Electro mobility at a crossroads: opportunity for SMEs and threat to car industry incumbents – or the reverse?

Résumé:

This paper argues that there are a number of fundamental differences between the emerging electric vehicle (EV) industry and the conventional internal combustion engine (ICE) sector. These differences embrace a range of dimensions including technologies, composition of the value chain, industry structures, regulatory and standards environments, innovation systems, supply chain organisation and policy regimes. The paper presents a summary of these features for different size categories of vehicles from e-bikes to large e-cars.

In particular light EVs offer a new competitive landscape both in development and production (supply) terms and market structure which creates opportunities for new firm entry and different forms of SME participation. By comparing and contrasting the rapidly developing light EV sector with larger EVs (city cars and above) we can identify opportunities which go beyond the introduction of new products to the drive towards new patterns of automotive industry organisation, the emergence of new geographic centres of production, design and development allied with a shifting balance between global and local inputs into design, development and production. A major driver of such changes, apart from shits in technology, is the potential for open platforms to promote widespread participation innovation.

Rapid developments in electromobility are the source of strategic challenge to the existing predominantly ICE-based industry. Should incumbents internalise the potential threat by acquiring innovators and capturing the technology? Should they collaborate more openly? Should they emphasise different parts of the vehicle value chain?

SMEs also face major dilemmas. How can SMEs enter existing supply chains? Or will the electro-mobility sector be organised differently and create opportunities for new SME entrants? Will new alliances between SMEs, lead customers and (ICE) OEMs emerge?

The paper draws on the results of the EU-funded INTRASME (Innovative Transport SME) project which focused on the role of SMEs in the electro mobility sector. The key areas of investigation were the ways in which SMEs acquired new technologies, the identification and analysis of the barriers SMEs face in entering existing supply chains, and the role of SMEs in R&D. Fifty-six detailed interviews with SMEs involved in the EV sector were conducted and provide the major primary data input into the development of the framework presented.