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E.ON Inhouse Consulting

Case: E-Mobility
Topic Difficulty Style
Market analysis, Market entry, Intermediate Interviewer-led (McKinsey
Market sizing, Profitability style), Real Case
analysis

Case Prompt

Climate change has become one of the biggest challenges in the 21st century, and with roughly
75% of all CO₂ emissions coming from energy, this sector plays a key role in the transition to a
reduced carbon footprint. E.ON has taken up on the challenge to promote more sustainable and
efficient energy solutions throughout its whole customer spectrum. Correspondingly, a shift
towards more sustainable energy consumption is noticed across the globe with many cities having
set themselves ambitious climate targets, among those are:

Copenhagen -100% CO₂ emissions by 2025

Amsterdam -60% CO₂ emission by 2030
New York -40% CO₂ emissions by 2030

With E.ON focusing entirely on the “new” energy world, we have become the partner of choice for
solutions propelling the energy transitions. Mr. Jensen, the mayor of Essen has come to E.ON

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requesting our help to accelerate the transition for his city.

Essen is a city with about 600,000 inhabitants and prides itself as a forward-thinking one with lots
of ambitions to become green itself. The economy is well and with his freshly won election the
mayor looks forward to put its promised big initiatives into real projects.

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Exhibits

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Task 1: Analysis of urban CO₂ emission hotspots and main type of
energy consumption

a) Please assess, which sectors within a city are mainly contributing to its CO₂ emissions

b) Please identify their main type of energy consumption

Additional Information

Note for Interviewer

Once the candidate made herself/himself an overview of the case description, hand out the
additional information of the simplified stakeholder overview (Exhibit 1) to the candidate.

Solution

Expected answer for a) and b):

Industry
Production
Manufacturing

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 Primary consumption: Gas
Commerce
Trade, e.g., stores, supermarkets, malls
Service providers, e.g., Telecommunications
Primary consumption: Electricity
Households
Heating and cooling purposes
Electricity for appliances, e.g., smart homes
Primary consumption: Heating via gas or electricity
Transportation
Public transportation, e.g., trains, buses, subway
Private transportation, e.g., cars, motorbikes, taxis
Primary consumption: Fossil fuels

Expectation: Alternative solutions are possible, as there is no perfect solution for the sector split.

Task 2: Assessment of green energy solutions

a) Please assess, in which of the identified areas green energy solutions are in use already

b) Please elaborate where you see potential for a shift towards more sustainable solutions in the
future

Solution

Expected answer for a) and b):

Industry & Commerce

Already in use, e.g., CHPs, solar panels, excess heat utilization
Future solutions, e.g., application of hydrogen / fuel cells to decrease strong reliance on
traditional energy sources
Households
Already in use, e.g., solar panels storage solutions, and heat pumps
Future solutions, e.g., smart home appliances (run at times of excess feed-in from
renewables)
Transportation
Already in use, e.g., electric passenger cars, busses, trains and micro-mobility solutions
(scooters etc.)

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 Future solutions, e.g., electric / hydrogen / fuel cell trucks

Expectation: Name at least two green energy solutions in use and two potential green energy
solutions in the future for every sector.

Task 3: Analysis of energy consumption in the transportation sector

a) Please calculate the energy consumption of the transportation sector per energy source

b) Please calculate how much energy of the transportation sector is produced from gasoline /
diesel, the largest emitter of CO₂ emissions

Additional Information

Note for Interviewer

“We are now evaluating the energy consumption of the transportation sector, divided by the
energy source, to get a better understanding of the sector’s energy demand.”

Once the candidate made herself/himself an overview of the question, hand out the overview
of the primary energy consumption per sector (Data Sheet A) to the candidate.

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Solution

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Task 4: Profitability evaluation of E.ON’s E-Mobility project

a) Please calculate the utilization rate

b) Please calculate the annual profit

c) Please calculate the margin for the project

Additional Information

Note for Interviewer

If the interviewee asks, the following information can be shared:

Besides the one-time setup investment, all other components (e.g., labor, utility) are
included in the yearly overhead costs of the charging stations
The assumption is that the stations operate 24/7 for 365 days per year

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“After we have made ourselves an overview of the overall energy consumption of the
transportation sector, it is now time to evaluate the project of Essen’s mayor Mr. Jensen as he has
approached E.ON to transform the city to more sustainable solutions. Within this project, Mr.
Jensen would like to promote E-Mobility in the city. Before starting the project with Mr. Jensen, a
profitability analysis from E.ON's perspective needs to be conducted.“

Once the candidate made herself/himself an overview of the question, hand out the overview of
the project’s data (Data Sheet B) to the candidate.

Expectation

It is expected that the interviewee is explaining its rationale on how to calculate the
utilization rate, the annual profit and the margin as the solution requires several interim
steps to get to the solution.
If the interviewee does not come up with a step based calculation approach, support the
interviewee to develop the step wise process.

Solution

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Task 5: Pitch of E.ON’s E-Mobility project

a) Please elaborate why the project should be started

b) Please elaborate why E.ON is the right partner to launch this project

c) Please present the key messages prepared in a) and b) to Mr. Jensen

Additional Information

Note for Interviewer

“After we have calculated the profitability of the project for E.ON, it is now time to prepare a
short pitch of the project to Mr. Jensen.”

Give candidate 3-4 min to prepare for the pitch.

Solution

Expected answer for a) & b):

Why should the project be started?

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 Environmental benefits – E-Mobility highly reduces local emissions, contributing to
better air quality and Essen’s CO₂ emissions goals
Economic opportunities – investing in E-Mobility infrastructure, e.g., charging
stations, as economic growth stimulator in Essen
Future-proofing transportation – promoting other eco-friendly urban mobility
solutions (e.g., car sharing) for Essen through E-Mobility
Why is E.ON the right partner for the project?
Experience – long-term experience with E-Mobility businesses in Germany and Europe
and large-scale projects in energy industry
Partnership – long-term relationship between E.ON and city of Essen (e.g., E.ON
corporate HQ in Essen since 2016)
Services – E.ON offers a wide range of complementary services and solutions for
electric vehicle (EV) owners, e.g., home charging solutions

Expectation: Name at least two points for a) & b).

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Further Questions

Q1: Financial perspective of the project

Please state your recommendation for E.ON whether the project should be started from a financial
point of view

Solution

Expected answer:

Short time frame until breakeven point with less than 4 years (total investment: 1,68m €;
annual profit: 424k €)
High profitability with profit margin of almost 7 % (6.73 %)

Q2: Improving the project’s profitability

Please elaborate how E.ON’s profitability can be improved and what are factors that could pose a
risk for the profitability

Solution

Expected answer:

Levers for profitability

Increase lifetime of a charging station, e.g., through improved maintenance or higher
quality components
Decrease yearly overhead costs by improving operational processes, e.g., central
maintenance hubs, efficient parts inventory or skilled workforce
Increase utilization rate, e.g., by avoiding downtimes due to technical errors and user
education to reduce risk of misuse
Risks for profitability
Higher prices due to high demand for charging station components as the energy
transition towards green modes of transport is significantly rising.
Overestimation of utilization rate, e.g., due to unpopular spots for the charging stations
Rapid advancements in charging technology can render existing infrastructure obsolete

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