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Talbot Truck - Coggle Diagram
Talbot Truck
What information to collect to understand the attractiveness for Talbot Trucks to produce and sell electric trucks in Europe
Environmental preference
Consumer preference
Political and government preference
Market understanding
total number of diesel trucks
total number of etrucks
Market outlook - forecast of market growth
Economic factors
Switch cost from diesel to etrucks
Environmental costs
Environmental cost on carbon emission
Environment cost on diesel
Subsidy to etrucks instead of diesel trucks
MCKINSEY HINTS
Market
Difference between large and small trucks customer
Price
Features
Reliability
Volume
Which geographies in Europe are most receptive to etrucks
Environmental political agenda
New entrants perception
What are potential substitutes
Train???
Financial
Are there different market segments for etrucks?
Revenue potential among these segment?
Main cost drivers
Pricing between different segments
Risks
Experience of the firm with etrucks
Did the firm work on build etrucks before
Will they be able to build reliable products in a cost efficient way?
What will happen to sales of current products
will legislation force a move towards etrucks
risk associated with actively addressing the issue instead of waiting it out???
ADDITIONAL: RISK
what is max price for toc same as diesel
Same total cost etrucks will be attractive
diesel truck 100k euro
total cost structure
fuel and depreciation roughly 70 - 80%
fuel is half
depreciation is same time
other and driver are the same
maintenance is 10% of cost structure - not considerable
using cost structure assuming so you can calculate
use diesel truck price and cost structure to calculate
McKinsey hints
existing diesel truck tco = 106K
other
10,000
maintenance
5000
fuel
= 30,000 = 30*1000
depreciation
= 100/4 = 25k
driver
= 3*12 = 36,000
etrucks tco = same diesel truck = 106
driver
36k
fuel (half diesel)
15k
maintenance
3k
other
5k
depreciation unknown
= 106 - (3+36+15+5) = 47k
therefore price = depreciation
4 = 47
4 = 188k
Situation
Truck equipment manufacturer
Produce and sell trucks around the world
Trucks powered by diesel engines
required carbon-based fuel
two kind of trucks
etrucks
Design
emotor and batteries
the way they're fueled
comparably slow charging
diesel trucks
Design
combustion engine
the way they're fueled
quick refilling with diesel
Want to reduce carbon footprint
prefer ETRUCKS
introduction of this new technology is disruptive for the manufacturers & customers
CEO ask Mckinsey to help determine the attractiveness of investment in eTrucks manufacturing for European markets
Leader in quality manufacturing
Customer base
Large trucking companies
Own thousand of trucks
Owner operators
smaller customers
owing fewer trucks
Question 2: What can you infer about the differences in the TCO for diesel vs etrucks
TCO
Other
10,000 per year
Maintenance
5000
Fuel
100,000 km pa
30l per 100km
1eur per litre
Depreciation
4 years
Driver
3,000 per month
Differences
Other cost of etruck is half
maintenance is slightly more than half
Fuel
Price for fuel is double
etruck 0.15 eur - diesel truck 0.3 eur
MCKINSEY HINTS
depreciation may vary, base on assumption that etrucks will be more expensive because of new technology
other costs much lower
tax break
financial incentives
Etrucks advantage over diesel for cost per km
etrucks more attractive per more distance they cover
fuel & depreciation account 80% of the cost & key drivers for buying etrucks
Goal
Assessing the feasibility of manufacturing electric trucks to reduce their fleets carbon footprint