Digital Evolution in the Automotive Aftermarket: A Comparative Analysis of EV Start-ups and Legacy Carmakers in China

Type de publication:

Conference Paper


Haomin Fu


Gerpisa colloquium (2024)


Purpose: The global automotive landscape is undergoing a significant transformation, characterised by intensifying competition between legacy carmakers and emerging electric vehicle (EV) start-ups. EVs, powered by alternative fuels, offer a unique combination of opportunities and challenges that are fundamentally reshaping the industry. The rise of market players like Tesla, which has surpassed traditional industry leaders in market capitalisation, highlights the growing importance of EV production (Brand Finance, 2023). In China, new entrants such as NIO, Li Auto, and XPeng Motors have gained substantial market share, compelling established carmakers to adapt to this paradigm shift.
The competition extends beyond product offerings into the realm of digitalisation. In this era of technological revolution, digital transformation has become a strategic necessity for carmakers to enhance competitiveness. Both legacy carmakers and start-ups must engage in long-term planning and continuous evolution to adapt to this trend. Opportunities for digitalisation are plentiful within the EV value chain, from design and development upstream to marketing and aftermarket service downstream. The shift in consumer mindset regarding car purchases has led the EV industry to prioritise user needs. This shift stressed carmakers’ active pursuit of transitioning from a conventional production-centred value chain to a contemporary, service-oriented framework. Within this revitalised structure, the integration of digitised after-sales services is seen as essential in the ongoing efforts to enhance value creation in the downstream chain. Carmakers are strategically expanding the boundaries of the downstream value chain by embracing a digital trajectory, reflecting their commitment and endeavours toward this transformative goal.
Design: The primary aim of this study is to uncover the evolving patterns and emerging trends of digital transformation in the aftermarket sector for EV start-ups and legacy carmakers through comparative case analysis. By selecting three representative EV start-ups and three EV brands affiliated with legacy carmakers in China, their digital transformation paths and practices in the aftermarket sector will be summarised and compared.
Preliminary findings: Research indicates that in the aftermarket field, start-ups born in the digital era, adhering to Internet thinking since their inception, have been making strides on the path of digitalisation, intelligence, and networking. Their degree of digitalisation is much higher than that of legacy carmakers. Start-ups, with a clear intention to reshape the user value of strategy with digitalisation, have built a user-centred service system of full digital management from purchase to after-sales. This includes brand APP, one-click charging service, etc. Simultaneously, start-ups and Internet giants entering the car-making business are forcing legacy carmakers to accelerate the pace of digital transformation significantly. Legacy carmakers are also transitioning from a “product-centred” to a “user-centred” approach under this trend. For them, the core demand of the digital transformation in the aftermarket is to meet user needs and create new value. Legacy carmakers emphasised their strength in manufacturing and adapted to use digital means to enhance production capacity. However, there is still room for progress in digitalising the aftermarket. At the same time, start-ups, with their strong service and operation, are closer to consumers. Both carmakers have strengths and weaknesses, and both rely on digital means to compensate for their shortcomings.
Practical and theoretical implications: This study contributes to the existing literature on digitisation in the automotive industry through a comparative perspective, offering practical implications for industry practitioners. The insights derived from this analysis will be instrumental in guiding their digital journeys, providing a comprehensive understanding of successful digitisation practices and strategies.
Brand Finance. (2023, April 4). Tesla overtakes Mercedes-Benz and Toyota to take pole position as the world’s most valuable Automobiles brand | Press Release |Brand Finance.

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