The Business of Electric Vehicles: A Platform Perspective

Jonas Boehm, Hemant K. Bhargava and Geoffrey G. Parker

Foundations and Trends(R) in Technology, Information and Operations Management, 2020, vol. 14, issue 3, 203-323

Abstract: Platform business tactics are highly visible and dominant in business today. Prominent firms in industries such as information services, retail, and travel, have embraced platform thinking. Still, many others are engaged in a platform game without realizing it, often to negative consequences. This monograph develops this theme with an illustrative focus on the battery electric vehicle segment of the automobile industry. It traces the development of the industry, identifies key decisions by various participants, and analyzes these decisions from a platform strategy lens. We emphasize that platform characteristics and network effects are at the core of the electric vehicle industry. A battery electric vehicle is not just a vehicle whose fuel happens to be supplied by the battery. Rather, the vehicle purchase decision is heavily influenced by the availability of a widespread supercharging network as a complementary good. Hence, it is vital for the vehicle maker to ensure that customers have access to both sides of the market—an exciting vehicle and robust supercharging network. An electric vehicle differs from gasoline-powered vehicles in this regard because the refueling network for gasoline vehicles is already robust, widespread, and interoperable across brands, thereby becoming inconsequential to customer adoption decision and firms’ strategy. For electric vehicles, the two-sided platform nature of the industry underlines the need for a well-coordinated strategy on both sides of the market. Our analysis reveals that industry participants (vehicle producers, providers of charging locations, government and policy makers)—with the notable exception of an industry newcomer, Tesla, which has astutely employed platform thinking in its core decisions—have executed a flawed strategy that fails to recognize and leverage the platform aspect of the industry.

Keywords: Automotive Industries; Technology Management and Strategy; New Product and Service Design; Strategic Management: Strategic management of technology and innovation; Strategic Management: Alliances and networks; Information Systems and Organizations:Business Models; Industrial Organization: Theory of the Firm; Impact of Electric Vehicles (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1561/0200000097 (application/xml)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:now:fnttom:0200000097

Access Statistics for this article

More articles in Foundations and Trends(R) in Technology, Information and Operations Management from now publishers
Bibliographic data for series maintained by Lucy Wiseman ().