While purchase subsidies in Europe are being reduced, the automotive market's transition to all-electric vehicles continues unabated. In this latest Point of View, HAïAT's consultants unravel the value chain of electric mobility and highlight the significant role oil and gas companies are expected to play in the coming years, potentially at the expense of traditional electricity suppliers
Regulatory changes in France and Europe
The European Commission's 'Fit For 55' package underscores the acceleration of Europe's energy transition, which mandates that all new vehicles be zero-emission by 2035. In addition to setting a 2035 deadline for clean cars, the legislation introduces an interim emissions reduction target for 2030, compelling car manufacturers to boost electric vehicle (EV) sales in the coming years. This requirement signifies a 55% decrease in combustion-powered car sales by 2030.
Ecological bonuses are being implemented to support this shift. However, these incentives have seen significant adjustments: in Germany, they were abruptly eliminated at the beginning of 2024, while in France, reductions of €1,000 were applied to the wealthiest households and completely removed for second-hand models. This recalibration is due to the state expenditures on these bonuses surpassing expectations, with the market share of electric vehicles reaching 17% in 2023, exceeding the forecasted 16%. By 2024, the government anticipates electric vehicles will constitute 21% of the new car market.
In this context, regulation is forcing players in the sector to adapt by exploring new business models and partnerships.To achieve this, clearly defining the electricity value chain in the mobility sector is important.
Understanding the electric mobility value chain
The electric mobility value chain is intricate, necessitating specialized knowledge at each step—from creating charging infrastructure to delivering services and products that meet consumer demands. At HAïAT, we identify three primary dimensions of the value chain in addition to the vehicle's production and maintenance.
The first dimension focuses on Electric Vehicle Charging Infrastructure (EVCI). It encompasses the fabrication of new infrastructures and their installation, operation, and maintenance. Additionally, it includes a broad array of associated services, such as vehicle-sharing programs, subscription cards, and more.
The second dimension addresses the electricity supply chain, which spans production to transmission and sales. Traditional electricity suppliers, such as EDF and RTE in France, have historically managed this segment.
The third and final dimension focuses on smart charging. It encompasses monitoring battery charge levels, offering related services, and facilitating the return of electricity to the grid, including its resale on the electricity market.
Each step within this value chain is crucial for the sector's overall efficiency, requiring cooperation among various stakeholders to deliver a seamless experience for electric vehicle users. The population of electric vehicle users in Europe, including France, continues to expand steadily.
Electric mobility ecosystem - Detailed value chain
New competition from oil and gas companies
Addressing customers' expectations for electric mobility presents numerous strategic challenges, especially concerning charging points. Consequently, all stakeholders, including manufacturers, energy suppliers, and distributors, are striving to establish a presence within this value chain segment. They are particularly focusing on the supply of electricity, a domain once dominated by incumbent providers. This shift illustrates the evolving dynamics in the electric mobility sector as various players seek to meet the growing demand for accessible and efficient charging solutions.
Segmentation of the analysis of product and service offerings in the electric mobility ecosystem - Illustration
Source : HAïAT, Strat’Anticipation
By 2030, it is estimated that vehicle manufacturers (Original Equipment Manufacturers, or OEMs) will venture into new, value-added segments of the electric mobility value chain, extending their operations beyond mere car production. In this evolving market, companies like Tesla are expected to function as electricity producers, leveraging their initiatives in photovoltaics and stationary batteries. Meanwhile, automotive groups such as Renault, Volkswagen (via Elli), and Stellantis are projected to act as electricity resellers, thus entering into direct competition with traditional electricity suppliers. The capability to offer comprehensive packages that include energy, charging solutions, and vehicles is poised to become a defining characteristic of the entire market.
Tesla already offers photovoltaic solar roof tiles for private customers, in addition to its vehicle ranges.
Oil companies appear to be exceptionally well-positioned in this transition towards electric mobility and stand to derive significant value from it. Their deep market knowledge, proven implementation track record, and substantial investment capacity render them uniquely equipped to facilitate this shift. Unlike automakers, for whom energy is not a traditional domain of expertise, oil and gas companies are poised to assume a pivotal role within the electric mobility ecosystem. They are especially capable of leveraging their extensive service station networks to extract maximum value from the emerging electric mobility landscape.
Oil and gas companies' vision of the electric mobility value chain in 2030
Source : HAïAT, Strat’Anticipation
What role will electricity suppliers play by 2030?
Between now and 2030, electricity suppliers will likely concentrate on the development and industrialization of intelligent charging solutions, particularly focusing on Vehicle-to-Grid (V2G) technology. V2G facilitates two-way charging, allowing vehicles not only to draw energy from the grid for charging but also to feed energy back into the grid from their batteries. Should these V2G initiatives be successfully industrialized, electricity suppliers could secure strategic positions in the energy reinjection process into the grid. Mastery over these networks will necessitate the collection and analysis of vast quantities of data in real-time, potentially benefiting technology companies active in this space.
Despite the looming competition from oil and gas companies, car manufacturers are viewed more as potential collaborators rather than competitors for energy suppliers. Consequently, energy suppliers should prioritize enhancing the electricity grid's efficiency and developing smart pricing systems. These efforts aim to balance electricity supply and demand, ensuring a smooth transition to a more electric mobility-focused future.
In the transition toward electric mobility, oil and gas companies are demonstrating their capacity for reinvention, aligning their operations with the goals of a zero-emission future.
This adaptation showcases the significant evolution within the industry, where the dynamics of competition and collaboration are defining a new energy landscape. The agility of these industry giants to pivot their offerings towards electricity is a testament to the changing demands and opportunities within the global energy market.
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