The volkswagen group in 2017 announced that they would offer 80 new electric vehicles across their brands by 2025 and electric versions of every one of its models by 2030.. In the same year, gm went public with plans to put at least 20 new electric models on the road by 2023 theyre, not alone bloomberg knew energy finance predicts that 500 different ev models will be available globally by 2022.. Yet, despite investments that add up to many billions of dollars, none of the major incubate automakers seem to pose a threat to market leader tesla, which has become nearly synonymous with evs. This is surprising, since one might reasonably have expected that once firms with annual revenues in excess of a hundred billion dollars, deep manufacturing, expertise and large market shares turned their attention to the electric vehicle market, the game would be up the reason why consumers still choose teslas Over products like audis e tron or the attractive evs from the gms buick cadillac gmc and the chevy brands is perhaps surprisingly simple. They can drive their teslas for long distances in full confidence that they will find convenient locations at which to recharge their vehicle. While the incumbent automakers are still focused narrowly on perfecting their electric cars, tesla has been thinking about the entire vehicle system, with the aim of solving consumers core driving needs. Electric vehicles cannot succeed without developing a nationwide network of fast charging networks. In parallel with the cars current ev business models are doomed unless manufacturers that have bet their futures on them, like general motors or vw, invest in or coordinate on a robust supercharger network.

The researchers explained that big and traditional automakers have made exciting evs but have essentially ignored the charging station side of the equation. Meanwhile, tesla worked both sides of the market by building a sufficiently wide network of high speed charging stations before they sold too many cars. There are about 4 000 high voltage super fast charging stations in the us, and the majority of them are available only to tesla vehicles. Tesla has played the platform game, other automakers are still playing a product game, said: hemant bergava, a professor of technology, management of the uc davis graduate school of management. This advantage that tesla has is not permanent. Other automakers are collectively investing 200 billion dollars in their new electric models. The car as a platform a car creates value to its owner when it is driven which requires refueling automakers of gasoline cars or trucks. Do not have to worry about this, as refueling stations are abundant. Over 160 000 stations are in the united states alone and easily accessible. They have therefore built their strategies around standard marketing, variables, product price placement promotion, build a great car or a truck advertise. It heavily and offer it in the right markets at a good price and the product will sell. An electric car, however, requires a different value analysis. Refueling stations, rapid charging facilities for electric vehicles are in their infancy, with only about 4 000 available in the united states. Moreover, the network of available charging stations is highly fractured across ownership and technology.

The next largest network compared to tesla is only 10 percent as large. Unless you buy a tesla, you have few options for reliable route planning, guaranteed access and rapid public charging. An electric car. Therefore, is a two sided platform: good, the two sides being an install base of car buyers and a large network of geographically dispersed multi install rapid charging stations selling electric cars requires a robust charging network, but investments in building a massive charging network makes sense only if There is a large enough user base and demand for these chargers. Platforms need networks, the son with the zippy and a relatively affordable leaf stole an early lead in the ev market and was the best selling electric car from 2011 to 2014.. Despite this, lead, nissan failed to provide a robust, fast charging network which left buyers, relying on a small number of third party stations available to all brands. Teslas approach was strikingly different. They began with a vanity product, the roadster that got them off the ground and generated some early sales. They then moved on to release the model s in 2012, which, for its few years, had roughly a one year waiting period to support the cars. However, tesla rolled out a coast to coast preparatory network, so, although tesla sold only a few thousand cars in its early years, it had built out a huge network. Most automakers have followed the suns approach and are focusing investments on making better electric cars, but imagine if, instead of investing tens of billions of dollars in producing cars with no way to drive long distances individually, audi gm ford and the rest each spend just a billion Dollars to build a network of super charging stations in north america, that amount would finance approximately a thousand locations with 10 charging stalls each if the stations were correctly placed a network of that size should give buyers enough confidence to choose a car based on its features.

Instead of on the features and and the charging network, the platform advantage employing a preparatory platform strategy as tesla did enables the platform owner to coordinate the two sides of the market, the installed base of cars and the network of charging stations, because it owns the charging Network tesla can choose how to price the number of stations, rollout timing and location. These choices can reflect teslas overall business strategy and detailed knowledge of where the buyers are and where they drive. Interestingly, another newcomer rivian is also building a proprietary charging network like teslas. Rivien is splitting its stations between major highways and campgrounds a perfect fit given its focus on electric adventure vehicles. Automakers would be well advised to take a leaf out of teslas playbook and focus on the network before heavily investing in designing and manufacturing new evs, or at least do so in parallel. They may not actually have to build a network. They could, instead partner with firms that have networks that could accommodate recharging stations. Focusing on the network, of course, is not without its risks rolling out a network from scratch, isnt a trivial challenge. Nor is it clear that potential partners would be willing to commit to an exclusive relationship with any one automaker, which the latter would need, at least to begin with, in order to get a head start on the other automakers. But investing in a network will certainly increase the odds of winning a dominant position in evs, which a focus on the cars alone is unlikely to deliver, at least according to the evidence so far.

Looking ahead its clear that tesla itself is doubling down on its big tech platform strategy at present, its business model for its new, automated driving capability is classic product pricing levy a one time up charge of ten thousand dollars. However, it plans to switch to selling automated driving as a service for a monthly fee. The strategy implicitly defines the car itself as a platform on top of which services can be delivered. Such a business model offers the additional benefit of enabling tesla to gather the training data that the machine learning algorithms for true self drivers will need which will confer a critical advantage in the next stage of motor vehicle competition. As for the competition around charging networks, should other firms get serious about building out alternatives, then we would expect tesla to open its own network, since the advantage to remaining closed will start to fade. Indeed, we are beginning to see initial signs of openness, as tesla hints, at allowing a new partner to connect firms that dream of being the next tesla should carefully examine why they are so far behind its, not the lack of knowledge about how to build cars. Many of the incubent firms have been doing that for over a hundred years. Instead, they should focus on the critical infrastructure, in this case the charging networks that have made customers willing to take a chance on newcomer and once theyve done, that they can begin to address the next battleground control over the vehicle data that will enable self driving cars And the tradition to vehicle as a service instead of a vehicle as a product.

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