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:

1. 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.

2. 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.

3. 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:

1. 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?"
2. 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?"
3. 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

1. Model each business unit explicitly; unit economics must stand alone before coupling
2. The ecosystem is a coupled economy, not a monolith — transactions, utilization, shared constraints
3. Explain total economics and participant-level economics (profitability pools)
4. 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.