-k for the year ended December 31, 2013. Washington, D.C. UNITED STATES: UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

global petrol prices (2014) Global Petrol Prices [online] available from <http://www.globalpetrolprices.com/gasoline_prices/> [11/26 2014]