Conventional Manufacturers

Firstly, it is important to define conventional manufacturers more precisely and how they differ from non-conventional manufacturers. What specific characteristics do they have compared to emerging manufacturers?

An essential aspect is that conventional manufacturers are the companies that founded the automotive industry and had a very important influence on the industry - i.e. these companies exist from the beginning, the terminology of the car and these companies go hand in hand. Their history and simply their long-lasting existence make them conventional. Examples of these are companies such as Daimler AG, Ford Motor Co., Volkswagen AG, Toyota Motor Corp. and Fiat Chrysler Automobiles. All these companies have hugely contributed towards the auto industry as it is known today – and they are still contributing to an important part. As aforementioned, these conglomerates globally still account for millions of sold vehicles.

Another key aspect is that it lays in the nature of these manufacturers to use internal combustion engines for their vehicles as their main driving trains. Partly also because of their historical background as many of these companies started as engine manufacturers.

Moreover, many of these companies were part of the complete rollout of the auto industry as it is known today. This, no matter if it is Toyota’s lean manufacturing, Henry Ford’s mass production or the boxer engine invented by Carl Benz. Every car brand had a significant era in the last century and contributed its part to the automotive industry so that it can exist as it is known today.

Nevertheless, many conventional manufacturers did not recognize the disruptive nature of EV early enough and are now struggling with the electrical transformation of their product portfolio. Therefore, it is also interesting to analyze the product portfolio of each manufacturer in regard to its electrification. The aim is to see whether these companies are too late in entering the market with EVs compared to the new manufacturers.

As aforementioned, the selection of the analyzed manufacturers is based on, among other reasons, the geographical location of the company. This as the particular home markets differ with regard to the requirements or the corporate culture, which has a considerable influence on the strategy and innovative strength of the company.

This will become obvious in the course of this chapter. In addition, the requirements of the governments in the countries of origin differ with regard to CO2 emissions or

incentives/subsidies. All these factors have enormous influence on the electrification of the product portfolio. Consequently, one company each in North America, Europe and Asia will be analyzed.

In order to carry out a selection in the individual automobile hubs of the world, we first look at a list of the largest automobile manufacturers. From this a selection of the companies can be carried out. For this purpose, we look at the data of the Global Auto Database, more precisely their ranking in terms of the bestselling manufacturers of light vehicles (cars & vans) in 2018.

Table 8: World Ranking – Best Selling Vehicle Manufacturer with Market Share in 2018 Source: Author’s Chart, According to (Global Auto Database, 2019)

As can be seen in Table 8, despite the diesel scandal in September 2015, Volkswagen sold the most light vehicles in 2018 worldwide. Consequently, it is logical to take a closer look at Volkswagen as a European representative. Close behind is the Japanese manufacturer Toyota, which, as an Asian company, the next company that will be analyzed. On place four follows General Motors and on six Ford, as North American representatives among the car manufacturers. According to the logic applied, an analysis of General Motors would have to be carried out. However, since Ford has done very little in the field of mobility in recent years and finally presented its e-mobility strategy at the beginning of April 2019, Ford will be analyzed in the following chapters. This is due to Ford's problems regarding the electrification of their product portfolio and the timeliness of their strategy.

Before we move on to the analysis of the individual conventional manufacturers, it is important to introduce the self-created Vehicle Type vs. Launch Date Matrix (VTD-Matrix). The purpose of this matrix is to analyze the electrical product portfolio (only passenger vehicles) in combination with the timing of the sales launch. This means

market conditions with the help of their launch dates. The aim is to find out whether the companies have not recognized the disruptive nature of EVs and are entering the market too late with their models.

Figure 15: VTD-Matrix (Vehicle Type vs. Launch Date) Source: Author’s Chart

To remove complexity, we only consider three possible powertrain types – PHEV, FCEV and BEV in the matrix. The reason for selecting these three vehicle types is that they are seen as the future of the automotive industry and fall under the category ZEV.

Regarding the time component with the attributes "Early" and "Late", we look at the more recent history of EVs. Here, the American company Tesla must be taken into consideration, as the Tesla Roadster is considered a pioneer and is responsible for the start of the electrification of the automotive industry. The Tesla Roadster was introduced in 2006 and went into series production in 2008 (Kuther, 2017).

If we know now that the development of a new car takes three to four years and is then sold for six to eight years, then in the BEV category we can speak of “Late”

market entry when the model is presented five years after the launch of the Tesla Roadster (Grünweg, 2013). In the case of an ICE, three years would already be very late, however two more years have been added, since BEVs constitute disruptive innovation and new expertise has to be acquired. Hence, all market launches after 2011 fall into the category "Late".

Although Toyota developed the first HEV car ever created, it was Renault that introduced the first PHEV car to the market in 2003. Renault used a nickel-cadmium battery for its electric version of the Kangoo van, but this had more of an experimental character and the production was already terminated in 2007. GM then introduced the Chevy Volt, with the first commercially available PHEV for sale in 2010 (U.S. Department of Energy, 2019). Due to the commercialization, the GM

Chevy Volt is therefore taken as the benchmark for PHEVs. As PHEV models do not make the combustion engine redundant, and are not in need of complete transformation, all PHEV models which were launched three years after GM in 2010 are considered “Late”.

For the fuel cell technology, however, the history is younger. Toyota brought the first commercial model “Miari” on the market in 2014 (Qin, Raissi, & Brooker, 2014).

As this technology is still not mature enough and experimentation is still ongoing, models created five years after the first Toyota model, are considered "Late".