Electrification in the automotive industry: the changing automotive environment and new value creation potential

Abstract

The goal of this thesis is to illustrate the impact of electrification on the automotive industry and particularly German Original Equipment Manufacturers (OEMs). An introduction to various types of innovation is given in order to highlight the disruptive nature of the electrification of the powertrain. Qualitative interviews with a political representative and representatives of German OEMs were used to analyze the changing environment in the automotive industry. The analysis of the political, competitive, technological and societal environment of the automotive industry shows the major trends that push electrification. Emissions standards, the growing competitive threat from China, technological advancements in the field of battery technology and a shift towards more ecological awareness are major factors that will lead to the widespread adoption of battery electric vehicles (BEVs). The results of the interviews were also used to analyze the traditional automotive value chain and to illustrate the changes set off by the process of electrification. The OEMs’ share in total value creation of a BEV will be lower than it currently is for an internal combustion engine vehicle (ICEV), if no significant investments are made to build up in-house competencies, e.g. in the field of manufacturing battery cells. The downstream stages of the automotive value chain, however, offer OEMs the chance to tap new business segments and to become mobility service providers.