Strategic intentions to the diffusion of electric mobility paradigm: The case of internal combustion engine vehicle

Abstract

The automobile industry is currently undergoing a profound change. Stringent emission standards coupled with issues of climate change and technological advances in alternative powertrain technologies are forcing the industry to set new strategic courses. While the electric vehicles are not yet profitable, their growing market share and advancement in battery technology will pose a considerable substitution risk for incumbent firms. Incumbent firms can react to this changed environment by implementing one of the three generic strategies, which are “exit”, “switch” and the “sailing ship effect” (SSE). Prior research has documented SSE as an explanatory factor for continuous improvement in conventional propulsion technology in light of facing a major technology transition towards electric mobility. To further contribute to the discussion on patterns of strategic intention, we propose an additional perspective on strategic action pattern in response to technological competition threat. To this end, the underlying pace of ICEV (internal combustion engine vehicle) technology development and its evolutionary technology path were examined by employing a patent-based analysis framework. The findings show that although the ICEV technology has entered into maturity stage, a complete departure from conventional combustion engines is not in sight for the next few decades. Moreover, we provide empirical evidence for a mimicry-based technological evolution pattern in the field of ICEV. This study can provide valuable insight for R&D managers and policy makers seeking to facilitate the transition from conventional vehicles to zero-emission vehicles.