-In theory, electric vehicles are nothing new. In 1900, when electric cars were breaking speed records, at over 100 km/hour, or distance records, almost 300 km/h without recharging, there were 19 manufacturers in the world. An electric cab fleet was in circulation in New York and 38% of the American automotive market were electric vehicles, 40% were steam cars and only 22% were petrol cars. This did not account for the incredible rise in thermal vehicles which progressively eliminated all electric vehicle manufacturers during the 1920s. We witnessed the progressive assertion of a dominant design based on a combustion engine. Electric vehicles must now contend with 100 years' worth of improvement and dominant design, which is not easy. The entire system is at the asymptote of this improvement. Ever since, we have been predicting the return of electric vehicles. We will mention three studies from 1973, 1979 and 1994 which all forecast rapid and important increases in electric vehicle penetration rating up to 25% of the market. However, these forecasts never became a reality. What could help electric vehicles become dominant? One necessary condition would be that the battery cost goes down substantially within a few years thanks to technological progress and volume increase, which is happening. The drop in cost is substantial. It was divided by 2 in 10 years. Since we need at least 30 or 40 kilowatt-hour to have sufficient autonomy and to power a vehicle, the market would not have taken off with the costs at their 2000s level, around 1 000 dollars a kilowatt-hour. In 2017, we can buy a decent battery pack for 6 000 dollars. The cost of infrastructures must also be taken into account. There are different charging processes which do not cost the same and imply different partnership approaches. First, "normal" charging with a 3 kilowatt-hour power is the cheapest method as it does not impact the size of the supply network. In addition, it requires widespread materials. This technology allows us to charge at home, in a car park or in the street. An electric vehicle can then recharge in 8 to 10 hours. Then, we have fast-charging. Semi-fast-charging, 23 kilowatt-hour, allows us to charge a car in one hour, and 43-kilowatt-hour fast stations allow us to charge in 30 minutes. These infrastructures are much more intrusive on the electric grid. Infrastructure cost includes investment, connection and maintenance costs. Investment cost depends on the type of plug and its location. Maintenance costs are set around 3% of the investment cost. In France, connection costs are borne by the distribution network for 40% and the buyer for 60%, be they a residence owner, a private car park manager or a public property manager. Now that the technology is ready, we must sell it, which involves business models. Business models imply that, no matter how great the technology, it can only be sold if it suits its clients and its offer system. When describing a business model, we are describing four elements. First, its value proposition or the perceived usefulness for the customer. The offer will be calibrated in order to showcase certain attributes, such as the ergonomics, design or availability. Then, we need technical objects which include this value. The customer must experience the innovation through boundary objects, boundary between them and the innovation. The revenue model refers to the way the offer will be priced. Will the customer have to pay a lot at once, take on a subscription? Will the offer be subsidized at first to help the market take off? Finally, we need a partner network to materialize the offer, customers, providers, private or public partners, who make the offer possible. If we take all these dimensions of electric vehicles seriously, we can see that the business model is not just about battery cost. It implies choices regarding various aspects. Technology offers a potential but we need to choose how to exploit it commercially into actual offers which make sense for the customer and are feasible. We cannot sell all the possibilities provided by the technology because of the cost, to present a clear offer, and because of the partner network. Let us now see five electric vehicle business models. The business model can be based on its ecological dimension. Who are the partners and allies? The government, the ministry for the Environment, and customers who value ecology. In this case, the aim is to put forward a value proposition centered around the low CO2 and fine particle pollution or the autonomy from oil. Now, you have to build an entire argumentation system. Not only will you have to build an actually ecological vehicle, but also a terminology which reflects the ecological aspects. For instance, you want to show the well-to-wheel CO2 impact, what "green energy" or "clean energy" means, what a purchase subsidy is and why it is justified, etc. This spurs manufacturers to go down new roads. Here is the green project Renault invested in Réunion in order to build an offer as decarbonated as possible. Why? Because the electric grid in Réunion is horrendous and supplied by old coal plants. The reflection must involve the energy production, consumption and recycling. This will lead us to rebuild a network based on solar energy, sugarcane waste, etc., in order to supply the car with clean energy. The second business model is completely different. The focus is the price competitiveness of electric vehicles. Electric vehicles are sold as being more economical than others. This is a good point as charging is very cheap. To implement this business model, we need to change the revenue model. Usually, people buy the vehicle with its tank for a fixed priced. The variable cost is that of energy. The difference in electric vehicle purchase price is still important since even with cheap energy, the battery is very expensive. Because of this difference, electric vehicles seem expensive as customers actually never calculate the total cost of ownership which would show them that they would profit from it as they are not used to this system. So drawing up a business model implies changing the revenue model. To prove that it is cheap, we post a fixed price equal to that of an equivalent thermal vehicle and variabilize the cost of energy by renting the battery. There are three upsides. The savings become visible when they were not. Second, we can segment battery rental and price depending on the customers. And third, the battery-related risks do not rest on the customer but on the seller. Third business model. Thanks to electric technology, we can make more efficient, powerful vehicles than thermal vehicles since electric vehicles have a constant engine torque. This is what Tesla did. They were selling a dream, a car capable of the same performance as a Porsche but with a more quiet and flawless driving experience. Thus, a lot of work has to be done on vehicle performance in terms of behavior, silence and autonomy. This also implies deploying their own charging station network to provide an efficient customer experience. Around 6 000 stations must be able to supply 145 kilowatts. This is an economical challenge for Tesla, given that the unit cost is between 100 000 and 270 000 dollars per station. They are of course working with premium customers and partners related to motorways to install fast-charging stations. In terms of revenue model, they sell the whole package. The customers pay a lot of money to be provided with a luxury vehicle, unlimited charging on a private network and, as with an iPhone, product updates. It seems magical to discover that your car was updated overnight. There are other value propositions. Renault looked into what they called "spa cars" a few years ago. The idea was to sell a car which was good for the outside and the inside. Based on this, they created a partnership with L'Oréal's Biotherm to develop a system which would respect skin hydration and protect it from pollution. They worked on original technical objects such as diffusers, hydration sensors, the development of interfaces and indexes that made it visible to the customers that driving the car was good for their skin. This also involved a revenue model based on selling electric recharges as well as hydration and scent products recharges. Finally, the last business model is a freely available car. To take advantage of policies favoring the development of electric solutions and the decrease in car fleets, we offer a carsharing service. At the heart of the system are vehicles that can be shared but mostly an information system to monitor the fleet and manage the bookings. Autolib', for instance, requires the implementation of a complex partnership network. Bolloré had to partner up with Microsoft for the information system, Pininfarina for the vehicles and ÉDF for recharge development. In terms of revenue model, the customers subscribe to the offer and pay when they use it. A public-private co-investment allows Autolib' to rent parking spaces to the cities in exchange for part of its income. As a conclusion, even though the battery technology is mature and more affordable, we cannot just electrify a thermal vehicle to sell it. It is necessary to choose a business model due to issues relating to cost, value, and clarity of the offer. Depending on the business model parameters, the customer can have access to very different offers.
