The application of financial analysis in business modelling : A case study of a public fast-charging station for electric heavy-duty vehicles in Sweden

Sammanfattning: Background: Climate changes and global warming call for behaviour changes from mankind and for new business models to introduce sustainable innovations. Financial analysis plays an important role in guiding the choice of these business models. However, assumptions and uncertainties pose challenges to the use of financial analysis in business modelling. Purpose: The purpose of this study is to develop a proactive systematic approach of financial analysis in business modelling. Accounting for the important role of assumptions and uncertainty factors, the approach should guide the choices of capital structure, revenue model, and strategic partnerships in the business model. Methodology: The developed approach combines the use of different methods to assess different business models for a public fast-charging stations for electric heavy-duty vehicles in Sweden. The used techniques are DCF analysis, What-If analysis, Tornado diagram, Monte-Carlo simulation, and multiple linear regression analysis. Results and analysis: Applied to the case of a public fast-charging station for electric heavy-duty vehicles, the approach leads to the identification of potential viable business models. Under the condition of using financial leverage through debt, additional revenue sources such as per-charge event user fee and advertising as well as partnership with the public sector in the form of grants, it is possible to achieve a viable business model. Conclusions: A systematic proactive approach of the use of financial analysis in business modelling was successfully developed and applied to the case of fast-charging stations for electric heavy-duty vehicles. The identified viable business models rely on financial leverage through debt, additional revenue sources and partnership with the public sector in the form of grants. Recommendations for future research: Simulations with more input parameters as well as combinations with observational studies of existing business models can be further investigated.