The large scale roll out of plug-in electric vehicles (PEVs) will be hindered unless investors stimulate demand, lower the cost of public charging infrastructure and manage the impact on the grid, according to a report...
The large scale roll out of plug-in electric vehicles (PEVs) will be hindered unless investors stimulate demand, lower the cost of public charging infrastructure and manage the impact on the grid, according to a report published by Accenture.
The report, “Changing the game: Plug-in electric vehicle pilots”, analyzed a range of electric vehicle trials around the world, focusing on pure electric vehicles (EVs) that depend entirely on charging from the electric grid. The report identified three key challenges:
“Plug-in EVs have extensive implications for business models because they require changes in consumer behavior and can increase strain on the grid,” said Melissa Stark of Accenture. “It will be critical to improve understanding of consumer preferences and to change consumer behavior through creative incentives if utilities and service providers are to manage the impact on the grid.”
Implications of PEV business models
“Changing the game” reviews a range of business models that have varying impacts on adoption and implications for service providers.
Charging Business Models: Today’s public charging infrastructure model is needed to drive initial large scale roll outs but carries high risks due to upfront costs, unpredictable charging patterns and possibly limited demand. More profitable commercial models are needed for a sustainable PEV market. These include:
Automotive Business Models: Direct vehicle sales to consumers are being tried by some manufacturers, but the high cost of the batteries makes this option unaffordable for most consumers unless large government subsidies are offered. Leasing of cars is more attractive, spreading the high purchase price over a long period of time. Automotive manufacturers will have to invest in capabilities to manage a new service-based relationship with consumers if they are to adopt this model.
Battery Leasing Models: Some service providers own and maintain the battery, leasing it through a subscription service whereby consumers pay for ‘miles’ driven instead of electricity.
“The consumer is the most important factor in determining which business models will succeed,” said Melissa Stark. “The capabilities needed to deliver these models will be the same across the world, but the players that choose to develop them will vary. This means that standardization of technologies is urgently needed to support the varied involvement of service providers. And greater efforts will be required to improve understanding of consumer preferences.”
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