Assignment Taken

Assignment 2. Provide a detailed overview of the financial target, Product Mix & Expansion Plan for Next 5 Year. Assignment 3. Prepare Product development plan Assignment 5. Prepare A market entry,

Case Understanding

SUMMARY Electronic vehicle in India as government is planning to capture 30% of market with electric vehicle by 2030 but it’s not that much easy as it seems making or adding a change in taste of Indian customer and for what they have to pay is vary difficult and as we all know India is one of the leading county to operate automobile so making there mind set to purchase Electronic Vehicle in favor of deiseal or petrol engine will be the most challenging part Second problem will be the pollution from the manufacturing of lithium battery the carbon produced from the manufacturing of lithium battery is very harmful for environment so the future target of government to make vehicle environment friendly will not be accomplished Third problem will be the charging station that is it possible to make sufficient charging station with low cost and distance and charging will also be the problem to avoid rush Forth problem will be the power and capability of electric vehicle that is it going to give that much power which we get from petrol and deiseal like if we take that electronic vehicle on the top of mountain will it go without any damage or how much we can riley on the vehicle that battery won’t be affected Fifth problem will be customer attraction how the customer is going to attract toward electronic vehicle what strategy we are going to plan to make electric India Sixth problem will be added on features and design of the product that how much we can make the look more attractive so that customer gets attract and the features also plays vary important role Seventh problem will be the safety measures how much the body of electric vehicle is capable at the time of accident and rating in comparison with on going model in petrol and deiseal engine segment what will make investors to invest in Indian market and fund raising will also impact the market condition of electric vehicles.

BCS Solution Summary

Solution for the summary According to the research our first problem will be understanding the consumer behaviour that what exactly we are going to provide which is accepted by consumer so our main focus will be on quality and trust building of product towards customer which will be possible only when e will provide following points 1. Providing on-site service 2. Feature loaded machine 3. Use of lithium battery 4. Battery warranty minimum 8 years 5. Advertisement influence 6. Low maintain cost 7. Safety 8. Easily available charging station Second problem was pollution from the manufacturing of lithium battery it can be reduced by innovating new technology or combination which will reduce the cost as well as pollution done from the manufacturing because as of now lithium battery is the most trustable and long-lasting product in the segment and no new technology has been developed yet which can replace it so we have to go with lithium battery until new technology came into existence Third problem was charging station and time taken to charge the machine to solve this problem we need to make more charging station and the charging station in metropolitan city will be at the distance of 10km and firs we have to fucus on the grade 1 city because the consumption of electric vehicle will be more as compare to rural area or backward area so the main focus would be the city having good literacy rate Fourth problem was power and capability of electric vehicle for this we will use hard material body and the engine should be capable of doing off rode for that we need to increase the power of battery also so that engine should work properly Fifth problem was customer attraction towards electric vehicle that why they are going to switch their preference to EV it will all possible by advertising and providing best class in low cost and safety Sixth problem will be added on features and design of the product that how much we can make the look more attractive so that customer gets attract we will not make it simpler everything would be according to the consumer behavior Seventh problem was body capability that how much the vehicle is safe for a rider it can be done by providing features like airbags, hard sheet, inner space and quality product Consumer behaviour will make a great impact on market capture

Solution

Market Overview

• The automotive sector in India is dominated by two-wheelers (scooters, motorbikes) and three wheelers (autos and rickshaws) that play a significant role in last mile mobility in the country. At 22 cars per 1000 people, car ownership is low, while two-wheeler ownership is among the highest in the world.

 

• While electric vehicles (EVs) currently account for less than 1% of total vehicle sales in India the market is growing rapidly and expected to be worth around at least £4.8 billion (INR 475 billion) by 2025. Two-wheelers account for the largest share of this market at 62%, followed by three- wheelers at 37%
• The Indian EV market varies significantly by state, depending on factors including demographics, income levels, regulatory landscape and urbanization. The state of Uttar Pradesh, for instance, with one of the lowest urbanization rates, has seen significant uptake of electric two-wheelers. Maharashtra, on the other hand, with a higher urbanization rate, has the highest penetration of electric three-wheelers and passenger cars.

 

PRODUCT MIX

 

 

• The penetration of electric two-wheelers is projected to reach up to 15% by 2025 from 1% currently
  • Low to medium speed electric two-wheelers (up to 40 kmph) with lead-acid batteries currently dominate the market but demand for Lithium-ion battery models is expected to grow rapidly under government incentives and demand from bike and scooter rental companies such as Vogo, Yulu and Bounce.

 

• Many OEMs have launched high-speed (>40km/h) electric scooters; two (Athar and Okinawa) successfully fulfilling the local manufacturing requirement under the FAME II scheme and thereby unlocking subsidies. Hero Electric, Athar Energy, Ampere, Okinawa, are establishing manufacturing units throughout the country

 

 

• Three- wheelers are the dominant mode for last mile connectivity in several states including Delhi, Bihar, West Bengal and Uttar Pradesh and the electric three-wheeler market is expected to grow rapidly. Further growth potential lies in converting pedal rickshaws.
• While most electric three wheelers are primarily low speed, growth is

expected in the high-speed market, particular for the cargo segment.

• The battery swapping model for supplying power has side-stepped the lack of charging infrastructure but the future is likely to see a mix of both models.
• With the push from government for ICAT-certified models from late 2018, the share of larger players in the e-rickshaw segment (e.g. Mahindra Electric, Kinetic Green and Lohia Auto) is gradually growing.
• The four-wheeler segment currently has the lowest EV penetration of 0.12% (3,400 units of electric passenger cars sold in 2020) but may grow to 5% by 2025 in an optimistic scenario. The demand in the short to medium term will be driven by fleets – including taxi and goods delivery services. For the commercial fleet segment, penetration is forecast to range between 20%- 30%).
• Factors such as limited market offerings, high upfront costs, insufficient battery life, high dependency on imports (with associated high tariffs), low range, power outages and crucially, an underdeveloped charging ecosystem continue to impede a higher penetration in the four-wheeler consumer segment.
• The electric four-wheeler market is currently limited to only four OEMs but several new players, domestic and international, are planning to launch their models over 2021-22. Two OEMs – Hyundai and MG Motor – currently import their EVs to India as CBUs or SKD (see glossary). In contrast, Tata Motors and Mahindra Electric manufacture locally.
• EV components present a market opportunity of another £2bn by 2025. Currently, EV manufacturing in India is being largely supported by imported components. However, large OEMs are making moves to enter the EV

 

components market to reduce reliance on imports and meet the 50% localization criteria to access government subsidies.

 

 

PRODUCT DEVELOPMENT

 

 

 

Market Drivers and Barriers

The key market drivers and barriers with regards to increasing EV penetration and success in India are summarized

 

 

Drivers

• Favorable government policies and subsidies
• Heavy investments from automakers
• Increasing diversity of products widening appeal to different groups
• Growing awareness of air quality and environmental issues
• Rising income levels in Tier-1 cities
• Lower Total Cost of Ownership (TCO) for EVs as compared to ICE Barriers

Barriers

• Complex criteria and processes to benefit from government incentives

(demand and supply-side)

• Recent decline in economic activity on account of COVID-19
• Low consumer spending power outside Tier-1 cities
• Lack of raw material limits domestic battery manufacturing
• Slow roll-out of charging infrastructure
• High upfront costs of electric four-wheelers compared to ICE vehicles
• Electricity network reliability issues

 

Opportunities and Understanding the Consumer

The EV transition in India opens up a range of opportunities for UK companies across services, vehicles, battery supply chain, charging infrastructure, and the electricity system. In general, these opportunities would be best pursued through a joint venture or other partnership with a local entity. Selected opportunities include

STRATEGY

Services and Solutions

• First and last mile micro-mobility and shared mobility EV services have potential (particularly for female travelers) offering opportunities for software providers for route-optimization tools.
• Solutions to managing charging and range anxiety:
• Analytics solutions to understand current range left given weather and traffic

conditions.

• Journey planning tools which incorporate planning for battery re-charging or swapping.

Electric Vehicles

• Cutting edge design and innovation in various elements of components manufacturing including electrical steel, cells, batteries and battery management systems.
• Fleet optimization software and services for ride-sharing, employee transport and last-mile freight companies.
• Vehicle sales, particularly premium offerings targeting the top end of the

market.

Charging Infrastructure

• Mass market adoption of EVs requires a charging infrastructure that is

affordable, accessible and serves all consumer groups.

• Partnering with Indian vehicle OEMs to provide charge point hardware and

software could be a route to market for UK charge point manufacturers.

 

• Specific opportunities include affordable and reliable public charging infrastructure, with appropriate considerations for the Indian market (e.g. two/three-wheeler compatible); battery swapping technologies, and online platforms for charging infrastructure visibility

Energy System

Supplying ‘green’ electricity for EV charging and taking advantage of the flexibility offered by EVs are longer term targets for India. Although the electricity market would need change to enable flexibility solutions, there are some areas where innovation is needed today, and UK companies The India Electric Vehicle Opportunity: Market Entry Toolkit 5 can potentially find opportunities in the following areas:

• Solutions to deliver consumer propositions that successfully access flexibility , in particular related to EV charging.

• Tools that provide a richer understanding of how transport, power, energy

and town planning interlink and can be coordinated.

• Systems that improve the understanding and visibility of current and future states of the Indian energy system.
• Automatically controlled interventions; storage, compensation and filtering.
• Technologies to decouple the grid from charging demands.

 

 

MARKET ANALYSIS OF ELECTRIC VEHICLES

 

 

 

The Indian EV consumer

• The Indian (mass) market is very price sensitive. Working to incorporate local components in order to access subsidies can help - as well as highlighting potentially cheaper total ownership costs.
• EVs are generally well suited to Indian driving conditions; points to emphasize for product launch. However, ensuring that safety and performance is delivered in the context of a variable climate, poor roads and a start-stop driving style is important. Test-drives can help provide reassurance.

 

• Prospective consumer customers have concerns about battery life and charging availability – which are often not material given the likely usage profile in India. Nonetheless, software for route planning and information on charge point locations may alleviate concerns.
• Usage is heavier amongst professional drivers; battery swapping provides an interim solution and there will be a ready market for fast-charging solutions when they become price competitive.
• Consumer customers worry about accessing servicing and maintenance support for their EVs: consider bundling these with the vehicle purchase.
• Vehicle ownership is an importance badge of status in India with larger private vehicles being prized. To encourage adoption of electric micro-mobility solutions or 2-wheelers, help owners signal their eco-credentials, something which is also socially desirable.
• The user experience of EVs depends on the ecosystem as a whole – important to engage and build partnerships therefore to help prevent a poor experience which isn’t within direct control.

Policy and Regulatory Environment

• FAME-II is the Indian government’s flagship policy to encourage the adoption and manufacturing of EVs in India (part of the ‘make in India’ push). The policy offers subsidies to manufacturers as well as to consumers to buy an ‘eligible’ EV at a reduced price.
• However, EVs need to meet several eligibility criteria to benefit from the subsidies, including minimum range, acceleration and maximum speed. Another challenging criterion for manufacturers is that more than 50% of components should be locally manufactured.
• For four-wheelers, incentives are only offered to vehicles used for public transport or for commercial purposes.
• EVs in India attract a lower Goods and Service Tax (GST) of 5% (reduced from 12% in 2019), compared to 28-43% for internal combustion engine vehicles.
• The government plans to make it mandatory for ride-sharing companies such

as Ola and Uber to ‘electrify’ at least 40% of their fleets.

 

• Several state governments have introduced their own EV policies to attract investment. States like Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Gujrat offer incentives such as capital interest subsidies, stamp duty reimbursements, tax exemptions and interest free loans.

 

The E-brand strategy
Brand portfolio strategy and brand architecture should offer flexibility to brand owners. Portfolio strategy should define roles for products, brands, and sub-brands. Brand architecture is the articulation of the relationships between products, brands, and sub-brands. Electric offerings are coming into portfolios alongside existing internal-combustion engine offerings, and, in many cases, hybrid combustion-electric offerings too (plug-in hybrid and self-charge).

The routes brands have chosen to take in respect to portfolio strategy and architecture vary, depending on a number of factors: when they were introduced, what else in the portfolio already exists/existed, and the connotations of those offers, and ambitions with the new electric launches.

Market entry strategies for electric vehicle start-ups in the automotive industry

The entry and growth of our Motors has produced enormous change in the automotive industry. What lessons can alternative energy start-ups learn when considering entry into an established industry? Reviewing the innovation management literature, we examine the emergence of Tesla Motors and analyses its commercialization of electric vehicles through an in-depth case-study. We draw on extensive secondary data and construct a performance trajectory depicting Tesla's entry into the automotive market, to demonstrate that Tesla Motors has not followed a disruptive innovation strategy. Instead, Tesla's commercialization strategy is explained through the lens of Architectural Innovation and the Attacker's Advantage. Implications are provided for new entrants.

Conclusion

India has one of the highest import tariffs on vehicles (particularly cars) in the world. In line with efforts to localize the EV supply chain, the government has increased customs duty on most imported EV components. • Companies looking to access demand incentives (subsidies) under the FAMEII scheme, are required to gradually increase local sourcing of components for their EVs. • India has standards and certification requirements in place for EV components/systems. Most are aligned with International Standards with the exception of some reflecting local use and environment; for example tests to demonstrate protection from flood and rain damage. • India is a signatory to international IP agreements and while legislative protection is comparable to Europe, bureaucratic delays in enforcement mean that practically speaking, this is a problematic area and India’s ranking in the International Intellectual Property (IIP) Index is low

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