The road to zero is best travelled together

At this year’s MOVE 2023, automotive startups and industry incumbents alike came together to address the greatest challenge facing the market—accelerating our collective journey towards net zero.

The discussions at the event revealed a clear consensus across industry professionals that achieving ambitious sustainability targets and driving greater business growth are not mutually exclusive. Rather, they are co-dependent.

With electric vehicles (EVs) expected to represent over 60% of vehicles sold globally^[1] by 2030, the demand for sustainable transport will only grow.Those that adopt greener innovative business models with strategic technology investments will not only be able to embrace this rapid transition to EVs and meet rising consumer demands but also unlock new levels of growth that are truly sustainable as the market evolves.

Even the largest players have struggled to adapt their business models and processes in line with the shifting sustainability-oriented consumer needs. If these business behemoths are battling amid fierce competition, how can smaller EV startups be expected to enter the fray?

To not only survive but thrive, these smaller businesses must allocate their resources wisely.

In the previous blog, we discussed what the current market looks like and examined the challenges many operators face. Now, let us look into how EV startups can find the right balance in this complex market.

Thinking in CIRCLES

In order to achieve these dimensions of success, and find the right mix that achieves both greater sustainability and drives business growth, the solution lies in a set of design principles that we call CIRCLES – Customer-centricity, Internet of Everything, Rapid Iteration, Configured for Scale, Lean Portfolio and Light Technology, Employee Value Proposition and Sustainable by Design.

This framework was created specifically with startups in mind, acting as a roadmap to help evaluate current operations, identify areas of improvement, and expedite the beginning of a new automotive corporate venture.

Putting the customer at the heart of your architecture

The first element of this framework emphasises customer-centricity. This ensures that the customers are top of mind throughout all business activities, from enabling early prototyping and live trials to gain customer feedback, to using new immersive metaverse technologies to showcase the product and excite potential customers. By decomposing the vehicle and looking at how every component satisfies a particular customer need, EV startups can build a more customer-first perspective, rather than viewing the vehicle as a closed system.

After examining deconstructed vehicle components, EV startups should focus on developing a holistic approach to vehicle design that brings all these elements together to work seamlessly as one. By defining a core data model up-front, they can achieve greater business efficiency. For example, with the right data, it can streamline battery pack design and placement to improve weight distribution and vehicle handling. This enables EV startups to build an enterprise system infrastructure that scales in line with funding rounds while minimising technical debt down the line.

Bringing it all together

As the world becomes increasingly connected, organisations should embrace the principle of Internet of Everything – a network encompassing vehicles, road infrastructure, smart devices, applications, and people. This convergence of connections could create a harmonious system of intelligent transport, boosting efficiency and improving safety. As 5G super-fast connectivity continues to expand, this future world of heightened connectivity unveils fresh opportunities for new business models that were once beyond reach.

Rapid Iteration is an approach to product and service design that involves incremental design and testing of changes, allowing for swift adjustments to product development based on customer feedback. While this approach is common for software developers, car companies have typically followed long product cycles that last several years.

However, as vehicles become more software-oriented, organisations can use over-the-air updates to release incremental improvements to the cars, thus extending the life of the vehicle. But making this change in product management the entire organisation to transform, from marketing and engineering departments.

Configured for Scale refers to both the practice of designing scalable parameter-driven applications, and selecting cloud-based platforms that can scale in line with complexity and funding limitations. This is also about defining business capabilities as software products. For example, Capgemini collaborated with a major OEM to create a ‘Plant-as-a-Product,’ enabling them to quickly replicate the complex equipment setups of their factories in different locations around the world.

Encouraging a lean mindset throughout the workforce

Lean Portfolio and Light Technology are essential for streamlined, cost-effective systems management as the company scales. As the organisation grows, it is critical to get a ‘digital core’ in place that enables well integrated processes for engineering, finance, purchasing and supply chain. This in turn enables flexibility in other business areas. However, getting this wrong can lead to significant costs and challenges later.

By selecting the right strategic platforms and focusing on simple ‘fit for purposes” processes organisations can avoid overly complex and industrialised approaches. For example, low-code and no-code solutions enable low-cost ways to bridge processes and increase automation.

From here, startups should establish an operating model that delivers on the vision and strategy of the enterprise. Through weaving in the Employee Value Proposition into everyday practices helps foster open communication and transparency, allowing employees to provide feedback and participate in decision-making processes.

Doing so unites the workforce along with your journey, accelerating the journey towards success.

Setting the stage for scalability

Finally, and most importantly, is Sustainable by Design. Any new leaders coming into the industry today should design their business to be sustainable from the outset to improve their appeal to investors and customers.

Circularity is a business model that prioritises the reduction of waste while maximising the use of resources. For example, designing a modular vehicle that is ready to be recycled and repurposed at the end of its life.

However, this cannot be done alone. The key to unlocking circularity is in developing partnerships and collaborations with suppliers and other stakeholders. This will help implement data systems that enable transparency of carbon impacts in the supply chain and more data-informed sourcing decisions to be made quickly.

Waiting until later runs the risk of facing significant transformations, as legacy companies currently do, in order to become sustainable. Thankfully, there are many innovative startups already offering sustainable products to the diverse needs of the ecosystem with sustainable products.

The Road to Zero

While there are many roadblocks along the path to EV market success, collaboration and speed are key to acceleration.

In today’s competitive market, there are a number of elements that EV startups need to get right if they want to succeed. Facing this daunting task has left many already trying to fast-track their way to success, without fully considering the tools available to them in laying the right foundation for sustainable growth. By using simulation technology, smart data or creating a more agile organisation, there are many ways that companies can and should speed up their route to market.

However, in this current climate, no start-up is expected to do it alone. Through partnering with the right stakeholders to unlock new capabilities, the possibilities are limitless. If there was one key takeaway from this year’s MOVE 2023, it’s that the road to zero is best travelled together.

^[1] https://www.iea.org/reports/by-2030-evs-represent-more-than-60-of-vehicles-sold-globally-and-require-an-adequate-surge-in-chargers-installed-in-buildings