Coordination dynamics between fuel cell and battery technologies in the transition to clean cars

Eugenie Dugoua () and Marion Dumas
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Eugenie Dugoua: d Center for Economic Studies and ifo Institute Research Network , 81679 Munich , Germany
Marion Dumas: a Grantham Research Institute on Climate Change and the Environment , London School of Economics and Political Science , London WC2A 2AE , United Kingdom

Proceedings of the National Academy of Sciences, 2024, vol. 121, issue 27, e2318605121

Abstract:

Significant progress reconciling economic activities with a stable climate requires radical and rapid technological change in multiple sectors. Here, we study the case of the automotive industry’s transition to electric vehicles, which involved choosing between two different technologies: fuel cell electric vehicles (FCEVs) or battery electric vehicles (BEVs). We know very little about the role that such technological uncertainty plays in shaping the strategies of firms, the efficacy of technological and climate policies, and the speed of technological transitions. Here, we explain that the choice between these two technologies posed a global and multisectoral coordination game, due to technological complementarities and the global organization of the industry’s markets and supply chains. We use data on patents, supply-chain relationships, and national policies to document historical trends and industry dynamics for these two technologies. While the industry initially focused on FCEVs, around 2008, the technological paradigm shifted to BEVs. National-level policies had a limited ability to coordinate global players around a type of clean car technology. Instead, exogenous innovation spillovers from outside the automotive sector played a critical role in solving this coordination game in favor of BEVs. Our results suggest that global and cross-sectoral technology policies may be needed to accelerate low-carbon technological change in other sectors, such as shipping or aviation. This enriches the existing theoretical paradigm, which ignores the scale of interdependencies between technologies and firms.

Keywords: energy innovation; electric cars; fuel cells; coordination; low-carbon transitions (search for similar items in EconPapers)
Date: 2024
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