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Abstract This paper explores why new entrants, instead of incumbents with resource advantages, are leading the electric vehicle industry from business model perspective. We focus on four selected cases, BYD and SAIC from China, and TESLA and GM from the U.S., one new entrant and one incumbent from both countries. Based on interviews, visits and literature research, we find that there are distinctive differences in the business model between new entrants and incumbents, and value propulsion better fit electric vehicle technologies, vertical integration value network, and costrevenue model with low variable cost are critical reasons for new entrants to lead. This paper helps to get a better understanding on two questions. One is how new entrants leverage business model to lead when incumbents have already applied new technologies. The other is what business model helps firms to lead in electric vehicle industry better.
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