A Bumpy Road Ahead? Industry Perspectives On The Fair-Wear Pricing Model For Sustainable Mobility

The Fair-Wear Pricing Model (FWPM) suggests an innovative way to lease vehicles; it changes pricing based on actual wear and tear to vehicles. The FWPM fosters fairness and sustainability in the automotive industry. It represents a shift from traditional product-centered business models to a more resource efficient, wear focused model. However, the practical application of the FWPM has more social and technical challenges than purely technical ones, because of the firm socio technical issue. Empirical studies have identified a 'manufacturer's conflict', where the advancement of sustainable technologies that minimize wear becomes a threat to the sustainability of the established after-sales revenue stream. Furthermore, there is a 'lessor's divide' where supporters

of FWPM view it as an effective risk management vehicle, while opponents favor traditional portfolio-based models. It is argued that the successful implementation of FWPM hinges on the resolution of seemingly disparate business model challenges, which will fundamentally reshape the value and risk balance for each participant in the automotive value chain. This study presents the first empirical evidence of the strategic barriers the automotive industry faces in developing sustainable wear-focused business models, leading to the first cohesive representation of stakeholder tensions.

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