Tesla Sees Opportunity in Nation of Technophiles

November 20, 2013 Leave a comment

November 20, 2013, 10:49 AM

Tesla Sees Opportunity in Nation of Technophiles

YOSHIO TAKAHASHI

While the big three U.S. car makers once again shun the Tokyo Motor Show, startup electric car maker Tesla Motors Inc.TSLA +3.71%  views Japan as a market brimming with opportunity. Why? Because Japan is a nation of technophiles. “From an American point of view, Japanese consumers are extremely open-minded. They are extremely open to new technology,” Kevin Yu, the Director of Retail Development for Tesla Motors in Asia Pacific, said at a briefing, held in Tokyo ahead of the motor show.The electric car maker is the only U.S. car maker exhibiting cars at the show this year, as the top triumvirate of U.S. makers skip the biennial show for the third time. The show will be open to the media on Wednesday and to the general public from Saturday.

Speaking in relative terms, Mr. Yu said that rapidly expanding power-charging infrastructure in Japan and the size of the country – not as large as the U.S. – reduce concerns over running out of electricity while driving, although Tesla’s latest Model S has a driving range of more than 500 kilometers on a single charge, nearly equal to the range of conventional engines.

For Tesla, there is another reason that Japan is important. Panasonic Corp.6752.TO +0.29% is supplying lithium ion batteries for the Palo Alto, Calif.-based car maker and the two partners said last month that the Japanese battery maker will supply 2 billion cells over four years from 2014 following a previous contract to make cells for 80,000 Tesla vehicles for the four years up to 2015.

At the joint briefing, Panasonic said it will increase its production capacity to enable it to supply sufficient batteries in line with the latest agreement. Panasonic will lift capacity at the plant it currently uses to produce batteries for Tesla and will resume operations at an idled plant by the end of March 2015.

At the currently used plant, Panasonic plans to produce 200 million battery cells in the two years up to December 2013.

While Tesla sees plenty of possibilities in the Japanese market, Mr. Yu also noted that the market would be no pushover. He pointed out that Japanese consumers are extremely demanding, always expecting the best product at the best price.

“The bar for success is very high,” Mr. Yu said.

Tesla is hoping to offer test-drives of the Model S to as many customers as possible at the show, he added.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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