Business Model Innovation for Electric Vehicles in China
Greater market penetration of electric vehicles needs business model innovation. Business model innovation and industrialization is the focus of the development of electric vehicles during the “12th Five-Year Plan” period. So how to promote business model
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Business Model Innovation for Electric Vehicles in China Yi-xi Xue, Jian-xin You, Yi Chen, and De-yang Kong
Abstract Greater market penetration of electric vehicles needs business model innovation. Business model innovation and industrialization is the focus of the development of electric vehicles during the “12th Five-Year Plan” period. So how to promote business model innovation is pivotal. However, now the theories about business model innovation for electric vehicles are not matching. The business mode for electric vehicles is a complex system and its innovation is in fact a transition of co-evolution process. Based on the discovery-driven approach and transition management theory, this paper analyzes the barriers and proposes some recommendations to business model innovation for electric vehicles in China. Keywords Electric vehicles • Business model innovation • Transition management • Discovery-driven approach
Introduction From the perspective of sustainability, many persistent problems are always associated with our current road transport system, including greenhouse gases (GHGs) emissions, climate change, congestion, noise, accidents, depletion of resources (Farla et al. 2010). Of all these problems, many are caused by the wide use of internal combustion vehicles (ICVs). Road transport is now one of the largest contributors to GHGs and transport is the sector with the highest growth rate of GHGs (Ko¨hler et al. 2009). In this context, the dominant position of ICVs is being challenged by a number of radically innovative powertrains such as biofuels,
Y.-x. Xue (*) • J.-x. You School of Economics and Management, Tongji University, Shanghai, China e-mail: [email protected] Y. Chen • D.-y. Kong School of Automotive Studies, Tongji University, Shanghai, China R. Dou (ed.), Proceedings of 2012 3rd International Asia Conference on Industrial Engineering and Management Innovation(IEMI2012), DOI 10.1007/978-3-642-33012-4_50, # Springer-Verlag Berlin Heidelberg 2013
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hydrogen, hybrid cars and etc., of which the pure battery electric vehicle (EV) is a prominent contender (Sierzchulaa et al. 2012). China, as one of the major CO2 emission countries, has taken many initiatives to promote market diffusion of EVs. However the industrialization of EVs has encountered many obstacles and the progress is very slow. According to the report Economic Operation of China’s Auto Industry In 2011 released by China Association of Automotive Manufactures, only 5,655 pure battery EVs and 2,731 hybrid electric vehicles (HEVs) are produced, and only 5,579 pure battery EVs and 2,580 HEVs are sold in 2011. This is far below the target set in the Automobile Industry Restructuring and Revitalization Plan. The key drivers to greater market penetration of EVs lie not only in technological breakthroughs, but also the business model innovation (BMI). Especially when the EV technology is not perfect and EVs have many disadvantages comparable with ICVs, the BMI matters most. This paper aims to find approaches to
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