search

Freeing Taas into Electric Vehicles Through Freewire

Download

Please note! This essay has been submitted by a student.

Download PDF

Abstract

The methods of transportation as a service (TaaS) industry have rapidly developed due to the introduction of ride-sharing service providers such as Uber and Lyft. Over the same time, increasing environmental concerns have caused a shift in consumer preferences placing an emphasis on eco-friendly concepts. Electric vehicle (EV) use has become a crucial transportation force that addresses sustainability concerns in the TaaS industry. EVs will become the main driving force that impacts how TaaS companies will restructure the way value is delivered in the industry. The operation of EVs is becoming more convenient and desirable by both consumers and firms. A new company named FreeWire Technologies has developed a solution to enhance and expedite the transition for individuals and TaaS providers to adopt EVs over current gas-powered vehicles. The fleets employed by transportation service providers are powered by supply from traditional gas stations. FreeWire has the ability to deliver a vehicle powering method for TaaS companies that will catalyze the transition of their operating models to EVs. This fundamental change will lower costs for drivers and increase brand positioning for TaaS companies.

As a result, these aspects pose a major disruptive threat to large companies such as ExxonMobil that currently supply fossil fuels to TaaS companies from traditional service stations. Consumer preferences coupled with FreeWire Technologies will catalyze the adoption of EVs by TaaS providers. IntroductionThe introduction of a mobile EV charging device and charging as a service will completely reshape the current infrastructure of refueling and charging services. The mobility and accessibility of the electric mobile charging technology created by FreeWire will accelerate the expansion of fossil fuel-free transportation offered by TaaS providers. Specifically, ride-sharing services will be able to offer EV rides without compromising driving ranges or increasing operating costs. Despite the fact that the growth of overall car ownership appears to be on the decline, the proportion of vehicles on the road used for TaaS is growing (“The End of Car Ownership”). This means that vehicles used for ride-sharing services such as Uber and Lyft are becoming a significantly larger portion of the vehicles on the road (there are about 2. 5 million Uber and Lyft drivers alone in the U. S. ) (cnet. com).

Essay due? We'll write it for you!

Any subject

Min. 3-hour delivery

Pay if satisfied

Get your price

Separately, the proportion of EVs on the road is also increasing by over 50% each year (statista. com). Thus, the TaaS industry will converge with future improvements in EV technology. The result of this convergence will disrupt the current reliance on fossil fuels by TaaS vehicles. TaaS providers will shift to use EV fleets and the activity of making trips to the gas station will be a thing of the past. A large oil and gas company such as ExxonMobil that has a strong and rigid position on liquid fuel will be challenged maintain its position.

ExxonMobil – Incumbent

Examining the nature of FreeWire’s innovation shows evidence that its market presence will disrupt the conventional business model of a gas stations, in terms of fueling or recharging a vehicle. ExxonMobil is the largest American oil and gas company and one of the largest providers of service stations in the United States (exxonmobil. com). A sales revenue of $237. 1 billion in 2017 also underlines their position as being a large standing incumbent in the oil and gas industry (Revenue of ExxonMobil Since 2002). Sources show that the company has chosen not to focus future investments on electric transportations services or vehicles (exxonmobil. com). The company primarily believes in the production of biofuels which is a unique new technology investment strategy and very different from the new technology investment strategies of their main competitors (ExxonMobil Future). ExxonMobil has taken a firm stance on that the concept of biofueling vehicles has a larger potential to catch on in the long run than EVs.

Competitive Advantages

ExxonMobil business model focuses mainly on achieving operational excellence as their strategy has been focused on producing and delivering similar products to their customers for many years. Their competitive advantages are bolstered by the companies massive size and widespread market reach. ExxonMobil focuses on sustaining rather than disruptive innovation investments which is reflected in their relatively conservative investment strategy according to reports to shareholders. Specifically, internal investments are made to improve the efficiency of their production and distribution processes. ExxonMobil is able to deliver a high volume of oil and gas products to consumers.

Focusing on vehicular transportation, ExxonMobil’s large physical presence through service stations is the only way that they can deliver their product to consumers. A combination of real estate acquisition, licensing, and product supplying are all methods that are used in its value chain (Business Model). External Factors The fuel distribution and charging industries face many external factors that must be addressed by individual firms. Firstly, the danger of global market volatility has a strong influence on these industries. Stress from the fluctuation of stock markets and the subsequent economic conditions cause by recessions adversely effect spending on fuel and even more so on EVs. Much of the market uncertainty is also derived from political decisions such as environmental regulations and the encouragement of adopting EVs through tax breaks and subsidies (Understanding Global Volatility). In addition, extreme weather conditions and natural disasters such as the BP oil spill at Deepwater Horizon are also factors which raise the concerns of end-consumers (Factors that Could Threaten). The point here is on consumer preferences being that people care more about the resources they are currently using and the impact they are having on the environment.

The ability for consumers to make eco-friendly decisions will likely expand due to the affordable availability of alternatives (in this case, the decision to use fossil-fuel). Most oil and gas companies have not been forced to take a strong stance on environmental issues because the current level of dependence on oil remains incredibly high (Factors that Could Threaten). However, the selection of EVs available is growing as most mainstream automobile manufacturing companies now sell their own line of EVs such as Toyota, Ford, and VolksWagen.

FreeWire-New PlayerFree

Wire Technologies has developed a product operating model that has expansive scaling capabilities. Concierge Charging by FreeWire is an electric vehicle charging service offered to employers who have an employee base of at least 30 electric vehicles. It represents FreeWires pilot platform. The Concierge service deploys a Mobi charger (As seen in Exhibit??), which is the “mobile energy storage unit that delivers rapid EV charging services (freewiretech. com). ” The Mobi charger is able to move between vehicles to provide flexible EV charging. This means that employees do not have to relocate their parked vehicles in order to share the likely one or two permanent charging station spaces in the parking lot. The service will save money for employers and increase their employee productivity time. It also removes the hassle for employees to ensure that their vehicles are charged for their commute home each day (freewiretech. com). On average, each EV driver spends 30 minutes a day switching parking spots to access fixed charging stations.

For workplaces with 200 EVs charging in a day, this can lead to $1 million in productivity losses over a year (evcharging. freewiretech. com). FreeWire performs its service using a Mobi charger attendant (one person) to navigate the Mobi charger throughout the employer’s parking lot to charge each electric vehicle requiring the service. Each individual employee requiring EV charging has the ability to communicate with the Mobi charger attendant and will also receive notifications when their charging session begins and ends. By using the Mobi chargers, employers are able to utilize off-peak electricity to save on utility costs at night instead of using the midday utility power that permanent charging stations require. This model can be expanded using the same attendant concept beyond large parking lots to serve entire metropolitan areas.

Key Value Proposition

The value proposition of FreeWire’s Mobi charger is comprised of three main factors: The Mobi charger caters to electric vehicles which have lower operating expenses than gas-powered vehicles. It is cheaper to charge an electric vehicle than to refuel a gas-powered vehicle by almost one third of the cost. (Exhibit 16 shows a cost comparison). In addition, EVs have lower maintenance costs as they do not require “oil changes, air filters, timing belts…” (Exhibit 18) and “EV manufacturers cover warranties for the battery. Ride-sharing drivers can save up to $2,500 per year in total vehicle expenses with an EV (greentechmedia. com). ” (Exhibit 17) It will save time for every EV user. The queue dynamics for stationary and Mobi charging are illustrated in Exhibits 9 and 10. The pilot Concierge concept saves employee productivity time as well as the additional time employees would need to refuel their vehicles on their personal time. Matching vehicle down time (when vehicles are parked) with vehicle recharging eliminates the traditional and long accepted activity of taking time to power your vehicle. In essence, queues for powering your vehicle are potentially being completely avoided in this model.

The environmentally friendly concept of supporting fossil fuel-free transportation enhances a social and marketing stance for TaaS companies that is favorable to shifting future consumer preferences (Exhibit 14). In essence, FreeWire allows consumers to operate an efficient eco-conscious vehicle without having to worry about “fueling” their vehicle. These value propositions will allow for the creation of such entities as a new fleet of “Eco-Uber’s. ” Basically, consumers can choose to ride in an environmentally friendly vehicle without making any significant trade-offs on price or convenience. FreeWire is operating under a product leadership discipline as they produce state-of-the-art products and will continue to pursue new solutions to mobile charging (Treacy and Wiersema 89). Competitive Advantages Ultimately, FreeWire provides a concept that mitigates the current tradeoffs that TaaS providers (Uber/Lyft drivers) would potentially have to face when switching to EVs. The crucial aspect of FreeWire’s service becoming mainstream will be its ability to match its service to driver downtime. FreeWire has the capability to deliver the Concierge charging when Uber drivers are out of commission, regardless of the driver’s (vehicle’s) location. DC Fast Charging offered by FreeWire allows for the rapid turnover times for “Eco-Uber” vehicles. The average distance covered by an Uber driver in a day is 143 miles (Hoeksema, Linkedin. com). It would take less than 20 minutes for an Uber driver to power an EV for this range. Therefore, if the driver can identify a small window of 20 minutes of downtime in his or her day, then a daily charge requires no daily tradeoff made by the driver. Any window of time greater than 20 minutes will allow for a greater range of almost 500 miles from 1 hour of FreeWire’s DC Fast Charging (evcharging. freewiretech. com).

Otherwise, night time charges would be even easier for FreeWire to execute. Even if prices for DC Fast Charging are the same as gas prices, the flexibility of matching the charging service with vehicle downtime and the sustainable nature of the vehicle, make it a valuable service. Target MarketsExxon MobilNearly everyone on the road today requires gasoline except for the small amount of EV drivers. Gasoline is viewed as a necessity and would be classified a utilitarian good. This makes ExxonMobil rely heavily on geography in deciding how to deliver gasoline to consumers. Consumers who use regular level gasoline do not distinguish between brands and simply look for price and convenience (thecasestudysolutions. com). Prices of gasoline between competitors are typically similar and the aspect of having as many gas stations in prime locations is the best way to expand market share. Determining places in cities and near freeways that will be frequented for stops is crucial as shapes whether a gas station will target road travellers or commuters.

Overall, the experience of fueling up a car has not changed much over past decades. Simple payment methods, loyalty programs and the growth of convenience store product selection are all key parts of the current refueling experience.

FreeWire Technologies

FreeWire focuses on a very specific segment of the market where early adopters are more likely to perceive the value in their offering. Currently, Freewire supplies a very niche segment of the market that is comprised of companies whose employees predominantly drive EVs. FreeWire’s major customers are Google, Evernote and Juniper Networks. These companies can be described as fast and responsive smart-tech companies who are open to new service applications as well as aware of increasing the productivity of their current workers. FreeWire pursues customers that are promoters of fossil-fuel free energy and likely identify with a strong eco-friendly lifestyle segment.

Demographically, FreeWire’s customers are of higher income brackets because most EVs are still sold at a higher price point and are not readily available as mainstream products. The next step for FreeWire would be to demonstrate how they can serve TaaS providers in a flexible nature that is cost effective and a benefit to branding. This segment already represents over 2 million drivers that drive about 142 miles per day (Exhibit 12 illustrates the customer decision making process of TaaS drivers). FreeWire’s ability to market and execute on fulfilling consumers expectations on the high availability of charging locations is a key activity. The eventual goal by FreeWire is to scale the business model to serve the entire EV market (“FreeWire Berkeley Presentation”). FreeWire will have room to grow as the EV charging market currently adds up to $260M and is predicted to reach a total of $2. 3B by 2020 (“FreeWire Berkeley Presentation”).

72
writers online
to help you with essay
banner clock
Clock is ticking and inspiration doesn't come?
We`ll do boring work for you. No plagiarism guarantee. Deadline from 3 hours.

We use cookies to offer you the best experience. By continuing, we’ll assume you agree with our Cookies policy.