Академический Документы
Профессиональный Документы
Культура Документы
Research Policy
journal homepage: www.elsevier.com/locate/respol
a r t i c l e
i n f o
Article history:
Received 6 June 2012
Received in revised form 20 October 2013
Accepted 28 October 2013
Available online 27 November 2013
Keywords:
Sustainable technology
Business models
Evolution
Path dependencies
Electric vehicles
a b s t r a c t
Sustainable technologies challenge prevailing business practices, especially in industries that depend
heavily on the use of fossil fuels. Firms are therefore in need of business models that transform the
specic characteristics of sustainable technologies into new ways to create economic value and overcome
the barriers that stand in the way of their market penetration. A key issue is the respective impact
of incumbent and entrepreneurial rms path-dependent behaviour on the development of such new
business models. Embedded in the literature on business models, this paper explores how incumbent
and entrepreneurial rms path dependencies have affected the evolution of business models for electric
vehicles. Based on a qualitative analysis of electric vehicle projects of key industry players over a ve-year
period (20062010), the paper identies four business model archetypes and traces their evolution over
time. Findings suggest that incumbent and entrepreneurial rms approach business model innovation in
distinctive ways. Business model evolution shows a series of incremental changes that introduce servicebased components, which were initially developed by entrepreneurial rms, to the product. Over time
there seems to be some convergence in the business models of incumbents and entrepreneurs in the
direction of delivering economy multi-purpose vehicles.
2013 Elsevier B.V. All rights reserved.
1. Introduction
Sustainable technologies hold the promise to reduce harmful emissions and use resources more efciently (Hockerts and
Wstenhagen, 2010; Johnson and Suskewicz, 2009). Despite
being desirable for society, however, these technologies still face
difculties in penetrating mainstream markets (REN21, 2013).
One barrier to market penetration is that sustainable technologies
challenge prevailing business practices that depend heavily on
the use of fossil fuels, especially in the oil and gas, electricity and
automotive sectors (Jacobsson and Bergek, 2004; Johnson and
Suskewicz, 2009). Since incumbents in these sectors have vested
interests in proting from unsustainable business practices (Cohen
and Winn, 2007), they do not seem likely candidates to drive a
change to more sustainable technologies. This role is expected from
entrepreneurial new entrants instead (Hockerts and Wstenhagen,
2010). However, new entrants not only face the problem that they
have to challenge powerful incumbents (Ansari and Krop, 2012),
but also deal with another barrier that is relevant to new entrants
and incumbents alike: sustainable technologies lack market
attractiveness (Johnson and Suskewicz, 2009). Sustainable technologies often do not t existing production methods, managerial
expertise and customer preferences (Johnson and Suskewicz,
2009) and the potential benet of resolving environmental degradation in itself does not seem a sufcient condition to generate
widespread customer acceptance (Kley et al., 2011; Siegel, 2009).
It has been argued, therefore, that rms need different business
models to transform the specic characteristics of sustainable technologies into new ways to create economic value (Chesbrough and
Rosenbloom, 2002) and overcome the barriers that hinder market penetration (Johnson and Suskewicz, 2009; Kley et al., 2011).
As Budde Christensen et al. (2012: 499) put it, it might be that
innovative technologies that have the potential to meet key sustainability targets are not easily introduced by existing business
models within a sector, and that only by changes to the business model would such technologies become commercially viable.
This would involve a fundamental reconsideration of the value
proposition (product/services and segments targeted), the value
network (product development, production and [after]sales), and
the revenue/cost model (payment and nancing) (Chesbrough and
Rosenbloom, 2002; Demil and Lecocq, 2010; Johnson et al., 2008;
Morris et al., 2005; Osterwalder et al., 2005). Moreover, through
business model innovation, sustainable technologies would create
new sources of value for customers in addition to their positive
impact for the environment.
1
It must be noted that electric vehicles are not sustainable per se. The potential to
improve energy efciency and reduce environmental degradation depends on the
electricity source used to power the car. Acknowledging this caveat, we use the term
sustainable technology to refer to electric vehicles because, if used correctly, they
have a potential to contribute to sustainability, also in view of lower emissions.
285
286
287
Table 1
The expected impact of path dependencies on business model evolution.
Path dependencies
Complementary assets
Contingent events
of recharging stations. The challenge is to translate these technological differences between EVs and conventional cars into new
sources of value creation through a viable business model (Budde
Christensen et al., 2012; Chesbrough and Rosenbloom, 2002; Kley
et al., 2011).
To investigate business model evolution, we identied all EV
projects of key industry players in the period 20062010, covering electric vehicles cars that drive on battery power alone as
well as plug-in hybrids such as the Chevrolet Volt, as they can drive
on battery power for an extended range (>20 km). We conducted
a content analysis of two industry trade magazines Automotive
News and Wards AutoWorld and a car magazine Autoweek
which provide insight into industry and rm perceptions and offer
rich descriptions of technologies and associated business models.
We also analysed the Financial Times because of its focus on business strategies and its attention for sustainability as well as the
broader political and economic contexts. A keyword search was
performed for the period from 2006 until 2010 using search terms
referring to plug-in and EV technologies which resulted in a set of
4796 articles. We started our analysis from 2006 when EVs increasingly (re)appeared on the agenda (Bakker et al., 2012). After an
initial period of interest in EVs in the 1990s, 2006 forms a landmark because various rms took rst steps towards (re)launching
EVs: Tesla launched the Roadster, Mitsubishi the Colt EV concept,
and GM, Toyota and Daimler started developing a plug-in hybrid.2
Table 2 provides an overview of rms engaging in EV projects, based
on 1235 excerpts that we used for the analysis.
To content-analyse the articles we used the qualitative data
analysis software Atlas.ti 6.2. We used a two-stage approach for
the data analysis. First, all EV projects for the period 20062010
were distilled from the dataset, only keeping those that intended
to commercialize EVs and thus excluding projects that did not
reach beyond concept car development.3 We made sense of these
2
Limitations of our choice of data sources and specic time window are that some
EV developments were omitted (e.g. the EV that the Indian rm REVA Electric Car
Company launched in several countries since 2001 did not come back in our data)
and that business models were still emerging. However, we aimed to actually capture a period in which car producers for the rst time developed and commercialized
EVs on an international scale, while keeping the analysis manageable. Still, to not
gloss over key developments, we sometimes refer to developments prior to 2006
and after 2010 where relevant. We particularly thank one of the reviewers for many
specic suggestions regarding this broader and longer-term picture.
3
A concept car that we omitted for this reason for example was GMs AUTOnomy.
While this concept car featured an innovative platform which could have led to a
radical change in the business model (due to a skateboard-like design), it was never
commercialized.
288
Table 2
Excerpt counts per rm for electric and plug-in vehicle technology (in absolute
numbers and as percentage of all articles on electric vehicles in total).
Firm
2006
Incumbent rms
18
GM
Nissan
0
5
Toyota
Mitsubishi
5
3
Daimler
0
Chrysler
2
Ford
BMW
0
0
Renault
0
Peugeot
0
Audi
1
Honda
0
Hyundai
0
VW
0
Subaru
Entrepreneurial rms
2
Tesla
0
Fisker
BYD
0
0
Think
0
Better Place
0
Reva
0
Chery
Othersa
14
Total
50
2007
2008
2009
2010
Total
Share
70
9
18
9
3
6
11
0
1
0
1
1
0
0
0
52
32
22
18
10
29
8
11
9
4
1
4
2
3
2
71
75
29
22
31
16
16
9
14
14
5
2
8
6
2
56
69
25
28
18
4
10
24
10
5
6
5
1
2
0
267
185
99
82
65
55
47
44
34
23
13
13
11
11
4
22%
15%
8%
7%
5%
5%
4%
4%
3%
2%
1%
1%
1%
1%
0%
12
2
4
5
1
0
0
26
14
9
5
6
3
0
0
21
23
17
6
6
6
3
1
35
23
11
5
2
5
0
1
14
74
39
20
19
15
3
2
110
6%
3%
2%
2%
1%
0%
0%
9%
179
265
417
324
1235
Others include rms such as Taneld, Smith Electric Vehicle, Aptera, Coda, VVehicle, etc.
Chesbrough, 2007; Teece, 2010) and structured it by distinguishing between three main components i.e. value proposition, value
network, and revenue/cost model (see Fig. 1 included in the next
section) derived from existing frameworks (Chesbrough and
Rosenbloom, 2002; Demil and Lecocq, 2010; Johnson et al., 2008;
Morris et al., 2005; Osterwalder et al., 2005). We limited ourselves to three main components to maintain a certain simplicity,
needed to trace the changes in each component and the interaction between them over time (Demil and Lecocq, 2010). This rst
stage had the objective to derive business model archetypes for electric vehicles (see Table 3 included in the next section) and trace how
these archetypes had changed over time.
In the second stage, the rms with EV projects were examined according to their historical background and complementary
assets. Because this paper is part of a wider study on the automotive
industry, we used our larger database that includes developments
on low-emission vehicles going back as far as 1997. The effects
of rms complementary assets and past experiences were summarized in a table and analysed. Subsequently, we examined the
inuence of contingent events on business model evolution on
a rm and industry level for the 20062010 period. Regarding
the value proposition, we looked for changes in the target segment, whether it was a luxury or economy vehicle, a specic- or
multi-purpose vehicle (Orsato and Wells, 2007), and if there were
adjustments to the product/service ratio (Kley et al., 2011). For the
value network, we tracked changes in the make/buy decisions in
development and production; whether the EV was purpose-built
or retted; and how sales and after-sales process were structured. For the revenue/cost model, we focused on changes in the
way EVs were brought to the market; how rms used government incentives; and whether they found new sources of revenue.
We summarized all these changes in a matrix and illustrated
them visually on a timeline. Based on the visual timeline, narrative descriptions were constructed for the evolution over time
289
Table 3
Electric vehicle business model archetypes.
Archetype
Value proposition
Value network
Examples
Product content
Service content
Production and
development
Sales
Luxury specic-purpose
- High-performance
two-seater car
- Delivers fast acceleration
n/a
- Retted
conventional car
- Production is
outsourced
- Flagship stores
- Dealers
- Tesla Roadster
- Audi eTron,
- Chrysler Dodge
EV
Luxury multi-purpose
n/a
- Retted
conventional car
- Production
outsourced
- Flagship stores
- Dealers
- Fisker Karma
Economy specic-purpose
- Urban commuter
two-seater
- Promises to be
sustainable and innovative
- Provides charging
infrastructure
- Possible car
sharing option
Retted and
purpose/built,
Production mostly
in-house
- Internet
sales/subscription
- car2go
- Think
- Mini E
Economy multi-purpose
- All-round
sedan
- Promises to be
sustainable and innovative
- Provides battery
swapping option
- Offers optional
conventional car
for longer trips
Purpose-built,
production mostly
in-house
- Dealers
- Nissan Leaf
- GM Volt
- Mitsubishi iMiev
- Tesla Model S
- Fisker Nina
business model for (conventional ICE) cars, one can argue that carmakers target mainstream customers on a global scale with cars
they produce themselves. These rms focus on multi-purpose vehicles in high-output production facilities, developed and produced
collaboratively with suppliers and competitors, and sold or leased
as-a-whole to customers. These choices have resulted in an affordable ICE-based mobility system that is rmly rooted in a widespread
petrol-station network (Orsato and Wells, 2007).
With regard to EVs, carmakers need to reconsider the business model and develop one that enables sustained EV mobility,
addresses infrastructure issues and triggers customers willingness
to buy. Firms face questions about the correct value proposition,
i.e. whether to focus on products or services and how to target
the desired customer. They encounter choices regarding the value
network, i.e. whether to make or buy EVs, how to sell them, maintain sold vehicles, and how to establish linkages with suppliers and
other producers. And there are choices referring to the revenue/cost
model. Due to technological challenges and cost issues, rms feel
obliged to provide additional services, such as leasing batteries that
continue after the purchase of the vehicle has taken place (Kley
et al., 2011).
Our analysis yielded four EV business model archetypes that
rms in our sample have adopted so far. We derived these
archetypes by distinguishing two dimensions of the value proposition. On the one hand, the value propositions differed with regard
to the target customer, i.e. some rms targeted the luxury segment,
others the economy segment. This dimension not only captures the
target customer of the business model, but also tends to reect the
corporate identity, being either a luxury or a mainstream carmaker.
On the other hand, the value propositions varied in terms of the
main purpose of the car, i.e. a specic-purpose or a multi-purpose
vehicle. While the purpose reects a traditional division between
car rms (e.g. between sports cars and family cars), in the case of
EVs this dimension also shows how rms cope with EVs limited
range. Combining these two dimensions led to four EV business
model archetypes: luxury specic-purpose; luxury multi-purpose;
290
Table 4
Selected EV business models, path dependencies and evolution.
Firm/cars
Incumbent rms
General motors
Volt
Path dependency
Evolution
Product/service content:
- Chevrolet Volt is an EV with a
range extender (runs on petrol and
can partially use ethanol E-85)
- Considered renting the battery
- In 2010 apps become an addition
to the value proposition, allowing
remote access to see charging
percentage, next charging spot, etc.
Target segment
- Economy, multi-purpose car
(sedan) under Chevrolet brand
Pricing
- Initially considered to rent the battery
Plan to sell the car globally
- Later offered selling or leasing of car including
battery
- Lease in the U.S. for $350 after $2500 down
payment (36 month)
- Gives 8 year/100,000 mile warranty on battery to
increase residual value
Value proposition
- Initially designed the Volt
to accommodate different
low-emission vehicle
technologies
- Later only designed for
plug-in hybrid
Pricing
- In 2009, planned to sell the car separate from the
battery to protect customers from technological
advances and to integrate tax credits
- Intended to charge same price as Honda and Toyota
hybrids
Later intended to sell the car and lease the battery
separately in Japan
- In the US customers preferred leasing which
combined battery and car
- Lease plan in the US offered for $349 after $2000
down payment (36 month)
- Gave 8 year/100,000 mile warranty on battery to
increase residual value
Product/service content
- Nissan Leaf is a full EV
- In 2010 apps were added to the
value proposition, allowing remote
access to see charging percentage,
next charging spot, etc.
- Initial design was like
conventional cars
- Next version was planned to be
more futuristic
- In 2008 Nissan announced to ease
complex recharging infrastructure,
including charging at home, at
work, while shopping and also
including battery swapping
Target segment
- Economy, multi-purpose car
under Nissan brand
Government support
- Loan from the US government through bailout plan
- Integrated $7500 tax credits in offering
Complementary assets
- Has production facilities
- Has EV1, patents, battery
management knowledge
- Also developed hybrid
technology
Contingent events
- Was in nancial distress
- Had EV1 experience
which was sold in limited
numbers
- Learned through EV1
experience about range
anxiety amongst customers
- Previously engaged in
fuel cell technology,
developed Autonomy and
Hi-wire concept, which
combined a skateboard
platform and chassis
- US government loan for
green technology
Government support
- Made sure that customers knew about tax
incentives and supported them to include these
- Received US government loan for production plant
Additional income
- Intended to sell used batteries to solar-power
generators and other secondary customers
Value network
- Initially outsourced
development and
production
- Consecutively added
production facilities for EV
core components
Revenue & cost model
- Initially considered to
rent battery separately, but
then decided to integrate
the costs in the lease
- After Nissan gave $350
lease for Leaf, GM also
offered a $350 lease
Value proposition
- Initially planned to rent
the battery separately from
the car and later added
optional battery swapping
service in selected areas
Value network
- First produced in Japan
only and subsequently
extended production to the
UK and the US
Revenue & cost model
- After GM gave high
warranty on battery,
Nissan also increased
warranty
Nissan
Leaf
Table 4 (Continued)
Firm/cars
Value network (production & sales process) Revenue & cost model
Mitsubishi
iMiev
Product/service content
- iMiev is a full EV
- Initially planned with in-wheel
EV motors
- Later with central EV engine
- Planned to look futuristic
Target segment
- Economic multi-purpose
- In 2009 targeted eet customers
in Japan
- Intended to target urban delivery
services
- In 2010 was offered to the wider
public
Product/service content
- In 2009, limited
commercialization of 450 full EV
two seaters based on Mini
- Installed charger in garage of
lessee
- In 2010, adding connectivity for
recharging
- Active E lease announced for 2011
- Planned to commercialize EVs
under new brand i
Target segment
- Luxury specic purpose
Planned luxury sports car and
urban economy vehicle under new
brand i
Entrepreneurial rms
Better place
Product/service content
- In 2007 suggested to build
recharging network and battery
swapping stations in various
selected regions
Target segment
- Economic multi-purpose
- Focus on cities and islands
nations, e.g. Israel
Government support
- Integrated government incentives in sales price
in Japan
Evolution
Value proposition
- First targeted eet market
and subsequently the
wider public
Complementary assets
- Relatively small car producer
- Production plant and
commercialization network in
place
- Comparatively little previous
knowledge of low-emission
vehicles
Additional income
- Production of rebadged iMievs for Peugeot to
spread development costs with slightly different
design, styling and suspension
- Delivery contract over 100,000 EVs in four years
Contingent events
- Was in nancial distress
- Used EVs to compensate/
- leapfrog lack of hybrid
technology
- Pre-stage to develop plug-in
hybrid
Pricing
- Lease for $850 per month including servicing,
maintenance, at-home charging station
- In 2010, planned a leasing option to make the
technology affordable, with the possibility of
including a mandatory take back option
Additional income
- n/a
Complementary assets
- Production facilities and
commercialization channels in
place
Contingent events
- Experimented with fuel cells
before
Value network
- n/a
Revenue & cost model
- Talks of
cross-shareholding with
Peugeot led to supply
contract
Value proposition
- Learned in the extended
pilot that 100 miles are
sufcient for urban drivers
and subsequently designed
following cars for that
range
Value network
- Initially retted Mini with
EV motor, then considered
retting 1 series for test
- Later decided to build
purpose-built car
BMW
Mini E
Pricing
- In 2008 cost $ 45,000 before incentives of $
25,000 in Japan
- Price was reduced when Nissan announced its
price ($40,700) for the Leaf from $48,800 to
$42,130 ($30,700 after subsidies) in Japan
- Offered for $30,000 in the U.S.
Path dependency
Pricing
- Battery was supposed to be owned by rm itself
- Mobile phone payment system
- Pre-paid plans
Considered offering cars for free
Government support
- Sought to enter countries with government
incentives rst (e.g. China or France)
Additional income
- n/a
Value network
- Added additional partner
with Chery Automobile
Revenue & cost model
- n/a
291
Contingent events
- New generation is familiar
with mobile payment plans
Value proposition
- n/a
292
Think
City
Product/service content
- Full EV
Target segment
- Economic specic purpose
- Planned to add a multi-purpose
model
- First targeted Europe, later
targeted US market
Product/service content
- Full EV
Target segment
- Initially luxury sports car
- Later planned to enter economic
multi-purpose segment
Pricing
- Lease battery separate from car
- Battery would be included in mobility pack price
(between $100 und $200 per month)
- Targeted to stay under $20,000 per car sales price
Government support
- Received US government loan for production
plant
Additional income
- n/a
Pricing
- Selling and leasing
Started selling for $109,000
Government support
- Received US government loan for development
and production of the new Tesla Model S
Additional income
- Retted Daimlers Smart EVs with their
innovative battery management system
- Was trading EV credits earned in the California
ZEV programme to other car producers
Provided Toyota with powertrain
Value proposition
- First targeted Europe and
after availability of
incentives and loans in the
US targeted North America
as well
Value network
- Was initially produced in
Norway, then after
investments from new
investors, production was
outsourced to Valmet,
Finland. Later a production
plant was built in the US
Revenue & cost model
- n/a
Value proposition
- Initially started retting
Lotus Elise sports cars.
Planned from the
beginning to add a
mid-sized car (which
became the Model S) and
an economic car
Value network
- After buying the Fremont
plant and obtaining money
from the US Department of
Energy, Tesla had the
resources to develop and
produce the Model S
Revenue & cost model
- n/a
Tesla
Roadster
Additional income
- Design consultancy, e.g. for Teslas Model S
Contingent events
- Received conditional loan
of $528 million for
development and
production of economic
model Nina
Complementary assets
- Bought previous GM
plant in Wilmington,
Delaware for $20 million
Value network
- Changed from
outsourcing to own
production due to several
contingent events,
particularly receiving loans
from US Department of
Energy for economic model
Nina
Target segment
- Initially luxury, multi-purpose
- Subsequently intended to build
more economic model Nina
Product/service content
- EV with range extender
Government support
- Received loans from the U.S. government for
development and production ($528.7 million)
Value proposition
- Was planned to change
from Luxury specic
purpose to economic
multi-purpose
Path dependency
Revenue & cost model
Value network (production & sales process)
Value proposition (content &
segment)
Firm/cars
Table 4 (Continued)
Evolution
293
economy specic-purpose, and economy multi-purpose. The subsections that follow will discuss them consecutively with overviews
of key aspects included in Tables 3 and 4.
2.1.1. Luxury specic-purpose business model
The rst EV business model archetype, luxury specic-purpose,
offers afuent customers expensive EVs made for specic purposes
only, such as leisure or urban commuting. Tesla Motors (Roadster) is an example using this business model and the one that
gained most visibility. Chrysler (Dodge EV), BMW (Mini E) and Audi
(eTron) also announced to pursue this business model, but have
made less progress; in fact, Chrysler cancelled its EV commercialisation project. In this business model, the cars driving experience
and image are paramount, while range is not so important. BMW
started a pilot in the US, as part of its Megacity project, using the
electric Mini E for urban purposes. In the pilot, BMW learnt that
range was no major issue for this segment: Ninety-ve percent of
our Mini E customers realized very quickly that with a 100-mile
range, on a daily basis, really there is no issue (Guilford, 2010b).
Tesla offered the Roadster, a luxury sports car, which accelerates
within four seconds from 0 to 100 km/h. While these cars are expensive, attributes such as a fast acceleration are seen as benets that
compensate for the initial investment costs. Moreover, the typical customer for high-performance EVs is assumed not to be very
price-sensitive and use them for leisure purposes. These customers
also do not have a large need for an additional service component
for recharging because they tend to have at least one other car for
daily purposes and a garage in which the EV can be recharged.
The luxury specic-purpose value proposition is also tied into a
specic layout of the value network. The luxury aspect is reected
in the sales and after-sales services. For example, Tesla decided to
sell the Roadster in agship stores designed by the creator of the
Apple stores. Were going to be in places like where I went with
Apple mainstream, where people are shopping day to day, stated
George Blankenship, Tesla Motors vice president for design and
store development (Guilford, 2010a). While Tesla lacks a network of
dealers, this approach ensures a high quality and allows educating
customers about the advantages of electric driving. The service and
maintenance of the car is provided via so-called rangers, sent to the
customers as a replacement of on-site maintenance. With regard to
development and production, these luxury vehicles are usually produced in small quantities. Considering the high costs of developing
a car from scratch and the difculties to t EVs into the existing production system, rms using this business model initially decided
to ret existing sports cars with EV technology. Retting refers to
using parts of an existing model, replacing the ICE with an electric motor, and adapting the overall system to the new propulsion
technology. Tesla retted the Elise of the British sports carmaker
Lotus, Chrysler intended to ret the Lotus Europe and Audi planned
to use its R8 platform. Sports cars such as the Lotus were suitable
because its aluminium/plastic body makes it lightweight, reducing
the requirements for the batterys power capacity. However, also in
retted cars the new propulsion technology which includes the
battery, electric motor and battery management system is key to
competitive advantage. Tesla decided to use the design and assembly facilities of Lotus, but developed the battery, the motor and
the control system itself. It used more than 6000 thousand small
standard laptop batteries and a proprietary management system to
cool, charge and discharge them.
2.1.2. Luxury multi-purpose business model
The next EV business model archetype, luxury multi-purpose,
also targets the high-performance market and shares many features with the luxury specic-purpose business model, such as
customers low price sensitivity and limited need for a recharging service component. However, this type differs in development
294
and production. These EVs are multi-purpose because they can seat
more than two passengers and transport several items (Orsato and
Wells, 2007), and tend to be sedans. The multi-purpose aspect has
implications for the cars performance, as it adds weight which
requires more power for an adequate performance level. As a
result, these cars have larger batteries to propel the vehicle or
have an additional power source on board e.g. a back-up motor
which adds complexity to the vehicle and has consequences for the
value network and the revenue/cost model. Building luxury multipurpose EVs requires more tangible and intangible resources from
a wide network of suppliers and partners, all of which considerably
increase production costs.
A case in point is Fisker, a new entrant from California that
pursued the luxury multi-purpose business model by building the
Karma, a sedan with plug-in hybrid technology. In contrast to Tesla,
Fisker designed the car itself but purchased the technology from
outside partners. It bought the batteries from A123 which were supposed to be safer and easier to pack into a car than Teslas approach
of using laptop batteries, but also more expensive. From General
Motors, Fisker purchased the plug-in technology which meant that
the Karma had two propulsion technologies on board, making it
less agile and less spacious. Valmet Automotive, a contract manufacturer with a focus on specialty low-volume cars, assembled the
car. Due to Fiskers specic choices, the Karma became relatively
heavy, more costly, whereas its driving capabilities were dependent
on outside partners expertise and development.
recharging cycles. Besides, they do not depend on a public recharging infrastructure which they install on their own premises instead.
The main obstacle for commercial customers was the uncertainty
about possible cost decreases; these are the result of often unpredictable or unknown (future) price differences between gasoline
and electricity and the residual value of EVs which depends on the
battery.
The main features of the economy specic-purpose business
model are a focused value proposition, combining product and
service aspects with adjustments to the revenue/cost model to
reduce the initial investment. Firms using this business model
started to add a service component to their product by renting or
leasing the battery separately from the car. Battery leasing makes
EVs more affordable and shifts uncertainty about the batterys reliability from the customer to the rm, while also increasing the
cars residual value. Think, a small Norwegian EV producer, sold
the car separate from the battery to be able to offer a price below
that of other cars with green credentials. We want to be under the
price of a Prius, and [take] away [customer] concern about battery
management (Automotive News, 2008).4
The economy specic-purpose business model has also taken
the form of a more radical departure from the traditional business
model for conventional cars. Firms have tried to overcome the problem of high initial costs with car-sharing programmes, increasing
the service component beyond battery leasing. Car sharing is based
on a belief that Generation Y is more interested in mobility as such
than in car ownership, which opens up partial ownership as viable
value proposition. A Toyota representative stated: Maybe its not
an owned car; its a shared car or a Zipcar. It means working with
a different type of customer, which automakers dont like. I challenge Toyota with the question: Who owns the EV customer? Is it
Toyota? Is it Zipcar? Is it the utility company? (Guilford, 2010d). In
2009, Daimler started with the car-sharing initiative, car2go, with
200 Smart cars in the cities Ulm and Austin. At the time, these cars
were still equipped with an ICE, but Daimler eventually integrated
EV technology into the Smarts.5
6
Better Place led for bankruptcy in 2013 due to low acceptance and too high
costs.
295
296
7
In 2013, BMW began mass production of the EV i3. Although the i3 is marketed
with a focus on urban mobility, its price (comparable to a Nissan Leaf at D 35,000),
the possibility to seat four people and the optional range extender seem to make
it more suitable for the economy multi-purpose category. However, other models
that will come out of Project i such as the i8 will be targeted to the luxury segment.
8
The Fisker Nina never entered the market as Fisker had to stop production in
2012 and faced bankruptcy in 2013. The Tesla Model S was launched in 2013.
297
298
While the extant literature has particularly focused on the technological and system attributes (Jacobsson and Bergek, 2004), we
paid attention to the need for business model innovation to bring
emerging sustainable technologies to the market (cf. Chesbrough,
2007). We addressed key decisions of rms in developing a business model to effectively overcome the disadvantages currently
hindering further market penetration of sustainable technologies
(Budde Christensen et al., 2012; Johnson and Suskewicz, 2009;
Kley et al., 2011). As it has been argued that path-dependent
behaviour affects incumbent and entrepreneurial rms differently
(Chesbrough and Rosenbloom, 2002; Sosna et al., 2010), our study
explored how this difference inuenced the move to a business
model standard for EVs, focusing on the impact of the dominant
business model logic of a rm, the complementary assets, and
contingent events that rms faced along the way (see Table 1).
vulnerable to contingent events as well. Their main sources of funding government programmes and venture capital were showing
erratic behaviour that made the continuation of their operations
highly uncertain.
In summary, all three factors that tend to drive path-dependent
behaviour i.e. the dominant business model logic, complementary assets, and contingent events (see Table 1) seemed to work
in close alignment, creating a self-reinforcing mechanism (Garud
et al., 2010; Sydow et al., 2009; Vergne and Durand, 2010). In the
short period that we studied this stimulated most rms in the direction of the economy multi-purpose business model (see Fig. 2).
However, due to the short time range of the study, no rm conclusions can be drawn, as many EVs were still in the concept phase
and there is much dynamism. The economy multi-purpose business model suffers most from the drawbacks of the battery and
thus seems less promising than the economy and luxury specicpurpose segments. There were indications that the efforts of BMW
and Daimler could break with the economy multi-purpose trend
with their focus on urban commuters, electric sports cars and
car-sharing schemes. Overall, the least promising business model
appeared to be the luxury multi-purpose segment due to technical
impediments; that is, the promise of high-performance acceleration is compromised by the added weight that comes with the
multi-purpose aspect.
3.2. Contributions, limitations and future research
With this study, we aimed to contribute to the emergent literature on business models (Zott et al., 2011) through an empirical
exploration of the inuence of path dependencies on business
model evolution in the case of EVs. This builds on recent suggestions that business model research would be more fruitful from
a dynamic perspective (cf. Chesbrough, 2010; Demil and Lecocq,
2010; Sosna et al., 2010). Our ndings showed that even in the conservative automotive industry, business models tend to be fairly
uid. However, the different business model components were
quite distinct in this respect; while the rms in our study did not
make radical changes to the value proposition, most adjustments
occurred in the value network and the revenue/cost model. Since
these adjustments are particularly pronounced in the early stages
of a new industry, the fact that we focused on the initial years of the
renaissance of the electric vehicle might have caused us to see more
changes than would be typical though. We would expect business
models to become less uid over time when the industry reaches a
more established state.
Our study also sought to contribute to the literature on sustainable technology (Hockerts and Wstenhagen, 2010; Jacobsson and
Bergek, 2004). It helped shedding light on the way in which technology and system attributes e.g. limited driving range due to
inadequate battery technology, high initial investment costs, and
lack of recharging infrastructure translate into specic components of a business model: its value proposition, value network,
and revenue/cost model (cf. Chesbrough and Rosenbloom, 2002).
This literature also argues that incumbents might not be involved
in the rst stages of the development of sustainable technologies (Hockerts and Wstenhagen, 2010). Our ndings suggest that
entrepreneurial rms were indeed the rst to develop the main
novelties in EV business models, but many incumbents were active
in developing EV business models around the same time, and could
thus not really be labelled as followers.
The study has several limitations. Firstly, although we were able
to collect and analyse vast amounts of data, the industry trade and
car magazines that were used as main sources are all based in the
US. Despite their global orientation, it might be that these magazines missed some developments in Europe and/or the Asia-Pacic
region. For Europe in particular, the inclusion of the Financial Times
299
was a counterbalance, but contains fewer details on the car industry. There were also limitations in identifying all the components
of a business model from the information provided by the magazines and newspaper, as this is not their main aim. To address this
problem as good as possible, we decided to focus on three main
elements of the business model value proposition, value network
and revenue/cost model which were easier to track.
Secondly, we decided to take a rm perspective and a fairly narrow focus on EVs over a relatively short time period. While this
helped us to focus our analysis, we acknowledge that EVs need
to be seen in the overall development of low-emission vehicles
(LEVs) over a much longer period. Since the early 1990s, three
LEV technologies have competed as sustainable alternative to the
ICE: fuel cell, hybrid, and electric vehicles (Bakker et al., 2012;
Pinkse et al., 2014). The evolution of the four EV business model
archetypes will also be affected by developments in hybrid and
fuel cell vehicles, which could be seen as additional contingencies.
And while our study was longitudinal in nature, the short period
of time considered implies that, as mentioned above, our ndings
on convergence on a specic business model archetype are highly
tentative. Our rm perspective might also have led us to disregard
business models that were coming from outside the automotive
industry. Although Better Place was not successful in the end, it is an
illustration of how the dominant business model in the car industry,
which is still focused on the production and sales of cars, might be
subsumed under a new business model that is completely servicedriven (Budde Christensen et al., 2012; Kley et al., 2011). Tracking
further developments in EV business models is worth follow-up
investigation, especially because the number of rms moving into
this industry has only increased since the period covered in this
study.
References
Aldrich, H.E., Fiol, C.M., 1994. Fools Rush in? The institutional context of industry
creation. Academy of Management Review 19, 645670.
Amit, R., Zott, C., 2001. Value creation in E-business. Strategic Management Journal
22, 493520.
Ansari, S., Krop, P., 2012. Incumbent performance in the face of a radical innovation:
towards a framework for incumbent challenger dynamics. Research Policy 41,
13571374.
Automotive News, 2008. Electric car may offer leased battery. Automotive News 82,
42.
Automotive News, 2010a. Americas chief sees steady growth for Nissan. Automotive
News 84, 14.
Automotive News, 2010b. Shopping list: light bulbs, solar panels, hatchback. Automotive News 85, 38.
Baden-Fuller, C., Morgan, M.S., 2010. Business models as models. Long Range Planning 43, 156171.
Baker, T., Nelson, R.E., 2005. Creating something from nothing: resource construction through entrepreneurial Bricolage. Administrative Science Quarterly 50,
329366.
Bakker, S., van Lente, H., Engels, R., 2012. Competition in a technological niche: the
cars of the future. Technology Analysis & Strategic Management 24, 421434.
Bayus, B.L., Agarwal, R., 2007. The role of pre-entry experience, entry timing, and
product technology strategies in explaining rm survival. Management Science
53, 18871902.
Bjrkdahl, J., 2009. Technology cross-fertilization and the business model: the case
of integrating ICTs in mechanical engineering products. Research Policy 38,
14681477.
Bourgeois III, L.J., Eisenhardt, K.M., 1988. Strategic decision processes in high velocity
environments: four cases in the microcomputer industry. Management Science
34, 816835.
Budde Christensen, T., Wells, P., Cipcigan, L., 2012. Can innovative business models
overcome resistance to electric vehicles? Better place and battery electric cars
in Denmark. Energy Policy 48, 498505.
Carroll, G.R., Bigelow, L.S., Seidel, M.-D.L., Tsai, L.B., 1996. The fates of De Novo and
De Alio producers in the American Automobile Industry 18851981. Strategic
Management Journal 17, 117137.
Casadesus-Masanell, R., Ricart, J.E., 2010. From strategy to business models and onto
tactics. Long Range Planning 43, 195215.
Ceschin, F., Vezzoli, C., 2010. The role of public policy in stimulating radical environmental impact reduction in the automotive sector: the need to focus on
product-service system innovation. International Journal of Automotive Technology and Management 10, 321341.
300
Chan, C.C., 2007. The state of the art of electric, hybrid, and fuel cell vehicles.
Proceedings of the IEEE 95, 704771.
Chappell, L., 2009. Nissan builds case for selling EVs battery pack separately. Automotive News 84, 10.
Chesbrough, H., 2007. Business model innovation: its not just about technology
anymore. Strategy & Leadership 35, 1217.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long
Range Planning 43, 354363.
Chesbrough, H., Rosenbloom, R.S., 2002. The role of the business model in capturing
value from innovation: evidence from Xerox Corporations technology spin-off
companies. Industrial and Corporate Change 11, 529555.
Cohen, B., Winn, M.I., 2007. Market imperfections, opportunity and sustainable
entrepreneurship. Journal of Business Venturing 22, 2949.
Demil, B., Lecocq, X., 2010. Business model evolution: in search of dynamic consistency. Long Range Planning 43, 227246.
Doz, Y.L., Kosonen, M., 2010. Embedding strategic agility: a leadership
agenda for accelerating business model renewal. Long Range Planning 43,
370382.
Garud, R., Kumaraswamy, A., Karne, P., 2010. Path dependence or path creation?
Journal of Management Studies 47, 760774.
Geels, F.W., 2002. Technological transitions as evolutionary reconguration processes: a multi-level perspective and a case-study. Research Policy 31,
12571274.
Greimel, H., 2010. Nissan shakes up core styling. Automotive News 84, 6.
Guilford, D., 2008. Automakers are high on electrics. Automotive News 83, 3.
Guilford, D., 2010a. Apple alum plans to reboot auto retailing. Automotive News 85,
8.
Guilford, D., 2010b. BMW EV optimism has limited range. Automotive News 84, 6.
Guilford, D., 2010c. An e-mission statement. Automotive News 85, 6.
Guilford, D., 2010d. Green shoots. Automotive News 84, 6.
Guilford, D., 2010e. Teslas Musk: purpose-built EVs will be better. Automotive News
85, 3.
Harding, R., 2009. Latest Final Fantasy may be Sony PS3s nal chance. Financial
Times, December 18.
Helfat, C.E., Lieberman, M.B., 2002. The birth of capabilities: market entry and the
importance of pre-history. Industrial and Corporate Change 11, 725760.
Hockerts, K., Wstenhagen, R., 2010. Greening Goliaths versus emerging
Davidstheorizing about the role of incumbents and new entrants in sustainable
entrepreneurship. Journal of Business Venturing 25, 481492.
Jacobsson, S., Bergek, A., 2004. Transforming the energy sector: the evolution of
technological systems in renewable energy technology. Industrial and Corporate
Change 13, 815849.
Johnson, M.W., Christensen, C.M., Kagermann, H., 2008. Reinventing your business
model. Harvard Business Review 86, 5059.
Johnson, M.W., Suskewicz, J., 2009. How to jump-start the clean economy. Harvard
Business Review 87, 5260.
Klepper, S., Simons, K.L., 2000. Dominance by birthright: entry of prior radio producers and competitive ramications in the U.S. television receiver industry.
Strategic Management Journal 21, 9971016.
Kley, F., Lerch, C., Dallinger, D., 2011. New business models for electric carsa holistic
approach. Energy Policy 39, 33923403.
Morris, M., Schindehutte, M., Allen, J., 2005. The entrepreneurs business model:
toward a unied perspective. Journal of Business Research 58, 726735.
Neubauer, J., Pesaran, A., 2011. The ability of battery second use strategies to impact
plug-in electric vehicle prices and serve utility energy storage applications. Journal of Power Sources 196, 1035110358.
Orsato, R.J., Wells, P., 2007. U-turn: the rise and demise of the automobile industry.
Journal of Cleaner Production 15, 9941006.
Osterwalder, A., Pigneur, Y., Tucci, C.L., 2005. Clarifying business models: origins,
present, and future of the concept. Communications of the Association for Information Systems 16, 125.
Pinkse, J., Bohnsack, R., Kolk, A., 2014. The role of public and private protection in disruptive innovation: the automotive industry and the emergence of low-emission
vehicles. Journal of Product Innovation Management 31, 10.111/jpim.12079.
Prahalad, C.K., Bettis, R.A., 1986. The dominant logic: a new linkage between diversity and performance. Strategic Management Journal 7, 485501.
Reed, J., 2010. Start-up to launch hybrid sports car. Financial Times, October 2.
REN21, 2013. Renewables 2013 Global Status Report. REN21 Secretariat, Paris.
Rennings, K., 2000. Redening innovationeco-innovation research and the contribution from ecological economics. Ecological Economics 32, 319332.
Rysman, M., 2009. The economics of two-sided markets. Journal of Economic Perspectives 23, 125143.
Siegel, D.S., 2009. Green management matters only if it yields more green: an economic/strategic perspective. Academy of Management Perspectives 23, 516.
Simon, B., 2007. GM eyes electric car initiative. Financial Times, August 13.
Simon, B., 2010. GM and Nissan sound the charge for electric cars. Financial Times,
July 28.
Sosna, M., Trevinyo-Rodrguez, R.N., Velamuri, S.R., 2010. Business model innovation
through trial-and-error learning: the naturhouse case. Long Range Planning 43,
383407.
Sydow, J., Schreygg, G., Koch, J., 2009. Organizational path dependence: opening
the black box. Academy of Management Review 34, 689709.
Teece, D.J., 1986. Proting from technological innovation: implications for integration, collaboration, licensing and public policy. Research Policy 15, 285305.
Teece, D.J., 2010. Business models, business strategy and innovation. Long Range
Planning 43, 172194.
Tripsas, M., Gavetti, G., 2000. Capabilities, cognition, and inertia: evidence from
digital imaging. Strategic Management Journal 21, 11471161.
Vergne, J.-P., Durand, R., 2010. The missing link between the theory and empirics of
path dependence: conceptual clarication, testability issue, and methodological
implications. Journal of Management Studies 47, 736759.
Winter, D., 2007. Not a sensible shoe. Wards AutoWorld 28, 3438, February.
Zott, C., Amit, R., 2008. The t between product market strategy and business model:
implications for rm performance. Strategic Management Journal 29, 126.
Zott, C., Amit, R., 2010. Business model design: an activity system perspective. Long
Range Planning 43, 216226.
Zott, C., Amit, R., Massa, L., 2011. The business model: recent developments and
future research. Journal of Management 37, 10191042.