Methodology¶
How financial modeling works in this repo. The modeling contract and repo workflow live in docs/context/ (agent-facing); this page is the reader-facing summary.
Framing (read first)¶
Three orientations anchor everything in this section:
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These are standard businesses. An EPS is a standard business in the solar industry. A swap network is the traditional gas-canister exchange model, extended into batteries in recent years by Chinese players — NIO's car-battery swap, and the scooter swap cabinets on city corners everywhere. We acknowledge these sectors and use the terms and performance gauges they have already adopted — we are not inventing an industry, we are modeling a known one entering a new geography.
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We separate BUs for insight, not corporate strategy. Corporate integration exists to gain efficiency — but integration must not become a veil that hides waste. Modeling each unit separately exposes where profit is actually made and what ROI is sensitive to. That is the purpose of the decomposition.
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BU modeling mirrors modular software architecture. Clean interfaces between modules simplify building and debugging, favor progressive development (one unit at a time), and reduce the complexity-management burden. The same engineering logic applies to financial models — each BUFM is a software object with a uniform parameter/state/query interface: BU Object Interface. The core logic is also unitary — agnostic to currency and product specifics; market profiles color it in: Unitary Core.
Sector-adopted gauges¶
| BU | Home sector | Gauges the sector already uses |
|---|---|---|
| EPS | Solar / IPP | PPA tariff, capacity factor, LCOE, availability |
| SNS | LPG canister exchange; battery swap (NIO, scooter cabinets) | swaps/station/day, station utilization, uptime, slot turnaround |
| BCS | Asset leasing / fleet management | LCOB, fleet rotation cadence, residual value |
| RIDER | Transport economics | TCO vs ICE, payback, cost/km |
Method in one paragraph¶
Every participant in the e-mobility ecosystem is modeled as a BUFM (Business Unit Financial Model): a self-contained unit with explicit inputs, outputs, and profitability drivers. BUFMs are coupled through the Demand-Supply layer, which carries transaction quantities, prices, and — critically — utilization: the shared state variable that links rider demand to battery throughput, network capacity, and energy purchases. The objective is always two-sided: does the total system create value, and which participant captures it.
What the models are for¶
Financial models in this repo serve decision-making in three directions:
- Analyze consequences — given a decision (a price point, a cost-reduction action, a fleet size), compute the financial outcomes per BU: cashflow profile, IRR, breakeven, profit pooling. The model answers "if we do X, what happens?"
- Inform decisions — the reverse direction: use the coupled model to formulate the decision itself. What pricing level is competitive while keeping every BU above break-even? What cost-reduction target restores margin? The model answers "what should X be?"
- Competitive analysis — market intelligence (partner models such as Maxwell's v12, published benchmarks, observed pricing) is recast into our framework-aligned language. It becomes both an input data source and a validation oracle — see the v12 Mapping as the first instance.
Specific outputs follow from these purposes: financial models per BU and market, pricing decision analyses, cost-reduction target sheets, and the BU × market output matrix. The documentation organization follows the same structure — see the Documentation Organization Proposal.
Governing principles¶
- Model each business unit explicitly; unit economics must stand alone before coupling
- The ecosystem is a coupled economy, not a monolith — transactions, utilization, shared constraints
- Explain total economics and participant-level economics (profitability pools)
- Support multiple commercial segmentations (one thin company vs several players)
Details: Models Overview
Parameter taxonomy¶
| Group | Contents | Role |
|---|---|---|
| Environment | FX, interest, fuel, electricity prices | market context, not controllable |
| Policy / fiscal | tariffs, income tax, subsidies | decision-relevant, changes by year |
| Operating | CAPEX, labor, scale factors, unit sizes | what the operator controls |
| Assumptions | utilization, failure rates, losses | behavior hypotheses to stress-test |
| Intermediary | computed variables | checking + comparison basis; never inputs |
Conventions and data formats are defined in Phase 3; every parameter will carry exactly one group label.
Standards posture¶
- Terminology: adopted as defined — see Terminology
- Industry technology/cost values: incumbent benchmarks, shown as contrast cases (ADR 0002)
- Deviations: registered, documented, never silent — see the deviation register in Terminology
Output matrix (Phase 5 preview)¶
Results will be reported as a business-unit × market grid, with per-participant KPIs (TCO saving, payback, IRR, utilization, break-even utilization, affordability) per market. Standalone market bundles (Kenya first) are generated on demand as HTML + CSV.