Submission BCS
Swoosh - A Revolutionary Indian EV Startup with a vision to provide electric mobility aimed at serving the humanity and nature, fully charged to 100%
Submission Date & Time: 2021-10-19 04:26:47
Event Name: NMO S4 Sprint One
Solution Submitted By: Garbhapu Chaitanya
Assignment Taken
Funding Proposal, Financial Targets and Expansion plansCase Understanding
Based on the case, the funding available is only sufficient to complete the prototype designing and product completion. For the initial trials and further research, we need to raise funding either through equity or debt. Over the next two years, we need enough funding for hiring resources and execute our expansion plans. A funding proposal covering the overview, budget, and time frame of the company should play a key role in getting the required funds for the company for further expansion and meet the target set forth by the key players.BCS Solution Summary
We have identified that our EV company doesn't have enough funding to get through the marketing and promotions phase before the launch and manufacturing phase after the launch and hence we would like to get the funding secured for the next 2 years to be sufficient enough set up and manufacturing plant which can manufacture 50,000 vehicles per annum and further expansion into 13 metro cities. The expected funds needed to reach the target is 300 crore which are planning to acquire from equity and operations during the first two years.Solution
In order to solve the identified problem, we need at least 300 crores out of which 80 crores can be utilized to setup a manufacturing plant and 40 crores can be spent on acquiring the resources and the remaining funds can be spent on marketing, setting up proper distribution channels, the required logistics and customer service support and getting the required workforce on board. The key concern here is to make sure there is enough funds available for the designing team to run the tests and trails to make sure they are delivering a product which aligns well in generating enough profits to make sure that we are reaching for financial targets.
On the other hand to expand further into the new markets, we would like to make sure that we are generating enough revenue from operations and raise capital to setup manufacturing plants with higher capacities to reduce the waiting periods which can also serve as a differentiating factor. By the end of 5 years the revenue accumulated from operations should give the advantage of having funds to pay dividends and debt and at the same time utilize the funds to launch a new product line by the end of 5 years.
To complete the above two targets, we have estimated the cost of producing a two wheeler in the initial years with the help of a research report and eventually made the projections for the subsequent years. For the first two years the majority of the cost is coming from cost of battery which is estimated at 54,000 which would reduce to 20,000 once the manufacturing capacity if increased in the next two years. The estimated profit margins on each vehicle in the initial years is 75 percent of the cost of production and eventually will raise to 125 percent with the reduction in cost of production as seen in the betteries and other components.
Conclusion
Producing the 50,000 Vehicles per year with a profit margin of 75 percent when the vehicles are prices at a competitive price of 1,45,000 INR and further scale up the production to 2.3 Lakhs can help is meet the financial targets.Attached File Details
Comments
Article Type: Business Case Scenario, Case Study Solution Submission
Business Case Detail
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Participant
I am a first-year student at IIM Shillong. I have completed my bachelor\\\'s in Computer Science and Engineering and have a formal work experience of 19 months.
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