As a new industry, eMobility introduces a new “value chain” – the charging infrastructure – which integrates with two existing value chains, automotive and power utilities. While the automotive and power value chains are well known, the EV charging infrastructure is comprised of completely new players. However, they are nevertheless vital to the eMobility customer experience and central to the development of new business models. But neither goal will be achieved if the industry simply replicates ICE-based business models.
eMobility requires a reinvention of the “mobility value chain”, and of individual organizations. In the emerging EV value chain, the first movers have a massive opportunity. The winners will be those with the courage to reinvent their business models: to become customer-centric organizations with a digital core that enables rapid growth.
It is also important to remember that across the three interconnected value chains sits a layer of regulation and governance. eMobility is a vital aspect of net-zero commitments urban redesign. Several levels of government have a significant interest in eMobility’s success and will play an important role delivering it.
The emerging EV charging infrastructure value chain
The EV charging infrastructure value chain encompasses the manufacture, installation and operation of charge points, and related eMobility services. The ecosystem includes several different players, all facing a requirement to massively scale their businesses. The value chain starts with hardware manufacturers, which supply both public and private charge points. They must scale production rapidly to meet the huge new demand over the next few years. This new demand will also require charge point installers to increase their scale of operations.
Charge point operators (CPOs) operate networks of charging points. They have been at the forefront of charge point deployments at highway locations, and have developed new opportunities at hotels, restaurants and retail sites. eMobility service providers (eMSPs) provide EV drivers with access to charge point networks. Software companies are another important part of the value chain, providing the industry with roaming platforms, payments systems, and IoT platforms to manage EV charging infrastructure.
Over the next two years, 23% of global utilities execs are planning to partner with car retailers/manufacturers for eMobility10
Requires close integration with the mature automotive and power value chains
A key long-term goal of the eMobility ecosystem is to seamlessly integrate this new charging infrastructure with the automotive industry and the power system, particularly distribution operators. And all players, across all three value chains, have a responsibility for this close integration.
One of the key principles of total enterprise reinvention is that it is boundaryless. Reinvention breaks down organizational silos. It helps organizations tackle capabilities end-to-end, not just within the organization but across industry value chains. This will be imperative if eMobility is to deliver excellent customer experience at scale in just a few years. So, what does this boundaryless reinvention look like?
Automakers and the charge point infrastructure need to adopt aligned hardware and software standards to ensure that vehicles can connect to charge points and participate in new EV-related programs. An example includes the Improvement of driver access to information regarding the cost and availability of charging infrastructure – or enabling two-way power flows that support vehicle-to-grid (V2G) functionality.
Charging infrastructure needs to become as standardized as the power system. Today’s power system was not designed with EVs in mind, so grids have to be reinforced to cope with the increased demands of EV charging. However, the power system will also use smart charging approaches to delay or remove the need for costly system upgrades. Smart charging relies on significant data interchange, and charge points need to be able to react to market signals sent by the power system.
Friction across the customer journey causes poor customer experience
Failure points occur across the eMobility ecosystem, and each one adds further friction to the charging experience. This frequently occurs when elements are not synchronized across the three value chains10. While an individual point of failure may result in a minor inconvenience, too often many frictions combine to create a poor experience. These problems will persist because these three value chains largely operate independent of each other.
The lack of synchronization exists especially because the eMobility industry is so new. It still has plenty of room to collaborate more because individual organizations operate with deeply ingrained incentives and behaviors. eMobility requires the automotive and power industries to work together in completely new ways – and both must work alongside ecosystem partners fulfilling the host of new roles in the EV charging value chain. The problems are exacerbated by the fact that each type of business has different strengths, resulting in different strategic approaches to EV charging.
The eMobility value chains need to converge at the charge point to address poor CX …
Recent cross-industry research by Accenture found out that blurring physical and digital worlds can make customer experiences more challenging, over-complicating the experience for the user, without achieving the utility that the technology promises. This “complexity tax” can be addressed by a more life-centric approach designing for simple but significant interactions across a unified experience continuum – promising both higher speed-to-market and higher customer satisfaction.11
Across industries, companies reducing complex customer experience are 26% more likely to achieve highest levels of speed-to-market12
From an EV customer perspective, what does reinvention look like? Another key element of total enterprise reinvention is to embrace the art of the possible. To leverage the digital core to enable new ways of working and create a new performance frontier. And where is this new frontier? In terms of customer experience, the three value chains converge at the charge point. The more seamless the value chains become, the greater the interoperability and the more services can be delivered. The charging experience becomes more frictionless and the result is a more satisfied customer. But collaboration is not just about improving customer experience. It also creates much more value across the eMobility ecosystem – and releases the potential for entirely new business models.
… and deliver a Tesla-like experience in an open ecosystem
Not all EV drivers have necessarily a poor charging experience. Tesla drivers can access a network of dedicated, well-maintained, and widely available charge points. To encourage early adoption, Tesla built a closed system charging network for its customers. It provides a blueprint of what a reinvented industry could look in the future. Tesla owns the entire ecosystem, up to the connection with power networks. And it collects data from across the entire ecosystem, giving it a complete end-to-end view. Tesla has created a seamless experience because all the essential elements are synchronized.
The challenge for the rest of the eMobility industry is to replicate this seamless experience in an open system. That requires a huge drive toward standardization, access, reliability and safety. It also needs a robust digital core that leverages the power of cloud, data and AI through an interoperable set of systems that that enables the rapid development of new capabilities.
Improvements and innovations should be shared widely to ensure a higher level of awareness and usability of the EV and associated infrastructure. Increased collaboration across the different value chains will incrementally remove points of failure, and steadily move the eMobility industry toward a well-functioning, open charging network that is available to all.
To that end, all eMobility players should take a value chain perspective
Outside Tesla’s infrastructure, eMobility players have too often taken a monolithic view, focusing their strategies on control and ownership of their own part of the market13. The lack of collaboration or focus on the customer journey means that automakers are not shipping EVs with V2G functionality, CPOs lock drivers into their charging networks, and network utilities have requested direct control of charge points to prevent drivers gaming smart charging programs. The industry should understand that enterprise reinvention is a central pillar in any organisation’s eMobility strategy, which will increase the value and improved customer experience that cross-industry collaboration can bring.
Regulators can help achieve this
While it is important that regulators do not stifle competition, they can help the industry move in the right direction. Regulators played an important role in stimulating early demand for EVs through subsidies and incentives14. Now that the costs of EVs have fallen, economics will increasingly drive the future adoption of EVs. In many markets, incentives will no longer be needed, and regulators have an opportunity to refocus their attention on the charging experience.
People without access to a private charge point will rely on public charging networks. However, in some instances it is difficult for private players to create a profitable public charging business model15. In these instances, the public sector has great potential in taking steps to help enable access for reliable charging – which is partially already happening eg with the EU policies recognizing minimum requirements for EV charging infrastructure16. Increasingly, public-private partnerships can help delivering this infrastructure, as part of public sector collaboration across the eMobility ecosystem.