Paving the road to electric vehicles - A patent analysis of the automotive supply industry

Automotive suppliers play a key role in the development of powertrain systems for cars. The technological change towards electric vehicles requires innovative activities and therefore impacts the supply industry heavily for two reasons. First, this change is a major threat, since existing powertrain parts will become obsolete. Second, alternative powertrain technologies offer opportunities for both incumbent suppliers and new market entrants. By analyzing the current supply industry structure and prospective developments arising from technological change, this study contributes to research on automotive supply networks. In order to measure and evaluate the innovative output of incumbent suppliers and of new market entrants, a patent analysis using 91,082 patents from the years 1990-2013 within four different powertrain technologies is conducted. This reveals specialization and patent portfolio quality for all firms within the automotive supply industry. The study has three key findings: (1) Innovative pressure, based on uncertainty regarding future technological development of electric vehicles, is passed on from car manufacturers to their supply networks. (2) Although most incumbent powertrain suppliers will suffer from the technological change, few Japanese suppliers intensively specialize in alternative powertrain technologies. (3) New market entrants in the supply industry will only benefit from this change if battery electric vehicles become the new dominant design, whereas this group lost its specialization in the field of fuel cell electric vehicles. Within these findings, the study explicitly reveals firms that will benefit or suffer from the technological change towards electric vehicles.