What happens if the success of your business is based on a technology that is banned? With a phasing out of the combustion engine having been announced in many places, this is a question that has become more pressing for the automotive industry. We give you three tips for foresight in innovation and technology management.
The sale of new cars with combustion engines is to come to an end by 2035, as far as the EU Commission is concerned. This political development marks a turning point for the automotive industry and its suppliers, which has not come unexpectedly for the industry. There are a few things to be learned from this situation for one's own innovation management.
New drive technologies in the automotive industry
The end of the combustion engine in the EU is a development with wide-ranging strategic consequences for OEMs and suppliers. It impacts value-added chains and technological orientation. For innovation and R&D departments, the ending of a technology will be palpable.
Electric mobility appears to be the most obvious alternative to the combustion engine ecologically, technologically, and economically. E-mobility will replace diesel and petrol engines as soon as possible. The emphasis, however, being on as soon as possible. After all, anyone looking into trending topics such as the mobility and propulsion technologies of the future will tell you that there are other options. Perhaps not as mature, but definitely with potential.
Nevertheless, by terminating petrol engines, the EU Commission put the innovation of electric mobility on the launch pad. But what do such developments actually now mean for innovation and R&D managers?
Roadmapping – sighting future catalysts
That the mobility revolution involves the end of combustion engines will surprise almost no one in the automotive industry. E-mobility, and the electrification of vehicles, influences not only their construction, function, and operation, it also changes the behavioral patterns and expectations of consumers over the long term.Fundamentally, it is not just OEMs and suppliers that are affected, as Christoph Krammer from Magna in Graz, for example, also summarizes a possible scenario:
"Small batteries and short ranges for urban traffic, mixed drive systems for long-distance commuters, and hydrogen in heavy goods vehicles – this provides numerous lines of attack for innovation in the automotive industry. Mobility will change intrinsically in any event, and with it mobility concepts too. What works and makes sense today will likely no longer be justifiable in the foreseeable future, and we need to prepare ourselves for this right now."
3 tips for successful innovation roadmapping
- Remain open to technologies, despite siren calls
A transformation in the automotive industry will first be steered in a particular direction that has been apparent for a good while. A study from Deloitte and the German Association of the Automotive Industry (VDA) shows that the automotive supply industry has been in transformation for a long time.
As curtains are drawn on the combustion engine, a certain momentum can build up emanating from a technology (or even from an innovation). In such situations, it is important to retain foresight and to perceive what's happening beyond the hype. The more whole industries hunt in packs in one direction, the more widely do the doors open for disruptive innovations and players from entirely different sectors. What saves you from this:
An innovation strategy adapted to the business strategy,
An innovation roadmap which is kept up to date, and
Well-grounded technology upgrades for strategically relevant fields. - Underestimate no influencing factors
In innovation management, we distinguish between the triggers that set an innovation project in motion, among other things. A newly developed technology, for example, can trigger a technology "push"; and increased demand from customers, a market "pull".
With the set intention of the EU Commission to no longer permit the sale of new passenger cars with diesel and petrol engines from 2035, criticism is coming from many quarters that there is a lack of openness towards different technologies. At the same time, a market pull is triggered, to which OEMs, and especially their supply industry, must now adapt more quickly.
In order not to miss an influencing factor on the development of your markets, you should use tools to perceive what is going on around you. To bring this back to the example of the automotive industry: vehicle manufacturers – apart from cars – are also working on solutions with electric drives, for example: Rosenbauer with the Concept Fire Truck, or the takeover of the battery manufacturer Kreisel Electric by the tractor manufacturer John Deer could lead to exciting innovations in agriculture. - Ensure the necessary focus in innovation projects
A clearly defined search area and a current roadmap in particular help make innovation projects successful. They limit the scope of action in a positive sense by, for example, considering political, societal and economic trends, while taking into account the influence of technology trends.
In the case of the phasing-out of combustion engines, this is a development that was foreseeable for OEMs and suppliers. It might have been unclear as to whether disruptive innovations, pioneering technologies, or a different catalyst would trigger the change. Innovation managers who have considered these influencing factors in their work were able to bring this to the attention of the relevant people in their companies in order to look out for process innovations, new markets, or technologies.
This way innovation and R&D teams can work on the right solutions and respond quickly to changes in strategic long-term projects. Strategic innovation management therefore ensures that companies stay relevant, withstand increasing competitive pressures, and demonstrate resilience in changing situations through innovation.
Conclusion: when political decision accelerate innovation
The de facto sales ban on new combustion engines will provoke discussions for some time. Irrespective of this, there are signs from other industries indicating that electric mobility could be a relevant drive technology of the future (let's stick with "could", as we don't want to rule out disruptive innovations).
Whether electric mobility is actually the solution or the future lies with another technology remains an open question. Yet the end date for combustion engines has become more precise.
This case provides us with valuable inspiration for our own strategic innovation management, irrespective of the industry. The outcome is yet to be determined, but the measures taken by the industry should be followed with interest.
