ProjectBusiness model innovation for electric vehicles (BeliEVe)

Competence Areas at RISE ICT
Business model innovation for electric vehicles (BeliEVe)

Electric vehicles are an important part of sustainable passenger transportation of the future. But unfortunately many people still associate electric vehicles with high prices, uncertainties about life-span of batteries and a concern that the electric vehicle will not be able to fulfill the needs of a regular car user. This makes it hard for the electric vehicle, despite its low running cost and potential environmental advantage, to compete with traditional cars when it is time for the family to buy a new car. 

But is private car ownership really the solution for future personal transportation needs? Privately owned cars are mostly parked, up to 90 % of the time, and if all costs of ownership are summed up the cost per driven kilometer is very high. In urban regions car ownership also becomes more and more troublesome as the availability of parking space for privately owned cars is steadily decreasing. Maybe it is time to rethink and try to find alternatives to the traditional business models’ way to provide personal mobility with cars? This is exactly what Viktoria Institute is hoping for in the project that is now carried out together with Ericsson AB.

The project has been given the name BeliEVe (Business model innovation for Electric Vehicles) and it is aiming to create new business models that can make it possible for electric vehicles to reach a broad breakthrough. The project was started in December 2011 and will run for two years. Except from developing new business models for electric vehicles the plan is also to demonstrate how these new business models could work in practice. To develop an information- and communication system that includes a payment solution and supports the business models created in the project is therefore part of the work. The BeliEVe project is co-funded by the Swedish Energy Agency’s Demonstration Program for Electric Vehicles and Ericsson AB.

Final report: Nya affärsmodeller för elbilar

Business Models

In the BeliEVe project, we have focused upon 4 different business models that have the potential to significantly boost the electric vehicle market i Sweden:

  1. All-electric car leasing chain
  2. Plug-in cars as company cars
  3. Free-floating all electric city cars
  4. All-electric car subscription

All-electric car leasing chain

Plug-in cars can have lower total cost of ownership than traditional cars due to their lower energy cost and lower maintenance cost. But this requires ownership of the car until its end-of-life, and that is fairly uncommon. If a car leasing company owns the plug-in car during its entire lifetime and leases it out in a leasing chain, the lower total cost of ownership can be shared among users and the owner. This leasing-chain business model is a hassle-free operational lease offer for customers with different preferences regarding car age and cost.

 

Business model description - All-electric car leasing chain

Plug-in cars as company cars

A significant part of the Swedish market becomes available if plug-in cars can be made attractive as company cars. Due to current tax-regulations in Sweden this can be achieved by using the right setup for financing the company car. In order to give employees, who have chosen all-electric company cars, access to another car when needed, the employer can offer a car-swapping service allowing employees to temporarily swap cars with each other. Modern technology makes it possible to keep track of all costs for the cars and distribute them between employer and employees.

 

 

Business model description - Plug-in cars as company cars

Free-floating all-electric city cars

You go by taxi but you are the driver. That is how free-floating carsharing services work. In this business model, the city contributes with free parking if the cars are all-electric, firstly because an all-electric car doesn’t contribute to local air pollution and secondly because a carsharing car replaces 4-20 privately owned cars and hence help reduce car density per citizen. As user, you pay per minute of use, and that's it! The typical customer is a city dweller who finds it increasingly annoying to own a car in the city but want personal mobility beyond what public transport and taxis can provide.

 

 

Business model description - Free-floating all-electric city cars

All-electric car subscription

Using all-electric cars in different carsharing services is an effective way to gear up the commercialization process. Buying a service instead of a product is one of the global megatrends today and interest in carsharing services is increasing vigorously. In this business model we combine the fact that the all-electric car should be used as much as possible to be profitable with our belief in carsharing solutions. The result is a subscription for an all-electric car that could be used for commuting, combined with easy access to another kind of car when you need one.

 

 

Business model description - All-electric car subscription