The electric vehicle and renewable energy: Changes in boundary conditions that enhance business model innovations

Abstract

Business model innovation consists of new ways of defining, creating, and capturing value including non-monetary value, and is an indicator of crossing traditional sector boundaries, thereby providing the necessary agency to achieve significant new market opportunities around technological innovation. Individual businesses may lack the scope or depth of competencies required, especially in the case of entrenched industrial structures, framings, regulatory provision, and consumer attitudes. Business models are thus potentially ossified within highly structured socio-technical systems. This article analyses innovation in business models arising from the confluence of two mature and stable industries under conditions of external pressure, deregulation, privatisation, and the emergence of a new, shared interest. We illustrate the paper with examples of vehicle manufacturers developing business concepts for vehicle-to-grid, domestic energy, second life, and industrial electricity provision from renewable energy. We find that in the period 2012 to 2020, 17 vehicle manufacturers used 38 electric models to test a diverse menu of options established from four applications with changes in boundary conditions that have influenced business model innovation. This process created space for energy policy and mobility policy to become increasingly intertwined as battery electric vehicles enter the mass market, raising questions over the future of automobility as well as electricity generation and distribution.