An ecosystem approach for EVs
October 14, 2022
Electric vehicles (EVs) face serious barriers in the marketplace, in spite of regulatory and financial support from governments. Premium price, limited driving range, and the lack of charging infrastructure have all held back adoption.?A piecemeal solution isn’t likely to accelerate sales enough to meet ambitious national goals in carbon emission reduction.
An ecosystem approach is needed to drive EV adoption on a large scale. It amplifies the value offered beyond the manufacturer — a network effect of customers, charging stations, telecom and technology partners, and transportation providers across the ecosystem.
Figure 1. An ecosystem approach across the life cycle of an EV
From an infrastructure perspective, the patchy availability of charging stations is the reason for range anxiety. The challenge in setting up charging stations is the initial investment and the diversity in their standards. A charging station setup needs the following considerations: number of charging points, mix of ports, charging level, power source, and pricing. A charging station configurator platform optimizes the configuration and accurately estimates the final cost. It is a decision tool for users to simulate and assess multiple configurations, their predicted specifications, costs, and accordingly recommend the best option.
The lifecycle of an EV starts with its conceptualization and design. The simplicity in their architecture enables mass customization, with digital channels used to interact with customers to capture their requirements. Once designed, EVs have low entry barriers to make them, when compared to large investments required to make internal combustion engine (ICE) vehicles. Several electrically native new players have entered the market. One lean approach for such new entrants to make EVs is a microfactory. Arrival founded in 2015 to make EVs uses a motorized platform instead of assembly lines. The platform carries unfinished vehicles to six robot clusters where different components are added to complete the vehicle.
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After their manufacture, the business model plays a key role for affordable EVs. A study conducted by Infosys showed that nearly three-quarters of automotive manufacturers earn less than 5% of their annual revenue from pay-per-use or subscription-based business models. The one-time sale of new cars continues to be their primary revenue stream. But subscription-based models or servitization is an opportunity to serve customer segments not interested in a long-term investment or priced out of the EV market.
Micromobility is an important use case for the usage of EVs. The Institute for Transportation and Development Policy describes micromobility as a range of small, lightweight devices operating at speeds typically below 25 kilometers per hour (15 miles per hour). These vehicles, which are usually electric bikes or single-passenger cars, are ideal for trips of up to 10 miles. Among all trips in the U.S, 80% are less than 12 miles. Micromobility with EVs is the ideal mode of travel for such short distances. It is the future of urban transportation, according to the WEF.
There is a severe shortage of virgin rare earth materials that are essential to make EV batteries. Circularity is vital to ensure supply of batteries. The Circular Cars Initiative for example is a partnership between multiple stakeholders from the automobility ecosystem. While cars may never be fully “circular,” the automotive industry can significantly increase its degree of circularity by adopting an ecosystem type of approach across car makers. Doing so has the potential to deliver economic, societal and ecological dividends. – World Economic Forum
The EV industry has too many stake holders for manufactures to act in their own siloes. Multiple stakeholders across the EV value chain from design of vehicles to mining of materials, manufacture of vehicles, their operation including charging and repair and the end-of-life handling should collaborate with each other for maximum benefit, not just for the environment but for business benefits too.
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