Strategic niche management from a business perspective: taking cleaner vehicle technologies from prototype to series production

Abstract

Strategic niche management has been outlined as a policy approach to assist development and diffusion of cleaner new technologies. Based on a case study describing the efforts of a leading actor in the heavy vehicle industry to develop and commercially introduce hybrid-electric vehicles, this paper discusses strategic niche management from the perspective of the manufacturing firm. In particular, the paper analyses experiences from extensive field tests executed in London, tests which involved a number of different manufacturers, hybrid systems and vehicles. The scale of this technological niche added confidence and credibility to the technology and helped opening up an important niche market, which was supported by an extensive subsidy scheme. The analysis shows how the field tests and the subsidies jointly functioned as bridging policies that facilitated an important step in the market formation process. The analysis further points at a critical tension between niches and the volume-oriented business of a major vehicle manufacturer, showing how investments in new technology need to be warranted in market trends and projections of future sales and production volumes to become accepted within a vehicle manufacturer's organization.