“Separation of Vehicle and Battery” of Private Electric Vehicles and Customer Delivered Value: Based on the Attempt of 2 Chinese EV Companies

Abstract

Electric vehicles are an effective tool to reduce vehicle born emissions from road transportation. Faced with major pollution issues, China is committed to vigorously promoting electric vehicles. China has made active efforts in subsidies, policies, charging facilities, business models, etc., so that the annual growth rate of electric vehicle sales has accelerated. State subsidies have greatly promoted the use of electric vehicles, but the government is gradually reducing subsidies. In the case of government subsidy decline or even zero subsidy, “separation of vehicle and battery” is considered to be a good mode for solving the development of private EVs. The battery of an electric vehicle does not form a whole with the chassis, but they could be physically separated, replacing the battery with one which is fully charged instead of charging by users themselves, substituting battery leases for battery purchases, called separation of vehicle and battery. However, a series of issues such as whether this mode is beneficial to consumers, whether it has competitive advantages for vehicle companies, and what difficulties exist need to be further studied. This paper firstly analyzes whether it is necessary to implement “separation of vehicle and battery” for private electric vehicles (SEPARATION) in China. Based on this, it sums up the attempts of two companies to implement SEPARATION and extracts the key factors involved in SEPARATION. Then, such key factors are analyzed, and the customer delivered value model of SEPARATION is established. Finally, this article discusses the predicament of SEPARATION and makes some recommendations for the implementation of SEPARATION in China. The innovations in this paper include: (1) Analyzing the issue of SEPARATION from the perspective of customer delivered value. (2) Proposing a customer delivered value model of SEPARATION for the first time. (3) Proposing a two-level battery replacement network in the SEPARATION mode.