Better Place: Shifting Paradigms in the Automotive Industry, Dror Etzion and Jeroen Struben (McGill University, Canada)
This is the 2011 winner of the oikos Case Study competition in which oikos and Ashoka join forces to promote the creation of high quality teaching cases on Corporate Sustainability (supported by oikos foundation) and Social Entrepreneurship (supported by Ashoka). The competition welcomes entries from all parts of the world. Written feedback is given to each case contributor. The editor (Cheryl Kernot) is a judge for this competition and has chosen this example because of its strong connection with Australia through Evan Thornley, Chief Executive of Better Place Australia and also because it illustrates the capacity of social entrepreneurs to drive huge systemic change.
“In a bold bid to dramatically reshape the automotive industry, start-up company Better Place is attempting to shift transportation from reliance on the environmentally destructive internal combustion engine to electric power from renewable sources. In order to overcome the limitations of current technology and utilize off-the-shelf hardware, Better Place is rolling out an extensive infrastructure to provide ubiquitous charging opportunities in the hope that this would satisfy virtually all driver requirements.
In pursuing this massive transformation, Better Place is promoting a paradigm shift in the business model for personal transportation, by shifting sales from products (cars and gasoline) to services, by selling its customers “miles”. The end goal is to truly make the world a better place by substantially reducing the environmental and social impacts of the transportation sector’s reliance on petroleum.
The case highlights the challenges of transforming a mature industry which is central to modern society. It includes a brief history of the automotive industry to date, illustrates various unintended consequences of its expansion, as well as provides overviews of various competing automotive technologies (hybrids, hydrogen fuel cells, etc.)
The case surveys the various aspects of the Better Place model, and probes its advantages and shortcomings. It also examines the Better Place rollout strategy, as an upstart entrepreneurial company attempting to grow and expand internationally at a very rapid pace. Besides a complex economic business model specifying large upfront investments in multiple dispersed international locations, key challenges include:
- How to convince established automotive producers (or newcomers) that Electric Vehicles are the way forward?
- Whether and how to coordinate infrastructure and standards? And,
- How to convince consumers to make the leap of faith and switch to an electric car.”
There are thirteen “exhibits” such as those which set the context of the challenge:
- Gasoline and Electric car cost per mile comparison
- Worldwide Petroleum Use by Sector
and the particularly interesting forward thinking components
- Battery Swapping Stations plans
- Graphical Representation of the Better Place concept
- Photos of charge spots and demonstration vehicles
In all, the case study excels in explaining how the business model online casino Australia will attempt to achieve both massive social transformation and financial returns.
Full case available here