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

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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 Energy
Birmingham Energy Institute, University of Birmingham
n collaboration with the Midlands Energy Consortium (MEC)
Wednesday 27th April 2016
European Research Institute (Room G51), University of Birmingham

@gavindjharper
Bulk of Vehicle Impact Occurs In
Use

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BUT: 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.

@gavindjharper
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 interconnected
business model
components

@gavindjharper
Business Model Canvas
 A model that can be
used to represent
the business model
components and the
interplay between them.
 Osterwalder & Pigneur
(2002).

@gavindjharper
Business
Model
Thephysical business model is the embodiment of the business model.
Businessmodels
arean
abstract concept
Thebusiness model ontology is arepresentationof the business model.
LevelofAbstraction

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Coding Schema
Data Analysed
With Max QDA

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Example Business Model Canvas

@gavindjharper
Regime Niche
Key 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

@gavindjharper
IP BM’s based around
Lightweighting

@gavindjharper
Riversimple: A New Business
Model
for low energy vehicles.

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

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