Technological diversity of emerging eco-innovations: a case study of the automobile industry

The automobile industry is in a remarkable state as not one, but multiple alternative fuel powertrain technologies are challenging the gasoline/diesel fueled internal combustion engine (ICE). This indicates a high level of uncertainty and suggests that the automobile industry might be transitioning past the ICE powertrain as the dominant design. Our research analyzed the technological diversity of alternative fuel vehicles (AFVs) from 1991 to 2011. We collected an unique database of 884 AFVs from the 15 largest auto manufacturers. This data was analyzed on a firm, technological, and industrial level. Results showed an increase in technological diversity over the study period. Although electric vehicles are the technology du jour, auto manufacturers are continuing to develop a variety of AFVs. This indicates that incumbent firms do not know if/which powertrain design will emerge as the dominant technology. Indeed, high heterogeneity in vehicle demand through influences such as government policies could lead to several different types of AFVs competing in distinct markets. In addition to analyzing industrial dynamics in the automobile industry, we also provided policy recommendations for how governments can support the transition toward more sustainable automobile transportation.