The GREAT report on Business models in e- and g-mobility is now available.

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Summary

The purpose of this report is to identify business models emerging within e-mobility and g-mobility respectively, discuss the latest movements and conclude on impact and recommended policies to achieve a desired outcome to promote fossil free transportation.

E-Mobility

All signs now point at an e-mobility mass market likely to be realized by 2025 given the large number of new EV models to be launched by all major vehicle manufacturers in the next few years.

When it comes to the, for e-mobility critical public charging segment, business models need to cope with little demand and large investments. Most viable business models for public charging are therefore trying to find additional revenue sources or sharing investments. Several of the large vehicle OEMs, power grid companies or global fuel station chains will also have to look beyond the stand alone charging business.

The need for a public charging infrastructure in the short term is also understood as a need for strategic locations that can better close the gap between dense charging point urban areas and more remote. There is also a need for larger clusters of charging points offering differentiated service levels and charging speeds, all in order to better meet e-mobility customer demands.

From a customer demand point of view it is also very much desired to see open interoperable e-mobility infrastructure initiatives emerge around generally accepted industry wide payment and connectivity solutions. This is especially important in cross-border regions such as that within the GREAT geographical area.

Policy recommendations to aide this emerging market reaching a self-sustained level and to support the next level of public demand of EV´s would be to:

• Subsidize BEV:s in the non-premium segment.
• Tax exemption on electricity for EV charging.
• Subsidize the set-up of larger clusters of public chargers in well-defined strategic locations, as defined by travel patterns.
• In order to improve interoperability this report suggests providing grants or subsidies to support development of industry wide solutions with regards to payments or integrated connectivity solutions.
• Finally, in order to neutralize market uncertainty about tax exemptions or direct subsidies this report proposes using a phased approach about time horizons tied to the development of e-mobility.

Important recommendations based on our study include encouraging collective solutions and valuable consolidation that will create robust players that can take on both operational and financial responsibility for the transformation required. There is also a need to monitor that the directive on interoperability is implemented through national legislation.

G-Mobility

The LNG/LBG infrastructure business is still taking its first steps in the Nordic countries. However, there is a positive development atmosphere especially in Sweden.

Based on anticipated development of the first-mover strategies and development along the value chain, the future g-mobility business models can be summarized as Gas-driven, Infrastructure-driven, Customer value-driven or Opportunity-driven business model. Our study has revealed both upstream and downstream players of which core players are location owners and business operators of LNG/LBG fuelling stations.

Logistics customers are in the driver’s seat in the LNG/LNG fuelling infrastructure development, as they have the decision power to demand and contract sustainable trucking services. Vehicle manufacturers have an important enabling role in creating the demand for LNG/LBG as they have the communication power and expertise to promote the use of LNG/LBG. An active role of logistics and trucking companies is critical. The companies should actively market the benefits of LNG/LBG, gather critical mass of customers and volumes, invest in LNG/LBG fuelled fleet and thus increase demand for LNG/LBG.

To strengthen the LNG/LBG market, and to make business models more viable, there is need for policy measures and subsidies. The predictability of policies/subsidies is a key factor as the creation of the needed g-mobility ecosystem takes some time. The encouragement of market pull, i.e. the end customer demand, should be addressed firstly in policies. It is also important to maintain a long-term competitive price level for LNG/LBG, compared with diesel. In order to encourage the transition from mature diesel technology to new and more expensive LNG/LBG technology, both the vehicle investments and fuelling infrastructure investments should be subsidized for a certain period of transition time.

From the sustainability perspective it is important to recognize that LNG is the available fuel cleaner than diesel for the heavy-duty transport at the moment, and it paves way to renewable LBG as the next step.

Overall Conclusion

This report’s conclusions on e-mobility for the light passenger car transportation flows as well as g-mobility heavy truck long haul goods flows reveal that there are significant opportunities to support and accelerate a transformation away from fossil transports in the region.

Further it is suggested to take action now and work along the policy principles suggested (not necessarily in detail) in order to particularly drive demand, create a better structured first infrastructure and promote industry wide solutions that are open and meet customer requirements.