We live in an accelerated transformation era, in which there are many opportunities to be seized but also many pitfalls to be avoided.
To navigate and thrive in this hyperconnected and globalized world, companies must be able to learn and change all the time, bring out the best in people and the ecosystem, ride the uncertainty and complexity, and be future-proof organizations.
I asked myself how advanced technologies can create a competitive advantage for a company or an entire industry?
I wanted to share my thoughts on a case I was inspired by: the Chinese manufacturer of luxury electric cars, NIO.
We all know that one of the critical problems for electric cars is battery charging. The different manufacturers faced this problem several years ago by evaluating and experimenting with the possible choices of charging, battery replacement station, and charging station. Eventually, they have focused on the continuous progress of technologies that would allow charging electric vehicles quickly.
This choice was influenced by the cost of installation and operation of a battery replacement station, which was higher than that of a charging station and the fact that the exchange model was not economically attractive if the utilization rate of the exchange stations had been too low.
The choice, therefore, of the development of the electric vehicle market seemed to be conditioned by the speed of technological progress.
NIO, the Chinese manufacturer of luxury electric cars, has adopted a different strategy, based on Value Created for the Customer instead of the technological limit. The obstacles to adopting electric vehicles were battery charging time, battery degradation, and the rapid loss of vehicle resale value.
To overcome these obstacles, NIO launched the Battery as-a-Service (Baas) in August 2020.
The plan lets buyers buy the car at a discount and rent the battery based on an excellent monthly plan. In return, NIO provides a free and unlimited service of swapping and battery upgrades throughout the car’s life.
NIO has opened 900 stations for battery replacement and plans to network 5000 stations by 2025 in China. It also has an expansion plan in Europe.
It has completed over 7 million battery swaps for its customers.
In 2021 it became No. 1 in the premium market of pure electric vehicles, with more than 40% of the market share ( electric vehicles sold in China in 2021 amounted to 2.5 million).
When NIO’s Baas became widespread, other companies also entered the market. They offered battery replacement services for different car brands, further expanding the service and creating new growth opportunities for companies in the sector.
The BaaS Advantages of NIO:
- More affordable car purchase price (25% average savings)
- About 3 minutes to replace a fully charged battery in an NIO swap station
- Battery efficiency
- Possibility of battery upgrade to increase the selling price of the vehicle
Technologies, in this case and especially in this historical moment, instead of creating value for the buyer, have discouraged it
When will technology again be the accelerating factor in creating exponential value for electric car customers?
Let’s assess existing and future scenarios on how it can change the value created for the customer by borrowing the technology as an enabler of services offered.
Strategy Table of Alternatives Scenarios
The alternative Recharge Standard provides charging from columns or homes, which limits the customer’s service, especially for long trips.
The BaaS – Battery as-a-service alternative – provides for the replacement of the battery in a short time with obvious benefits for the Customer. The cost for the infrastructure is paid off if many users use it and the infrastructure impact is higher than that of the recharge standard.
The alternative Solar Panel, futuristic and I hope soon feasible, provides for the installation of solar panels, active even at night, directly on the vehicle, to allow vehicle autonomy without charging infrastructure. This solution linked to technological evolution will have a double impact on both the customer and the infrastructure.
On what will be the right choice in the medium to long term, we must also consider other scenarios that include using alternative combustion cars to assess the value created for the customer and the impact on the environment, infrastructure and resources to produce them.
If you want to create value and impact across the Value Chain and not just achieve mere profit, then every business and industry need to make a quantum leap, a mindset shift.
I wrote this article because I believe that the focus is on how to create value for the customer and ecosystem, finding solutions that don’t have to chase technology innovation. Technology is one of the many ways how you do it.
The cases of Product as-a-Service are many. I, too, have transformed the Lean Decision Quality method, which is easy to use, engaging, fun, productive and replicable, into a MaaS – Method as-a-Service. I used technology, the enabler, to build a collaborative strategic platform in a way that made it accessible to all -https//www.stratego.life/pathfinder-x/
If the method had not had specific enabling characteristics to co-create in a structured way in the search for more sustainable, inclusive and profitable solutions, focusing only on technology as a differentiating factor, I would have made a hole in the water.
I’d love to get your feedback on “Think Different”.