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Stakeholder Analysis Case Study

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Stakeholder Analysis Case Study: BYDauto Enter HK’s Electric Taxi / Bus Market Hui Qiu, EMBA 18 ESC Rennes Case background Hong Kong (HK) is one of the most crowded cities in the world, with almost the highest vehicle density. It has long been criticized for its bad air quality compared to its advanced economy. With the recently hazardous air pollution in China mainland, HK has been affected as well for its geographic neighborhood. The Air quality readings recently (PM2. 5: 60µg/m? ) have exceeded the loose local standard (50µg/m? ), 3 times of WHO’s recommended standards (20µg/m? ).

The public appeals to the government to take actions to improve air quality. Electric vehicle (EV) is considered the best solution for the problem. It generates nearly zero emissions of pollutants. HK lacks heavy industry, and its main source of air pollution is vehicle emission. Among all the vehicles, public transportation including buses and taxis is the best start point: * According to statistics [UN, 2011], Taxis typically drive up to ten times or more the distance per day if compared with personal cars.

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Therefore, taxis also have much higher fuel consumption and disproportionally contribute to total air pollution..

* Governmental intervention in public transportation sector is more effective than in private vehicle owners; * With a known number of vehicles, the investment of infrastructures like charging stations can be predictable; * The infrastructures should be able to serve for private EVs, this makes it easier for the citizens to buy and drive EVs in the city. BYDauto is the leading EV manufactures in China. It offers both E6 for e-taxi and K9 for ebus. A fleet of 100 BYD E6 taxis and 200 e-buses now operates in Shenzhen since 2010. According to BYD’s report [BYD, 2011], the fleet testing has been extremely successful.

BYD has exported its e-taxi and e-bus to Bogota Colombian, London British, and Espoo Finland since 2012. Now BYD plans to enter its neighbor market – HK. Identifying the Stakeholders and Their Concerns Before initiating the project, BYD analyzed and listed the potential factors and elements that may influence the adoption of e-taxi and e-bus. BYD held multiple consultations and meetings with some key stakeholders, like the related government officials, fleet operators, taxi drivers and major environmental protection NGOs, to identify the whole set of stakeholders and their concerns and interests in the project.

Meanwhile, with the help of media and labs, BYD continues to accept comments through email, online comments and written submissions, to gather input from public and societies. The key stakeholders, potential factors and elements were pre-selected from past experience, and adjusted according to the information gathered through the consultations, meetings, questionnaires and comments. Table-1 lists the factors and elements concerned. Table–1: Influential factors and elements on the projects ?| Influential Factors and Elements|

Investment and Planning| (1a) Infrastructure (charging stations) investment and reallocation of land;| | (1b) Additional taxi licenses and bus lines or vehicles renewal| | (1c) High vehicle purchase prices comparing to fuel cost savings;| Financial support| (2a) Government subsidies| | (2b) Financial support and payback| | (2c) Free or low cost charging| Operation concerns| (3a) Driving distance on a single charge and charging duration;| | (3b) Potential high maintenance costs and inconvenience| | (3c) Operation safety| | (3d) Ride comfort|

Incentives| (4a) Taxation incentives| | (4b) Tolls reduction| | (4c) Parking Incentives| | (4d) Eco-friendly labels| Other concerns| (5a) Effects presentation on improving the air quality| | (5b) Impacts to current petrol and LPG filling stations| | (5c) Impacts to current taxi / bus owners| | (5d) Social influences| Table-2 lists all the recognized stakeholder groups and their main concerns to the factors and elements in Table-1. The key stakeholders are emphasized by the bold. Table-2: Stakeholder groups and their concerns

Stakeholders’ Influence and Participation over the Project Base on the understanding of stakeholders’ concerns and how the project will affect them, we tried to shape their support or resistances and participation in the project. Another factor is the power or influence each stakeholder group has on the running of the whole project. Of course the groups with highest influences deserve more attention. And the groups with less power or influences need enough monitor and involvement. Graph-1 situates the stakeholders on a two-dimension graph: Influence over decision making and level of support:

Graph-1: Stakeholder influence & Support As we can observe from graph-1, the key stakeholders are 3 groups: Government departments (Transport and Financial); Public transportation sector (fleet operators, taxi drivers and passengers); competitors (other EV automakers, like Nissan). Among the key stakeholders, government departments could be the key role of decision making. They have the willingness of adopting EV taxi / bus under current urgent circumstances, but BYD is only one of the candidate automakers.

Also, to what extent they support EV taxi /bus may decide the start and success of the project, such as the quantity of new dedicated taxi licenses or enforcement of taxi replacement; bus line adjustments and old vehicle replacement; monetary and other non-monetary incentives. As we mentioned in table-2, their influences and concerns focus on the following issues: * Investment and monetary support needed; * The successful operations of EV taxi /bus; * Effects evaluation and presentation of emission reduction and air quality improvement; * Avoid conflicts with current taxi / bus operator;

* Operation safety; * Other social benefits and influences; In any plan on taxi and bus industry, taxi / bus companies, drivers and passengers are always the key stakeholders. In our HK case, additional conflicts come from the newcomers and the old ones. In fact, the price of a taxi license in HK is 7million HK dollars, or 700,000 euros, 25 times of the price of BYD E6 [hk. taxixchange. com, 2013]. This means that current license owners will strongly oppose new licenses, but a stage of experimental EV fleets operation is needed to prove its reliability in HK environment, which needs new licenses.

The balance of new licenses and replacement of current vehicles should be concerned. Taxi / bus drivers: * Oppose new licenses for taxis and buses, afraid of new competitors in the market; * Need governmental subsidies and financial support to renew their old vehicles; * TCO (Total cost of use) in operation, comparing the pricing gap between electricity and fossil fuel [McKinsey&Company, 2012]; * Number and location of charging stations;

* Concerns about charging time and driving distance, comparing to LPG taxis / diesel buses; * Concerns about potential high maintenance costs and inconvenience; * Operation safety; Taxi / bus fleet operators, or license owners: * Strongly oppose new licenses for taxis and buses, concerns of license devaluation; * Need governmental subsidies and financial support to renew their old vehicles; * TCO (Total cost of use) in operation, comparing the pricing gap between electricity and fossil fuel; * Concerns about charging time and driving distance, comparing to LPG taxis / diesel buses; * Operation safety;

Passengers: * Taxi and bus pricing; * Operation safety; * Ride comfort; Other competitors like Nissan also plans to enter Hong Kong EV taxi market. It offer pure EV model – Leaf. The follow tables summaries the advantages and disadvantages between BYD E6 & Nissan Leaf, and the winner in each comparison are marked in bold. As we can see, except the perceived quality, BYD win in every area. Table-3: Comparison between BYD E6 & Nissan Leaf Further plans and approaches

After recognized the key stakeholders and their concerns on the project, BYD take plans and actions to communicate with them, and encourage their participation in the project, finally win their support on the plan. As the first step of the plan, HK government has bought 8 BYD K9A e-Buses. The first bus has arrived in HK in Sep 2012 and started its 6 months trial. References McKinsey & Company, 2012. “Recharging China’s electric vehicle aspirations: A perspective on revitalizing China’s electric vehicle industry” Available online at: http://www. mckinseychina.

com/wp-content/uploads/2012/04/McKinsey-Recharging-Chinas-Electric-Vehicle-Aspirations1. pdf Presented at United Nations Expert Group Meeting on Sustainable Urban Transport: “Modernizing and Greening Taxi Fleets in Latin American Cities: International Experiences” in Rio de Janeiro, Brazil, 18-19 May 2011, pp. 10 Available online at http://sustainabledevelopment. un. org/content/documents/Taxi_booklet. pdf Released by BYD. “BYD Fleet Summary”. April 28 2011 Available online at http://www. businesswire. com/news/home/20110428007512/en/BYD-Announces-EV-Fleet-Results-Anniversary-Green-Taxi

Cite this Stakeholder Analysis Case Study

Stakeholder Analysis Case Study. (2016, Sep 02). Retrieved from https://graduateway.com/stakeholder-analysis-case-study/

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