I: How would you go about launching Tesla in Bangalore, India ?
C: Ok, let’s talk a little about what Tesla does to start with. Tesla is a sustainable energy company and manufacturing electric vehicles is the core of its business. Tesla cars are not only electric but are also software operated. These cars receive over the air updates for free to improve performance.
People buy Tesla for primarily 2 factors - clean energy and technology (self drive mode, there are no mechanical controls inside the vehicle - everything is controlled by a tablet). When people own a Tesla, they want to signal that they are truly early adopters of technology and are ready to stick with Tesla no matter the pain points. (Installing charging stations, getting used to a new way of driving, ensuring that there are enough charging stations on the route in case they’re travelling long distance).
I’m assuming that Tesla is trying to expand its business and create a new market in India with Bangalore as the first location for launch.
I: Solid, go on.
C: What is Tesla’s goal behind launching in India?
I: Let’s talk about that for a little bit. What are your thoughts?
C: Sure, here are some possible goals that I can think of
Revenue/profit
Market share - establish themselves as a leading player in the Indian electric vehicles space
Testing the feasibility of Tesla in India - Will Tesla be suitable for Indian roads? - I’m going to assume that enough testing will be done before launch as this is the most cost effective method. It seems very expensive to test this after establishing a full fledged manufacturing and sales office in India. It is also important to test, as this could be Tesla’s entry point to entire South east Asia.
I would like to go with market share as Tesla’s goal.
I: Hmm, sure let’s go with that.
C: Before we get into the launch details, I would also like to address some barriers to entry in the Indian market that Tesla should consider before making this decision.
Regulations - Tesla should consider local policy and regulations depending on the type of office they want to set up in India. Policies will also vary from state to state.
Set up costs - Tesla will incur huge set up costs to build and install charging stations all over India.
Demand - How is the EV market share in India when compared to overall auto companies? Will Tesla be able to create sufficient demand for Tesla cars especially at their price range?
Competition - With India’s goal to move to EVs by 2030, Tesla will have to look at other EV makers (especially local competition) that India will open itself up to.
Adaptability of the technology to Indian roads and drivers - Will Indians be open to technology driven cars? Will Tesla’s self driving tech work for Indian roads and the variables involved (people walking, cows crossing, cyclists/2 wheelers, lack of lane switching rules, etc.)?
I: Interesting. Let’s assume that Tesla has considered all these barriers to entry and they have decided to go ahead with the launch.
C: Cool, here’s how I think Tesla would decide if they have been successful in the Indian market
Metrics for success
market share - % share in the total auto market, % share in the EV market
Brand recall
Word of mouth
I would measure this every quarter for a year and ensure there’s quarter on quarter growth.
Target segment and positioning
Before I address the target segment, Tesla should figure out it’s initial positioning. Tesla can position itself as a premium brand that everyone aspires to buy someday and can differentiate itself as an innovator aspiring to create a clean and pollution free environment.
Based on this, I would pick working professionals (middle and senior management) and business owners as the target segment with a focus on tech and energy sectors. I think this segment would be perfect as there is a need and the ability to buy a car like Tesla.
I: Sounds good.
C: Do we have any constraints for the launch?
I: No constraints please go ahead.
C: Awesome, I’ll detail out some launch activities now. To give this a structure, I’m going to divide this into partnerships and launch related activities.
Partnerships
Partner with other EV companies like Ather to build charging infra that’s compatible with most electric vehicles. This would reduce Tesla’s cost in building charging stations across the state and country exclusively for Tesla vehicles. This would also increase the share of EV sales in the auto market as people will not have to worry as much about adequate charging stations on their commute routes.
Partner with tech companies to offer car lease programs to their employees. This is the target segment we spoke about and will resonate well with them.
Partner with the government and start talking about lesser emissions from EVs and clean energy. Work with the relevant government organization to include incentives for EV owners - separate lanes, lesser taxes, etc.
Launch activities and campaigns
Digital - Create a buzz around launch on channels where our target segment spends the most time. Some channels - social media and youtube. The primary messaging here is that Tesla is launching in India.
Physical - put up billboards on key junctions especially in areas around tech parks and near the airport.
Pollution free campaign - Start a conversation about how polluted the air is in Bangalore because of auto emissions and what the people in Bangalore can do about this. Show emissions data and show Tesla numbers in comparison and talk about how driving a Tesla helps create cleaner, pollution free environment. We could also gamify this by creating badges and swag for Tesla owners. Swag could be a car sticker that says “I’m an environment champion” or “I’m a pollution warrior”. This will create a sense of exclusivity and community around the brand and will occupy mind share in the market.
Once this is in place, post launch I would go back to the metrics and see if Tesla’s launch has been successful.
Notes
What if I don’t know Tesla’s positioning during the interview?
Keep in mind that the interviewer is looking for your thought process and also that there are no wrong or right answers. There are just well thought out/structured answers or random/haphazard answers. If you have no clue what Tesla’s positioning is, call that out honestly and say that you would like to assume that and reason out the rest of your answer.
Nice post. Just wanted to drop couple of points on this because I have been following Tesla very closely for 5+ years:
1. Tesla typically spends $0 on traditional marketing. So I am guessing things like Bill boards will be immediately shot down. The company's only source of marketing is word of mouth and they go out of their way to make a very good referral program. Some way to create that fan following here could be to have an India specific referral program?
2. Another area of partnerships is tieing up with businesses which are patronized by your target audience such as 5 star hotels and provide them with free chargers. Given that charging infra will be a critical factor while planning long distance travels, this could be a low risk investment for some of these businesses. It's called destination charging in the US.
3. On the entry part, typically auto manufacturers spend a lot of time recruiting dealers and figuring out the right incentive structure. Given that Tesla has a no dealer policy, it will be interesting in terms of how they approach this in India where the laws allow them to have a no dealer policy unlike many states in USA. They may face significant troubles at local RTOs though.
4. Last point, why assume Tesla will focus on selling only cars? They have a decent energy business, gives how much GOI is pushing for renewables, that maybe an area to focus on for getting the initial traction and word of mouth out because those products are way more economical plus the need for energy storage in India is far higher than USA given the inefficient local power distribution but governments resulting in more frequent power failures. Maybe this is something one has to clarify with the interviewer.