Business Models for a Battery Electric Truck Manufacturer to Increase Customer Use of Renewable Electricity A Case Study of a Swedish Truck Manufacturer

Abstract

To prevent negative consequences of climate change, emissions from the transport sector must be reduced. Road freight by heavy trucks accounts for almost a third of global total road transport emissions and the European Commission has presented a legislative proposal suggesting a 90 percent emission reduction for new heavy trucks by 2040. To take responsibility for emissions in the truck’s entire lifecycle, several heavy truck manufacturers have committed to following science-based targets, designed to guide companies towards limiting global warming below 1.5 degrees. From a truck life cycle perspective, 90 percent of carbon emissions occur in the use phase which makes decreasing carbon emissions from powering the trucks a priority. Battery electric trucks have the potential of reducing total emissions significantly if they are charged with renewable electricity. Pursuing business models to increase customer use of renewable electricity would help battery electric truck manufacturers ensure that their trucks lead to the emission reduction that is expected of them. Our study was a single case study of a battery electric truck manufacturer on the Swedish market. Through semi-structured interviews and collection of secondary data, seven business models to increase customer use of renewable electricity were identified. By examining strategic alignment between the business models and the case company’s established strategy, business model, and external environment, the most appropriate business model to pursue was determined. Being a mediator in a power purchase agreement was the business model with the highest strategic alignment, thus, deemed to be the most appropriate business model for the case company to pursue. By investigating a previously uncharted topic, our study expands existing research and identifies some business models not found in previous research. Furthermore, we introduce a new method for determining a company’s strategic alignment with a new BM including a focus on a specific sustainability dimension.