Honda Hybrid Car Technology

Case Study: Honda and Hybrid Electric Vehicles

1. Are hybrid electrical vehicles a radical innovation or an incremental innovation? Are they competence enhancing or competence destroying, and from whose perspective? How would you answer these questions for fuel cells vehicles?

The “Radical Innovation” is defined as: new and different from existing product; while the “Incremental Innovation” is defined as: changes on existing products. Although the idea of a hybrid system wasn’t new to the world (Toyota was the first to develop a hybrid system), the operating systems of both companies are different. Nevertheless, this new design is not exceptionally different, because it is based on previous designs, and even depends on the use of gasoline. For the reasons previously mentioned, the type of innovation of the Honda's hybrid engine is closer to the definition of "Incremental Innovation".

On the other hand, if the analysis is applied to fuel cell system, the answer would be different. The reason is that this system doesn't exist in the world, and it would change the habit of using fossil fuels. In other words, it's not based on pre-built systems and would be different from existing products. For these reasons, the system "fuel cells" would follow a "Radical Innovation".

2. What factors do you think influence the rate at which hybrid electric vehicles are adopted by consumers?

In the case of hybrid cars, its sale in the US market behaved as shown in Figure 1. At first glance, it resembles an S-curve in technological diffusion. The complexity of the technology and/or the slow development of the complementary resources may have prolonged the “understanding phase”, which seems to have endured from 2000 to 2004. The diffusion rate began to increase rapidly since 2005 and fell in 2008, probably influenced by the international crisis.

Currently, one of the factors that have more influence on the diffusion rate of this kind of technology (in addition to those...