Exploring the Potential of Crowdfunding for EV-charging Infrastructure Development

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IN

DEGREE PROJECT MECHANICAL ENGINEERING, SECOND CYCLE, 30 CREDITS

STOCKHOLM SWEDEN 2020,

Exploring the Potential of

Crowdfunding for EV-charging Infrastructure Development

A Strategy for Collaborative Financing of EV Charging Points in Sweden

ANTON BREW

OLIVIA ZETTERBERG

KTH ROYAL INSTITUTE OF TECHNOLOGY

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Exploring the Potential of Crowdfunding for EV-charging Infrastructure Development

A Strategy for Collaborative Financing of EV Charging Points in Sweden

by

Anton Brew Olivia Zetterberg

2020-06-03

Master of Science Thesis

KTH School of Industrial Engineering and Management Energy Technology ITM-EX 2020:339

SE-100 44 STOCKHOLM

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Studie på potentialen för crowdfunding för utveckling av elbil-laddningsinfrastruktur

En strategi för samfinansiering av elbil-laddningsstationer i Sverige

av

Anton Brew Olivia Zetterberg

2020-06-03

Examensarbete

KTH Industriell ekonomi och management Energiteknik ITM-EX 2020:339

SE-100 44 STOCKHOLM

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Abstract

Keywords: Sustainable mobility transition, Electric vehicles, EV-charging infrastructure, Crowdfunding, Co-creating, Demand-driven roll-out

All over the world, raising concerns about energy conservation and the environmental impacts of greenhouse gas emissions has promoted the development of a sustainable mobility transition.

Successful electric vehicle (EV) deployment plays a vital role in this manner but is still facing obstacles, where public charging infrastructure is one of them. Additionally, digitization is transforming and introducing new industries worldwide, contributing with new constructs to be used in the evolving transition. Simultaneously, technology is surpassing the competition, and is one of the most potent transformational force affecting customer relations in the energy sector, leading to customers anticipating more from the power utility companies. To attain a long-term- sustainable competitive advantage, firms have to retain, sustain, and nurture their customer base.

To do so, corporations have comprehended the value of embracing customer-centric incentives, enabling them to capture more indirect business values.

Furthermore, this thesis was done in collaboration with a power utility company, referred to as

‘Org X’ or ‘the CPO’. Influenced by the reasoning above, it investigated the opportunity to create indirect business values through a demand-driven roll-out of the national charging infrastructure with the use of crowdfunding. This was achieved by adopting an exploratory methodology approach, where a mixed inductive-deductive design was used. A multi-method qualitative data collection was made; consisting mainly of semi-structured-, and unstructured interviews with experts in the field. Thus, a profound perspective of the EV-charging market landscape was attained, which enabled adequate reasoning when proposing a strategy approach for the cause. Additionally, quantitative secondary data was used to develop a tool for an initial location evaluation, that is part of the recommended approach. This tool was also used to enhance the understanding of the national EV-charging market landscape, the customer segments, as well the potential market for a co-creating platform.

The findings suggest that the perceived readiness level of crowdfunding charging infrastructure varies depending on what aspect that is being accommodated. A platform that connects stakeholders is encouraged by actors in the field, but crowdfunding through solely end-users is questioned as close proximity to the end-user’s location is a key-factor regarding motivation to fund a charging point. A ‘Tier based framework’, that facilitates this transition was therefore developed and evaluated. Additionally, the framework was considered in the market analysis case study, which further included a recommended implementation and communication approach. If used accordingly, this framework could bring both indirect- and direct business values to the power utility company in question, as well as the involved stakeholders.

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Sammanfattning

Nyckelord: Hållbar utveckling, Elbilar, Elbil-laddningsinfrastruktur, Crowdfunding, Samskapande, Efterfrågedriven utveckling

Oro över energieffektiviseringar och miljökonsekvenser från utsläpp av växthusgaser världen över har främjat utvecklingen av ett hållbart energisystem. En framgångsrik marknadspenetration av elbilar (EVs) har en viktig roll i denna aspekt, men står fortfarande inför hinder där publik laddningsinfrastruktur är en del av problemet. Digitaliseringen leder till transformation och nya industrier vilket bidrar med ytterligare konstruktioner som används i övergången till ett mer hållbart samhälle. Samtidigt driver teknikutvecklingen till ökad konkurrens och har en kraftfull påverkan på vad kunderna förväntar sig från företagen. För att uppnå mer långsiktigt hållbara konkurrensfördelar måste företag sträva efter att behålla, upprätthålla och ta hand sin kundbas.

Företag börjar förstå det ökade värde som finns i att utöva mer kundcentrerade incitament och strategier, vilket potentiellt bidrar till mer indirekta affärsvärden.

Denna uppsats är i samarbete med ett Svenskt energiföretag, följaktligen refererat till som 'Org X' eller 'CPO'. Baserat på resonemanget ovan, har möjligheten att skapa indirekta affärsvärden genom verkställandet av en mer efterfrågedriven utveckling av den nationella elbilsladdning infrastruktur med hjälp av crowdfunding undersökts. Detta uppnåddes genom att använda ett utforskat tillvägagångssätt, där en blandad induktiv-deduktiv design användes. En kvalitativ datainsamling gjordes på flera sätt; huvudsakligen bestående av semistrukturerade och ostrukturerade intervjuer med experter inom området. Således uppnåddes ett djupgående perspektiv på av elbilsladdning marknaden vilket möjliggjorde sakliga resonemang kring den presenterade och rekommenderade strategin. Ytterligare användes kvantitativ sekundärdata för att utveckla ett verktyg för en initial plats bedömning, vilket är en del av den rekommenderade strategin. Detta verktyg användes dessutom för att öka förståelsen för den nationella elbilsladdning marknaden, kundsegmenten, liksom den potentiella marknaden för en samskapande plattform.

Resultaten tyder på att den upplevda beredskapsnivån att crowdfunda laddningsinfrastruktur varierar beroende på plats och kundgrupp. En plattform som ansluter intressenter uppmuntras av aktörer på marknaden, men crowdfunding genom enbart slutanvändare ifrågasätts då närhet till slutanvändarens läge är en nyckelfaktor när det gäller motivationen att medverka i finansieringen. Därav har ett tier based framework utvecklats och presenterats, som bör underlätta transformationen mot en mer kunddriven affärsmöjlighet. Dessutom beaktades ramverket i fallstudien för marknadsanalysen, som ytterligare inkluderade en rekommenderad strategi för implementering och kommunikation. Om den används i enlighet bör ramverket ge både indirekta och direkta affärsvärden till det aktuella energi företaget, liksom till berörda intressenter.

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Acknowledgment

First, we would like to thank Org X and the involved employees for providing us with the opportunity to conduct our research in collaboration with them. More specifically, we would like to thank our supervisor, Per W; You have truly been an honor to work with and have provided us with great support throughout the whole project. We have really appreciated your devotion, enthusiasm, and hospitality. Secondly, we want to express our gratitude to our supervisor at KTH, Elena Malakhatka, for consenting us as her thesis students. Thank you for always providing us with great feedback, being supportive, and available in any circumstances. Your devotion and curiosity are incredible, and we could not have wished for a better supervisor for our master thesis. The project would not have been the same without you, and you have truly contributed with great knowledge, energy, and inspiration to our last year(s) at KTH.

Furthermore, we would like to thank all of the industry experts and academia participating in the interviews for this study. Thank you for your time and effort in providing us with great insights that could not have been attained elsewhere.

We also want to seize the opportunity to thank our examiner, Per Lundqvist, who has brought value to our time at KTH and the Industrial Engineering and Management program like no other professor. Your visionary methodologies used for educating us in Energy Technology and Management has genuinely been appreciated, fun and productive.

Lastly, we want to thank one another for always spreading ‘positive energy’ and supporting each other through the whole process. Through the daily-dose of encouragement, laughs and motivational speeches, we kept pushing ourselves in moments of doubt.

Anton Brew Olivia Zetterberg Stockholm, June 2020

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List of Figures

Figure 1: The predicted growth of EVs and PHEVs in Sweden (Andersson and Kulin, 2019) Figure 2: “What do politicians think?”. Distribution of opinions regarding the EV deployment in Sweden (Andersson and Kulin, 2019)

Figure 3: Number of charging points, by type, in Sweden 2017-2020 (ELIS, 2020)

Figure 4: Overview and key points of the main charging segments for light-weight EVs in the current market situation. Adapted from Jennings, Parkin and Del Maestro (2018), IEA (2019) and AUAS (2019)

Figure 5: Distribution of power supply for AC respectively DC charging in Sweden (Power Circle, 2020c)

Figure 6: Types of charging modes and its charging type. Altered from AUAS (2019) Figure 7: The value chain of stakeholders and competencies that affect the charging

infrastructure market. The blue stakeholders are part of the simple value chain and the grey stakeholders are part of the extended value chain (IEA, 2018)

Figure 8: Market role overview for public charging stations, including responsibilities of the actors. Adopted from AUAS (2019)

Figure 9: Steps of the initial procurement process of a charging point implementation Figure 10: Key impact factors on the profit of public charging infrastructures. Adopted by Zhang et al. (2018)

Figure 11: Thesis Research Process

Figure 12: Identified Customer Segments in respect to charging- and EV-driving patterns Figure 13: Trends and uncertainties schemed in a driver analysis grid in respect to impact and uncertainty

Figure 14: Stakeholder grid in regards to buy power and interest Figure 15: Tier based framework

Figure 16: Tier based framework in regards to desired business-driven v.s. people-driven business values

Figure 17: Stakeholder grid in respect buy power and interest, with applied clusters from the tier based framework

Figure 18: Engagement process for B2B2C to capture both direct-, and indirect business value Figure 19: A generalized visualization of how the Tiers will be utilized, in regards to

implementation and communication, in the public-, respectively private approach Figure 20: Key-components of the public approach implementation

Figure 21: Key-components of the private approach implementation

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List of Tables

Table 1: Description of the various Charging Modes (Spöttle et al., 2018) Table 2: Description of the various Charging Types (Spöttle et al., 2018)

Table 3: Factors with direct impact on the profit of public charging infrastructure (Zhang et al., 2018)

Table 4: Interactions between the direct factors (Zhang et al., 2018)

Table 5: Indirect factors and their influences both direct and other indirect factors (Zhang et al., 2018)

Table 6: List of interviewees

Table 7: Overlook of compatible crowdfunding platforms currently on the market Table 8: Key findings from the case study market analysis

Table 9: Scoreboard from the appropriateness evaluation

Table 10: Essential components of communication of the public approach Table 11: Essential components of communication of the private approach

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Abbreviations and Glossary

Abbreviations

AC Alternating Current BM Business Model B2B Business to Business

B2B2C Business to Business to Consumer B2C Business to Consumer

BEV Battery Electric Vehicle

BRF “Bostadsrättsförening” - housing society/housing cooperative CEB Customer Engagement Behavior

CP Charge point

CPEV Charge Point per Electric Vehicle CPO Charge Point Operator

CRM Customer Relation Management DC Direct Current

EV Electric Vehicle

eVMT Electric Vehicle Miles Travelled

EVSE Electric Vehicle Supply Equipment (charger) GHG Greenhouse Gas

ICEV Internal combustion engine vehicle KPI Key Point Index

K-S Key Stakeholder PEV Plug-in Electric Vehicle

PHEV Plug-in Hybrid Electric Vehicle RFID Radio-frequency identification VPP Virtual Power Plant

V2G Vehicle-to-grid

UVP Unique Value Proposition

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Glossary

B2B2C: Business to business to customer, meaning you target businesses are the ones with direct contact to the end-users.

Critical Mass: The critical amount of people who need to show interest to realize a new CP.

Business-driven approach: Values utilization rate and economic factors highly seeking direct business values.

CPO: are the companies that install, maintain, operate or optimise EV charging infrastructure

Demand-driven roll-out: EV-charging infrastructure develop through the needs of the end-user

People-driven approach: Values customer-centric seeking to create indirect business value by (e.g. brand, customer satisfaction etc.) .

Strategic-driven roll-out: EV-charging infrastructure developed through a strategic perspective targeting specific locations.

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1. Introduction

This chapter covers the topics related to the EV-charging infrastructure landscape and crowdfunding solutions in a broader context. The inquiry that is to be studied is formulated along with the purpose of the thesis, research question, and research contribution. The chapter ends with a discussion on the thesis´ limitations, delimitations and an outlining of the disposition of the thesis.

1.1 Background

Sweden has ambitious climate goals whereas one of them is to achieve net-zero emissions compared to 1990, hence an 85 percent reduction, by 2045 the latest (Swedish Energy Agency, 2019). Today, burning fossil fuels has the greatest impact on the greenhouse effect, including Sweden and the world in general. The Swedish transportation system is deeply dependent on fossil fuels and its domestic transport sector stands for one-third of the emissions in total (Swedish Transport Agency, 2019). The objective of the transportation sector is to decrease its emissions by 70 percent from 2010 to 2030 (Swedish Environmental Protection Agency, 2019).

There are a lot of challenges in order to transition to a fossil-fuel-free transportation sector, but the technological conditions and incentives are promising. Energy-efficient and fossil-free vehicles, renewable fuels, and a transport-efficient society are the three main components of critical actions towards a more environmentally friendly transportation sector (Swedish Environmental Protection Agency, 2019). The first mentioned component includes electric vehicles (EVs), and its deployment has been growing promptly over the past ten years. Between 2017 and 2018 a global increase of privately owned EVs increased by 63 percent reaching five million in total (IEA, 2019). The market share of newly bought EVs in Sweden is predicted to grow significantly in the coming years, reaching 90 percent by 2030 (ELIS, 2018). However, in order to achieve a successful market penetration of EVs, reliable charging infrastructure is required (Hardman et al., 2018; Zhang et al., 2018). In 2018, the number of charging spots increased with 44 percent worldwide in relation to the previous year. However, the biggest share of new charging points was private, accounting for more than 90 percent of the newly installed chargers (IEA, 2019).

Today there are many incentives to build out the Swedish infrastructure for EV-chargers, both from the government, organizations, and companies. The question is how to drive this development, and in what way it should be financed to achieve high socioeconomic value.

Simultaneously, the concept of crowdfunding is transpiring worldwide. This relatively new funding alternative has enabled numerous entrepreneurs, organizations, and distinct projects to achieve objectives that otherwise would have been neglected. In practice, it involves a creator that raises external financing in small amounts from diverse sources, such as, e.g., private people or assorted types of investors. Additionally, the involvement of civic and social entrepreneurship, co-creating urban development, and customer engagement have increased lately. Acknowledging

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the pronounced environmental concerns in combination with the customer-centric concepts in question; this study investigates how crowdfunding can be used as a financing method for the development of EV-charging infrastructure in Sweden.

1.2 Problem Statement

The EV deployment and charging infrastructure go hand in hand, and is somewhat of a chicken and egg dilemma (Transport and Environment, 2018). The perception of accessible public charging infrastructure is crucial when encouraging non-EV-users to go electric, even though public charging is rarely used (Haustein and Jensen, 2018; Transport and Environment, 2018).

Additionally, developing public charging infrastructure is generally not economically sustainable (Zhang et al., 2018). Hardware and other maintenance costs are commonly high, while the income is relatively low, which leads to investors being reasonably opposed to allocating capital until there is a stable market. Estimations speak for a continuous EV-deployment, which will require additional support from the charging infrastructure (IEA, 2019). Due to this, along with the financial challenges of public charging infrastructure, crowdfunding charging points will be evaluated. However, the concept of crowdfunding in regards to charging infrastructure is, in an academic stance, found to be practically unaddressed. However, the concept of crowdfunding in regards to charging infrastructure is, in an academic stance, found to be practically unaddressed.

The lack of research and cases of execution leads to the questionability of how an approach should adequately be disposed.

Lastly, as many industries have embraced the concepts of servitization, customer-centric, and co-creating business approaches, their feasibility will be examined in this manner (Kohtamäki et al., 2018; van Doorn, 2010). Therefore, an alternative strategy is investigated as an actor could benefit from taking a more demand-driven approach, listening to the end-users' needs, and creating a more customer-centric strategy for the deployment.

1.3 Purpose & Research Question

Derived from the problem statement above, the overall aim of this thesis is to examine the feasibility of introducing a strategy for EV-charging infrastructure development based on crowdfunding. Specifically, the objective is to evaluate strategies for collaborative financing of charging points in the national EV-charging landscape of Sweden. To fit the purpose of the thesis, the following research questions were formulated:

RQ1: How can an energy supplier create indirect-, as well as direct- business value through a demand-driven charging infrastructure roll-out?

RQ2: What are the enablers and blocks of co-creating EV-charging infrastructure for a power utility company in the Swedish market landscape?

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1.4 Research Contribution

This thesis has the potential to fill gaps in several disciplines due to the interdisciplinary nature of the determined topic. Firstly, it intends to contribute to the sustainable mobility transition literature, exploring the difficulties with EV deployment in regards to its charging infrastructure.

Additionally, it looks at the opportunities and challenges of energy firms, in this specific field, to create indirect business value as they embrace a customer-centric business approach based on customer demand and input.

The relation between crowdfunding, and co-creating, charging infrastructure is rare in academic literature. Attention has been applied to aspects of the topics separately; however, research overlapping these subjects is inadequate, and there are only a small number of published articles in the academic literature that focus on the development on EV charging infrastructure in general (Broadbent et al., 2017; Hall and Lutsey, 2017). One study, by Zhu et al. (2017), on the possibility of crowdfunding charging infrastructure has been found. However, as it is limited to the Chinese market, its result might indicate one thing, while putting it into a different context with opposite preconditions might provide other findings. Additionally, limited suggestions on the implementation process exist today.

Hence, this thesis aims to increase the knowledge about the current state and future outlook of the EV market landscape in Sweden. Additionally, it seeks to increase the understanding of the possibility for an energy firm to strengthen itself in the charging infrastructure market by embracing a demand-driven roll-out with the help of crowdfunding. Finally, it intends to contribute with recommendations on how this approach should be implemented and communicated. Furthermore, the thesis has the objective of providing a practical contribution to the business that this thesis is in collaboration with the so-called ‘Org X’. If successful, the insights produced by the thesis can result in increasing the competitiveness and profitability of the organization.

1.5 Limitations and Delimitations

Limitations refer to the boundaries and implications that are out of control of the study. For this investigation, time- and resource- constraints should be acknowledged. Additionally, due to the circumstances of the global pandemic (caused by the spread of COVID-19), the research procedures had to be altered to some extent in the middle of the research process. E.g., the attempt to address the crowdfunding aspect more in-depth got limited as the planned interviews with the key actors in this field were canceled, as they had to put all of their resources on their core business operations. Additionally, further insight into Org X´s operations could have been attained if more time was spent at their office. During the pandemic, recommendations to stay at home were followed, and all meetings were held online.

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Delimitations are active choices to limit the scope of the study. Firstly, the thesis is delimited to a single-case study as it is conducted in collaboration with Org X, and its operations on the Swedish market. Therefore, the geographic area and the strategic alignment evaluation will be based on Org X´s situation. Hence, aspects will be considered somewhat in the context of Org X´s abilities and preconditions when evaluating opportunities and blocks of the proposed problem formulation. Additionally, when examining the EV landscape, the scope is limited to battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), excluding other forms of electric vehicles, as they are considered as the end-users of Org X. Furthermore, the choice of examining one energy provider, located in Sweden specifically, might restrain the study’s generalizability. However, it will be aimed to present the research and the findings in a way that enables similar strategies to be applied in additional regions with similarity.

1.6 Disposition

Chapter 1 - Introduction: The context of the thesis is exhibited in this chapter. Firstly a short background is presented, followed by the problem statement, purpose, and research question.

Lastly, the expected scientific contribution, limitations, delimitations, and the disposition is stated.

Chapter 2 - EV-charging infrastructure landscape: The current state and outlook of EV deployment, as well as EV-charging infrastructure, is covered. User preferences, regulations and incentives, economic factors, and technological aspects of the field are presented.

Chapter 3 - Crowdfunding and Co-creating Approaches: In this chapter, the concept of crowdfunding is explained. The benefits, challenges, and need for engagement is described along with some examples of success stories. Additionally, it covers literature on co-creating for social community causes, as well as discussing different types of entrepreneurship.

Chapter 4 - Case study: This chapter provides an introduction of the organization, Org X, that the thesis is conducted in collaboration with. The organization is explained together with a short description of the cause of this project. Lastly, the applied theoretical lens is evaluated on.

Chapter 5 - Methodology: The utilized methodology is outlined in this chapter. Initially, the research design and approach is presented, followed by data collection and analysis. Lastly, a discussion regarding the reliability and validity is raised.

Chapter 6 - Findings and Analysis: This chapter presents the results gathered throughout the research process. First, it gives the findings that motivates the developed theoretical framework, followed by evaluations on a strategy and two approaches that are recommended for the project objection. Analysis, discussion, and interpretation of the results are incorporated throughout the whole section in regard to each specific outcome.

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Chapter 7 - Conclusion: Initially, the key findings from the study are apprehended in X main points. Following the conclusion, suggestions for further research are elaborated on.

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2. EV-charging infrastructure landscape

In this section, an outlook of the EV-charging infrastructure landscape is covered. It involves aspects of the EV-market, policies and regulations, consumer profiles, description of technological factors, user-preferences, as well as procurement processes, and financial aspects.

2.1 Sustainable Mobility Transition

The electrification of the transportation sector plays an essential role in meeting national- and international sustainability goals (IEA, 2018). The transportation sector is, as mentioned earlier, highly dependent on fossil fuels, and its domestic transport sector stands for one-third of all CO2 emissions in Sweden (Swedish Transport Agency, 2019). The transition into more sustainable alternatives of transport means has the potential to enhance a paradigm shift in future markets of energy and mobility, which will broaden the positive effects on the current environmental issues (Turton and Moura, 2008). A fundamental shift along several dimensions is needed, where charging infrastructure, user practices, technological enhancement, and organizational changes are just a few of the phenomenons concerned.

This thesis focuses on EV-charging infrastructure, and the potential of collaboratively developing it, which are aspects of a broader context of the EV transition. The EV- and charging infrastructure deployment can, as mentioned, be seen as a chicken-and-egg dilemma, where concerns of building high volumes of charging points for a small number of vehicles are questioned (Transport and Environment, 2018). Meanwhile, psychological barriers to purchasing electrified vehicles are usually linked to the lack of an adequate charging infrastructure (Egnér and Trosvik, 2018). The general complexity of socio-technical transitions, as well as network externalities of the mentioned dilemma, are aspects that affect this particular development, likewise, the development of the involving dimensions of the system as a whole.

2.1.1 Current situation and Outlook of the EV Market

As the EV-charging infrastructure development is highly dependent on the EV-market, it is essential to evaluate its progression. Due to the urgent need to address transportation-, fossil oil use-, and CO2 emission issues, the interest of EV penetration has become substantial during the past decade (Jansson, Nordlund and Westin, 2017; Noel et al., 2020). The global importance of EVs has been legitimized at various levels, including aspects such as governmental long-, medium- and long-term penetration targets as well as automotive manufacturers announcements (Noel et al., 2020). The academic literature has put a lot of effort in addressing its adoption barriers, as the deployment is seen as an essential part of the socio-technical transition towards decarbonized transport, along with contributing to other benefits such as local health emissions, noise pollution, etc. (Noel et al., 2020).

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As for the development, the number of electric vehicles in the Nordic countries has been growing steadily since 2010. By the end of 2017, it reached up to 250 000 electrified cars, and the region has one of the highest ratios of EVs per capita in the world (IEA, 2018). Based on announced policies, the current market trends as well as ambitions climate goals, the EV stock is estimated to reach four million by 2030 in the Nordic Region (Iceland, Finland, Denmark, Norway, and Sweden) (IEA, 2018). More specifically, as this thesis focuses on the Swedish market, a demonstration of the national predicted growth, regarding BEVs and PHEVs, is presented in Figure 1 below.

Figure 1: The predicted growth of EVs and PHEVs in Sweden (Andersson and Kulin, 2019)

2.1.1.1 Incentives for EV deployment

To enable EV market deployment, policy support is essential as it promotes the uptake of EVs to be more appealing for consumers (Egnér and Trosvik, 2018). Purchasing choices are highly influenced by policy measures that impact the upfront price of a vehicle, including taxes and registration fees (IEA, 2018). Norway has become a global leader with the highest EV market share. The country is a pioneer in this manner, as the increase has been pushed by regulatory actions to enhance the EV value proposition (IEA, 2019). It´s procurement can be studied in order to attain an understanding of how incentives can be used to enhance the development in other countries, as a wide range of studies suggests that the implementation of national-, as well as local policy instruments have a positive impact on EV adoption (e.g., Mersky et al., 2016;

Sierzchula et al. , 2014; Gallagher and Muehlegger, 2011; Beresteanu and Li, 2011; Chandra et al., 2010).

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As for Swedish incentives, a national target that implies a fossil independent vehicle fleet by 2030 is determined (SOU, 2013:84). Purchase rebates for energy-efficient vehicles were nationally introduced in 2006 in forms of registration tax benefits and rebates, as well as tax credits. Ten years later, Sweden differentiated the subsidy for BEVs and PHEVS, with a value of SEK 40 000 respectively SEK 20 000. This purchase subsidy applied for vehicles with a tailpipe emission lower than 50 g CO 2/km and was referred to as the “supermiljöbilspremie” (IEA, 2018). The rebate was available for both private and company cars and the taxation benefits on private use of company cars were also lower for EVs than for ICE vehicles. The differentiated purchase subsidy did not have a significant effect on the relative BEV or PHEV share in Sweden´s EV market. An explanation of this could be the tax relief that is available for company cars, as well as the popular consumer preferences towards large PHEVs (IEA, 2018). The

“supermiljöbilspremie” was replaced by the bonus-malus system in 2018. As it takes effect, the ¹ motivations for BEVs and PHEVs might change the share distribution; as it encourages higher BEV shares. Andersson and Kulin (2019) argue that the bonus-malus system and the implementation of ‘environmental zones’ will positively contribute to the increase of electric ² vehicles in the country. However, its entry effect on the market is yet to be recognized as well as the potential for future policies and incentives. As for the future, Figure 2 below, demonstrates the distribution of answers from Swedish politicians regarding their view on EV deployment in the country.

Figure 2: “What do politicians think?”. Distribution of opinions regarding the EV deployment in Sweden (Andersson and Kulin, 2019)

2.1.1.2 Challenges and Enablers Regarding the EV Uptake

The most highlighted barriers of the EV penetration in the academic literature are technical or economic factors (Noel et al., 2020). Additionally, it is argued that the deployment is strongly dependent on customer acceptance, where the barriers and concerns are highly interconnected and commonly associated with consumer knowledge and experience (Vassileva and Campillo, 2017; Noel et al., 2020). Matters such as range anxiety, battery charging time and lack of charging

1The bonus-malus system applies to new class 1, and class 2 passenger cars as well as light buses and light trucks. It implies that the stated vehicles with low CO2 emissions receive a bonus, while gasoline and diesel-powered vehicles receive an increased vehicle tax during the first three years after purchase (Swedish Transport Agency, 2019a).

2Environmental zones are used to limit the use of gasoline and diesel vehicles that do not have adequate emissions class in urban areas where air quality has exceeded EU limit values (Swedish Transport Agency, 2020).

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infrastructure (compared to the use of fossil fuel stations) are examples that limit the mass adoption of EVs (Egbue and Long, 2012). Notable investments in battery development, vehicle-to-grid (V2G) technology, blockchain technology, virtual power plants (VPP), etc. are technological developments that have the potential to address some of these barriers by decreasing the cost trade-off of EV-infrastructure (Ketter and Dalen, 2018). A study on the Swedish market shows that local policy instruments of public charging infrastructure have a significant impact on the BEV deployment rate (Egnér and Trosvik, 2018). Additionally, the effect of policy instruments is higher in urban municipalities compared to suburban or rural districts. Therefore, it can be argued that the difference in the expansion of the public charging infrastructure across the country has led to different deployment rates of BEVs (ibid).

Additionally, the Swedish Energy Agency (2016) claims that there is a need for more detailed information regarding driving forces that affect the adoption of EVs, which is supported by The National Institute of Economic Research (2013) who argues that the national adoption rate is not high enough to achieve the targets set for 2030.

Mersky et al., (2016), conducted a study on Norway's maturing market and found that the most significant predictive power for the adoption, at a regional and municipal level, is access to charging infrastructure, proximity to major cities and regional income. Furthermore, Janson et al.

(2017) argue that policy adoption and the manufacturing of environmentally friendly vehicles are not enough for the deployment to be extensive. Consumer preferences and willingness for adoption are also aspects that have to be considered, where norms and pro-environmental attitudes are highlighted influencers (ibid).

2.1.1.3 PEV Consumer Profiles

A study by Haustein´s and Jensen´s (2018) supports a wide range of research considering the typical BEV owner profile. It is shown that the group is very homogeneous with regard to the characteristics. Owners are more likely male, living with children and have more than one car in the household. It is also proven that they belong to the higher income class with a higher educational background. An evaluation made by Stockholms Stad supports this and additionally confirmed that the majority of the current PEV users in the capital are male over the age of 36 (Granström et al., 2017; Stockholms Stad, 2019).

2.1.1.3.1 Consumer Opinion and Attitudinal Constructs

Attitudinal constructs consist of personal norms, social norms, ecological attitudes, opinion-leading, and opinion seeking. A study by Jansson et al. (2017) confirms that both interpersonal influence and attitudinal factors have an impact on drivers that is part of the eco-innovation adoption. A wide range of studies shows that opinion leaders have a significant influence on their followers and exert a force that changes the opinions and actions of many (Venkatraman, 1989; Weimann et al., 2007). It is shown that a combination of personal norms and opinion-leadership and -seeking are the essential constructs that explain EV adoption actions (Jansson et al., 2017). EV adopters were shown to be less opinion seeking and rather attain more opinion-leading qualities; showing that EV adopters are more prone to look for

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information from sources like category-specific magazines or store visits; meanwhile, opinion seekers rather look at opinion leaders for information (Shoham and Ruvio, 2008). This illustrates the importance of targeting the right individuals (target groups) with convenient details and the use of appropriate communication channels (Jansson et al., 2017). This will be further discussed in section 6.3.4.

2.1.1.3.2 Expected Demographics: Norway as a Pioneer

As mentioned, Norway has shown great success in the transition to an electrified vehicle fleet.

The impressive development is resulted by their extensive incentives and long-term BEV-policy, implying that all vehicle purchases have to be zero-emission vehicles in 2025 (Figenbaum, 2018).

Rogers´theory on diffusion of innovations claims that users can be distributed on a timeline of successive adopters, innovators, early adopters, early and late majority, and laggards. BEV owners in Norway were, in 2016, classified as early adopters, and we were moving towards the early majority user group in 2018, and have now approached the average socio-demographics of vehicle owners in general (Figenbaum and Nordbakke, 2019). BEV models with more extended range and increased fast-charging network, as well as increased familiarity with electric vehicles in the population, seem to be facilitators of this development (ibid).

In 2016 the BEV owners were mainly young male workers that tended to be part of larger households with high education and higher income, hence, reflecting the consumer profiles on the Swedish market today. Recent studies show that the BEV owners resemble the general population of car owners in terms of socio-economic characteristics (Figenbaum and Nordbakke, 2019). The association of being in larger households has decreased, and a broader demographic of age and gender are seen. As for the driving patterns, BEVs are generally used more frequently than ICEVs for e.g., local trips; such as commuting, shopping, and escorting children to activities. Additionally, it is found that the dominant owner group of BEVs are families that tend to have a greater need for local transport than other vehicle-owned groups (Figenbaum and Nordbakke, 2019).

In regards to charging, the study by Figenbaum and Nordbakke (2019) showed that the frequency of home charging did not change over the years, despite the user-demographic transformation. 80 percent of the users charge at home, at least three times a week; and solely 7 percent of the respondents claimed that they never charge at home, and 2 percent charge at home less than once a month. Of the people who do not frequently charge at home, 56 percent charge at work, 29 percent charge at public chargers, and 15 percent charge on streets close to their home.

Actors in the field can benefit from observing the Norwegian development, as it is perceived as a pioneer on the market (IEA, 2018). However, it has to be seen in a broader context as the country has implied extensive national and local incentives due to strict policies. Not only have they forced the deployment of EVs through comprehensive policy measures addressing purchase

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benefits, but also incentives that benefit EV-drivers in other ways such as free parking, access to bus lanes, and waivers on other expenses (IEA, 2018).

2.1.2 Current situation and Outlook of EV-charging Infrastructure

The development of the infrastructure is mostly driven by economic initiatives, by multiple parties, such as governments giving subsidies or typical charging infrastructure operators, have contributed to the construction of if so far (Zhu et al., 2017). However, in certain situations, it is challenging to motivate implementation at specific locations that would extract customer value rather than a high utilization rate that leads to higher gross profit (Jennings et al., 2018). The exact number of charging points for the infrastructure to be considered adequate is yet quite unexamined, with exception to a few studies made in Germany where it was shown that ten fast chargers per 1000 PEV might be considered as a sufficient target (Hardman et al., 2018).

In 2017 there were more than 16 000 publicly accessible charging points in the Nordic Region, and as for today, there are 2164 allocated in Sweden (ELIS, 2020; IEA 2018). The International Energy Agency (IEA) is estimating that the number of publicly accessible charging outlets across the Nordic countries will sum up to 290 000 by 2030 (IEA, 2018), indicating that actors in the field are taking action to contribute in this transition. The Figure below demonstrates the increasing number of charging points in Sweden between 2017 and 2020.

Figure 3: Number of charging points, by type, in Sweden 2017-2020 (ELIS, 2020)

Figure 3 is given in regards to the different types of charging that can be observed in the current national market (these will be further clarified in section 2.2.1). As for the current market, Figure 4 provides a mapping of the diversified charging segments that are mostly used by EV-drivers today. Key points regarding the respective segment, along with implications and opportunities, are briefly covered.

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Figure 4: Overview and key points of the main charging segments for light-weight EVs in the current market situation.

Adapted from Jennings, Parkin and Del Maestro (2018), IEA (2019) and AUAS (2019)

One can find various reasons that support the need for enhanced public charging infrastructure.

With that being said, there are also arguments that speak against it. For instance, evidence shows that home charging and workplace charging are the most prominent charging locations for convincing new PEV consumers to make a purchase, and these are also shown to be the most commonly used locations to charge (Hardman et al. , 2018). Contrariwise, as the share of home charging in the EU is estimated to represent 75 percent in 2020, it is expected to decrease to 40 percent by 2030 (Hertzke et al., 2017). Reasoning for this is the vast expansion of public charging infrastructure that will be pushed by EV deployment among middle and lower-income households.

2.1.2.1 EV-charging segments and Consumer preferences

As already indicated, the charging infrastructure has to function, and its capacity has to meet the demands in order to achieve a successful market EV penetration. For instance, studies show that a lack of public charging infrastructure is one of the main concerns for internal combustion engine vehicle (ICEV) drivers while considering a BEV purchase (Haustein and Jensen, 2018).

Hence, the visibility of public charging is shown to be critical in encouraging non-EV-users to go electric, even though public charging is rarely used (Egnér and Trosvik, 2018; Transportation and

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Environment, 2018). Furthermore, in addition to an increased EV deployment rate, it has been shown to address obstacles among the existing EV-owners. Studies on consumer preferences indicate that a more developed charging infrastructure alleviates driving range concerns (also known as range-anxiety), and contributes to a significant increase in electric vehicle miles traveled (eVMT) among EV users (Axsen and Kurani, 2013; Kurani et al., 2018). More specifically, it is shown that a combination of home charging and an adequate public charging infrastructure facilitates PEVs to reach 95 percent eVMT (Plötz and Funke, 2017). The positioning of charging points is also an essential aspect as optimal locations can increase fleet eVMT by 88 percent (Shahraki et al. 2015). Hence, the configuration of the infrastructure is highly dependent on placement decisions to be valuable.

2.1.2.2 Incentives for EV-charging Infrastructure Development

Research shows that governmental support plays a vital role in the development of EV-charging infrastructure. Still, it suggests that more effort should be put on examining how the government incentives and policies should be tailored to favor the development more effectively (Zhang et al., 2018). The European Union has announced EVSE-related policy instruments with an original budget of 170 million USD (IEA, 2018). This, however, includes all forms of charging;

hence it is not explicitly directed to public charging infrastructure. Between 2018 and 2020, Sweden deployed a support scheme for private charging, allocating SEK 90 million (USD 11 million) to support 50 percent of the cost for private charging implementation (IEA, 2018).

Studies on how these incentives act in favor of charging infrastructure development are yet hard to come by.

2.1.2.2 Challenges and Enablers Regarding the EV-charging Infrastructure Development

The increasing number of EVs on the market is a prominent enabler for EV-charging infrastructure development. General dissemination of information seems to be a challenge as mainstream consumers attain lacking knowledge and awareness when it comes to EV-charging infrastructure (Axsen et al. 2017). Consumers that have already purchased a PEV, or considered buying one, have higher awareness and knowledge compared to traditional ICEV users (Hardman et al. , 2018). This is supported by Haustein and Jensen (2018), who proved that PEV users were more satisfied with the current charging situation than ICEV users. PEV- and ICEV users should, therefore, be addressed by different strategies when aiming to increase the national PEV and charging uptake, as they are also shown to be affected by different factors in the purchase evaluation (Haustein and Jensen, 2018).

A possible enabler of public charging infrastructure is the rapid urbanization. Projections indicate that there is a gradual shift towards people moving from rural to urban areas, where Stockholm is one of the fastest-growing regions in Europe (UN, 2020; Stockholms Stad, 2020).

It is argued that in large cities, where a high share of the citizens live in flats rather than houses, a greater need for public charging infrastructure should be expected (Egnér and Trosvik, 2018;

IEA, 2013). Egnér and Trosvik (2018) even argue that a limited ability to charge at home might be a more significant barrier than range anxiety, particularly in urban areas.

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Another aspect that has to be considered is the impact that various levels of EV penetration will have on the power system (Vassileva and Campillo, 2017). Studies indicate that EV charging will not have a significant impact on the electricity grid short-term, but it will bring challenges to the electricity system in the future as the number of deployed vehicles increase (Hardman, S. et al.

2018). However, it is found that consumers are likely to charge at similar times during the day, which could lead to a demand peak (Axsen et al., 2011; Schäuble et al., 2017; Zhang et al., 2011).

However, even though the estimated increase of EVs in the Nordic Region will correspond to a power demand of around nine terawatt-hours (TWh) by 2030, the IEA (2018) claims that it should not contribute to major threat of power shortage (for reference; the fleet in 2017 stood for 470 GWh power demand).

2.1.3 Collaborative Platforms for EV-charging Infrastructure Development

As this thesis concerns the collaborative development of the EV-charging infrastructure, it is of purpose to investigate similar attempts. Amsterdam University of Applied Science (AUAS) developed an assessment platform to examine the use of a collaborative dashboard as a demand-driven expansion of charging infrastructure. The project was in collaboration with the cities of Amsterdam, Rotterdam, The Hague, and Utrecht and was based on an online platform that the participants were able to interact on. Five representing KPIs were visualized based on real-life charging data, and two tools were implemented that enabled visualization of potential bottlenecks of the charging infrastructure. The dashboard enabled the EV drivers, located in the cities, to send requests for public charging points to their municipality, and based on informed decision making; roll-out practitioners could analyze the current use of the charging infrastructure in that specific area. Hence, when evaluating if the request was justifiable, the surrounding charging infrastructure´s performance was taken into consideration to justify its legitimate expansion. After the analysis, the practitioner either accepted, declined, or proposed a new location to the various stakeholders (AUAS, 2019).

A demand-driven roll-out, such as this project suggests, is shown to be an effective strategy to meet the needs of EV-owners who do not have access to private parking facilities. The alternative, strategic-driven roll-out is valid in terms of placing valuable places in leisure areas, public facilities, shopping areas, and other points of interest. The AUAS (2019) study suggests that strategic-driven development enhances the number of unique users and is favorable for places that have a mature status of EV deployment, meanwhile, demand-driven development is beneficial for immature EV markets and guarantees a baseline utilization. This will be further concerned in section 6.1.1.

2.1.3.1 Other Co-creating Solutions for EV-charging Infrastructure

There are various platforms on the market that try to capture value for EVSE stakeholders in diversified ways. In the United States, a company named EVmatch has successfully developed a platform where private owners register their charging point for other EV-drivers to use, while the owner does not. The charging points that are registered are visualized online or through an

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app, where information about the charger includes voltage, price, and availability (Team, 2020).

In 2016, a similar attempt was made in Sweden that would enable users to borrow their parking spot and charger on a site called Elbnb. The idea was to create a comparable platform as Airbnb, but for EV-charging, where the user and the owner negotiated about time and price for each charging situation (Lyrborn, 2016). The platform did not succeed and is currently unavailable.

There are no other collaborative platforms available in the nation today, but as technology and alternative business models (BMs) develop, more enhanced solutions might be expected.

2.2 EVSEs Technological Background and Functionalities

2.2.1 Essential Denotations

Charging infrastructure is generally categorized in different types depending on the accessibility, type of connection, power level, and charging strategy. This section will clarify some definitions as well as the status of the Swedish market.

Firstly, the accessibility refers to whether the charging station is public, private, or semi-public.

Private charging is only accessible through its owner, typically at home or at work charging.

Public charging, on the other hand, is charging available to anyone. These stations are normally activated by using a charging card that uses a so-called radio-frequency identification (RFID).

Lastly, semi-public charging is a form of public charging that has limited accessibility e.g., during certain hours of the day, which is typically decided by the charge point operator (CPO) (AUAS, 2019).

Secondly, the difference between a charging point and a charging station should be distinguished.

A charging station is where cord or connector equipment has the possibility to power more than one PEV at once, whereas each cord by itself is referred to as a charging point. This has to be considered when looking at accessibility in certain areas, where computing charging points would be more accurate than computing charging stations (Spöttle et al., 2018).

Furthermore, Tables 1 and 2 below describe the different types of charging points: Charge mode and Charging Type, and represent the definition used by the EU (Spöttle et al., 2018). The charging modes are describing the differences in charging power that is usually divided into slow-, semi-fast- or fast charging. As each driver has their charge plug-in and different charging needs depending on the situation, these two tables give an overview of what standards and types of charges occur at specific locations.

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Table 1: Description of the various Charging Modes (Spöttle et al.^{, 2018)}

Table 2: Description of the various Charging Types (Spöttle et al.^{, 2018).}

Acknowledging the thesis boundaries, Type 1 and Type 3 are not relevant in this manner as they are currently non-existing on the Swedish market.

Alternating Current (AC) charging is most commonly used as normal charging, which ranges between 3- 22kW (Spöttle et al., 2018; Stockholm Stad, 2016). Although some charging points

Exploring the Potential of Crowdfunding for EV-charging Infrastructure Development

Exploring the Potential of

Crowdfunding for EV-charging Infrastructure Development

A Strategy for Collaborative Financing of EV Charging Points in Sweden

ANTON BREW

OLIVIA ZETTERBERG

Exploring the Potential of Crowdfunding for EV-charging Infrastructure Development

A Strategy for Collaborative Financing of EV Charging Points in Sweden

Studie på potentialen för crowdfunding för utveckling av elbil-laddningsinfrastruktur

En strategi för samfinansiering av elbil-laddningsstationer i Sverige

Abstract

Sammanfattning

Acknowledgment

Table of Contents

List of Figures

List of Tables

Abbreviations and Glossary

Abbreviations

Glossary

1. Introduction

1.1 Background

1.2 Problem Statement

1.3 Purpose & Research Question

1.4 Research Contribution

1.5 Limitations and Delimitations

1.6 Disposition

2. EV-charging infrastructure landscape

2.1 Sustainable Mobility Transition

2.1.1 Current situation and Outlook of the EV Market

2.1.2 Current situation and Outlook of EV-charging Infrastructure

2.1.3 Collaborative Platforms for EV-charging Infrastructure Development

2.2 EVSEs Technological Background and Functionalities

2.2.1 Essential Denotations