INCUMBENCY AND THE DISRUPTIVE REGULATOR: THE CASE OF ELECTRIC VEHICLES IN CALIFORNIA

Alan Pilkington () and Romano Dyerson
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Romano Dyerson: School of Management, Royal Holloway, University of London, England

International Journal of Innovation Management (ijim), 2004, vol. 08, issue 04, 339-354

Abstract: For much of the past century, the automobile sector has been dominated by a handful of oligopolistic firms, protected through path dependencies and the build up of complementary assets. But that very dominance built upon years of experience and translated into the periodic release of incrementally innovative new car designs, may now be threatened by the actions of regulators in California and elsewhere, in mandating emission friendly cars.The biggest challenge in this area has been the demand for zero emission vehicles resulting from Californian regulations. Zero emission legislation mandates the use of technologies radically different from those used in the development of internal combustion engines. Such technology acts in a disruptive manner on the existing skills base of the automobile firms, negating some of the benefits of incumbency. With little or no experience of the systems needed to develop a viable electric vehicle — batteries, electric motors and controllers — the established automobile manufacturers have struggled with a strategic question: how to incorporate disruptive elements into a mature organisation. This paper explores the nature of the regulatory threat and the strategic responses generated by the automobile firms.

Keywords: Disruptive technology; dominant design; electric vehicle; strategy; regulation; incumbency (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1142/S1363919604001106

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