Concepticon Motors is entering the electric vehicle market with its new model E2Day. Summarizing the key points: 1) The electric vehicle market indicates great potential for growth, projected to reach over 1.4 million cars sold globally by 2021. 2) Initial projections show the E2Day generating a positive NPV of €99.52 million for Concepticon, driven primarily by sales in the EU and Japan markets. 3) Several opportunities for improving the business case were identified, such as centralizing assembly in Shanghai to reduce costs, modifying the battery design to lower costs, and expanding sales in China's large EV market.

1. ENTERING ELECTRIC VEHICLES MARKET
CONCEPTICON MOTORS
HA team
BCG Strategy Cup 2012
Pavlína Froňková, Eva Peterková, Peter Zildner, Miroslav Havela

2. E2Day
EXECUTIVE SUMMARY HA-team
1500 Electric vehicles market Centralizing all assembly
Entering the segment of in Shanghai decreases the
indicates great electric city cars with E2Day overall costs, with added
potential, with benefit of simplifying the
1000 promises the NPV of: value creation process
1 440 758 cars sold in
2021 and CAGR of 26% 99,52 M EUR EU
500
over the next 10 years. USA Shanghai
This NPV indicates that
Jap
E2Day is a profitable
China
0 investment into EVs.
2012 2021 NPV +134 M
Battery is the most expensive China is going to be the The small city segment in the Small/Medium cars
component of the whole car, world’s 2nd largest market USA causes low sales and segment has potential for
thus any savings related to in EVs. negative DCF, resulting in further expansion into
the battery significantly If Concepticon increased its reducing NPV. It is EV’s, as it constitutes
increase overall margin. low market share here (5%) recommended not to launch ~50% of whole EV market.
to 10%, sales would grow there.
fast.
3 US
S/M
2 Japan
China
1 City
battery EU
63% 0
2012 2015 2018 2021
EU US Japan China
NPV +617 M NPV +31 M NPV +67 M NPV +178 M
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3. E2Day
EVS MARKET INDICATES GREAT POTENTIAL HA-team
3,8 % CAGR of
car market *
2012 2021
2012 2021
2012 2021
26 % CAGR
in EV market 2012 2021
21 % CAGR of
EVs sold
EVs penetration
2012 2021
EU 75 544 537 284
Increasing penetration of EVs into city US 30 902 334 027
and S/M segment drives market size from Japan 26 232 203 868
today’s 0,18 M to 1440,76 M in 2021
China 47 802 365 579
worldwide.
total 180 480 1440 758
* In segments with significant presence of EVs in next 10 Y
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4. E2DAY IS PROFITABLE WAY TO ENTER THE MARKET, E2Day
HA-team
INCOMES DRIVEN BY EU AND JAPAN
Investment EU US Japan China NPV
Contribution to NPV -1057,62 854,07 M -46,70 M 402,55 M -52,79 M 99,52 M
*
margin 5 449 2 495 9 774 847
market size 297 896 72 543 188 577 197 062
market share 20% 5% 10% 5%
200
Driven by positive results in EU and Japan, E2Day generates the 0
NPV of 99,52 M EUR.
-200
-400
China is unprofitable because of small market share and low -600
margin, while the negative CF in the US is a result of low size -800
and minor share of the market there. contribution to NPV by region
-1 000
* data for 2021; margin per car sold, market size and share given for city segment -1 200
invest. EU US Japan China NPV
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5. E2Day
THERE IS A ROOM FOR IMPROVEMENT HA-team
Improvements in value creation are possible,
ranging from streamlining current operations to strategy refocusing Contributions
to NPV
Assembly centralised in
Streamline value chain +134 M
Shanghai
E2Day characteristics
15 % saved in COGS +617 M
modification
Boost market share in China +31 M
Change strategies
in regional markets
Withdraw from US city segment +67 M
Tap the S/M segment Launch S/M segment car +178 M
BCG Strategy Cup 2012 Concepticon: Entering the EV market 5/9

6. STREAMLINE VALUE CHAIN E2Day
HA-team
TO GAIN SAVINGS OF 134 M
manufacturing shipping assembly Generates
4189,68 M
in COGS
in Shanghai into regions in each region over next 10 Y
manufacturing and assembly shipping Centralisation
lowers COGS* to
4055,92 M
centralised at Shanghai plant into regions over next 10 Y
+95,45 M +2,83 M +34,96 +0,77 M = 133,76 M
for EU for US for Japan for China increase of NPV
All investments to assembly capacity diverted to Shanghai. * Overall COGS between
2013 and 2021,
This offers significant savings given the labour intensity of assembly. discounted for 2012
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7. MODIFICATION OF BATTERY INCREASES MARGIN E2Day
HA-team
& KEEPS US COMPETITIVE
battery consumption range savings
Battery is main driver in costs of components [kWh] [kWh/100km] [km] [EUR]
frame
29% Mitsubishi 16 13,88 115 -
Think Global 23 23,2 99 -
charger E2Day 20 12 167 -
2%
motor E2Day modified 14 12 117 +3540 per car
4% power battery
electronics 63%
2% Using 14 kWh battery still gives E2Day the very best range in the
*
market segment, but allows for significant cost reduction.
100% margin;
margin; 12,42% + still the best range on the - May have a negative impact on
0,9% market market share
75%
COGS; 68% COGS; 57% + optimizing the cost of the most - Competition might catch up
50% expensive component more easily
Sales cost;
=> major impact on overall
10% profitability
25%
VAT, 21% 617 M increase in NPV
0%
before after * Both graphs are for EU 2013
BCG Strategy Cup 2012 Concepticon: Entering the EV market 7/9

8. FOCUS ON THE SECOND LARGEST MARKET E2Day
HA-team
TO BOOST SALES
Gross margin in China 2021 is 2 794 EUR per car,
promising steady CF if number of units sold rises
* Margin - OK
Low DCF in China, 3
only 11M market size
2
Units sold – not OK
1
market share 0
EU US Japan China
2nd
China is the world’s most important market for EVs
China’s minor contribution to NPV is driven by with almost 2M units sold between 2012 and 2021
small presence of Concepticon on the regional
20%
market in China. EU
15%
Additional investment in market research and 10% Japan
marketing campaign in China in order to increase 5% China, US
overall brand awareness and E2Day’s perceived 0%
value on Chinese market. (10 M)
E2Day market share in China is only 5%
Potential of sizeable, high growth market is untapped
*
* Assuming 10M EUR additional investment in marketing in 2012
Increase in NPV + 31 M and usage of 14 kWh batteries as suggested in previous slide.
BCG Strategy Cup 2012 Concepticon: Entering the EV market 8/9

9. ADAPTING STRATEGY TO REGIONAL SPECIFICITIES IN THE USA E2Day
HA-team
& LAUNCHING S/M SEGMENT MODEL
600
Not launching
500 no of EVs sold in 2021 by segment
Large distances in the US E2Day in the US
400
results in
300
increase of NPV
Traditional preference
200 by 66,7 M *
100 S/M
for larger vehicles city * = 46,7 in DCF
by local customers 0
EU US Japan China
+ 20 in investment to
assembly capacity
1400
Market size by segments ½ of EVs market Launch small/medium benefits:
1200 for EU, US and China: potential untouched EV in EU, US and China
+ NPV = 178,2 M
1000 for Concepticon
Assumptions: in S/M EVs
800
• Concepticon market share same as in city
+ Concepticon EVs
600 segment
market in all four
• Additional R&D investments 50% of E2Day regions
400 R&D
S/M • Price set to match competition in segment + presence in both
200
city • Margin and FC the same as in the city segment important
0 • Capacity investments needed are the same as segments of EVs
with the city segment
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
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