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“Ultra-Low Emission vs. Ultra-Low Energy Vehicles in the UK market: A Business Model Perspective”GAVIN D. J. HARPER

Conference on Social Science Research in EnergyBirmingham Energy Institute, University of Birmingham

n collaboration with the Midlands Energy Consortium (MEC)

Wednesday 27th April 2016European Research Institute (Room G51), University of

Birmingham

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Bulk of Vehicle Impact Occurs In Use

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@gavindjharperBUT: PERSONAL MOBILITY REMAINS ENDURINGLY POPULAR

MODAL SHIFT IS CHALLENGING

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Personal Mobility: A Durable Phenomenon

Cars are not just a means of getting from A – B They are a projection of identity. People form ‘emotional’ relationships with

vehicles. They are a personal, private space. They are a point of differentiation from peers.

Without major society change, the desire for personal mobility is not going to disappear.

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Focus on emissions:

*at the point of use

*

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Quote from Autoblog:

“The issue is so-called "upstream" emissions and the Model S was judged to use enough electricity to be judged as a polluter. ”

Whilst many have viewed this approach as heavy handed in the early stages of the nascent ultra low emission vehicles industry – do they have a point; should we revisit Ultra Low ENERGY Vehicles as a Policy Objective.

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Responses in Bygone Times To Oil Crises / Price Increases

Downsizing – novel vehicles, novel materials.

Consumers adapt to times of high oil prices with smaller vehicles, but seem wedded to the concept of personal mobility.

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What is a Business Model

Shafer Smith & Linder (2005) >No consensus in the literature as to what constitutes “A Business Model”, lots of different components discussed for inclusion.

A conceptual model, no single definition – however, one framework that has been popular is Alex Osterwalder’s “Business Model Canvas”.

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Osterwalder & Pigneur’s (2002) definition:

9 interconnectedbusiness model

components

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Business Model Canvas

A model that can beused to representthe business modelcomponents and theinterplay between them.

Osterwalder & Pigneur(2002).

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Business Model

The physical business model is the embodimentof the business model.

Business modelsare an

abstract concept

The business model ontology is a representationof the business model.

Leve

l of A

bstra

ction

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Coding Schema

Data Analysed With Max QDA

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Example Business Model Canvas

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  Regime NicheKey Partners Firms within the regime have access

to high quality relationships with other large Tier 1’s within the regime. Have the presence to establish JV’s with companies outside of vehicle industry, e.g. batter tech.

Smaller firms do not have the presence in the marketplace to establish the same quality of relationships with Tier 1’s. Some however, have established relationships with OEM VMs to which they “add value” to vehicles.

Key Activities Firms within the regime are wedded to processes which necessitate high volumes which dictate other elements of the business model. (Press steel)

Niche firms use a much wider range of activities to produce vehicle bodywork. Often these are more labour intensive but can yield lighter weight bodywork.

Key Resources Large existing investments in press tooling, ICE manufacturer. An asset but also a barrier to innovation.

Often undercapitalised, resources are often IP rather than physical. New ideas, processes, methods or business models.

Value Proposition A range of different drivetrain technologies are being trialled and there is variety in the types of vehicles being deployed. There is however less variety in the bodywork technologies used.

Also a range of different drivetrain technologies.Much more variety in the types of bodywork technologies that are used, often resulting in lightweight construction.

Customer Relationships

Established brands which customers may already have a relationship with. This ‘brand expectation’ shapes to some degree the sort of products firms are willing to offer.

Smaller SME firms may not have the established relationship with customers, allowing them to be creative with their product offerings and to offer ‘radical’ products that are potentially disruptive.

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Steel: Defining “Key Activities” in BM

Volume producers use steel – but of course, because they are using steel, it dictates the volumes at which they have to produce vehicles. So if the large car companies starting producing vehicles out of carbon fibre, aluminium, lightweight technologies – they would still be “large car companies”, but they would not be “volume car producers” – they might offer a larger range of models, say 200 models rather than 20; but these would be produced in much lower numbers.

Interview with Prof. Steve Cousins, Axon Automotive

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Differentiation based on Lightweighting

One of [the] key means [by which we differentiate our VALUE PROPOSITION from volume car makers] is weight – we have put a lot of effort into differentiating ourselves by weight – and I don’t believe that a large volume manufacturer can reach a weight of less than 700 kilos on a conventional car [because of pressed steel] They have to meet elements of legislation, and the demands of their marketing departments in terms of noise, vibration and harshness, that we don’t.

Paul Faithfull, Westfield / Potenza

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IP BM’s based around Lightweighting

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Riversimple: A New Business Modelfor low energy vehicles.