SIM-Drive’s Business Model for EVs

“A corporation is a wealth-creating entity.
As such, naturally
It will aim to increase sales
And make a profit.
And yet
Even the most booming sales
And soaring profits
Will not win society’s respect.
For a company is judged
Not by the scale of its earnings
But by what it does with them.
How much well-being has
Its wealth created?”

–Soichiro Fukutake, Think Forward Moving Ahead

One company that has earned my respect is SIM-Drive.  I heard SIM-Drive’s President and CEO Dr. Shimizu speak at the Open Source eCar Conference a few weeks back.  He reminded me of a wise professor or enlightened monk.  So soft spoken, yet each concept shared was a jewel. 

If there’s a forerunner to the Electric Vehicle (EV) movement, Dr. Shimizu is it.  SIM-Drive is onto their 11th EV, so r-e-s-p-e-c-t for their commitment to making our sustainable transportation dreams real and viable. 

Yet perhaps what’s more interesting is their business model. (Please eject traditional business models from your mind now.) 

SIM-Drive’s mission and business model answer the same question:  “How to spread EV technology?”  But let me back peddle a little before I share the answer. 

Dr. Shimizu said that EV technology will never become widespread until it performs well.  These are the three key points:

  • Acceleration
  • Space inside the vehicle
  • Comfort

Searching for the right magic-three formula has been SIM-Drive’s mission for 30 years.  And they do not want to discover it alone!  Thus their business model, effective January 2010:

  1. A company, government or individual can pay SIM-Drive 200K€ to join their R&D team for 1 year.  Note that 1 year = 1 different EV project.  For the 2010 project year, 32 companies and 2 local governments ‘joined.’  SIM-Drive hopes to increase the numbers by 30 each year.
  2. SIM-Drive teaches you all they’ve learned about EVs.  Then you can take this knowledge and technology back to your company. Naturally during the process of making the EV prototype, you share your knowledge and experience.  Kind of an EV masters program.  
  3. The money contributed goes towards making the new prototype. 
  4. SIM-Drive benefits from new information, international friends, and the spread of technology.  Companies wishing to thereafter use SIM-Drive’s technology pay a small royalty fee.  
  5. Next phase: sharing manufacturing knowledge.

Dr. Shimizu explains on the SIM-Drive website:

“The purpose of our company is not to manufacture electric vehicles ourselves, but to provide the highest level of electric vehicle technology and information, at the lowest cost, to all those involved with electric vehicles.”

What I like about this is it’s not egotistical.  Sure, SIM-Drive gains knowledge, friends and royalties.  But their spirit and mission are far from the common ‘I want to take over the world’ approach. I don’t know of a more open business model in the automotive industry. 

What do you think about this?  An answer to our augmenting transportation challenges?