EVaaS, CaaS, and BaaS, Three Business Models Accelerating Transport Electrification

Sept. 19, 2022, 11:47 a.m.

Anything as a Service, or simply XaaS, is an emerging business model around the globe, benefiting from the fact that almost everything can be a service. XaaS was initially used as a digital term to refer to models such as SaaS (Software as a Service), PaaS (Platform as a Service), IaaS (Infrastructure as a Service), etc. However, the term now applies to the non-digital world too. We see companies such as Rolls-Royce and its famous Jet Engine as a Service model or The Room, which provides a fast, flexible, and cost-effective hiring experience through its Talent as a Service model.

One of the drivers of XaaS' efficiency is that customers do not have to pay large amounts of money for upfront costs otherwise necessary to adopt specific solutions. This concern is a significant challenge in rapidly evolving sectors such as e-mobility. As a result, new "as a Service" models are invented and implemented to encourage companies and individuals to adopt electric vehicles. This innovation snapshot highlights three of these models.

Electric Vehicle as a Service (EVaaS)

With more incentives and rising environmental consciousness around clean and sustainable transport, several companies wish to adopt electric vehicles for their operations or to electrify their fleet completely. However, many companies cannot afford this transition's large capital and all the logistic considerations associated with it, such as the charging infrastructure.

This challenge gave birth to a business model named Electric Vehicle as a Service, where electric vehicles are provided to companies to use in their operations. South Africa's Everlectric is one of the startups using this model. For a monthly fee, the company offers access to a fully maintained commercial electric vehicle, charging infrastructure, and as much electricity as needed to run the business.

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Charging as a Service (CaaS):

According to the International Energy Agency(IEA), charging infrastructure needs to increase more than twelve-fold by 2030 to support the growth of electric vehicles (both public and private charging points). However, installing a public fast charger comes at a high cost of around $200,000, which can be considered a large amount of money to risk.

Companies such as DeepVolt use AI-powered software to help organizations interested in deploying charging equipment with decision-making. This includes location evaluation and charging station design to ensure the cost-effectiveness of the installation.

Another way of minimizing the risk is the Charging as a Service model. Some go as far as considering it risk-free since the installation, ownership, and maintenance are the provider's responsibility. Customers of CaaS companies pay a monthly subscription fee and receive an EV supply equipment, which includes management software. The customers can be individuals and commercial businesses (multi-family units, office buildings, etc.) and can make a positive cash flow. Individuals can give the public access to their supply equipment and charge them a fee for using it, which is the same for commercial businesses and their residents, employees, or clients.

Battery as a Service (BaaS)

As e-mobility in most parts of the world is associated with four-wheels, it is more about two- and three-wheelers in Africa. Micro-mobility companies such as Zembo and Mazi Mobility operate a vast network of electric scooters and tuk-tuks with the battery swapping principle rather than charging. They are using the Battery as a Service model with their Drivers. With this model, drivers do not have to worry about the battery's depreciation and maintenance. All they need to do is go to a swap station and replace a discharged battery with a fully charged one. Companies using BaaS ensure that the batteries provided have a good state of health (ability to store and deliver electrical energy). At the same time, drivers focus on what they are good at, driving.