EV Scale Up, from Product Modularity to Mobility Versatility

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Abstract:

Many scholars wondered whether time has come for the electrification of the car, but evidences from the field such as growth of sales, deployment of charging infrastructures and high level of investment made by carmakers, demonstrate that electro mobility roll out is now on its way. Consequently, carmakers have to face a sharp increase of production of EVs which points out the necessity to focus strategy and management research on industrialization issues along the full value.
On the one side, and in spite of vertical disintegration, outsourcing and fierce competition among them, carmakers still hold control and maintain significant value share in their industry. Consequently, at the dawn of the surge of electric vehicles, and despite some intrinsic limitations such as a restricted ability to catch up with an optimized BEV design, the hierarchical architecture of the vehicle production value chain, from Original Equipment Manufacturers to Tier N suppliers, is still in place. Incumbents carmakers know how to produce BEVs and the reuse of most of the existing ICEVs design rules facilitates the integration of the e-traction components or complex packaging as well as an intensive use of existing manufacturing assets: by doing so, they keep their integrator’s role and retain a strong overall added value. On the offer side, incumbents use core knowledge and / or develop new knowledge to expand or catch up e-traction business whereas newcomers are integrated accordingly to a controlled contribution, such as electro-chemistry specialists restricted to battery’s cells or modules supply.
On another side, the global move to electro mobility ecosystem is acknowledged and scholars discuss the possible organizational structures and relationships among the stakeholders of such an emerging ecosystem. Authors have emphasized that the switch from our current mobility paradigm based on cheap fossil fuel energy and individual mobility to a new one, characterized as a clean, efficient, affordable, shared mobility, drives new usages and values for customers. Consequently, a disruptive scenario must challenge the ability to offer new usages and values for customers and overcome the existing BEVs. General Motors and Waymo have already announced forthcoming installation of manufacturing facilities dedicated to the production of self-driving cars. One step further, the emergence of new concepts such as multipurpose robotized e-platforms presented by incumbent OEMs or Tier 1 suppliers clearly draws a path to new electro mobility vehicle architectures.
While, at the dawn of EVs scale-up, we consider that the automotive industry remains under the existing hierarchical architecture, no study, addressing the key technological, industrial and business enablers of a potential transformation towards an open ecosystem, has been carried out. Therefore, we wonder how the emerging e-traction value chain could be disrupted by a transition scenario pulled by an innovative product design.

We mobilize the relevant literature, addressing the different value systems as well as modularity in design, in production and in use to provide a theoretical framework to our scenario. We also define its main characteristics and patterns: we derive them from a new mobility concept exploration using C-K methodology consolidated by an empirical study exploring both high level (newcomers in shared mobility business) and low level (disruptive concepts of robotaxi) signals coming from the offer side. Combining these two inputs, we define a typology of disruptive BEV’s designs that we characterize by their architectural characteristics as well as their usages (capabilities towards mobility versatility). Building on these data, we elaborate different value chain scenarios and identify the main patterns which could enable significant transformation of the industry architecture.
The Concept side, of the new mobility concept exploration, is a result of our own research while the Knowledge side is based upon interviews with automotive experts and technological announcements made by automotive suppliers. Data, addressing technological announcements made by automotive suppliers as well as high and low level signals coming from the offer side, have been extracted from relevant websites for the automotive industry (carmakers, suppliers, consultant companies, and electromobility dedicated websites).
On the one side, our new e-mobility concept study emphasizes that an automatized, versatile and reconfigurable mobility offer is highly valuable for the society and the final customer: it offers a wider scope of operation (industry, service at home on top of transportation) and contributes to pollution, congestion and casualty reduction at an affordable cost. On the other side, emerging knowledge addressing robotized multi-purpose e-platform and modular architecture capabilities demonstrates a possible convergence towards new mobility demands. Consequently, we draw some value chain scenarios which challenge the integrator role of incumbent carmakers and identify the importance of complementing actors; some already exist in the automotive industry landscape such as car adapters, but the emergence of e-mobility operators is much more significant since they could offer real in use adaptation to customers’ needs by the means of hubs’ networks. The greater and greater importance of B to B (to C) business model also drives some substantial impacts on the value distribution inside the industry since it paves the way to recurrent revenues for actors on the service side.
Most of the literature addressing value systems considers a B to C business model centered on product which intrinsically restricts the possible switches from a hierarchical to an ecosystem system: how could complementing actors significantly, and in a sustainable way, modify a complex integral product delivered by focal firms? We elaborate that a B to B (to C) business model centered on reconfigurable services in use and fueled by product modularity to mobility versatility is a key enabler to a sustainable electromobility ecosystem; we, thus, summarize key factors of success in the establishment of an ecosystem value system for electromobility.
For the automotive industry incumbents, our research provides guidance about new technologies development, evolution of vehicles architecture as well as manufacturing scenarios in order to catch up with the new mobility trends and expectations. For all (future) electromobility operators, it paves the way to new businesses based upon modularity in use; especially, for carmakers, it paves the way to an extension of their revenues along the full life cycle of the product.