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Effective electric vehicle launch inEurope – Thinking beyond big markets
Mainstreaming BEVs in Europe takes manufacturers to challenging markets

From 2017 to 2018, electric vehicle sales in EU/EFTA countries grew significantly, by almost 40 percent (Battery ElectricVehicle (BEVs) at almost 50 percent). The EV share of sales was, however, only at 2.3 percent – more than half of which wereBEVs. Markets in the region developed very differently, with approximately 25 percent of all BEV sales driven by Norway.
Nonetheless, to meet ambitious emission reduction targets and emerging customer demand, and to benefit from growing
government support, car manufacturers are starting to launch EVs in smaller European markets as well. Arthur D. Little’sexperience shows how to successfully roll out and launch BEVs in these yet-immature EV market environments, whereimporters and dealer networks often face limited customer potential, with few resources.

BEV rollout is a major challenge to importers andNSCs with limited human and financial resources

ADL’s experience from electric vehicle rollouts in Europe can besummarized in 10 key learnings:

When thinking about the European automotive market, wetend to focus on Germany, the UK or France. However, smallermarkets such as Finland and Portugal remain relevant for OEMsin terms of sales volumes. More importantly, the examples ofEurope’s big EV markets in terms of sales volume and relative
market share – Norway, the Netherlands, and Sweden – showthat market-specific conditions can easily make the typically“small” markets “big” for BEVs. However, due to relatively
small sales volumes of conventional cars and limited numbersof dealerships, smaller markets often appear to be short-staffed.
Not only do many markets lack sufficient on-site capacity topromptly perform the necessary rollout activities for BEVs,
but oftentimes, they also lack sufficient financial resources tocope with the necessary upfront infrastructure investments.
Responsibilities for importer levels for dedicated sales,
marketing or after-sales activities dedicated to BEVs in thosemarkets are typically assigned to very small teams – or even to
single employees, who face significant numbers of questions
and challenges. The introduction of the first BEV raises
questions that are often complex, cross-functional and mostly
new to “petrol-heads”. Small importer organizations therefore
quickly find themselves in strained situations during the BEV
market implementation.

1. Full-time personnel with clear responsibilities for BEV rollout
are required at all levels of importers and national salescompanies.
2. Leveraging PHEV infrastructure and experience in markets iscrucial.
3. Small dealer networks reduce rollout complexity.
4. Dealer set-up is critical and time-consuming.
5. Electric grid performance in European homes is sufficient tocharge BEVs overnight, but special charging equipment may
be required.
6. Public charging availability is still critical in many smallermarkets – the focus is on home charging.
7. New after-sales processes for BEVs ensure sufficient time
for adjustments in rollout.
8. BEV ecosystems are set up in all European markets –companies must ensure sufficient time for partnering.
9. Tailor rollout to markets, or at least market clusters.
10. Constantly track and support smaller markets.

Full-time personnel with clear responsibilities for BEV
rollout are required at importer and NSC level
Requirements during the rollout of battery electric vehicles differ
from the launch of any conventional new vehicle or model line.

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The set-up and rollout of value-adding technology and solutions,e.g., for charging, requires additional management capacity
early in the process. Additional investments in resources pay off
when the rollout timelines are stuck to and BEVs are launchedsuccessfully, with high customer acceptance.
Prior to the rollout, it is crucial to dedicate people with clear
mandates, in order to avoid delayed market launches oroverburdened teams in later phases. This is key in both OEM
headquarters and in importer market organizations. Examples ofsuccessful OEMs show that only a fully dedicated rollout teamwith clear responsibilities and tasks can manage the complex
challenges – as opposed to an ordinary project set-up that only
involves adding tasks to the project staff’s daily job routine.

Leveraging PHEV infrastructure and experience inmarkets is crucial
As many car manufacturers have previously introduced plug-in
hybrid electric vehicles (PHEVs), importers can build upon theknowledge and experience from past rollouts. Often, basic
electric vehicle infrastructure, knowledge of legal requirements,and first EV-related after-sales processes are already in place.
This facilitates the rollout process and leads to smoother
implementation, if used in a smart way. OEMs and importers
should, for example, build on their agreements with installation
partners for wall boxes at customers’ homes, with utilities forgreen energy contracts, as well as high-voltage battery service
and recycling partners. However, regardless of whether PHEVs
exist in the market, most importers and retailers will require
guidance and support from OEMs to gain clear understanding of
the key issues linked to the rollout of pure BEVs.

Small dealer networks reduce rollout complexity
Smaller automotive markets in Europe often have a striking
advantage: rollouts are substantially less complex than in larger
markets due to the comparatively small number of dealerships
and service locations. Instead of preparing, training, equippingand supplying hundreds of business partners or outlets,
importers can focus on BEV sales networks that are limited
to a dozen or less locations, e.g., in the capital and primarycities of the country. As a result, implementation activities anddependencies on capacity bottlenecks in the central organization
are reduced. The rollout process becomes more manageable
and less stressful for all involved parties. On the flip side, lessroutines and large-scale processes are set up and applied.
Rollout at a handful of dealers will most likely follow a tailoredapproach and heavily rely on personal alignments. If this fact isconsidered and reflected in processes and the rollout timeline,e.g., by focusing resources and leveraging good personal
relationships between importer and dealers, small dealer
networks can facilitate the vehicle rollout.

Dealer set-up is critical and time-consuming
Nevertheless, the dealer set-up remains a critical and timeconsuming part of the rollout. Particularly time-consuming
activities include:nnPreliminary grid connection checks with external partners

nn

Amendments or changes to dealer contracts

nnInstallation of required hardware at dealer locationsnn

Training of sales and after-sales personnel

In terms of electrical grid capacity, one should look ahead atlarger BEV volumes in the future. With multiple vehicles charging
at the same time, grid-capacity limits can be quickly reached. In
many markets, external partners need to perform grid checks.
It turns out that in most of Europe’s smaller markets, theaverage available buffer for dealerships is somewhere between
40 and 80 kW. In case of insufficient power supply, the dealer
should evaluate the feasibility of a power upgrade with its utility
provider, or investment in an often even more expensive battery
buffer solution.

Electric grid performance in European homes issufficient to charge BEVs overnight
Among current customers in European markets, residential
home charging is the prevalent way to charge BEVs, given thatthe vehicle is typically parked at home for the longest portionof the day. In Europe, home charging accounts for almost 80
percent of total charging. Since many European households are
already equipped with three-phase electric-current connections,with 400 volts and 16 or 32 amps, the maximum-possible
charging power typically ranges from 11 to 22 kW.
As a result, even vehicles with the largest-available batteries canbe fully charged within six to eight hours. Since 80 percent of allprivate commutes are, on average, less than 60 km per day, an
11 kW connection easily covers most charging needs for daily
driving distances. But OEMs need to consider that emphasizing
home-charging solutions somewhat limits the group of potential
customers to those who have access to dedicated parking lotswith lockable and protected electricity supplies.

Public charging availability is still critical in manysmaller markets – focus is on home charging
The possibility of charging vehicles at public locations greatly
differs across European markets. Whereas countries such as
Norway and the Netherlands have approximately 200 stations
per 100,000 citizens and dense networks of available locations,
EV drivers in countries such as Greece and Bulgaria have barely
any public charging spots. In these markets, OEMs, importers
and dealers especially need to work on public charging
opportunities in order to reduce range anxiety and skepticism
among customers regarding the usability of EVs.
In most European countries, public charging networks require
customers to register for authorization and payment. OEMs2Mainstreaming BEVs in Europe takes manufacturers to challenging markets

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and importers can enter agreements with external charging
partners to increase user convenience. Official partnering withexisting charging networks usually improves the way customers
perceive the vehicle charging ecosystem – as examples such as
ChargeNow and the upcoming Ionity network show.
Public charging availability
in Europe

reduce revenue and profits for workshops, OEMs and parts
suppliers. Even brake replacements are partially affected, since
recuperation takes some load from conventional brake systems,
which leads to longer replacement cycles.
The servicing of BEVs requires additional qualifications forworkshop staff, such as high-voltage handling certificatesand special safety trainings. In addition to qualifications for
employees, service centers need to be equipped with BEVspecific tools, including lifting and transport equipment for highvoltage batteries and high-voltage battery workstations for repair
or replacement of battery components. Given these specificaftersales needs, OEMs should plan for ample time to ensurecompliance with regulatory requirements and successfully
implement the processes. Rolling out after-sales capabilities
across dealerships could follow a staged approach, with initialfocus dealerships taking the lead.

BEV ecosystems are set up in all European markets –companies must ensure time for partnering
Source: Arthur D. LittleHighMediumLow

In some markets, rollout planning is rendered even more
complicated as different types of charging plugs are in use.
However, after initial disagreement over the optimal plug forelectric vehicles in Europe, the CCS is becoming the dominant
DC charging standard in Europe.
Our analysis has shown that more and more local and national
utilities, tech start-ups and petrol suppliers are establishingthemselves in the fast-growing business of public EV charging
stations. This represents an opportunity for OEMs in smallermarkets to form partnerships and develop white-label charging
solutions.
A number of car manufacturers, including BMW, Daimler,Volkswagen, Audi, Porsche and Ford, have teamed up in theIonity joint venture to deploy an 800 V/350 kW charging network
across the continent by 2020. These high-performance charging
stations are bringing an interoperable charging infrastructure toEuropean motorways, allowing BEVs to recharge for hundredsof kilometers in less than half an hour.

Important local stakeholders for BEV rollout
Customer-facing partners
Local charging partner
Provides public access tocharging stations
Installation provider

Internal partners
Recycling partner
Provides local recycling
solutions for batteries
Local utility

Provides installation services
at the customers’ homes

Can provide dealershipand residential grid upgrades

Green energy provider
Offers residential green
energy to customersTransportation partner
Transports damaged batteries
to/from the point of service

Source: Arthur D. Little analysis

Importers are increasingly entering into partnerships to facilitatesustainable energy concepts, innovative charging technologies
and green business models. Interface design andjoint projects
done
between importers and external partners (e.g., utilities,installation, or battery recycling partners) are key success factors
for marketing BEVs. Only with external partners can OEMs
ensure a seamless and satisfying BEV customer journey.

Many maintenance procedures and wear repairs related tothe combustion engine will become obsolete, which will

Building new partnerships often proves to be time-consuming,as objectives, processes and responsibilities need to be defined,
and the right partners for each market need to be identified andapproached. With the introduction of PHEVs, many markets
have already started to form cooperation agreements. In mostcases, however, these agreements need to be adapted tothe specific requirements of BEVs. Installation providers, forinstance, need to consider additional charging equipment andhigher charging loads. Similarly, recycling and transportation
processes likely need to be adapted for BEV batteries. In thesecases, it becomes crucial to provide required information early
to importers and partners, so BEV-specific processes can beadjusted in time, together with installation providers or recycling
and service partners.

Mainstreaming BEVs in Europe takes manufacturers to challenging markets

3

New aftersales processes are required for BEVs –as well as sufficient time for adjustments in rollout
Electric mobility will decisively change the after-sales businessfor OEMs, importers and dealers. Changes range from different
workshop equipment requirements to employee qualification
and workload. The important spare-parts business is also heavily
affected. Preparing the after-sales has turned out to be themost time-consuming and complex part of rollout planning andpreparation for many OEMs in smaller European markets.

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Tailor rollout to clustered markets

Contacts

The BEV product offering and market introduction approachshould be adapted to the size and complexity of each market,
in order to guarantee an efficient rollout. Even though Europe isquite homogeneous in terms of regulatory environment, a BEV
rollout cannot use a “one size fits all” approach: country-specificcharacteristics such as political and infrastructural factors canjeopardize the success of the rollout. Government incentives
and subsidies, for example, will have a significant impact on thenumber of expected sales and the required offering portfolio.
Customer-specific requirements can vary according to driving
and housing habits. Clustering markets according to EV-related
market specifics therefore helps to generate synergies between
markets and processes, and saves resources during the rollout.

Austria

The Netherlands

taga.karim@adlittle.com

eikelenboom.martijn@adlittle.com

Belgium

Norwaybaes.kurt@adlittle.com

thurmann-moe.lars@adlittle.com

Czech Republic

Russiabrabec.dean@adlittle.com

ovanesov.alexander@adlittle.com

FranceSingapore

knab.delphine@adlittle.com

ito.yuma@adlittle.com

GermanySpainschmitz.klaus@adlittle.com

colon.cristobal@adlittle.com

India

Swedensrinivasan.srini@adlittle.com

brundin.niklas@adlittle.com

Italy

Switzerland

agresti.giancarlo@adlittle.com

schmitz.klaus@adlittle.com

Success factors of BEV rollout in EuropeJapanTurkey

suzuki.hiroto@adlittle.com

baban.coskun@adlittle.com

Korea

UKlee.kevin@adlittle.com

eagar.richard@adlittle.com

Adjust the product offering to the local
market requirements
Leverage capabilities to overcome countryspecific obstacles

Latin America

USA

Track the rollout progress to identify support
needs
Provide constant support and guidance tothe markets

kuruvilla.thomas@adlittle.com◼
Partnerships

Regional
approachProjectmanagement

◼
◼
◼
◼

◼

Select partners with experience andexpertise
Plan with a lengthy negotiation process

guzman.rodolfo@adlittle.com

beaumont.mitch@adlittle.com

Middle East

Source: Arthur D. Little analysisAuthors

Constantly track and support smaller markets

Andreas Schlosser, Philipp Seidel, Andreas Schulze, Viktor
Kanzler, Alexander Krug

In the initial rollout phase and through internal workshops, it
is important to get all stakeholders aligned by prioritizing anddiscussing rollout activities, tasks and dependencies in detail.
All stakeholders must have been identified, and everyone needs
clarity on the project’s objectives and outputs. Subsequently,
regular progress tracking will be essential to identify local
support needs early on. Ultimately, the level of support andguidance provided by the OEM will determine the effectivenessof the overall rollout.

Conclusion

Arthur D. Little
Arthur D. Little has been at the forefront of innovation since1886. We are an acknowledged thought leader in linking
strategy, innovation and transformation in technology-intensive
and converging industries. We navigate our clients throughchanging business ecosystems to uncover new growth
opportunities. We enable our clients to build innovation
capabilities and transform their organizations.

Electric mobility will fundamentally change the automotive andcar business in all European markets, not only in Germany,
the UK and France. This change represents a major challenge
along the entire value chain, not only for established automobile
manufacturers, but also for the national sales companies andimporters in individual markets.

Our consultants have strong practical industry experience
combined with excellent knowledge of key trends anddynamics. ADL is present in the most important businesscenters around the world. We are proud to serve most of theFortune 1000 companies, in addition to other leading
firms anddone
public sector organizations.

Examples of electric vehicle shares in Norway and theNetherlands show that the market uptake of EVs can takeplace quickly, provided the right conditions are in place. Other
European markets will likely follow in the near future, becausein Europe in particular, stricter emission limits and the poor
image of combustion engines are giving an additional boost toalternative, environmentally friendly powertrains.

For further information please visit www.adlittle.com or
www.adl.com.
Copyright © Arthur D. Little Luxembourg S.A. 2019.
All rights reserved.

www.adl.com/EffectiveEVLaunch