Business innovation and government regulation for the promotion of electric vehicle use: lessons from Shenzhen, China

The deployment of electric vehicles has attracted growing attention and is now seen as a possible pathway for a transition towards sustainable transportation. This paper provides insight into the commercialization of electric vehicles in Shenzhen focusing on business innovation and the regulatory context in which it occurs. Using the business model canvas framework, this paper analyzes interactions between enterprises and governments along the value chain of electric vehicles in the bus and taxi fleets. It also discusses the strengths and weaknesses of the Shenzhen model both in business innovation and government regulation for promoting electric vehicle use. This paper finds that Shenzhen has succeeded in fostering a distinct government-enterprise cooperation model that not only reduces the financial pressure on the local government to promote electric vehicle use, but also gives enterprises significant leeway to experiment with various innovative business models. The joint result of these efforts is that the commercialization of electric vehicles has become feasible for delivering the public transport service (buses and taxis) in Shenzhen. Still, this paper argues that the current model of Shenzhen can be further enhanced by: 1) encouraging private investment in charging infrastructures by means of public–private-partnerships; and 2) standardizing electric-vehicle technologies and production to break down the local protectionism in the electric vehicle market. The Shenzhen model acts as a source of inspiration by pointing out the significance of integrating business innovations and government regulations to facilitate the deployment of electric vehicles, which provides practical lessons for industrial players and policy makers in other cities. Furthermore, this work offers theoretical references regarding the application of the multi-actor perspective and the business model canvas framework to analyze the actors and interactions along the value chain of innovative technologies.