Industry
Energy, Resources & Utilities
Rebalance the energy equation
Highlights
- This article evaluates the next-gen business models built around electric vehicles—2W, 3W, 4W, passenger-carrying CVs, and load-carrying CVs (LCVs, MCVs, HCVs)—and suggests which models to adopt against diverse market needs in eMobility.
- Though the current focus has been on the automotive industry to stem the eMobility drive, it is important that the focus needs to shift now towards the other players in the ecosystem, namely the fleets, charging stations, and the power supply producers.
- As the world accelerates its transition to eMobility, business models must evolve to meet the unique demands of the automotive market. Collaborations between automakers, charging infrastructure providers, fleet, power supply providers, and technology companies will drive innovation and shape the future of eMobility.
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Introduction
The global enthusiasm for eMobility is tapering off, as evident in the declining growth rates of EV sales. From rapid expansion between 2015 (60% YoY growth) the pace has slowed – growth fell to just 21% in 2024. Month-over-month figures show a similar trend, with Jan’24 seeing a 27% increase but August registering a 42% decline, culminating in a 2.3% drop in Nov’24. Understanding why this slowdown occurs requires examining two leading adopters: Norway and China.
Norway initially pushed eMobility by supporting the local EV brand “TH!NK” and offering significant incentives (free parking, access to bus lanes, reduced toll fares, VAT exemptions, and tax-free insurance). However, recent rollbacks in these benefits have reduced the attractiveness of EVs compared to conventional ICE vehicles.
China on the other hand, built its EV industry by leveraging domestic manufacturers and vast rare-earth element (REE) reserves. Subsidies such as zero-emission credits, purchase tax exemptions, and gasoline-to-EV exchange incentives bolstered the sector. However, protectionist policies and deglobalization trends have led to declining exports and overcapacities reaching 50%. These trends indicate that government subsidies alone cannot sustain eMobility. The industry must develop revenue-generating, self-sustaining business models. This paper explores such models, focusing on ecosystem-wide value generation and a robust framework to engage all stakeholders and continuously create value to ensure longevity.
eMobility ecosystem
Electric mobility involves not only EVs but a broad ecosystem including conventional players like consumers, automakers, financiers, fleet owners, and newer stakeholders like battery swappers, refurbishers, charging station providers, and app aggregators. Innovations like energy bidding platforms bring personalized charging tariffs, marking a shift from uniform gasoline pricing. This price elasticity introduces new dynamics to eMobility. The ecosystem functions as a “keiretsu”, with each entity supporting others for collective survival.
Figure 1: eMobility ecosystem
Figure 1: eMobility ecosystem
Prioritize business models
The success of the eMobility business lies in adopting the right business model. One can use a multi-parameter ‘Value Generation Framework’ to assess viability of various business models. Such framework assesses, creates, and delivers value within a business context. It helps identify the specific areas where a business model is unique, highlighting the business model's long-term competitiveness. A bird's-eye view of the framework will appear naïve, but deeply ingrained within are the innovation levers of each framework dimension, furnishing the unique competitive advantage to the business model:
Figure 2: Value generation framework
Figure 2: Value generation framework
Another way of assessing business models would be as per the available maturity of the eMobility ecosystem – a niche approach to adopt as per the ecosystem’s needs. In geographies, where the ecosystems are not very advanced, the business models need to be mapped to lower offering complexity. Adopting an advanced business model with an infant ecosystem will not be the right recipe for success. This may lead to a scenario of long gestation period for value generation, leading to an early demise of the business model. One must prioritize the adoption of such business models as per the ecosystem & offering complexity.
The niche framework below prescribes the business models best suited for a given ecosystem complexity:
Figure 3: B4C4 framework for prioritizing new eMob
Figure 3: B4C4 framework for prioritizing new eMob
Key success factors
In addition to choosing the right business model, the e-mobility ecosystem must also provide certain support Given below are some of the key enablers for making these business models thrive and evolve.
1. The need for charging infrastructure sizing models
The need for scientific estimation of charging infrastructure sizing for eMobility growth makes it imperative that charging infrastructure sizing models are created for each geographical pocket where eMobility growth is visible. The infra sizing models are econometric models involving factors such as demographics, driving patterns, traffic movement clustering, charging technologies, and correlated economics, which are part of the value generation framework. The absence of this infra-sizing scientific model hinders the growth prospects of investments in eMobility growth in the geography.
2. Need for unified digital platforms
There is a significant need for a unified digital platform encompassing all three requirements into a single package. These are:
- EV health and security condition: A platform that captures all parameters of EV condition, break-in security, SOS-calling, which can be monitored remotely through telematics, and locally through a driver/ owner app
- Connected convenience and commerce services platform: A platform providing convenience for vehicle service, top-up charge, battery swap, parking, infotainment, V2V, V2I, etc.
Charging infra: A platform that combines the charging infra stations into a chain, to remotely monitor charging queues, charging speeds, charging demand of nearby EVs, and an integrated energy-exchange for buying power in bulk through bidding. This unified platform will drive personalization and consumer loyalty through actionable data insights.
3. Separate out the e-Mobility business model for B2C and B2B
Deriving new business models for commercial vehicles and increasing the EV penetration for CVs are easier when compared with passenger vehicles. First, businesses can afford EVs, which are more expensive than ICE vehicles, because they are more financially capable than individuals. Second, if drivers hit a high enough annual mileage threshold, electric cars may reach the break-even point of total cost of ownership. Commercial businesses that maximize fleet usage are much more likely to attain this mileage threshold than individual owners. Third, commercial businesses may purchase EVs rather than ICEs because they need to step up and meet their sustainable initiatives.
Conclusion
As the automotive, logistics, power, and retail industries converge in the eMobility domain, the focus shifts from the EV manufacturers to other players in the ecosystem. Including the technology and digital industry in the eMobility space will revolutionize the business models and propel them towards self-sufficiency. These new business models provide new sources of value generation and reduce the risk of business failure when government subsidies are withdrawn. The business model selected for a geography must synchronize with the available ecosystem maturity. The ecosystem partners start working as a keiretsu, fostering collaboration and shared value creation for all players. The survival and growth of eMobility is a must, as a long-standing strategy towards sustenance and climate change.
