The Study of Re-construction Method of EV Business Model based on Value Chain Analysis

Abstract

Due to the difference on powertrain configuration and energy supply, there must be new business models from that of CVs. Moreover, as the change of internal and external conditions, EV business models will also do some adjustment. In this paper, firstly, the traditional auto industry and business model of China is analysed to see what the value chain of CV is like. Secondly, as the technical and organizational innovation of electric mobility happens, what changes will happen to the EV industry is discussed. Thirdly, the concept of re-construction is introduced to illustrate the transformation of EV business model. There are two types of methodology used. One is the value chain analysis, which was developed and popularized in 1985 by Michael Potter, the professor of Harvard Business School. In this paper, the value chain analysis is extended to the EV industry chain to understand the generation of margin in business models. The other is re-construction method, which is put forward originally to illustrate the mechanism of transformation of EV business model from systematic angle. The results of this paper concentrate on the following areas, one is that the main internal reason of the transformation of EV business model is the change of industry value chain, the second is that the re-construction of EV business model is the outcome of the adjustment to technical and organizational innovation, and the third is that by re-construction the business models achieve the innovation, which plays the positive role in promoting EVs. Lack of effective quantitative tools, we only discuss the re-construction of value chain and business model by the systematic framework, so the comparison of margins between new business models and old business models after re-construction cannot be done precisely. The innovation of this paper is as follows, one is introducing the value chain analysis to the research of EV business model; another is setting up the concept of re-construction of EV business model. In this paper, the existed value chain method is developed to analyse the internal reasons of the transformation of EV business model, the re-construction concept is projected to construct the new business models systematically. At the end of paper, one example of demonstration city is used to explain the re-construction method of EV business model. The main inadequacy of this paper is the lack of quantitative analysis, which may be the direction for improvement in the future.