Electrification of Transports: New Business Horizons through Technological Disruption

This is a summary from the presentation of the same title by Antti Vainio, Founder - eMobility and Sustainability advisor of Vainio AB, at the Future of Electrification 2024 conference. Watch the full session here:

In his presentation at the Future of Electrification 2024 conference, Antti Vainio, an expert on sustainable solutions with a proven track record of developing and implementing effective strategies to address environmental changes, discussed how companies can benefit from sustainability. Particularly in the rapidly changing field of electric vehicles and charging infrastructure. He shared his insights on how traditional businesses like gas stations are adjusting to this new era of electrification, the emergence of new business models, and the role of policymakers in supporting this transition.

Vainio emphasized that companies that fail to adapt to major changes, can suffer significant consequences. He noted that with the transition to electric vehicles, the traditional car industry offers a stark example. As companies like Tesla disrupt the market with innovative EVs, established manufacturers risk falling behind if they are slow to react and cling to outdated technologies and business models.

Electrification is a massive shift, elaborated Vainio, comparable to the move from horses to cars. The United States Leather Company, once a giant, went bankrupt because they kept making saddles and whips, while the world adopted automobiles. Companies that can succeed will be those that can learn, innovate, and adapt while keeping their core business strong.

Vainio explained that the focus on sustainability is rapidly growing, with executives increasingly seeing it as a business opportunity rather than a burden. Companies that fail to adapt risk losing market share and attracting top talent. Government regulations are one factor pushing companies towards sustainability, but customer demand, pressure from partners, and even financing decisions from banks are also driving the surge in sustainability efforts. He compared electrification to a flywheel, gaining momentum and becoming unstoppable due to various forces acting together. Companies that can integrate sustainability into their core business models and learn to navigate this new landscape will be well-positioned for success.

According to Vainio, electrification is changing the way that we refuel our cars. Gone are the days of quick gas station stops; instead, charging will become integrated into daily errands and road trips. This presents a goldmine of opportunities for a variety of businesses. Restaurants can attract customers by offering charging stations, extending their visits, and potentially increasing food sales. Supermarkets can integrate EV charging into their loyalty programs, rewarding customers with points or offers while their cars charge. Gas stations, traditionally seen as threatened in the era of electrification, can reinvent themselves as “flagship stations” with high-quality food, play areas for children, dog walking areas, and other amenities to encourage longer-term stays and more spending on higher-margin items. A real-world example is Barstow, California, a small town along a popular road trip route. The addition of EV chargers at the Outlets at Barstow has attracted more customers, leading to new cafes, restaurants, and shops opening up. This positive spiral creates new jobs, income, and business opportunities in the area. Similar trends are likely to unfold in other regions and electrification continues to take hold. 

Vainio emphasized the importance of partnerships in navigating this transition. Companies should focus on their core competencies and identify partners who can complement their services. This creates a win-win situation where each business leverages its strengths to offer a more compelling value proposition. For example, restaurants can partner with charging point operators to attract more customers while providing an essential service for electric vehicle owners.

The transition to EVs is not just about cars; it’s a complete transformation of our transportation system and the energy landscape that powers it. With a growing dependence on renewable energy sources like solar and wind, which fluctuate in production, ensuring a steady flow of electricity becomes a challenge. However Vainio, he pointed out that EVs can become an asset for the grid through smart charging and energy services. For example, companies can offer frequency balancing services by temporarily stopping EV charging. This helps stabilize the grid's frequency and ensures a reliable power supply. Homeowners and businesses can invest in battery storage systems to store cheap, off-peak energy generated by renewables and use it during peak hours when electricity costs are higher. This not only reduces reliance on the grid but also allows selling stored energy back to the grid when needed, generating additional income.

According to Vainio, despite the exciting opportunities, the shift towards electrification still faces challenges. One major hurdle is the shortage of skilled workers in key areas, from electricians to factory workers and truck drivers. To address this, he called for more cooperation between political and business communities to train employees for these new roles. Another challenge is the slow pace of policy changes in comparison to the fast-moving business world. He emphasized the need for long-term stability and clarity to allow businesses to plan and adapt, explaining that ideally, there should be a mix of industry and government action, with stable long-term policies from governments to create a predictable market.

Vainio’s presentation underscored a critical shift in perspective: sustainability is no longer a nice to have - it’s a core business strategy. Companies that innovate and adapt will be the ones profiting. According to a report, the global profit pool for the EV charging sector could balloon to a staggering $8 billion to $13.5 billion by 2030. While challenges remain, the potential benefits for businesses, consumers, and the environment are undeniably substantial. This paints a compelling picture: by prioritizing sustainability, companies can not only contribute to a healthier planet but also unlock a new stream of financial success.