Electric vehicles (EV) will make up the majority of new car sales worldwide by 2040, and account for 33% of all the light-duty vehicles on the road, according to new research published by Bloomberg New Energy Finance. Automaker worldwide are speeding up their efforts to develop EV – mainly due to potential high demand from China. The country has become the world’s biggest supporter of EV. Beijing has already called for 1 out of every 5 cars sold in China to run on alternative fuel by 2025 (Bradsher, 2017).
The rising of EV is a double-edged sword – It will jeopardize fuel marketing business due to lesser gasoline/diesel demand but at the same time brings opportunity to other associated services/products. So, how do we make profit in this emerging market? In this article, I will recommend 3 business opportunities to make profit in the booming EV market.
1. Provide public EV chargers through platform business model
One of the factors that will lead to the rising of EV will be the availability of EV charger. The more EV chargers, more electric mobility connectivity, hence more EVs will be sold to market. Based on IHS, Global EV charging stations to skyrocket by 2020. IHS Automotive forecasts the global EV charging stations installation is expected to grow more than 12.7 million in 2020 (Kosior, 2015).
The data revealed that increasing deployment of EV charger in future could translate to stronger demand for the facility – hence a good business opportunity. Plus, it could be considered as a very low capital business. Single-port public EV charging station hardware costs range from $1950-$3000 depending on the features and brand of the machine (EVE Australia Pty Ltd., 2017).
But, most of the public EV chargers available today are provided for ‘FREE’. Some of the chargers are chargeable, but it may not be attractive to the EV users if they can go to the other nearby public charger and get the electric juice for FREE. So how do you monetize from this business? My recommendation is to adopt platform business model.
What is Platform Business Model?
DEFINITION: a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers (Moazed, 2015).
By providing EV chargers through Platform Business Model, you protect the customers by preventing them from spending for the electricity. This is a perfect solution for fuel marketers to counter the risk of potential lower gasoline demand due to the rising of EV.
What you need to do it to capture car makers or Original Equipment Manufacturer (OEM) through strategic partnership and impose subscription fees of (Price) per EV car per year. The price will consist of the electricity cost and maintenance cost, plus your margin.
Users will use the facilities by using their mobile phone to activate the chargers using QR code. The unique QR code will not only allow the users to use the chargers, but also provide usage data for the OEM and to you as EV charger provider for future planning and marketing purposes (through data analytics).
Car makers now can promote their EV, even more aggressive. They can sell their EV with “FREE electricity!”
2. Partner with EV charging stations to provide one stop center for ‘Charge & Chill’ experience.
It takes time to charge an EV. Tesla recently announce their plan to setup Tesla supercharging stations. Their supercharging could be considered as among the advanced technology today. But even that, it took 30 – 40 minutes to fully charge!
But the new Tesla charging stations will go a step further than simply providing somewhere for drivers to charge their car. Tesla’s chief technology officer JB Straubel explained these charging stations would have up to 40 charge points, a lounge where drivers could sit back and relax, and coffee on-hand (Motoring research, 2017). By providing facilities for the users to “Charge and Chill”, this is basically another good business opportunity.
What you need to do is to form a strategic partnership with EV charger provider (or you become one) and setup a one-stop-center for EV users to “Charge and Chill” while waiting for their cars to be fully charged. It could be a café complete with restaurant, launderette, cinema or even shopping complex. This is a good opportunity to existing retailers to tap on the rising EV market through strategic partnership/collaboration.
3. Provide battery disposal services
The rising of EV later on will eventually will lead to a problem. Current EV battery technology is the same as our smartphone battery – which currently use Lithium. This is a controlled materials and needs proper disposal activity due to environmental concern. Once the EV battery expired and needs replacement, it needs to be disposed. Specialized service to dispose the battery is another business opportunity due to the rise of EV.
The global battery recycling market is projected to reach USD 11.83 Billion by 2022, at a CAGR of 6.5% between 2017 and 2022. The growth of this market can be attributed to the growing output of spent batteries from the automotive and industrial sources (Research and Markets, 2017). The data revealed that there is a strong demand for battery disposal services in future. Good news is, battery disposal services will cover not only for EV, but also for other electronic devices!
Well, there are a lot more business opportunities in the rise of EV. Let’s discuss!
Bradsher, K. (2017). China Leads Way to Electric Cars. New York: The New York Times .
EVE Australia Pty Ltd. (2017, 4 8). How much does it cost to set up an EV Charging Station? Retrieved from EVE Electric Future: https://www.evse.com.au/blog/evchargercost/
Kosior, K. (2015, May 28). News Releases. Retrieved from IHS Markit: http://news.ihsmarkit.com/press-release/automotive/global-ev-charging-stations-skyrocket-2020-ihs-report-says
Moazed, A. (2015, 5 1). What is a Platform? Retrieved from www.applicoinc.com: https://www.applicoinc.com/blog/what-is-a-platform-business-model/
Motoring research. (2017, 9 28). Tesla wants to reinvent the motorway service station. Retrieved from http://www.erpecnewslive.com: http://www.erpecnewslive.com/article/1376/tesla-wants-to-reinvent-the-motorway-service-station
Research and Markets. (2017). Battery Recycling Market by Chemistry (Lead Acid, Lithium-Based, Nickel-Based), Source (Automotive, Industrial, Consumer & Electronic Appliance), End Use, Material, and Region – Global Forecast to 2022. Research and Markets.