Shift 4Ford China

Patrick GilkeyTeng Zheng

Megan StuffelbeamLauren Colasanti

Agenda

Key issues

Opportunity

Recommendation

Implementation

Financial Projection

Key Issues

Availability of charging stations.

Intensified EV competitions from local automakers.

Chinese government policy restrictions.

Charging time.

Range of Ford EVs.

Opportunity Fleet vehicles are a viable option in the short-term

The Chinese Government has mandated that 30% of all government vehicle purchases run on “green technology” (pure EV or hybrids) in EV pilot cities.

Ford has established an amicable relationship with Chongqing and Hangzhou’s local governments

Ford’s ICE vehicles make up a small percentage of these government fleets

Plant Locations

Ford’s Target CitiesWith respect to Ford’s 5 plant locations, Ford should target government fleets in three cities:

❖ Chongqing

❖ Hangzhou

❖ *Changchun

EV pilot cities MUST purchase some EV’s or plug-in hybrids for their government fleets or lose government subsidies.

Estimated number of government employees in 3 pilot cities: 587,500

Recommendations❖ Negotiate with these three Chinese local governments to include Ford EV’s in their fleets.

■ Ford will make a large capital investment into public infrastructure only if the local government agrees to include Ford EV’s into their government fleets

■ 2% of Ford’s EV & PHEV sales to government fleets is reinvested back into charging infrastructures in the governments workplaces and public charging stations

❖ Jump-start consumer demand for EV’s in these cities

❖ By installing the charging stations themselves, Ford creates a branding opportunity

❖ Ford can leverage this partial ownership to create incentives for future EV purchases

Recommendations (continued)Target Market Considerations:

❖ Changchun: Government fleet sales should focus on Plug-in Hybrid (PHEV), because its location is in northern China. The colder climate will limit a pure EV’s range (car heaters consume large amounts of electricity).

■ These will earn 3 credits per PHEV sold.

❖ Hangzhou & Chongqing: Ford’s government fleet sales should focus on Pure EV, because these cities are much more southern and consist of warmer climates

■ These will earn 5 credits per EV sold.

MyFord Mobile App ❖ All EV drivers can use the MyFord app to utilize charging stations

Show availability of charging stations Nearby locations (shops, restaurants, etc.)

❖ Ford drivers charge at a discounted rate

❖ Other drivers pay a fee per charge that can be paid through the app ❖ Marketing Benefits

Ford knows where consumers are driving Invaluable customer and potential customer information

Charging Station LocationsHangzhou: Infrastructure Recommendation

Implementation Faster is Better!

Ford will install 480v, 50 kW “fast-chargers” (5 chargers per station)

❖ These level-3 fast-chargers are able to charge 80% of an EV battery in approx. 30 minutes.

❖ Hardware + installation for 1 charging station with 5 (level 3) chargers = $352,000

❖ Cost to install one station in each city = $1,056,000

34%

23%17%

26%

Cost Per Fast Charger Installation: $70,400

Charge station hardware 480V transformerTotal labor Other expenses

Implementation TimelineShort- Term

(6 mo. - 1 year)Medium

(1 - 5 years)Long-Term

(5 - 10 years) 2025 & Beyond

Phase I:Negotiate with local

Chinese governments

Phase II:Install 50 charging

stations in each city

Phase III: Increase private

consumer demand for Ford EV’s

Promote 2% of government fleet sales reinvested back for charging

station infrastructure

Begin developing a unified standard

charging method in these three cities over the first five

years of implementation

With more charging stations available to

the public, consumers will have less range anxiety and will associate charging stations

with Ford

The goal is to increase Ford’s overall sales in

the Chinese market

EV & PHEV Sales Projections

Annual Sales & Revenue

Ford’s Investment Breakdown

Investment Cost Initial Installment of Charging Infrastructure $52,800,000

Marketing Campaign Budget (2019-2025) $40,000,000

MyFord Mobile App Development $2,000,000

App Incentives and Promotions $15,000,000

Total Cost $109,800,000

Return on Investment

Return on investments & Total credits 258% 220,748

Total net income over 10 years (in million)$283.25

Total revenue over 10 years (in million)$6,756.06

# of total EV’s/PHEV’s sold over 10 years187,580

Thank you!

Any Questions?