Tuesday 3 June 2008

Innovation and Sustainability: Nissan attempts to promote electric vehicles

In the world where people are becoming aware of the impact of global warming, the demand on cleaner and environmental friendly products has pushed automakers to engage in research and development of greener vehicles.

The attempt is not baseless. Information on climate changes, global warming and pollution covered by the media have changed people’s attitude in perceiving environmental issues as crucial subjects even from now. Saving the planet earth is not only a matter of preserving the planet from further disasters but also as a cognizance in promoting social values and responsibilities.

With the price of oil hovering beyond the psychological barrier of 100 dollar per barrel, efforts in commercializing more energy efficient vehicles which do not rely on fossil fuels are emerging. Relying on fossil fuel as the energy sources will not ensure environmental sustainability even if new materials allowing a car to be lighter and has better fuel efficiency are discovered. Excessive demand as a result of improving income is the major reason that such effort will become useless in the future.

As these issues progress, companies are attempting to come up with better solutions to anticipate the possible enactment of environmental regulations. It is obvious that from several options, electric vehicle appears to be the prospective choice for automakers along with hybrid vehicle. Electric vehicle is considered to be the most feasible solution to reduce oil consumption for transportation usages. The vehicle can be plugged in for power. The owner does not have to go to the gas station to fuel the car. The environment will be cleaner since CO2 pollution is reduced. At the same time the business facts suggest on the cons side. While operating electric vehicle seems to be straightforward and economically viable, current sales of the electric vehicle do not seem to be promising. Lack of speed and lengthy time to fuel the car are the main reason hampering the adoption of electric vehicle. California is the only place where electric vehicles are becoming popular.

Zero emission cars, particularly electric vehicle, are perceived to be the trajectory of the car future by Nissan. The company believes that urban people as the major user of the car will shift their preferences to greener cars as the oil price becomes unpredictable. To anticipate this possibility, Nissan and Renault tied up together to develop their first electric car in Israel. It is anticipated that the product can be launched to the market by 2011.

On the other hand, hybrid car is believed to be the dominant platform of the future car. Unlike what Nissan and Renault do, Toyota conceives hybrid car as the future trajectory where the need of a car running at ‘normal’ speed combined with the necessity to preserve the environment intersects at a point called a greener car. Other companies such as Proton capture a different track by promoting biofuel car.

Different tracks on the development of zero emission vehicles make Nissan aware that innovation is currently under the transient phase. On this phase, different technologies exist and each of them is battling to become a dominant platform. While the electric car is the most prevalent prospect seen by Nissan, there is no guarantee that efforts in promoting electric vehicle will turn the competition into an electric vehicle platform. To tackle this issue, Carlos Ghosn, Nissan CEO, iterated that the company is pursuing different technologies to avoid abrupt changes in the trajectory.

Leveraging other technologies during the transient phase is essential to avoid the Not Invented Here (NIH) syndrome undertaken by companies thinking their technologies will become the dominant design. Once other tracks emerge and escalate, companies under NIH syndrome will not be prepared to deploy the emerging technology nor have sufficient time to catch up with those maturing in the trajectory.

Nissan has anticipated different routes in the transient phase to avoid the NIH problem. The company also expands it capabilities beyond electric vehicle to avoid the lock out problem. We will see whether the electric car will become a dominant design in the future. But at least we know that companies such as Nissan and Renault have prepared the capabilities ready to be deployed once different trajectories against their projection emerge.