Driving the electric bandwagon: The dynamics of incumbents' sustainable innovation

Abstract

Given that entire industries face sustainability challenges, it is important to understand the dynamics that lead “firms-in-an-industry” to engage in sustainable product innovation. To provide more insight into the question of how innovation activities spread from individual firm action to an industry-wide engagement, this paper examines the automobile industry and the development of electric vehicles (EVs). The analysis covers automobile incumbents over a crucial decade for EV development in the industry, focusing on the different strategic motives that especially the so-called “first movers” used to justify their earlier engagement. We find that EVs became a core pillar of the incumbents' technology strategies through a combination of coercive, normative, and mimetic pressures. Yet, the strategic motives to engage in EVs stayed poles apart between different companies. The insights from our study are relevant for those interested in the diffusion of sustainable product innovation and in incumbent behaviour in sustainability transitions.