Reconfiguring Capabilities in China’s EV Downstream Value Chain: A Dynamic Framework Approach

Abstract:

Purpose
The downstream value chain of electric vehicles (EVs) encompasses all customer-facing activities after the vehicle is readied for the market, including charging infrastructure, after-sales support, and mobility solutions such as shared services. This chain differs substantially from that of internal combustion engine vehicles (ICEVs), where the downstream segment has traditionally focused on dealership networks, spare parts, and standard maintenance. In the EV context, downstream activities require specialized competencies—ranging from robust charging and energy management systems to software-based customer engagement—and these new elements hold higher value-creation potential. Unlike ICEV owners, EV users depend on reliable charging solutions, integrated digital services, and connected mobility features. As a result, the EV downstream sector often generates continuous revenue streams through subscription models, data analytics, and customer-focused technology platforms.
Drawing on previous literature, including Bozzola et al. (2024), which used a dynamic lens to examine how capabilities move across sectors relevant to EVs, this study focuses on mapping capability distributions and resource reconfigurations in the downstream value chain of China’s EV industry. Its aims are: first, to describe how incumbents, start-ups, and new entrants each manage charging, after-sales service, and flexible mobility offerings; and second, to pinpoint where further investigation could shed more light on how evolving digital and service-driven business models transform the final stage of automotive value delivery.
Design
A multi-case study method forms the core of this study. To begin, secondary data sources—ranging from corporate annual reports and press statements to third-party industry analyses—are reviewed to create a baseline of how China’s EV downstream chain is structured. This framework highlights functions that typically appear in the downstream domain, including charging infrastructure and energy management solutions, after-sales and customer relationship management tools, and diverse mobility offerings (e.g., ride-hailing platforms or subscription-based access to vehicles). As the initial phase remains exploratory, it gathers insights on how different player types—long-established carmakers, digitally minded start-ups, and companies from other industries—position themselves to capture value.
Building on these descriptive findings, a capability framework is being developed to observe how those players allocate resources and reconfigure processes within downstream domains. This approach adapts concepts from Bozzola et al. (2024) by systematically mapping whether companies pursue vertical integration or form alliances to create an ecosystem around the end user. Subsequent phases of the research will involve interviews and direct observation, enabling a more detailed analysis of how these strategies evolve over time in response to competition and technological advances.
Preliminary findings
Early data collection suggests that incumbents, which once relied on conventional dealerships for ICEV after-sales, are integrating extended charging services and digital CRM capabilities to align with shifting customer expectations. One incumbent appears to have moved progressively from third-party charging partnerships to forging alliances with tech companies for cloud-based service ecosystems, while also collaborating with mobility platforms. A start-up, by contrast, built its own charging and battery-swapping infrastructure almost from the outset, establishing a vertically integrated model and a highly engaged user community. Though these observations originate mainly from corporate announcements and reports, they highlight the diverse ways each actor seeks new downstream revenue streams. They also point to potential resource overlaps where multiple actors strive to develop proprietary solutions, showing a dynamic environment in which ecosystem alliances and cross-industry partnerships are becoming increasingly common.
Practical and theoretical implications
From a practical standpoint, recognizing the differences in downstream structures and capabilities can help carmakers refine their approach to customer services, technological investments, and collaboration with complementary providers. As new entrants continue to bring expertise from software, telecommunications, or other fields, incumbents may feel compelled to accelerate their own digital and infrastructure capabilities to keep pace. For those seeking to invest in or partner with Chinese EV ventures, mapping these downstream dynamics aids in identifying which segments hold the greatest promise for sustained revenue and brand differentiation.
Theoretically, this study expands discussions on how technological shifts within an industry reshape value distribution at its final stage. By focusing specifically on China’s EV downstream domain and evaluating how different player categories deploy resources, the study offers empirical grounding for theories of dynamic capabilities and value chain transformation. Ongoing and future steps, such as direct interviews and site visits, will further refine this framework, potentially revealing new insights into how a fast-growing automotive market balances hardware, software, and service-based innovation in the pursuit of high-value returns.
Reference
Bozzola, C., Anzolin, G., & O’Sullivan, E. (2024). The changing landscape in EV “value chain ecosystem”: A framework to assess present and future capabilities. International Journal of Automotive Technology and Management, 24(2), 169–192. https://doi.org/10.1504/IJATM.2024.141517