Submission BCS
Power Rangers Business Case on Electronic Vehicle
Submission Date & Time: 2021-10-19 04:09:53
Event Name: NMO S4 Sprint One
Solution Submitted By: Aayush
Assignment Taken
Finance role where I was responsible for designing 5 year expansion plan along with financial planning and also generate Operating planCase Understanding
Financial Plan Registered Vehicles in India in 2021:- 230 Million Adoption target of electrical vehicles by government till 2030:- 30% Corpus fund available to us:- 46 lakh Maximum Loan available: - 60 lakh @ 16% per annum interest rate Co-working space for 8 people rent: - 3000 per workstation per month Assuming a 5% growth annually in electrical vehicle sector in India for the next 5 years We are a team of 8 members with average monthly needs of :- 50000 per month which translates to 50000*8= 4 lakh per month that is 48 lakh per annum Currently we are not in a position to pay our team members fully we can only finance a maximum of 20% of their ask which translates to 9.6 lakh per annum Suppose we have 1 workstation for 1 worker and since we have 8 workers with us we will have 1 workstations since one workstation will cost about 16 lakh that can service around 25 vehicles daily as per the national renewable energy data and we are charging an average of 200 per vehicle per charging session Assuming 20% profit margin Total revenue = 1*25*200 = 5000 daily Total monthly revenue= 5000*30= 150000 per month Profit margin = 150000*0.2= 0.3 lakh per month we are able to generate 0.3 lakh per month through charging EV Yearly revenue generated through charging EV = 3.6 lakh per annum Now we are left with 48 lakhs – 16 lakhs = 32 lakh After manufacturing and selling Two wheelers we are left with an additional amount of 32 lakhs which we have to use to manufacture Electric cars Approximate cost of producing 1 EV car = 8 lakh So we can produce 32/8= 4 cars annually. Now lets assume a high profit margin of 50% as our costs are lower compared to competitors Profit = 32*0.5= 16 lakh per annum The total profit we are able to generate in 1 year =16+3.6= 19.6 lakh per annum Now our team members required 48 lakh rupees per year but we don’t have enough profits to py them that amount so we will pay 20% of those 48 lakhs which translates to 9.6 lakh per annum. Net profit we are left with for 1 year= 19.6-9.6 = 10 lakh per annum Now let us consider a average annual growth of 20% in profit margin as government is making plans on improving EV infrastructure and giving subsidies to startups. So, in the next 5 years total profit we can earn = 10 + 10*1.2 + 10*1.2*1.2 + 10*1.2*1.2*1.2 + 10*1.2*1.2*1.2*1.2 = 72.21 lakh rupees We can use these profits to expand our earnings and we can still keep paying the amount to our team members. Since we already have the infrastructure with usBCS Solution Summary
Financial Plan Registered Vehicles in India in 2021:- 230 Million Adoption target of electrical vehicles by government till 2030:- 30% Corpus fund available to us:- 46 lakh Maximum Loan available: - 60 lakh @ 16% per annum interest rate Co-working space for 8 people rent: - 3000 per workstation per month Assuming a 5% growth annually in electrical vehicle sector in India for the next 5 years We are a team of 8 members with average monthly needs of :- 50000 per month which translates to 50000*8= 4 lakh per month that is 48 lakh per annum Currently we are not in a position to pay our team members fully we can only finance a maximum of 20% of their ask which translates to 9.6 lakh per annum Suppose we have 1 workstation for 1 worker and since we have 8 workers with us we will have 1 workstations since one workstation will cost about 16 lakh that can service around 25 vehicles daily as per the national renewable energy data and we are charging an average of 200 per vehicle per charging session Assuming 20% profit margin Total revenue = 1*25*200 = 5000 daily Total monthly revenue= 5000*30= 150000 per month Profit margin = 150000*0.2= 0.3 lakh per month we are able to generate 0.3 lakh per month through charging EV Yearly revenue generated through charging EV = 3.6 lakh per annum Now we are left with 48 lakhs – 16 lakhs = 32 lakh After manufacturing and selling Two wheelers we are left with an additional amount of 32 lakhs which we have to use to manufacture Electric cars Approximate cost of producing 1 EV car = 8 lakh So we can produce 32/8= 4 cars annually. Now lets assume a high profit margin of 50% as our costs are lower compared to competitors Profit = 32*0.5= 16 lakh per annum The total profit we are able to generate in 1 year =16+3.6= 19.6 lakh per annum Now our team members required 48 lakh rupees per year but we don’t have enough profits to py them that amount so we will pay 20% of those 48 lakhs which translates to 9.6 lakh per annum. Net profit we are left with for 1 year= 19.6-9.6 = 10 lakh per annum Now let us consider a average annual growth of 20% in profit margin as government is making plans on improving EV infrastructure and giving subsidies to startups. So, in the next 5 years total profit we can earn = 10 + 10*1.2 + 10*1.2*1.2 + 10*1.2*1.2*1.2 + 10*1.2*1.2*1.2*1.2 = 72.21 lakh rupees We can use these profits to expand our earnings and we can still keep paying the amount to our team members. Since we already have the infrastructure with usSolution
Financial Plan Registered Vehicles in India in 2021:- 230 Million Adoption target of electrical vehicles by government till 2030:- 30% Corpus fund available to us:- 46 lakh Maximum Loan available: - 60 lakh @ 16% per annum interest rate Co-working space for 8 people rent: - 3000 per workstation per month Assuming a 5% growth annually in electrical vehicle sector in India for the next 5 years We are a team of 8 members with average monthly needs of :- 50000 per month which translates to 50000*8= 4 lakh per month that is 48 lakh per annum Currently we are not in a position to pay our team members fully we can only finance a maximum of 20% of their ask which translates to 9.6 lakh per annum Suppose we have 1 workstation for 1 worker and since we have 8 workers with us we will have 1 workstations since one workstation will cost about 16 lakh that can service around 25 vehicles daily as per the national renewable energy data and we are charging an average of 200 per vehicle per charging session Assuming 20% profit margin Total revenue = 1*25*200 = 5000 daily Total monthly revenue= 5000*30= 150000 per month Profit margin = 150000*0.2= 0.3 lakh per month we are able to generate 0.3 lakh per month through charging EV Yearly revenue generated through charging EV = 3.6 lakh per annum Now we are left with 48 lakhs – 16 lakhs = 32 lakh After manufacturing and selling Two wheelers we are left with an additional amount of 32 lakhs which we have to use to manufacture Electric cars Approximate cost of producing 1 EV car = 8 lakh So we can produce 32/8= 4 cars annually. Now lets assume a high profit margin of 50% as our costs are lower compared to competitors Profit = 32*0.5= 16 lakh per annum The total profit we are able to generate in 1 year =16+3.6= 19.6 lakh per annum Now our team members required 48 lakh rupees per year but we don’t have enough profits to py them that amount so we will pay 20% of those 48 lakhs which translates to 9.6 lakh per annum. Net profit we are left with for 1 year= 19.6-9.6 = 10 lakh per annum Now let us consider a average annual growth of 20% in profit margin as government is making plans on improving EV infrastructure and giving subsidies to startups. So, in the next 5 years total profit we can earn = 10 + 10*1.2 + 10*1.2*1.2 + 10*1.2*1.2*1.2 + 10*1.2*1.2*1.2*1.2 = 72.21 lakh rupees We can use these profits to expand our earnings and we can still keep paying the amount to our team members. Since we already have the infrastructure with usConclusion
Financial Plan Registered Vehicles in India in 2021:- 230 Million Adoption target of electrical vehicles by government till 2030:- 30% Corpus fund available to us:- 46 lakh Maximum Loan available: - 60 lakh @ 16% per annum interest rate Co-working space for 8 people rent: - 3000 per workstation per month Assuming a 5% growth annually in electrical vehicle sector in India for the next 5 years We are a team of 8 members with average monthly needs of :- 50000 per month which translates to 50000*8= 4 lakh per month that is 48 lakh per annum Currently we are not in a position to pay our team members fully we can only finance a maximum of 20% of their ask which translates to 9.6 lakh per annum Suppose we have 1 workstation for 1 worker and since we have 8 workers with us we will have 1 workstations since one workstation will cost about 16 lakh that can service around 25 vehicles daily as per the national renewable energy data and we are charging an average of 200 per vehicle per charging session Assuming 20% profit margin Total revenue = 1*25*200 = 5000 daily Total monthly revenue= 5000*30= 150000 per month Profit margin = 150000*0.2= 0.3 lakh per month we are able to generate 0.3 lakh per month through charging EV Yearly revenue generated through charging EV = 3.6 lakh per annum Now we are left with 48 lakhs – 16 lakhs = 32 lakh After manufacturing and selling Two wheelers we are left with an additional amount of 32 lakhs which we have to use to manufacture Electric cars Approximate cost of producing 1 EV car = 8 lakh So we can produce 32/8= 4 cars annually. Now lets assume a high profit margin of 50% as our costs are lower compared to competitors Profit = 32*0.5= 16 lakh per annum The total profit we are able to generate in 1 year =16+3.6= 19.6 lakh per annum Now our team members required 48 lakh rupees per year but we don’t have enough profits to py them that amount so we will pay 20% of those 48 lakhs which translates to 9.6 lakh per annum. Net profit we are left with for 1 year= 19.6-9.6 = 10 lakh per annum Now let us consider a average annual growth of 20% in profit margin as government is making plans on improving EV infrastructure and giving subsidies to startups. So, in the next 5 years total profit we can earn = 10 + 10*1.2 + 10*1.2*1.2 + 10*1.2*1.2*1.2 + 10*1.2*1.2*1.2*1.2 = 72.21 lakh rupees We can use these profits to expand our earnings and we can still keep paying the amount to our team members. Since we already have the infrastructure with usAttached File Details
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Article Type: Business Case Scenario, Case Study Solution Submission
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Participant
My name is Aayush Garg and i am currently pursuing MBA from IIM Shillong
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