University essay from KTH/Skolan för industriell teknik och management (ITM)

Abstract: Promoting the use of electric vehicles (EVs) has become an important measure to solve the environmental issue in China. In Beijing, the number of EVs has increased rapidly during recent years. In parallel, an extensive charging infrastructure has been deployed. However, most charging infrastructure operators find it difficult to make a profit by only providing charging services due to the lack of a sound business model. This thesis aims to investigate the current status of charging infrastructure for electric vehicles in urban Beijing and the business models of Beijing’s main charging infrastructure operators. Furthermore, based on the empirical findings, the weaknesses in the business models are identified. Beijing was chosen as case study in which the three main operators were studied in order to identify their business models in terms of value proposition, value creation and value capture. Questionnaire and interview as data collection methods were used to collect qualitative data. The study has shown that owing to the market demand and governmental promotion, the charging infrastructure industry retains its rapid development in Beijing. Moreover, the study indicates that the EV users’ most important demands on the charging services are: safety, convenience, speed, and stability during charging. The services need to be delivered at a reasonable price, and this is the development orientation for the charging operators. The business models of the three main charging infrastructure operators are almost identical, as all of them both manufacture and deploy charging piles as well as deliver charging services. They create and capture value by providing charging piles and service as well as various services based on mobile apps. Furthermore, through the investigation and analysis of their business models, five weaknesses in the business model have been identified: the slow pace of technology adoption, high initial investment requirements, few revenue streams, high cost for both internal personnel and external contractors, and insufficient information from App/mobile platform.

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