Electric vehicles and product-service platforms: Now and in future

Abstract

This study combines the concepts of product?service system and platform operations involving network externality between consumers and charging stations in the electric vehicle (EV) context. We call this unique aspect of EVs the product-service platform (PSP). We identify four main players (manufacturer, charging service provider, government, and consumers) and propose three cases of EV PSPs: an integrated case (case IPS), a case where the service provider operates independently (case NES), and a case where the manufacturer and service provider form a partnership (case PES). The study investigates which EV PSP case yields superior performance under present and future situations involving different conditions. In the present, characterized by government subsidy and high service fee sensitivity, IPS does well by inducing the highest demand, number of charging stations, and government subsidy when both the network efficiency and consumer sensitivity to service fees are sufficiently high. In the future, however, with no government subsidy and low sensitivity to service fees, NES and PES induce larger demand and profit when the network efficiency is high and sensitivity to service fees is very low. Our study offers an important insight for companies using the integrated approach now (e.g., Tesla). Minimizing the service fee may be the right choice in the present. However, in the future, raising the service fee to the highest possible extent while minimizing the EV price would be the right decision.