Unlocking Green Innovation

RESEARCH AT THE ESRC centre for Business Relationships, Accountability, Sustainability and Society (BRASS) is examining whether 'Business Model Innovation' offers the potential to bring new ultra-low emission vehicle technologies to market. Doctoral researcher Gavin Harper has been conducting research with vehicle manufacturers to discover how automotive industry business models are evolving to meet the challenge of realising the potential of Ultra Low Emission Vehicles (ULEVs). Around a quarter of Britain's carbon emissions come from transport and there are questions about where to get our transport energy in the future. ULEVs use a range of innovative new technologies — electric, hydrogen and advanced plug-in hybrid technology — that decrease reliance on oil as a fuel. Many manufacturers see opportunities here and governments worldwide are offering incentives to encourage uptake of them. ULEVs also have the potential to bring good news for British industry — as a high-value, knowledge-intensive export product for British manufacturers. The transition to low-carbon auto mobility isn't just an opportunity for manufacturers but also for their key partners who furnish the industry with components and technology. We need to make these vehicles appealing, but technical innovation is slow and expensive. ULEV technologies offer different performance to conventional vehicles (which will satisfy many users) but the market share occupied by ULEVs is still small and needs to grow. Does the answer lie in Business Model Innovation and redefining customer relationships with vehicle manufacturers? The BRASS research contrasts the views of volume manufacturers to niche manufacturers who produce fewer vehicles. The niche manufacturers often have a different cost structure to manufacturing, requiring, for example, technologies to create bodywork that is economical at much smaller volumes. Their scale necessitates carrying out the key activities in a different way from volume manufacturers. This can often unlock sustainable synergies allowing lightweight bodywork that requires less energy to move around. By contrast, volume vehicle producers are wedded to the technologies of large-scale production. so many of their ULEV offerings are based on heavy, pressed-steel bodywork. One of the upshots is that niche manufacturers must offer an attractive value proposition to entice customers to purchase their vehicles, so often target specific customer segments. Some differentiate their niche offerings on performance and exclusivity; some cater for businessmen. We need to re-evaluate the way that we pay for our automobility. We are used to a world of cheap vehicles and fuel, but now the price of road fuel continues to rise with the realisation that oil is a finite resource. By contrast, the 'fuel' for electric vehicles (electricity) is comparatively cheap, although the vehicles are expensive. There is also the matter of servicing and maintenance: with fewer moving parts electric vehicles require less consumable, disposable service items over a life cycle. Perhaps the answer lies in new business models that create value for the consumer, while offering new revenue streams for the industry. Around a quarter Britain's carbon emissions come from transport. How can more drivers be encouraged to switch to electric cars? www.brass.ac.uk