Position of the builder in the EV charging value chain

The builder offers branded/un-branded hardware in the charging infrastructure sphere

Position of the maintenance-installer in the EV charging value chain

The maintenance-installer benefi ts from contracts to service the growing population of public/semi-public charging stations

Position of the broker-operator in the EV charging value chain

The broker-operator offers to manage the complete charging infrastructure sphere on behalf of potential network owners

Position of the gridmaster in the EV charging value chain

The gridmaster differentiates by integrating the smart grid solution for utilities with charging infrastructure management

Position of the guardian in the EV charging value chain

The guardian takes the unique position to offer services to all spheres, including the EV customer

The builder's role is similar to an internet modem developer.

We take a look at the five business possibilities, and assess the risks and reward profiles of each.

• The builder

  Who is the builder?

  This player would simply create the infrastructure hardware necessary for charging batteries in an urban residential or corporate setting. But it would be beyond the builder's scope to work on the operations of the vehicles and electrical companies. The builder's role is similar to an internet modem developer.

  Position of the builder in
  the EV charging value chain

  

  Opportunities and threats for the builder

  Opportunities

  • Tangible demand for charging devices is expected in the next three to five years.
  • The unbranded charging station market can be attractive if the device is to be constantly updated with leading-edge technology and design.
  • The right partnership with an OEM or city administration may prove very profitable.

  Threats

  • Companies active in this sector will face the commodity challenge: low cost/high volume but will also have to revamp their product to stay in business, which is to be capital intensive.
  • Potential alternate technologies such as induction charging can replace need for standard charging stations.
  • Low-tech nature of hardware reduces differentiation and competitive advantage.
  • Selling charging stations as such will limit the target audience significantly in the mid-term because several users will require more than a device to satisfy their needs (they will need network connection, billing capability, etc.).
  • High exposure to supply chain may cause a supplier to become a competitor.
  • Higher capital expenditure will be a heavy burden for independent players with low market capitalization.

  Product market domain

  	Product		Services
  	Hardware	Software	One-time contract	Multiyear contract
  Customer	Private	Corporate	Retail/Semi public	Public
  	Home owners	Fleet managers	Car rental/sharing	Municipalities
  	Condominium owners	Corporateemployee EV parking	Hotels and restaurants Gas stations Commercial parking lots	Utilities Government facilities (hospital, etc.)
  Geography	Local	Regional	National	Global

  Highlighted regions determine most predominant sector of activity.

  Value proposition

  Competitive positioning

  

  Short-term revenue source

  

  Our takeaway

  Business strategies that rely exclusively on hardware charging stations are not likely to keep up with the pace of change in the market. Players in this area will need an important strategic partner to succeed. Builders will have few opportunities for differentiation outside specific regional voltage requirements. True advantages are more likely to grow out of alliances with OEMs, but this is a rapidly diminishing opportunity. We recommend that the builder seek a specific customer target niche and customize its offering based on explicit needs it might have. Devices could be customized for particular special-tyniches. In collaboration with city administrations, charging stations may be set up near metro and public transportation stations, integrating EVs into the municipal transportation scheme. Rather than concentrate on permanent facilities, some entrants might develop portable charging stations that EV owners could take with them, reducing the need for permanent infrastructure. Companies operating this business strategy may choose to own, outsource or even have a panel of banded - unbranded charging station manufacturers.

• The maintenance-installer

  Who is the maintenance-installer?

  This company would install and then manage the operational reliability of charging stations. This might sound a little like gas stations, but the special nature of battery charging (i.e., it may take hours) will likely demand a very different kind of infrastructure, perhaps integrated into parking lots.

  For home installation, the low maintenance that such facilities will require and the lack of differentiation would likely limit the possibilities to build customer loyalty.

  This is a very different story for owners of public/semi-public charging networks. Maintenance contracts are significantly more important for them as downtime will result in lost revenues.

  Position of the maintenance-
  installer in the EV charging
  value chain

  

  Opportunities and threats for the maintenance-installer

  Opportunities

  • Home chargers that can be installed with fewer additional electrical upgrades than other charging solutions have strong potential moving forward.
  • The growing need to educate buyers may open up new business opportunities surrounding the business of the maintenance-installer: while retailing, installing or servicing charging device, supporting utilities in energy saving campaigns may, for instance, generate new business.

  Threats

  • In the US, home installation projects have so far proven time consuming and more risky than initially anticipated.
  • The maintenance-installer will find it hard to expand geographically. It will have to comply with installation regulations and service requirements that are likely to vary significantly by region, at least until the market is established.
  • This market niche is also likely to disappear for some target markets (for instance home charging), as utilities may decide to bundle it into their service package.
  • Selling charging station as such limits the target audience significantly as it access only a limited number of stakeholders in the value chain.

  Product market domain

  	Product		Services
  	Hardware	Software	One-time contract	Multiyear contract
  Customer	Private	Corporate	Retail/Semi public	Public
  	Home owners	Fleet managers	Car rental/sharing	Municipalities
  	Condominium owners	Corporateemployee EV parking	Hotels and restaurants Gas stations Commercial parking lots	Utilities Government facilities (hospital, etc.)
  Geography	Local	Regional	National	Global

  Highlighted regions determine most predominant sector of activity.

  Value proposition

  Competitive positioning

  

  Short-term revenue source

  

  Our takeaway

  The value of maintenance contracts may increase over the years as the number of charging stations in operation is likely to expand in the future. Charging stations are set to evolve rapidly, which will also force the maintenance-installer to constantly adjust its service offering. Devices could be customized for particular special-tyniches. It is difficult to imagine EV consumer ownership without a home electric vehicle supply equipment (EVSE) installation. Both will have to be carefullycoordinated to avoid disappointment among enthusiastic early adopters. The maintenance-installer is best positioned to help accelerate standardization. It should carefully navigate the risk associated with the lack of standardization in order to manage inventories while providing ready services. Strategic combination of installation device with a green energy supply or off-peak energy management support may attract environmentally aware consumers. For instance, some stations may generate on-site power from green energy sources built into the structure, such as photovoltaic panels. Investments in technicians merged with a good service model are to be strong differentiator in the market.

• The broker-operator

  Who is the broker-operator?

  The broker-operator would manage the energy delivery and install and maintain the charging stations. This company would manage the energy use, the costs of that energy and the amount that needs to be billed to the customer.

  One of the broker-operator's key strengths lies in its managing and monitoring abilities. One partial segment to this business strategy may be to companies that provide the tracking analytics for cell phone usage.

  As a middleman, the company would be in a position to extract better terms with both the utility and the consumer, or at the very least, create analytics that could add value to power companies. This additional data could also be used to create bundled offerings based on a household's complete energy consumption profile.

  Position of the broker-operator
  in the EV charging value chain

  

  Opportunities and threats for the power-broker

  Opportunities

  • The broker-operator has a wide array of service to be packaged for an extensive range of customers.
  • Need to educate buyer: currently, it is hard to imagine that potential EV charging station buyers can see a compelling reason to enter this business. The broker-operator should be able to help understand how to monetize the opportunities at hand, thereby strengthening its role in the value chain.
  • Buyers need to have a network connection in place to purchase charging station without data management processor.

  Threats

  • Revenue models are not yet fully tested for all activities offered by the broker-operator.
  • Potential buyers are likely to expect several services to be free.
  • Some of the services will be core propositions for other stakeholders in the EV industry.

  Product market domain

  	Product		Services
  	Hardware	Software	One-time contract	Multiyear contract
  Customer	Private	Corporate	Retail/Semi public	Public
  	Home owners	Fleet managers	Car rental/sharing	Municipalities
  	Condominium owners	Corporateemployee EV parking	Hotels and restaurants Gas stations Commercial parking lots	Utilities Government facilities (hospital, etc.)
  Geography	Local	Regional	National	Global

  Highlighted regions determine most predominant sector of activity.

  Value proposition

  Competitive positioning

  

  Short-term revenue source

  

  Our takeaway

  The key competence owned by the broker-operator is the ability to involve billing to the charging process. One of the broker-operator'sstrengths and value in the market will therefore be to help identify and quantify the value of a potential charging infrastructure project. But billing as such may also become a commodity and should not be considered as an ultimate safety net against other business strategies as car makers might end up having compelling mechanisms on board via telematics. One way to counter that riskcould be to seek an active role in the telematic industry, thereby solidifying a function for OEMs. The business of the broker-operator requires signifi cant investment in systems and communications tools. The diagnostic capabilities of the broker-operator may also be useful to insurance companies and other data-centric businesses. The broker-operator will find it hard to cover all business highlighted under his activity set; success will depend on strong allianceswith energy companies, many of which tend toward non-entrepreneurial cultures.

• The grid master

  Who is the grid master?

  This player would also manage energy, but in a different way. Beyond monitoring the charging process, the gridmaster would use the batteries of parked cars as a resource.

  One of the most difficult aspects of electric energy production is that most energy is generated for immediate use, not for use at a later date.

  As a result, generators producing energy must be able to handle the highest peak load times even if most of these spikes are infrequent.

  Renewable energy has this problem as well in that the amount of energy created by the most popular renewables - such as solar or wind — vary tremendously, and they are not always in synch with usage peaks. A gridmaster would help lessen these twin problems by making the entire network more efficient, using these parked car batteries to first store and then draw down energy to help smooth load requirements.

  This market player provides energy storage and generation solutions, as well as off-grid or off-peak charging with a premium paid for convenience.

  Position of the gridmaster in
  the EV charging value chain

  

  Opportunities and threats for the gridmaster

  Opportunities

  • Software solutions for the power sector are needed. Players are emerging but more can be done.
  • Utilities need better data management systems at an affordable price that will help them better serve their customers.
  • Software and monitoring costs might be offset by peak hour energy management advantages.

  Threats

  • It is nearly impossible to assess the practicality of this idea, because the smart grid software that might support it is not yet mature.
  • Battery-swapping systems may catch on instead.
  • Fast-charging may become the norm, limiting the need for all-day/all-night connections.
  • OEMs may resist installing two-way charging technology into their vehicles.
  • Utilities may snatch the space for themselves.

  Product market domain

  	Product		Services
  	Hardware	Software	One-time contract	Multiyear contract
  Customer	Private	Corporate	Retail/Semi public	Public
  	Home owners	Fleet managers	Car rental/sharing	Municipalities
  	Condominium owners	Corporateemployee EV parking	Hotels and restaurants Gas stations Commercial parking lots	Utilities Government facilities (hospital, etc.)
  Geography	Local	Regional	National	Global

  Highlighted regions determine most predominant sector of activity.

  Value proposition

  Competitive positioning

  

  Short-term revenue source

  

  Our takeaway

  Creating an EV charging infrastructure is an ambitious goal. Building a smart grid is equally ambitious. To do both at the same timemight multiply the value of each but will also increase the magnitude of investment and managerial effort required. Given the lack of understanding of market demand and ROI, companies focusing on a smart grid deployment will need to work closelywith companies that can help make smart grid adoption more affordable and immediately appealing to utilities. One example would beto seek an alliance with data management software makers who can demonstrate a clear ROI. In the end, the gridmaster's success will depend on the creation of a three-sided value proposition that appeals as much to theautomobile OEM and the power provider as to the consumer. Standard-setting could create a barrier to entry in this sector. The role at the utility level may help secure business immediately. Trading "green" energy credits to support EV charging with renewable sources will be an attractive complement for the gridmasteronce this market establishes.

• The guardian

  Who is the guardian?

  With or without ownership of the back-end power infrastructure, the guardian extends its service offering to the owner of the EV (business or private), in addition to other stakeholders in the EV charging ecosystem.

  At this stage, the key differentiators from other business strategies are the value-added services that may be peripheral to the charging infrastructure, but are critical in the overall EV ecosystem.

  In particular, the guardian has a more strategic role in the management of the charging network, and therefore exposure to greater risks (as well as upside potential) compared to the broker-operator, which is a relatively back-end operations management role.

  Position of the guardian in
  the EV charging value chain

  

  Opportunities and threats for the guardian

  Opportunities

  • No other opportunity touches so many different industries as the guardian's business strategy, which will touch the OEM, telecom, software and even insurance industries. Controlling the record of the EV's operation and the data flows surrounding its operation, the value of the guardian could combine the usefulness of building control systems and buyer loyalty cards with the potential to be a kind of "app store" for your vehicle.
  • The guardian has the unique opportunity to customize the vehicle and energy access package based on the customer — business or private.
  • Unlike other business strategies, the guardian can help establish regional and (or) national standards for the charging infrastructure, and manage a network of gridmasters and broker-operators.

  Threats

  • OEMs are increasingly moving toward a service offering that might compete with the activity set of the guardian.
  • Demand for these services might be different than current market developments suggest.
  • Concerns about privacy might lead to limits on the data harvest.

  Product market domain

  	Product		Services
  	Hardware	Software	One-time contract	Multiyear contract
  Customer	Private	Corporate	Retail/Semi public	Public
  	Home owners	Fleet managers	Car rental/sharing	Municipalities
  	Condominium owners	Corporateemployee EV parking	Hotels and restaurants Gas stations Commercial parking lots	Utilities Government facilities (hospital, etc.)
  Geography	Local	Regional	National	Global

  Highlighted regions determine most predominant sector of activity.

  Value proposition

  Competitive positioning

  

  Short-term revenue source

  

  Our takeaway

  This model could be a sweet spot, but the successful player will require access to EV OEM systems, data that few of today's techsavvy OEMs will part with easily. The leaders are likely to either grow out of an industry with close ties to OEM servicing, insurance or navigation. The guardian's value proposition will be most effective when serving a fl eet of EVs, hence private EV owners may not be its initial target customer group. Identifying cost reduction opportunities for potential customers, then proposing adequate implementation integrated in a charging network could also prove a to be good business complement. The guardian can consider offering selected EV owners specifi c peripheral services such as vehicle leasing, subscription-based energy access packages. The guardian could also offer peripheral services related to the EV's batteries, such as operating a network of swapping stations and (or) recycling centers.

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