Tesla looks to South

Korea

November 3rd, 2016

Meet Our Team

Elise Cather, Asia Specialist

Emma Junk, Tesla Team Expert

Christina Clewlow, Marketing Expert

Myriam El Mouniri, Financial

Expert

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

Tesla Car Models

Saving the World One Car at a Time- Social Responsibility

- Fulfilling our mission

- Pollution in Asia

- Tax Incentives - PowerWall

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.

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!

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.

Tesla’s Finances Continued.

Tesla’s Current Marketing

Marketing - United StatesProduct: Models, Energy Services

Place: Sold only online, Stores are for display

Promotion: Minimal advertising

Price: Set price, High

Tesla is positioned as a high end green

electric car company positioned in a luxury market

with a unique customer

experience

Understanding the Foreign Market

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

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

South Korea is ranked #1 in the World for access to electricity

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

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

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

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

South Korea’s Business Environment

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

Our Recommendation

Wholly Owned SubsidiaryJapanese model

Exclusively model 3Korean team

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

Expansion Model 3 - Affordable, Higher Demand

Model X - Condensed parking

South Korea

- Maintain demand for luxury models

Social Responsibility - Corporate Mission

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