Circular Business Models for Electric Vehicle Battery Second Life : Challenges, enablers, and preconditions from an ecosystem perspective

Abstract: Sustainability has become a critical issue due to global warming, scarcity of resources, and the high costs of raw materials. It is vital to reconsider linear business models and value creation processes and transition towards circularity. The growth of the electric vehicles market is promising; however, it comes with a major downside. Soon there will be a considerable number of used batteries without the original capacity and potentially hazardous that cannot go to landfill due to environmental and economic reasons. In this regard, the use of electric vehicle batteries in second life (EVBSL) is suggested as a solution. EVBSL comes with benefits such as the extension of the battery life cycle, extracting value from the remaining capacity of the battery, reduction in the upfront costs of the electric vehicle, and create new revenue streams for the companies. And since various actors are involved in EVBSL, it is essential to study this phenomenon from an ecosystem perspective.Despite the recent focus of researchers on EVBSL, there are several gaps in the current literature on this topic. The first gap concerns the challenges and enablers of implementing circular business models (CBMs) for EVBSL. The second gap concerns the second life operations of electric vehicles (EV). There is a lack of research on the solutions that can guide the ecosystem actors to manage EVBSL-related activities. And the third gap concerns the limited research on the preconditions of circular business model innovation for the EVBSL that focuses on the transition from linear business models to CBMs. Therefore, this thesis aims to develop knowledge of the factors that influence the implementation of CBMs for EVBSL from an ecosystem perspective.This study intends to address these gaps by conducting qualitative research. An exploratory research design has been deemed adequate due to its flexibility and compatibility. This research draws on the existing literature on the second life of EV batteries, and circular business models. In total, 20 interviews and 15 workshops have been conducted covering 15 companies in the EVBSL ecosystem. Purposeful sampling was employed to select the EVBSL ecosystem actors with the aim of covering the key actors such as OEMs, battery manufacturer, recycling companies, remanufacturers, energy utility companies, material supplier for battery parts, construction and housing company, and public transportation companies. The collected data was analyzed via qualitative methods such as thematic analysis. The results of this study have led to the identification of nine key challenges and seven key enablers. Moreover, two dimensions (i.e., time frame and responsible entity) are identified from the empirical data, through which companies can structurally categorize and work with the identified key challenges and enablers. Based on this, a guiding framework is suggested that could support firms in the EV battery ecosystem to establish and manage various configurations for second-life operations in a series of phases such as firm-level initiation, ecosystem construction, firm-level optimization, and ecosystem orchestration. Finally, the current linear business models (traditional sales of products and services, product maintenance and support, R&D, consultancy, and services), upcoming CBMs (regenerating, looping, and sharing), and the preconditions (for value creation, capture, and delivery) for the circular business model innovation are extracted. This study contributes to the existing body of knowledge in several ways. It enhances the current literature on challenges and enablers of EVBSL by covering various actors in this ecosystem and extends the knowledge on the scope of these factors. Moreover, this study is the first one that suggests a guiding framework for the ecosystem actors through configurations for second-life operations while shedding light on the preconditions of circular business innovation for EVBSL. This study also provides interesting insights for practitioners and managers in the EVBSL ecosystem.

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