Two-sided online markets for electric vehicle charging

With the growing popularity of electric vehicles (EVs), the number of public charging stations is increasing rapidly, allowing drivers to charge their cars while parked away from home or en-route to their destination. However, as a full charge can take a significant amount of time, drivers may face queues and uncertainty over availability of charging facilities at different stations and times. In this paper, we address this problem by proposing a novel, two-sided market for advance reservations, in which agents, representing EV owners, report their preferences for time slots and charging locations, while charging stations report their availability and costs. In our model, both parties are rational, profit-maximising entities, and buyers enter the market dynamically over time. Given this, we apply techniques from online mechanism design to develop a pricing mechanism which is truthful on the buyer side (i.e., drivers have no incentive to misreport their preferences or to delay their reservations). For the seller side, we adapt three well-known pricing mechanisms and compare them both theoretically and empirically. Using realistic simulations, we demonstrate that two of our proposed mechanisms consistently achieve a high efficiency (90–95% of optimal), while offering a trade-off between stability and budget balance. Surprisingly, the third mechanism, a common payment mechanism that is truthful in simpler settings, achieves a significantly lower efficiency and runs a high deficit

Platform Markets and Energy Services

A structural shift from transaction-based, marginal cost pricing to fee-based service business models often accompanies We emergence of “platform” markets, i.e. multi-sided markets where an intermediary captures the value of the interaction between user groups. The many examples include telecommunications, data storage, cinema, music and media, and the automobile industry. Why not electricity? In this paper, we explore how the electricity supply industry can be conceived of as a platform-mediated, two-sided market and the consequences for pricing. Through two cases, a balancing services provider for smart home energy management systems and an electric vehicle charge manager, we show where a platform entrant could position itself in the retail electricity markets between supply companies and end-users. The drivers of such a transition include increased volatility due to renewable generation, the new complexity of roles for end-users, and the introduction of information and communication technologies. Conceiving of electricity as a platform market where new entrants provide an energy optimisation and management service may stimulate a competitive ecosystem and innovation. We suggest that fee-based pricing would enable the objectives of time-varying pricing to be achieved without adversely affecting the most vulnerable customers

Hyperfunding Regulating Financial Innovations

Innovations in corporate finance are driven by frustrations with present regulations and fueled by the internet and social media. Hyperfunding is one such example: Tesla paved the way for an electric vehicle revolution by preselling hundreds of thousands of its Model 3 EV direct to consumers. Unwary consumers may not have realized that they were underwriting Tesla’s bold strategy to transform multiple product markets. Risks were not disclosed. Rewards proved illusory. Investors would have been entitled to disclosures and colorable claims of fraud when Tesla missed milestones and deadlines. But consumers can only get their $1000 deposit back, without interest, if Tesla has the financial and reputational capital to refund consumers. What happens when an undercapitalized or fraudulent firm uses the same technique and fails to deliver? Are cryptocurrency promoters and “initial coin offerings” already Hyperfunding, pumping, and dumping vaporware? This Article explores challenges with regulating novel techniques in corporate finance and discusses an initial framework for protecting investors while promoting innovation

Value creation in electric vehicle charging networks

Electric vehicles (EV) are gaining a prominent share of the trillion-dollar automotive market. The growth is fueled by falling battery prices, tightening emission standards, government subsidies and increasing competition. The rise of EV’s creates a need for, and also depends on, charging infrastructure on a large scale. Electric vehicle charging networks are services that are used to manage and enable access to charging points. This study aims to understand how these networks can succeed in the tightening competition by examining what factors contribute to the value of an EV charging network for its participants. To reach this goal an explanatory single case study was conducted. The case examined a public EV charging network in Finland. First, earlier research in platform economics and EV charging were used to understand the context and to synthesize a theoretical framework. Next, empirical data was collected primarily with semi-structured interviews. Finally, pattern matching was used to analyze the data. Based on the results, the EV charging industry is still its infancy. EV charging networks mediate transactions between EV drivers and charging point owners (CPO), enabling exchange of information, control of charging points, and payments. Various signals suggest an expansion towards the energy system, as EV charging networks are likely to start aggregating and mediating vehicle-to-grid (V2G) services between EV drivers and energy market agents. The results suggest two focus areas as key factors creating value for participants. Firstly, the main contributor to the success of an EV charging network is the amount of charging points connected to it. This is mainly due to EV drivers’ strong positive cross-side network effects and to CPOs’ strong positive same-side network effects. Secondly, an EV charging network’s boundary resources should be designed to maximize efficiency for both sides. For EV drivers, charging is a mundane task that needs to be as effortless as possible. For CPO’s, offering charging is not a main business, but a relatively small value-added service. This study serves as a starting point for a new research stream, converging EV charging with platform economics research. In addition, the results help researchers in understanding the state of the industry and network operators in making strategic decisions

Monenpuoleisen alustan kehitys: strategioita sähköautojen latausverkostoille

Multi-sided platform is an attractive business model for organizations that can create value by mediating transactions of two or more sides willing to interact with each other. Electric vehicle (EV) charging networks enable interactions of EV users and charging point owners (CPO), and thus, they can be observed as multi-sided platforms. This thesis aims at, first, understanding the competitive platform dynamics that characterize EV charging industry, and second, finding suitable multi-sided platform strategies and future development pathways for EV charging networks. A qualitative interview study was conducted to study the European EV charging market. The empirical data was collected with 17 semi-structured cross-sectional interviews from different stakeholders in the charging industry. Thematic analysis was used to discover patterns in the data and thereafter the results were analyzed in relation to previous body of knowledge on multi-sided platforms and EV charging networks. The results show that strong but local network effects, low preference for variety and low multihoming costs for EV users characterize the competition of multi-sided EV charging platforms. However, the industry is fragmented to multiple other business models that consist of market roles of electro-mobility service provider (EMSP), charging service operator (CSO) and CPO. Thus, no conclusive results of the competitive environment can be confirmed purely based on platform dynamics. Strategywise, the results suggest designing pricing symmetry and governance of a multi-sided EV charging platform such that growth and quality of the interactions on the platform are supported. Additionally, decision to enable interoperability (roaming) between charging networks is an important strategic choice that depends on the business model, size and strategic ambitions of the network. For theoretical contributions, the thesis clarifies the distinction between market roles and business models in EV charging and provides a new conceptualization of roaming in EV charging networks. Furthermore, the study extends the research of multi-sided platforms to the context of EV charging networks and provides researchers and managers a snapshot of opportunities and future pathways of a rapidly evolving industry.Monenpuoleinen alusta on houkutteleva liiketoimintamalli organisaatioille, jotka luovat arvoa toimimalla välittäjänä kahden tai useamman osapuolen vuorovaikutuksessa. Sähköautojen latausverkostot mahdollistavat sähköautoilijoiden ja latauspisteiden omistajien välisen vuorovaikutuksen, joten niitä voidaan tarkastella monenpuoleisina alustoina. Tämän diplomityön tavoitteena on (1) ymmärtää alustataloudellisia kilpailudynamiikoita, jotka vaikuttavat sähköautojen lataustoimialaan, ja (2) löytää sähköautojen latausverkostoille soveltuvia monenpuoleisen alustan strategioita sekä tulevaisuuden kehityssuuntia. Työ toteutettiin laadullisena haastattelututkimuksena ja sen tarkoituksena oli tutkia Eurooppalaista sähköautojen latausmarkkinaa. Empiirinen data kerättiin 17 puoliavoimella haastattelulla, jotka tavoittivat poikkileikkaavasti toimialan eri osapuolia. Data analysoitiin temaattisen analyysin menetelmällä, minkä jälkeen sitä verrattiin olemassa olevaan kirjallisuuteen monenpuoleisista alustoista ja sähköautojen latauksesta. Tulokset osoittavat, että vahvat mutta paikalliset verkostovaikutukset, vähäinen tarve monipuolisille palveluille ja matalat monikotisuuden kustannukset sähköautoilijoille määrittävät monenpuoleisten sähköautojen latausalustojen välistä kilpailua. Toimiala on kuitenkin pirstoutunut moniin muunlaisiin liiketoimintamalleihin, jotka koostuvat latauspalvelutarjoajan, latausoperaattorin ja latauspisteen omistajan markkinaroolien yhdistelmistä. Tästä johtuen pelkkään alustataloudelliseen dynamiikkaan perustuvaa päätelmää alan kilpailutilanteesta ei voida tehdä. Strategioiden osalta työn tulokset suosittavat monenpuoleisen alustan hallinnan ja hinnoittelun symmetrian suunnittelemista niin, että ne tukevat alustalla tapahtuvien vuorovaikutusten laatua ja määrän kasvua. Lisäksi työssä havaitaan, että latausverkostojen välisen yhteentoimivuuden (engl. roaming) avaaminen on tärkeä strateginen päätös, joka riippuu verkoston liiketoimintamallista, koosta ja strategisista tavoitteista. Tämä työ täydentää aiempia tutkimuksia selkeyttämällä eroa lataustoimialan markkinaroolien ja liiketoimintamallien välillä. Lisäksi työ ehdottaa uutta käsitteellistä määritelmää latausverkostojen yhteentoimivuudelle. Diplomityö laajentaa myös monenpuoleisten alustojen tutkimusta uuteen kontekstiin -- sähköautojen latausverkostoihin, ja tarjoaa tutkijoille ja alan yrityksille tuokiokuvan nopeasti kehittyvän toimialan mahdollisuuksista ja tulevaisuudennäkymistä