Executive Summary
How to overcome How to overcome
Key Question Infrastructural hurdles?
To Sort Inadequate charging To Minimize the high costs of
Focus & electricity distribution Personal EVs in India due to facilities and their location of
Infrastructure
Fostering partnerships,
Inputs Building capabilities that suit
the Indian condition
Better and reliable charging
facilities enhancing customer
confidence & leading to
Outcomes increased penetration of EVs
in India
Whether to set up How to develop the EV How to foster the Sales and
Regulatory hurdles? any facilities in India? market in India? Distribution network in India?
Assessing the need of Undertaking Excessive To achieve High Sales and
Marketing & confidence Target the Premium
high import duties Installation building campaigns Customer market segment
Creating a D2C channel via
Tesla shall collaborate and Excessive Marketing through
Setting up local both online(website) and offline
negotiate with the Govt,
setting up local
manufacturing assembly
Social media, SEOs, SEMs,
Print media, TV ads, Referral
presence(Tesla Trend Studios,
plants and R&D centres Retail Stores and VR Digitized
manufacturing units. and Loyalty Schemes, etc.
Stores)
Less cost of EVs, hence Decrease in the cost of Developing Key Account
Increased customer
enjoying better margins and Tesla Vehicles in India Management Relationships
confidence and better
reduced costs thus and possibility of by providing Quality
increasing the profitability of becoming a World EV
acceptability of EVs in
Customer Service and
India
company Export hub Loyalty Programmes
Infrastructural Bottlenecks
Problems
Lack of adequate charging
facilities in India.
Indian electricity and
distribution is not ready to
support the EV revolution.
Indian Roads are not
ready for self driving cars.
India lacks Public Parking
Spaces
Problems
Implications Solutions
India suffers from a dilemma/chicken and egg problem of charging
infrastructure. Lack of adequate charging facilities can significantly
deter the public sentiment towards EVs,. A 2018 report by McKinsey Partnering with Ather Energy, IOC which are
on Japanese customers does tells us the lack of charging
Partnering with Sun Mobility,
setting up special DC superfast charging
infrastructure can lead to almost 42% customers having low
developing Battery Swapping
Technology facilities for this; entering into a joint
satisfaction rates and loss of over 34% loss on long term basis. maintenance contract
Majority of Indian Households are connected through 200 kVa Setting up Solar power
transformers which will not be able to handle more than 20 cars(with operated Charging
7.4kWh AC chargers) at a time. Additionally more than 13% Indian stations in petrol pumps
Households are not connected to grid and more than one third by partnering with
households having unpredictable and intermittent electricity supply, existing Indian OMCs.
thus deterring the mass usage of EVs.
Removal of auto driving sensors by setting up
India ranks 24th out of 25 nations on Autonomous Vehicle a factory in India, which will serve 2 purposes:-
Readiness Index 2019 by KPMG. Indian roads are also narrow as 1. Avoiding any unpleasant and self defeating
compared to their Western and Chinese counterparts. Indian roads debacle with the government.
also suffer due to lack of proper signage and poor upkeep. Besides 2. Reduce our costs by almost 5000 USD
political issues around 40 lakh jobs in India for drivers are also at (close to 4 lakh rupees)
risk. The randomness of Indian roads require an algorithm, which
3. Avoidance of hefty duties ranging from
again demands high R&D.
60%-100%.
If Public parking cum charging facilities are not available ten range
anxiety can not be completely dealt with. Moreover it will deter the
rich urban segment which tends to go three- five times more on a
car trip as compared there other counterparts. Cities like Delhi have
only capacity of 94000 cars and additionally for a few thousand in Setting up of joint ventures and collaborations for
some metro stations but has close to 31.4 lakh crore vehicles out of a call and pick up services, with Indian Startups like E-chargeup
which nearly 3 lakh forms our target group.
and Zypp.
Insights
Incentives Set-up Price-Point Analysis Promotional Implementation +
 Regulatory Problems
RESTRICTIVE PRODUCT
POLICIES
Indian Government has various
restrictive laws that can increase
costs and are restricting trade:-
HURDLE
• Indian Laws on radar usage for
private vehicles are restrictive in
Nature.
• Indian Authorities have declared
their displeasure for the Auto
pilot feature of EVs.
COLLABORATION
Initially, Tesla should focus on
collaborating with the government
STRATEGY
and getting some waivers from the
tariffs. As the demand rises, Tesla
should set up Gigafactory in India.
This will help it reap the subsidy
benefits.
Problems
LOW FOCUS ON
PRIVATE VEHICLES
• The centre has so far
extended subsidies only to the
fleets and commercial vehicles
and not to vehicles for
personal usage in three
wheeler and four wheeler
segments.
• Prominent examples being
FAME and FAME 2.
GOVERNMENT LOBBYING
Tesla should lobby with the
Central Government so as to get
subsidy benefits. Tesla should
indulge in excessive marketing
avenues as well as undertake
promotional campaigns to raise
awareness about the brand and
creating brand equity.
Insights
Incentives Set-up
LACK OF STATE POLICIES
• Only 10 of the 28 Indian states
have formed a draft/complete
EV policy.
• Majority of the states are in the
Southern region of India..
• Due to the lack of EV promotion
policies, consumer confidence
will be low.
SELECTIVE OPERATION
ESTABLISHMENT
Various southern states including
Tamil Nadu, Kerala, Karnataka,
Andhra Pradesh are having policies
promoting EVs. As a result, Tesla
should set up initial operations in
these southern states. By the time
Tesla will expand to other states,
there will be more states having EV
promoting policy.
Price-Point Analysis Promotional
IMPORT TARIFFS
• Indian government has decided
to increase the basic customs
duty on imported EVs to 40%.
• Further GST has been levied on
luxury cars at 28%s along with
other cess making the effective
tax rate at 60%.
• The buyers will have to pay
15% extra price for owning a
Tesla car.
RAPID EXPANSION
Initially, Tesla will have to import
cars. However, as operations
expand, Tesla should set up a
Gigafactory in India for avoiding
high import duties and also to have
access to cheap labour. India also
boasts of world class automobile
infrastructure and can serve as a
export hub for other nations
especially Europe.
Implementation
Assessing the Utility of Auto – Pilot Features
TESLA SHOULD NOT LAUNCH THE AUTO-PILOT FEATURES DUE TO THE FOREMENTIONED REASONS
Affecting Livelihoods Forbidden Rules Safety Issues
Driving constitutes nearly 40 lakh The sensors which are required for Traffic rules are not followed as
jobs in India which will be Severely initiating auto pilot in the rigorously as in other nations.
Affected if this technology is further automobiles are banned for private Making it highly unsafe for the
developed. use in India. drivers as well as for the pedestrians.

₹ ₹
Government Regulations Exorbitant R&D Costs Improper Roads
The Central Government is not in favour As indigenous technology for Indian Indian roads are still not ready to
of the proposal to allow auto pilot in roads needs to be developed, it handle the Auto pilot feature as
the Indian economy as of now. requires huge R&D expenditure. Indian roads lack proper
maintenance and signage.
Though Auto pilot impact won’t be launched in India in short term, In the long term R&D expenditures being high, auto
pilot can be proven safely and can be launched in India as well.
Problems Insights
Incentives Set-up Price-Point Analysis Promotional Implementation
Government Incentives
Central Government Schemes
Approval for Green License Plates
The government has approved green license plates
for electric vehicles to encourage people to use
them. The purpose behind is their easy identification
for proposed benefits such as concessional toll,
preferential treatment for parking and free entry in
congested zones.
Production – Linked incentive Scheme
PLI Scheme aims at extending subsidies to the
production companies by the central govt. It will
help to increase R&D (Research and Development)
Reduction in GST
The GST Council reduced the tax on EVs from 12%
to 5% and on chargers from 18% to 5%
Tax cut on Financed EVs
A tax cut has been announced on the loan amount
taken for the purchase of electric vehicles in India.
Huge Incentives for Electricity Supply
The sale of electricity has been allowed as a
'Service' for the charging electric vehicles which is
set to provide huge incentives in order to attract
investments into charging infrastructure
Problems Incentives
Delhi
• Road tax and registration fees
will be waived for all battery
electric vehicles during the
period of the policy
Maharashtra
•Exempts EVs from road tax and
registration fees over five-year policy
period
•Enable fuel stations to set up charging
points through governing regulations
and support by electric supply agencies
Karnataka
• Providing incentives such as
interest-free loans on the net state
goods and service tax for EV
manufacturing enterprises
• Set up 112 EV charging stations in
Bengaluru
• Proposes to offer 20% subsidy on
installation of EV charging stations
Set-up Price-Point Analysis
Punjab
• Private EVs will be given 100% waiver
on motor vehicle tax for a period of
five years
Uttrakhand
•Exempts the first 100,000 EV buyers
from motor vehicles tax for five years.
Andhra Pradesh
• Complete reimbursement of road tax
and registration fees on sale of EVs
until 2024
• Establish one lakh (100,000) slow and
fast charging stations by 2024
Tamil Nadu
• Re-skilling allowance for employees
working with EV manufacturing units
• EV-related and charging infrastructure
manufacturing units will receive 100%
exemption on electricity tax through
2025
Promotional Implementation
Setting up Tesla’s Facilities in India
KEY QUESTION RECOMMENDATION WHERE & WHY
Manufacturing Unit Setup in
Khushkera, Alwar, Rajasthan
YES Rationale:
• Existing Manufacturing plants of
Tesla needs to develop its own Honda and Hero Electric
• Favourable Government Policies
manufacturing and R&D Facility • Leveraging Solar Powered Plants
Assessing due to the following reasons: • Catering to Demand in North
India
whether Tesla • Indian Government wants to • Favourable Labour Laws
needs to boost local manufacturing of
develop its EVs, batteries and other
own components
Research & Development Unit Set-
Manufacturing • Relaxations on Import Duty Up in Bengaluru, Karnataka
and R&D from 100% to up to 20% Rationale:
• India’s Technological Hub
Facility in
• Cheaper Labor Costs in India • Hub of India’s global inhouse Manufacturing Unit Set-Up in South Tamil
India, if yes centre of MNCs Nadu: Between Tirunelveli and Thoothukudi
then where • India’s possibility of becoming • Scale: Approximately 40,000- Rationale:
an export hub 55,000 sq.ft (similar to other • Proximity to Railway Station and Ports
and why ? R&D Centers in Bengaluru) which will aid imports and exports .
• About 80% of components for • Corporate friendly labour laws • Well Established EV manufacturing Units
• Proximity to R&D Centre
lithium-ion batteries being • Existing Infrastructure for Ev ecosystem
made locally now • Favourable government policy for
automobiles.
• Scale: 200-300 acres

Problems Incentives Set-up Price-Point Analysis Promotional Implementation

Price – Point Analysis
Key Takeaways
MODEL TESLA MODEL TESLA
TESLA MODEL X TESLA MODEL Y • It can be interpreted from
3 MODEL S
COSTHEADS the adjoining calculation
Price in USA $ 37,990 $ 70,620 $ 81,190 $ 49,200 that if Tesla imports CBUs of
model S, X and Y; it will be
Conversion Rate in India (A) ₹ 27,73,270 ₹ 51,55,260 ₹ 59,26,870 ₹ 35,91,600 approximately 1.65 times
Duties and various taxes @ ₹ 16,63,962 ₹ 51,55,260 ₹ 59,26,870 ₹ 35,91,600 more expensive as
60% on price less than $ compared to USA. Tesla
40,000 and @ 100% on price model 3 will cost twice in
more than $ 40,000 (B) India as compared to USA.
Other charges including ₹ 15,53,031 ₹ 36,08,682 ₹ 41,48,810 ₹ 25,14,120 • As per the price analysis,
duties, cess and freight @ Model 3 serves as the
35% on (A+B) (C) cheapest car among all and
Total (A+B+C) ₹ 59,90,263 ₹ 1,39,19,202 ₹ 1,60,02,550 ₹ 96,97,320 should be introduced first in
the Indian economy.
Margin Rate @ 10% ₹ 5,99,026 ₹ 13,91,920 ₹ 16,00,255 ₹ 9,69,732 • Thus we recommend direct
setting up of a factory in
Expected Range ₹ 53,91,237- ₹ 1,25,27,280- ₹ 1,44,02,295- ₹ 87,27,588- India, which will reduce
₹ 65,89,289 ₹ 1,53,11,122 ₹ 1,76,02,805 ₹ 1,06,67,050 costs to nearly 40%-100%.
ASSUMPTION:
(1)1$ = ₹ 73 (Approx.) as on 03 February, 2020 (2)Revised Import Duties in Union Budget have been considered (3)Base models have been considered

Problems Incentives Set-up Price-Point Analysis Promotional Implementation

Promotional Tactics
Target Audience Offline Marketing Online Marketing (25-35 age) Celebrity
Endorsement
(35-55 age)
Demographics Psychographic
AWARENESS Ads on Print Media
SEOs; SEMs
Directing traffic to
Hiring brand
ambassador like
Age: 35-55 Ads on TV Channels Tesla’s website Ranbir Kapoor,
• Enjoy a YT Channels: My Country
Gender: Male & Benedict
luxurious life Installing Billboards My ride, Powerdrift, etc
Female Cumberbatch etc.
• Techno savvy/
Profession:
trend followers
Corporate Magnate
• . Admires Make the car popular and worth considering through-
& Executives
Innovation
CONSIDERATION Attractive website and blogs Creating a sense of Displaying the
regarding the different brand equity through car in Auto
features of the car and value sponsoring IPL, soccer expos
and luxury that it provides league, etc.
Volume

35-50

• Providing Special discounts for early bookings and referrals for the online car
25-35
PURCHASE purchase
Demand • Providing personalized experience at technological advanced stores and
make the customers get the car they want
Behavioral Geographic
• Affinity for
sustainable and
• Tier-1 cities
Delhi, Bengaluru, POST Customers should feel emotionally attached to the company’s service via:
techno savvy PURCHASE Loyalty Planning events Referral Programmes: Free Charging
24*7
Kolkata, Mumbai,
brands. etc. or maintenance vouchers with the
schemes and for fellow owners purchase of a new Tesla car . Publicity
• Brand loyalty is • Tier-2 cities like
high Ahmedabad, discounts on and enthusiasts through giving Model Y monthly or
Pune, etc. support service referrals Roadster supercar quarterly.

Problems Incentives Set-up Price-Point Analysis Promotional Implementation

Sales & Distribution Network
Channel Management Virtual Reality Stores Customer
Service Channel
• Digitized Interactions with no physical
Online Sales Customers vehicles House Call Multi- Purpose
• Visitors can travel through a Virtual futuristic approach Dealership Stores
world and see the digitally customized vehicle
Distribution
Tesla Design • Feature to view the in-car features of the House – Call
Channel
Studio vehicles upfront, trying out the sound system, Approach
folding roof and touchscreen display and even Tesla Customer Service Team will
Car Dealership virtually drive a car
Physical Stores travel to customers’ homes to
Stores • These innovative places in malls provide the
perform annual inspections,
customers a Personalized experience and
Virtual Reality firmware upgrades and services
keep them engaged
Digitised Stores
Multi – Purpose
Retail Stores
Tesla Online D2C Tesla Design Studio Car Retail Stores Car Retail Stores can be used for
Sales • Tesla configurator will provide a • Selling through Tesla’s own Servicing the cars of customers
• Primary Distribution Channel User Interface to design their Car Retail stores wherein Tesla owns the entire process from
• Customers can directly order Roadster from a computer, customers will be allowed to vehicle design to customer delivery
cars online from their website smart phone or iPad test drive the cars as well which allows for close
• A 7-day money – back • Staff is available at these stores • Additionally, Selling through communication between Tesla
guarantee in case anyone has to address detailed queries stores like Big Boy Toys to engineers, sales and service to
second thoughts about the about options, performance, target the premium ensure product quality and an
purchase and specifications segment market exceptional ownership experience
Problems Incentives Set-up Price-Point Analysis Marketing Implementation
Implementation Timeline & Risk Mitigation
2021 2022 2023 2024 2025
1. Creating Awareness
Initiating Pre-Launch Ads Sponsoring Initiating Post-Launch Advertisements
about Tesla
Using ATL and BTL Methods
Implementation

Events like IPL Celebrity Endorsements; Digital Marketing

2. Setting-Up Tesla’s Setting up of a manufacturing
Facilities R&D Plant in Bengaluru
plant in India
3. Expansion in Tier 1 Setting up and Expansion of distribution centres in India across Tier 1 cities
Cities

4. Expansion in tier 2 Setting up of distribution network in Tier 2 cities

cities

Risk scenarios Mitigation Strategy

11
▪ Undertake campaigns which enhance consumer confidence
High

Low consumer confidence

1 in Electric Vehicles pertains ▪ Lobby with states regarding EV promotion policies
Impact on brand/sales

2 22
Risks

High costs pertain due to ▪ Initially, create a brand value in the mind of Indians.
high tariffs by the ▪ Set up Giga factory in the expansion phase so as to reap benefits of
3 government government schemes
33
Domestic competitor
Low

develops EV vehicles with ▪ Create luxury experience for the customers.

Low Probability High premium features at low cost ▪ Setting up production units in India to avoid import tariffs

Problems Incentives Set-up Price-Point Analysis Marketing Implementation