Could Autolib' Transform the City of Lights into a City of Electric Vehicles?

Could France become the leader in electric vehicle technology? And what does that mean for the future of sustainable urban mobility? Photo by Lea Marzloff.

From BusinessWeek:

Could the City of Lights soon become the City of Electric Cars? Paris Mayor Bertrand Delanoë, building on the success of the city’s popular Vélib curbside bike rental scheme, is planning to deploy a fleet of 2,000 electric cars that customers can pick up and drop off at rental stands around the city. Another 2,000 vehicles will be offered in two dozen surrounding cities.

The green scheme, dubbed Autolib (short for “automobile” and “liberté”), is scheduled for launch as early as the end of 2010, although city officials say the startup date could be closer to mid-2011. Advocates say the system would reduce carbon dioxide emissions by 22,000 tons a year while improving traffic congestion as fewer Paris residents would need to own cars. It would be the first major city to offer such a service. “This could revolutionize transport,” Delanoë told French radio station RMC when he first proposed the program in June 2008.

Now, after numerous delays, Autolib’ is finally going forward…

TheCityFix asked a consultant from Corporate Value Associates, a consulting firm that is working with public institutions and blue-chip companies, to explain the progress of the Autolib’ service. What are some key obstacles? And why does France think this service will revolutionize the carsharing industry?

In a follow-up post, we’ll talk about some of the limitations of this service and why putting more cars on the street doesn’t necessarily make the most sense for sustainable urban mobility.

By Benoit Boisseuil:

France wants to take the lead in the new electrified vehicle industry. The 2007 Grenelle Environnement (a multi-party roundtable to define public policy in France) helped to shape the country’s sustainable development strategy. The stimulus plan at the end of 2008 emphasized this effort by establishing an 800 million-euro fund for sustainable development grants, partly to help create a greener automotive industry

Now, global industrial leaders such as the Renault-Nissan alliance and EDF, the French electric utility, want to define what could be the future of the country’s Electric Mobility Operator (EMO), which would supply customers with the infrastructure needed to recharge and manage electric vehicles. At the same time, technology- or service-driven companies are emerging as innovators. What we can call not only an electrified vehicle value chain but, more broadly, a sustainable mobility constellation is changing the way we sell cars.

To paraphrase François Mitterrand, natural selection will occur between business models, not between technologies. Among all models emerging, we can  divide them into three extensive categories: the carsharing model, the battery leasing model, and the EMO model (Better Place, for example.)

Carsharing is well-known and is becoming a mass market solution, especially in Switzerland, Germany and even the United States. Even though operators are trying to purchase low carbon vehicles, it is still internal combustion engine cars that are offered in that kind of service. In 2010, a new kind of carsharing service will be in place for the Parisian people with Autolib’.

Autolib’ — short for “automobile” and “liberté” — is supposed to be the next generation of mobility service, following the great success of Vélib’, the first large-scale implementation of a public bicycle rental program. Vélib’ was a breakthrough business model: an urban furniture company, JC Decaux,  took charge of system operations, in return for the City of Paris paying for a substantial part of on-street advertising, a much more lucrative business. The point is that Velib’ is not only good for the city and the environment but also for the client.

From an economic standpoint, sharing an electrified vehicle through a service like Autolib’ is like sharing more fixed costs with 10 to 20 other users. Therefore, the price of such a service could be, in medium terms, competitive in comparison to the internal combustion engine carsharing equivalent.

What’s more, 80 percent of the electricity in France is generated by a carbon-free nuclear park, and consumers are used to buying small, fuel efficient cars, making France the ideal cradle of the early adoption of electric vehicles. This niche market could be a perfect test lab for the infrastructure, information technology, consumers demand databases, and battery technology companies that are needed to build 1,400 recharging stations and deploy 4,000 electric vehicles by the end of 2010.

If you think about selling sustainable mobility, you think about other stakeholders willing to enter the market, such as SNCF, the leader in high-speed trains, or Véolia, a transportation operator and environmental service company. Paris envisions itself as a more ambitious multi-modal city, linking TGV, metro, commuter trains, buses, and now, electric vehicles.

From a more practical perspective, after numerous delays, Autolib’ is finally moving forward. One key obstacle is the juridical form of the operating company and investment vehicle. One major challenge is creating a intergovernmental city council to oversee the business scheme, since several cities around Paris will host the charging stations. The project will be likely to be operated under the classic form of public-private partnership.

A consortium of companies, including SNCF, RATP, the metro operating group, and Avis, the car rental company, poses as a serious candidate to operate the 4,000-car service. The EV manufacturer is still unknown, even though Renault-Nissan and Daimler have officially expressed interest. Finally, the economics are to be clarified, but according to the most recent study of the Mairie de Paris, customers would have to register for Autolib’ in advance of paying a monthly subscription fee of about 15 to 20 euros.

About the Author:

Benoit Boisseuil is a consultant at Corporate Value Associates.

He provides operational and strategic  consulting in Europe, Asia and Africa, with a particular focus on energy, clean technology and sustainable transportation business development. His experiences span a variety of sectors, including cost cutting in railway transportation, purchasing organization in the mining industry, and energy efficiency retail business development. He is a frequent writer and public speaker about doing business in China. He is fluent in English and French and proficient in Mandarin Chinese.

About CVA:

CVA was founded in 1987 with a unique proposition in management consulting: to help a select number of CEOs manage the “Value Flow” of their respective businesses and thereby realise maximum value for all stakeholders in both the long and short term.

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