Recent interview published on cityfix:

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 inSwitzerland, 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, andAvis, 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 Daimlerhave 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.

For much of the past decade, policy-driven demand in a series of champion markets has driven the growth of the global PV industry. Successively, Japan, Germany and then Spain fueled the PV market growth. Now, secondary markets such as the French one are poised to take off.

Specificity of this market is its uncertainty. Uncertain markets throw out a steady stream of opportunities and threats. In these environments, companies succeed to the extent that executives and the organization are able to respond to shifting circumstances. Analysing the speed of market growth, the ever changing competition structure and regulatory framework, French PV market possess everything of what we saw in numerous industries in China this last decade. Here is what we can learn from them:

Double digit growth entails an interesting development: every single type of player can not sustain the growth and different business models are emerging. From the pure player/retailer 100% dedicated to PV to the large home furniture distribution company entering the business as well, several models are finding their own substantial market share.

One of the key characteristic point for the French Solar market is that it is structured by downstream part, on contrary of German market, upstream-structured by key players, relying on large specialized wholesalers and atomized installers network. In France, solar PV market is still an end-customer game, a situation on the verge to change with the middle size and large scale power plant markets ready to take off. From here, different strategies are emerging: those who bets on leveraging on their B2C brand awareness to enter the more attractive mid size market and those who prefer to stay focused on the larger scale power plant, securing their cost base, mostly with strong sourcing capabilities.

Regulation is still changing almost from one quarter to another. Striking example is the regulation loophole found with agricultural roof eligible to the most attractive feed-in tariff, a policy about to change with “non-natural”agricultural warehouses or facilities mushrooming in the country.

The key lies in how a company moves through an iterative cycle of translating uncertainty/speed of change into action. In the so-called SAPE cycle introduced by the work of Donald Sull, managers sense the overall situation, anticipate emerging threats and opportunities, prioritise actions, execute on these priorities in a timely and effective manner, and close the loop by revisiting their original assumptions.

This is exactly what best companies are undertaking to win in this fascinating market. Though policy programs in pioneer countries have succeeded in building financial and consumer support for the PV industry, they have also created severe structural problems, partially precipitating the precarious state the industry finds itself in today. In the presence of rapidly falling module and system prices, collapsing margins, difficult financing conditions and uncertain subsidies in major markets, understanding the support programs, market structures and active players is a necessity for continued success.

Even if nuclear electricity generation will always be prominent, there is room for renewables in France. Specialists are more and more inclined to talk about the “nuclear program countries” as the most promising markets for large scale introduction of renewables in their energy mix. Nuclear to provide stable base load, renewables to complement with an home based, free-carbon energy production with enough flexibility to provide enough visibility thanks to storage technologies.

Imagine a country where:

-  You can be stopped 12 times by ‘customs’ service during a 5 hours travel. That’s how you can first assess how free trade is taken into consideration.

-  Investment concept is just a terra incognita word. Switching from a day to day P&L culture to an investment and ROI culture can be a tough one sometimes.

-  Drinking nine green teas per day is a minimum requirement. That helps to turn oceans of data available to islands of insight, they say.

-  For every investment decision you take, you should bear in mind that additional costs are particularly prevalent: maintenance costs, hiring talents to operate it and risk to failure. That’s real TCO.

-  Cronyism sometimes is translated into a weird expression close to “familial and fragile management” in extreme difficult situation.

-  Is Inch’Allah a wise expression of stoicism or an evil appearance of procrastination? Anyway that makes me remember the Peter Drucker expression: unless a decision has ‘degenrated into work’, it is not a decision; it is at best a good intention.

-  The Little Prince, reading his night story in the desert could be happy blowing his nose in the sky full of stars. Silence in the desert can make you deaf. Night in the desert is surely more securing than daytime.

-  When you touch the financial structure or the forces shaping a business in a developing country, you should take into consideration the real impact of your choices: not only the potential changes in economics, but also the potential change in capabilities and in relationship.