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2023 | Book

The Green Transition of the Automotive Industry

From Technological Sustainable Innovation to Mobility Servitization


About this book

This edited collection offers deeper understanding of the green and digital transition in the automotive industry. It explains how mobility products, services and business models are changing, the opportunities and threats correlated to this double transition as well as the competences and resources needed for firms in this fluid scenario.

The book firstly provides an in-depth overview of the strategic and managerial implications for automotive and mobility incumbent firms. Chapters describe how sustainable technologies have been changing over time and identify the challenges of the shift imposed by the new competitive environment, such as the so-called servitization of the industry. The second section describes the new drivers of growth and profitability, such as open and collaborative innovation, and provides guidance on how incumbents can surf this turbulent landscape.

Table of Contents

1. Introduction
The automotive and mobility industries are facing years of turbulence and transformation driven by the concurrent effects of the perfect storm of new technologies, new legislation that in many states support sales of greener vehicles, new players entering the industry, and an increased social consciousness of cars’ impact on the environment (Borgstedt et al., Journal of Cleaner Production 167:75–87, 2017; Teece, Management and Organization Review 14(3):501–512, 2018). Particularly, electric motorizations provide means to reduce transportation-related air pollution and emissions that lead to climate change. Such green transition imposes a technological shift, which had to overcome carmaker incumbents’ initial barriers (Steinhilber et al., Energy Policy 60:531–539, 2013), as incumbent carmakers and public mobility vehicles producers traditionally have core competences in the design and production of Internal Combustion Engines (ICEs) while they lack specific competences in the design of electric batteries and consequently never produced them in large quantities (Borgstedt et al., Journal of Cleaner Production 167:75–87, 2017). Electric batteries are the most distinctive component of BEVs (Batteries Electric Vehicles) and are the key performance variable affecting BEV performance. Furthermore, only recently these vehicles appear to be as a real alternative to ICE (Internal Combustion Engines) counterparts in the wake of rapidly increasing sales, but they are still less rewarding, and incumbents try to maximize the earnings deriving from electric vehicles by enlarging mobility services provided by means of such vehicles and coherently with clients’ increased interest in Mobility as a Service (MaaS). In this setting, while most strategy scholars have so far considered the automotive industry protected by almost insurmountable barriers to entry, Tesla’s success opened a heated debate on the urgency of controlling EV technology (Teece, Management and Organization Review 14(3):501–512, 2018). Upon these premises, the automotive and mobility industries represent a unique setting to study how incumbent firms can adapt their competences, resources, and strategies to survive in turbulent times. Scholars and practitioners are now investigating how incumbent firms could face competence-destroying technologies that are changing the rules of the game and rethink their business models coherently with the direction set by such perfect storm.
Anna Cabigiosu, Pietro Lanzini

Part I

2. Reshaping the Auto Industry Through Unconventional Challenges
The automotive industry has undergone considerable transformations throughout its history where changes result from the unexpected interaction of multiple strategies with contextual factors and path dependency. In order to better understand the forces at play in such transformations, this chapter provides an evolutionary perspective that capitalises on the past while discussing the roles of incumbents and new entrants in the ecosystem, attempting to shed some lights on whether a new dominant design could emerge.
Leonardo Buzzavo, Giovanni Favero, Francesco Zirpoli
3. From Transport History to History of Sustainable Mobility
The chapter provides a synthetic review on how mobility and transport historians have treated the history of the emergence of automotive sustainable alternative technologies in Europe and the US. Historical literature on the diffusion of sustainable automotive technologies has grown exponentially in the last two decades. The chapter offers an interesting perspective on the new approaches aiming at underlining the intertwining of political, economic, and cultural variables influencing sectoral technological trajectories in Europe. The chapter, by relying on the Italy case, also suggests that specific attention needs to be paid to the contribution of relevant experts’ communities and their relation with the political decision-making process and to the shifting positions of the multiple voices in the debate on technological options at the light of both industrial policy options and the peculiar geopolitical situation of Italy.
Valentina Fava, Giovanni Favero
4. Greening the Car—Mission Impossible or Not Pursued?
In recent years, the majority of players and stakeholders in the automotive industry have focused their attention on new powertrain technologies. There has been a constant tug-of-war between proponents of electric drive and defenders of traditional engines, a debate that appears to be more emotional than based on a rational assessment of the technical and social aspects of the alternatives in play. Further, a debate that overshadows what at the moment seems indisputable, namely that traditional engines are unsustainable for health and the environment, and that electric cars themselves (although greener), are not a fully sustainable option, either.
The emphasis on technical aspects over social ones is a legacy of an anachronistic approach driven by the prevalence of economic interests over the concern for quality of life. The quasi-ideological clash of technologies is a diversion from the real problem, which is to think about a future where we can live without cars, at least in urban areas.
Andrea Stocchetti
5. The Transition of the Automotive Industry from an Identity Perspective
The transition of the automotive industry can be tackled from different points of view. In this chapter, we discuss the change that this sector is facing from an identity perspective. More precisely, we question if the impact that the technological transition, in the form of digitalization and electrification, is causing concerns to the identity of the automotive industry and we resonate on the effects that such an impact produces on the evolution of the automotive industry.
Lisa Balzarin, Francesco Zirpoli

Part II

6. Mobility and Individual Choices in Turbulent Times—An Overview
The automotive industry and the mobility sector are experiencing turbulent times, where the intertwining effects of both endogenous and exogenous phenomena are swiftly changing the rules of the game. The rise of innovative technologies and business models, the shift from the concept of ownership to that of use and an unprecedented awareness of sustainability-related issues are all dimensions that are likely to change the way individuals conceive mobility and choose between different options available. Now more than ever, it is crucial for automakers willing to get an edge over competitors (both inside and outside the car industry) to gain further insights on the demand side. That is, shedding light on the behavioural and psychological determinants of individual choices in the domain of mobility, being this a pre-requisite for the implementation of effective corporate strategies. The chapter (i) illustrates the role that variables such as attitudes, values or habits play in shaping individual behaviours and (ii) focuses on the survey-based empirical appendix on electrification from the point of view of demand, highlighting perceptions, attitudes and hindrances that linger on such envisaged change of paradigm.
Pietro Lanzini
7. Open and Collaborative Innovation in the Automotive Industry
This chapter discusses the implications of sustainable transition on carmakers’ core competences and focuses on how carmakers can rely on open innovation during the era of shift from internal combustion engines to electric vehicles by describing the process through which they leverage open innovation for the provision and development of electric batteries, the most distinct component of electric vehicles. The chapter adopts a processual view that describes how Toyota, VW, and GM used a path-based open innovation framework for green technology characterized by an inverse U-shaped breadth and depth of partnerships correlated to different levels of technological uncertainty. The chapter also provides managerial implication and discusses how policy makers can support transitions toward radical and sustainable innovations.
Anna Cabigiosu
8. Automotive Distribution at the Gates of Change: Towards New Architectures
The automotive industry has been long adopting a selective distribution scheme in sales and service featuring an architecture of vertical quasi-integration. Growing competition and the need for efficiency have triggered a process of downstream consolidation, while digitalization has been impacting retail by enabling new forms of coordination. In this context some automakers are driven to reshape the distribution architecture gaining more control mainly through an agency approach. However, its application may be more challenging than expected, making room for hybridization and co-existence of many strategies.
Leonardo Buzzavo
9. The Role and Design of Open Territorialized Mobility Platforms for Sustainable Mobility
The chapter analyses the travel preferences of citizens in the main European capitals, highlighting, on the one hand, the strong use of the private car as a means of transport and, on the other hand, the willingness of private and public transport companies to discourage its use in favour of greater environmental and social sustainability promoted by public transport, micro-mobility, and shared mobility. In particular, within this setting, the chapter analyses and compares open public mobility platforms in Europe and the main sustainable mobility projects developed by local public transport operators with a focus on the electrification of bus fleets and discussion of the case of Venice. This analysis aims to identify the main trajectories of changes in public transport in Europe that are driving green transitions, their challenges, and the results obtained so far, to disentangle future avenues of change.
Flavia Furegato, Anna Cabigiosu
10. The Role of Institutions, Social Actors and Public Policies to Support Sustainability in the Automotive Industry in Europe
What role are the national governments and the European Commission playing in addressing sustainability in European car production? The adoption of regulatory measures and tax incentives for the purchase of non-polluting cars seems to be the most evident facts; but what role are the governments playing in supporting car manufacturers? The acceleration of sustainable mobility and the production of electric cars, if on the one hand have been affected by the debate around the causes of the pandemic, on the other they constitute, for some European countries, one of the main drivers of industrial development in the coming decades. It is clear that these funding instruments also include renewed support for investments in research and development made by car manufacturers and suppliers. The competitive advantage of some countries, both on an industrial and institutional level, runs the risk of polarising this important manufacturing sector again, with the inevitable deterioration of the production system in the countries that have lost significant positions in the last years (such as Italy) or have become manufacturing production areas without significant repercussions on the level of research and development, mainly in past years (such as Spain and Eastern European countries).
Davide Bubbico
The Green Transition of the Automotive Industry
Anna Cabigiosu
Pietro Lanzini
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