The Global Automotive Industry

By Paul Nieuwenhuis and Peter Wells

The automotive industry is still one of the world's largest manufacturing sectors, but it suffers from being very technology-focused as well as being relatively short-term focused. There is little emphasis within the industry and its consultancy and analyst supply network on the broader social and economic impacts of automobility and of the sector that provides it.

The Global Automotive Industry addresses this need and is a first port of call for any academic, official or consultant wanting an overview of the state of the industry. An international team of specialist researchers, both from academia and business, review and analyse the key issues that make vehicle manufacturing still the world’s premier manufacturing sector, closely tied in with the fortunes of both established and newly emerging economies. In doing so, it covers issues related to manufacturing, both established practices as well as new developments; issues relating to distribution, marketing and retail, vehicle technologies and regulatory trends; and, crucially, labour practices and the people who build cars. In all this it explains both how the current situation arose and also likely future trajectories both in terms of social and regulatory trends, as the technological, marketing and labour practice responses to those, leading in many cases to the development of new business models.

Key features

• Provides a global overview of the automotive industry, covering its current state and considering future challenges
• Contains contributions from international specialists in the automotive sector
• Presents current research and sets this in an historical and broader industry context
• Covers threats to the industry, including globalization, economic and environmental sustainability

The Global Automotive Industry is a must-have reference for researchers and practitioners in the automotive industry and is an excellent source of information for business schools, governments, and graduate and undergraduate students in automotive engineering.

• Language: English
• Publisher: Wiley
• Release date: Aug 10, 2015
• ISBN: 9781118802359

Book preview

1

Introduction and Overview

Paul Nieuwenhuis¹ and Peter Wells²

¹ Centre for Automotive Industry Research and Electric Vehicle Centre of Excellence, Cardiff Business School, Cardiff University, Cardiff, Wales, UK

² Centre for Automotive Industry Research, Cardiff Business School, Cardiff University, Cardiff, Wales, UK

1.1 Introduction

It is an impossible task to do full justice, in one book, to the global automotive industry with the pervasive impact, economic significance and cultural status that it brings. As editors, our task is as much one of selective omission as one of collation, to create an account of the business of making, selling and using cars that is both representative and yet respectful of the diversity we know to be a feature of the industry. Moreover, this is an industry in the midst of reinventing itself. It had seemed to some both inside and outside the industry, around the turn of the millennium, that this was a ‘sunset’ industry characterized by over-capacity, plant closures, job losses, declining profitability and a product that seemed unsuited to meeting the environmental and social challenges arising from mass car ownership and use. The combination of profound environmental pressures and endemic economic distress appeared to call into question the pre-eminent position enjoyed by the car in providing for personal mobility and the viability of the industry behind this most contradictory of products. These concerns came to a peak with the arrival of the global economic crisis around 2007–2008, which resulted in new car sales falling steeply in the established markets and investment freezing while the entire financial community held its collective breath to see whether the world would plunge into an economic abyss. Those looking closely at urban developments and the changing cultural priorities of young people started to whisper about the concept of ‘peak car’ in which the high tide of automobility had been reached in the saturated markets of the European Union, North America, Japan and Korea.

Yet, only a few years later, the industry has reemerged, burnished by the embrace of new technologies and with resurgent sales in the previously moribund West being more than matched by the frenetic growth of sales in China and elsewhere. Regulatory interventions such as the European Union fleet average carbon emissions targets that were once seen as burdensome and punitive have arguably helped stimulate the technological renaissance of the industry alongside the realization that there might be other routes to profitability. Later chapters in the book are more concerned with this recent period of transformation and the possible futures it portends: Chapter 16, for example, is about the impact of the electric vehicle, while Chapter 18 links technology change with possible innovations in business models forced on the industry by such technological changes. Chapter 19 is more speculative, but offers up some signposts for the future of automobility and the automotive industry.

This is not to say that the process of change has been without stress or consequence. Restructuring of the industry has continued apace: the merger of Chrysler and Fiat came as a consequence of several years of corporate turmoil while the rescue of PSA by the French government and by the Chinese company Dongfeng costs the Peugeot family their control over this long established business – the oldest in the industry. The great expectations held for battery electric vehicles remain as yet largely unrealized, despite the highly visible and expensive efforts of companies like Nissan, Renault and BMW alongside the publicity-garnering machine that is Tesla. In the meantime, high-profile failures such as the battery swap business Better Place serve as stark reminders that attempts to reinvent this industry, especially by new entrants, are fraught with hazard. At the same time, markets in the European Union have not really recovered to pre-crisis levels and perhaps never will.

So, despite an apparent ‘business-as-usual’ attitude permeating the automotive industry at the moment, in reality, it is subject to potentially radical change. Only a few years ago, we saw two of the world’s largest car manufacturers, General Motors and Chrysler, on the brink of collapse. Having decided both were ‘too big to fail’, they had to be bailed out by the American tax-payer. Ford managed without direct government support, but it is nevertheless quite clear that the collapse of the supply base that would have resulted from a collapse of both their key domestic competitors, GM and Chrysler, would also have dragged down Ford in due course. Within a matter of months, the world’s most prominent car industry and the oldest mass production car industry could have disappeared; only intervention from the public sector saved this key component of the private sector, underlining that, apart from anything else, the close synergies and intertwined relationships continue to exist between the private and public sectors in developed countries (Mazzucato, 2013). This highlights not only the weaknesses inherent in the close links between the financial and car systems but also indicates that the current mass production system, whether seen as Fordist or Buddist (see below), may well be due for a rethink in several respects.

In Europe, the apparent success of Germany, more recently the UK automotive industry, is easily misunderstood, leading perhaps to overconfidence, but do note that the secret of success in Europe is largely confined to the more upmarket segments, with the Germans the primary beneficiaries, and that this success is very reliant on demand from Asia, particularly China; it has therefore made Europe – and also the United States, particularly GM – very dependent on that far from stable market, as also outlined in more detail in Chapter 10. At the same time, pressures to make the car more environmentally compatible, as we see it, have not only led to cars with much less harmful tailpipe emissions, but the more recent pressure to reduce the carbon footprint of cars, particularly focused on their emissions of the greenhouse gas carbon dioxide, has the potential to radically reshape the industry and its products. These regulatory pressures are reviewed in Chapter 14, although the potential impact of this agenda is not yet fully understood, but it has already led to a new wave of alternative powertrain vehicles in the market, ranging from early petrol-electric hybrids – including the now iconic Toyota Prius – via so-called range-extended and plug-in hybrids such as the GM Volt and Ampera, to full battery-electric vehicles such as the Nissan Leaf, Renault Zoe and Tesla Model S. Such developments, as well as the introduction of the even more radical BMW i3, which not only introduces a full battery-electric powertrain, but also houses this within a radical departure from the tried and tested ‘Buddist’ (see Chapter 5) all-steel body in using a carbon fibre body on an aluminium chassis, are clear signs that business-as-usual is steadily being undermined even from within the established industry.

Despite the size of the industry, car making is in reality a very precarious business. In its present form, it lacks resilience; it is not sustainable. This is true not just in terms of environmental sustainability, where it clearly is not measuring up, but even in terms of basic, economic sustainability. Yet, this industry is still crucially important, representing a significant part of the economy in many industrialized countries, as well as many newly industrializing economies, notably China. In addition, the car-based transport system, or ‘regime’ (Geels et al., 2012), which extends well beyond the industry that makes cars to the way in which automobility has become integrated in our societies and cultures, has become so embedded that its removal would lead to widespread social and economic crisis.

In some regards, therefore, this book may be a testimony to a dying era as much as a hymnal to a new one. Thus far the automotive industry has managed to contain the pressures for change, both economic and environmental, within the broad ambit of the long-standing business model of the mainstream vehicle manufacturers. In parallel, those purchasing and using cars in the traditional manner have remained by far the majority compared with more innovative solutions such as car clubs, city car sharing schemes and other alternatives that might presage the end of established automobility cultures. The question is whether the collective and cumulative impact of all the new developments sweeping through the industry will be sufficient to herald the arrival of a new ‘automotive ecosystem’ as some have termed it, or ‘regime’, according to others, and one in which the dominance of the established vehicle manufacturers and their entrenched supply chains is challenged by a new order of communications and mobility providers. Some caution on these issues is urged here. The automotive industry is not immune to hype cycles or the fevered imaginations of those professional change-mongers with a vested interest in fermenting and emphasizing the new over the continuous.

1.2 Continuity and Change

The book as a whole therefore represents an attempt to capture continuity and change in the global automotive industry; this theme is brought to the fore in the first main chapter of the book, Chapter 2, as change is very much a feature of the current phase of the automotive system. Change of course needs to be seen in historical perspective and as such, many of the chapters offer up a historical narrative that builds a temporal dynamic into the account of the subject under consideration. There is some need, in seeking to understand the structures and practices of the present, to delve into the past. If nothing else, path dependency theory tells us that many decisions are nonlinear, irreversible steps that result in distinct historical outcomes bounded by time and place. As we have sought to delineate elsewhere, the cluster of innovations that created the template for the mass production automotive industry occurred largely in the United States in the early years of the twentieth century: the Ford moving assembly line with standardized and inter-changeable parts; the Budd all-steel body that could be stamped, welded and painted and the Sloan multi-brand company with marketing innovations such as consumer credit and annual model changes; these developments are outlined in Chapter 5. Despite many years of incremental change, the basic architecture of the industry remains in place. That such durability is evident speaks volumes for the scope for productivity improvement within this basic architecture over many decades and the efficacy of the system as a whole in terms of matching the imperatives of production economics to the demands of the market. For this reason, key early chapters in the book, for example Chapters 3, 4, 5 and 6, are about the production system and the market for cars. There is no subscription here to the simple neoclassical economics assumption that ‘consumers’ demand and ‘producers’ provide. Rather, there is a continuing dynamic tension between supply and demand sides that is never entirely resolved.

1.3 Overview

The chapters in this book are thus essentially an attempt to take stock of the industry in its present state of a well-established industry on the verge of potentially radical change, tracking some of its history – trying to answer the question of how did we get here – assessing key aspects of its current state, while also plotting some possible futures for the industry and its products. This book does not seek to present chapters that are held together by a common theoretical thread. Such works can be tremendously informative and insightful (see Geels et al., 2012), but of course tend to place primary emphasis on the question of theoretical coherence. Rather, the approach here has been more agnostic in theoretical terms and has been to seek insights and individual views by those who are established experts in their fields and who are known for their knowledge of the automotive industry (or a specific aspect of it) alongside their particular theoretical or methodological frameworks. Each chapter is thus a cameo, able to stand alone as a concise insight into one dimension of this multi-faceted industry but also serves as a piece in the jigsaw that describes and explains how this industry really works.

There are some gaps of course. It is not possible to give consideration to all the countries producing cars and the unique contexts within which they operate. The salience of the ‘varieties of capitalism’ school of thought (see Section 2.3) is acknowledged here and some comparative chapters are pertinent to this school: notably those on labour–management relations in North America and Japan (Chapters 7 and 8, respectively). While the question of labour relations in Japan has remained largely immune to external influence (notwithstanding the substantial impact of Renault on operations at Nissan and the rather lesser impact of Ford on Mazda), the story in North America has a strong thread in which ‘Japanization’ has been highly significant. Chapters 9, 10 and 11 cover the broad sweep of the automotive industry in Asia, highlighting South Korea, China and India respectively – both Korea and India have become comparatively neglected in view of the immense attention directed at China. Interestingly, both these countries are more than passive recipients of automobility and can claim to be home to significant companies within the industry of the modern era, while also representing unique markets.

An apparent gap in the account includes a chapter that explicitly deals with the global supply chain of components and raw materials to the vehicle manufacturers – where typically up to 85% of the ex-works value of a new car is accounted for by bought in components and materials. The theme of supply chain management is an important facet of the industry but is not given a distinct treatment in this book, although aspects of it are covered in a number of chapters. Indeed, a more ‘functional’ approach to the industry could include themes such as marketing and branding, inbound and outbound logistics, vehicle finance, production management, R&D, government affairs, human resource management, leadership, trade and currency risk management, reverse logistics, service and maintenance, end-of-life vehicle management and much more. Inevitably, aspects of these functional typologies do in any case appear to a greater or lesser extent in the chapters, but the book is deliberately not designed around them.

On the car supply side, the automotive manufacturing industry itself, the debate has long been dominated by issues surrounding the organization of labour and this is reflected in Chapters 7 and 8 in particular, which highlight the traditional mass production, or ‘Fordist’, or ‘American System’-based approach, while contrasting this with the different Japanese approach, as developed under the Toyota Production System, now also known as ‘lean’ production. Both chapters also highlight how in recent years the two approaches have increasingly influenced each other, a theme also touched upon in Chapter 5. Chapters 6 and 9 take a more mixed approach, with the former reporting on and analysing recent trends in mass manufacturing in various locations around the world and the implication of these on the organization of labour. Chapter 9, while still involving discussion of the organization of labour in a mass production system, also proposes the role of other factors in the rapid growth of the Korean car industry, something also reflected in Chapter 11 on India. The other feature of the supply-side story is the role of technology; it was technology after all that enabled the development of mass production, which then prompted a rethink on the organization of labour used to interface with that technology. This is the dominant theme of Chapter 5, which recaps previous work on the technological history of mass production, as pioneered by Edward Budd and links this with recent advances in ‘lean thinking’.

The demand-side story is interwoven with the above chapters, as in truth supply and demand are closely linked. This side of the automobility system is first covered in Chapter 3, which deals with markets, while Chapter 4 analyses the crucial psychology of automobility in all its different aspects – how do people make decisions about their transport needs? Chapter 12, then, covers the interface between supply and demand more specifically: the crucial retail and distribution system, which is tightly linked in with the way cars are mass produced today, being tasked with resolving many of the issues that arise from the requirement, outlined above, to reconcile the needs of the mass production system for standardization, with the needs and wants of the market for increasing differentiation. The three chapters that follow then consider wider aspects of the automobility system. Thus, Chapter 13 provides an account of the various negative impacts of the industry, particularly in the areas of occupant safety and toxic emissions; Chapter 14 examines how such impacts have been ameliorated through regulation, while Chapter 15 considers the bigger picture of the role of the industry in the world, the ongoing globalization process and the resulting impacts on economies both global and local.

The final four chapters, then, consider the future, which in product terms is likely to witness an increasing adoption of electric powertrain vehicles of various types, ranging from simple petrol-electric hybrids and diesel-electric hybrids, via plug-in and range-extended hybrids to battery-electric and fuel cell cars. These are discussed in Chapter 16, while Chapter 17 reviews various possible alternatives to the car and the current car system. Chapter 18 then discusses the need for new technology and use configurations to be delivered through new business models that may be rather different from those that both industry and end user have become familiar with over the past 100 years or so. The final chapter then considers the state of the industry and its future prospects in the light of what has been covered in the other chapters.

The story of the car industry and the automobility system it has allowed to be created is a compelling one. However, many fundamental aspects of both are likely to come under increasing pressure in the very near future. An overview of the industry and the socio-technical regime that underpins it is therefore timely. This book contains insights by experienced and in many cases world-renowned experts in the industry in its various aspects, thereby presenting a real state of the art of the industry today, its explanation in the past and prospects for its future.

References

Geels, F., Kemp, R., Dudley, G. and Lyons, G. (2012) Automobility in Transition? A Socio-Technical Analysis of Sustainable Transport, Vol. 2 Routledge Studies in Sustainability Transition, New York: Routledge.

Mazzucato, M. (2013), The Entrepreneurial State: Debunking Public vs. Private Sector Myths, London: Anthem Press.

2

Understanding Change and Difference in the Global Automotive Industry

Peter Wells

Centre for Automotive Industry Research, Cardiff Business School, Cardiff University, Cardiff, Wales, UK

2.1 Introduction

The global automotive industry is one in which change does appear to be endemic, and much has been made of the processes of globalization whereby a single coherent industry may emerge. Yet, it is apparent that understanding the degree and pace of change in the industry, and of whether or not there is convergence and integration at a global level, requires more than the reductionism of globalization. The structural volatility of the sector alone is sufficient cause to think that a simplistic consolidation into an ever-diminishing clutch of multi-brand, multi-market companies is unlikely to materialize in the near future whether at vehicle manufacturer or supplier level. The additional complicating interventions of the state at multiple levels further acts to erode any suggestion of ‘pure’ economic forces shaping the industry. Then, the insertion of cars into everyday life results in a sort of hybridization of cultures of automobility, with differing flavours of such automobility emerging in different places despite the apparent homogeneity and ubiquity of the car.

This chapter therefore seeks to draw on three distinct literatures and perspectives with regard to the theoretical understanding of change and non-change in industrial structures. It is recognized that of course there are other understandings or insights from other theoretical traditions, but the perspectives offered by socio-technical transitions, varieties of capitalism and global value chains respectively have been both influential and heavily involved in empirical study of the automotive industry. Each of these theoretical traditions seeks, in its own way, to step outside the narrowly economic dynamics of the industry and look for wider societal structures for the explanation of change and stability. Understanding the relationship between continuity and change is a continuous challenge for those engaged in business and economic research. There is a bias towards change because novelty and ‘news’ sell – not just newspapers but also academic journals. There is also a bias towards ‘success’ and seeking to explain what went right (particularly in the mainstream business literature) so that others might learn from and emulate those successes.

As a consequence, there is less effort invested in seeking to understand inertia, failure or active resistance to change and perhaps also a tendency to focus on the big companies, the emblematic technologies and the major government policy initiatives in a manner that can easily miss the collective and cumulative impact of minor developments. Underpinning this understandable tendency to focus on the apparently most important companies, technologies and policies is a largely unspoken sense of the difference between incremental and radical change. Sometimes, clear discontinuities are evident: a significantly different working regime may be introduced, for example, or a significantly and qualitatively different technology may penetrate the market. Often, profound change is more obvious in hindsight than in the present, but simultaneously our expectations over the future rate and pace of change are often rather optimistic given historical experience.

Concepts of change and inertia are inevitably underpinned by a (often implicit) notion of time. A change in a system or a phenomenon means that it is different in one time point compared with another. Words like ‘radical’ or ‘revolutionary’ change imply a rapid change over a short time, compared with ‘incremental’ or ‘marginal’, which imply a rather modest change spread over a longer time period. This much is clear. What is rather less clear is how this is treated within different theoretical traditions and discourses, and what metrics are available to allow us to measure change over time in a manner that then allows judgements to be made on whether such changes constitute radical or incremental change. In the socio-technical transitions literature, the early examples of regime shift (i.e. a transition from one socio-technical regime to another) unfold over a period of 80 years or more (Geels, 2002). In contrast, global value chain theory really engages in understanding shifts in the global economy over the recent past (say the last 20 years) and the near future. These differences in temporal framing may be contributory to isolating one line of academic inquiry from another, or make the task of integrating different theoretical perspectives that bit more challenging.

Academia also tends to layer into the discussion certain biases, one of which is the quest for generalization as a means of attaining a higher level of truth. Hence, the more we are able to say that the phenomenon that our theory seeks to define and our data seek to illuminate is generalizable, the more powerful is the truth that we have to offer. In the social sciences, such a quest is often problematic because explanations, particularly narratives as are found elsewhere in this book, tend to be grounded in context and specificities. Again, the three theoretical approaches outlined in this chapter all in their various ways seek to deploy a theoretical framework that transcends time and place, but that in application are verified by and in specific concrete conditions.

It is pertinent at this point also to consider the question of new entrants and incumbents, as these are often considered to have different capacities for change. Indeed, perhaps reflecting a certain ideological bias towards entrepreneurial actions, there is often a distinct inclination to consider that new entrants are the vectors of change, while incumbents are passive or active in resisting change. Yet in highly complex, rapidly evolving and inherently unstable socio-economic structures and practices, this neat distinction is rather difficult to sustain. It could be argued that incumbents are best placed to be agents of change: they have most to lose from the destabilization of the current order, and they have the resources (knowledge and skills; physical capital and infrastructure; financial resources; supply chains, contacts and networks; brands and customer bases) to make change happen. Alternatively, new entrants may manage a precarious existence on the margins of an industry, but fail to penetrate into anything approaching significance, and if by chance they do become important then they may be subsumed by the dominant incumbents. Moreover, the incumbent/new entrant distinction rather ignores other potentially important vectors of change, in particular the national or sub-national state. The state may act in many distinct ways as a catalyst and participant of change: from funding R&D through to being a significant ‘stepping stone’ market for innovative technologies. Indeed, Mazzucato (2013) argues quite convincingly that all major technological innovations have seen public sector involvement in their early stages, from the worldwide web, through GPS to space exploration. Only after such technologies have become sufficiently established can viable markets be recognized and can private entrants justify the now reduced risk of entering such novel markets (Mazzucato, 2013). However, beyond the formal structures of the state are the more nebulous but still highly important impacts of social practices, behaviours, attitudes and norms that constitute much of what makes one place different to another, and what social forces act to constrain or enable change to happen.

The chapter proceeds in the following manner. Each of the three main perspectives of change under consideration here is considered in isolation and in turn: from socio-technical transitions, through varieties of capitalism, to global value chains. Thereafter, a more speculative section seeks to draw some of the possible explanatory merit to be derived from bringing insights from each individual tradition to bear on the others. While this final section is by no means comprehensive, it does at least suggest a research agenda that finds an empirical focus in uncovering the unfolding of technological, social and economic changes as they play out across geographic space. The process of theory building in the social sciences often builds new insights from the hybridization of previously distinct schools of thought in a multi-disciplinary or cross-disciplinary manner, and this chapter therefore marks a further attempt to continue this tradition.

2.2 Socio-Technical Transitions

Socio-technical transitions are conceived of as long-term structural shifts in the economy and society arising from the permeation of key technologies into widespread use. A dynamically stable set of inter-relationships may then develop linking technologies with economic structures (such as markets and international trade relationships), organizations (such as companies, Trades Unions and NGOs), government (such as in the form of regulations and laws, and participation in the market) and social practices (including behaviours and beliefs). The resulting ensemble is often termed a ‘regime’, which is not only enduring, but effectively acts to secure the reproduction of the conditions for its own existence.

In this theoretical framework then there are two main areas of interest: the significance of path dependency in structuring nonlinear change and indeed resistance to change, and the scope for shifts in the existing regime. Regime stability may be undermined from one of three main sources in this theoretical concept: meta-pressures at what (in the so-called multi-level perspective) is called the ‘landscape’ level; changes from within the regime itself; and what are termed ‘niche’ developments that may grow and develop to an extent that they displace the existing regime (Geels, 2002). The landscape consists of external framing conditions in the form of resource availability, infrastructure, broad economic and political conditions (such as currency areas and international trade agreements), cultural norms and other factors that provide a contextual framework within which the embedded regime may expand and develop. Landscape conditions can change both suddenly (e.g. the oil ‘shocks’ of the 1970s) or more slowly (e.g. climate change). What constitutes a niche is a bit vaguer, or more diverse, in the literature on socio-technical transitions. A niche may be a discrete innovation or a cluster of related innovations around which initial markets may become established. But a niche may also be a protected market space (perhaps created by state regulation or the provision of incentives under ‘strategic niche management’ approaches), and it may be a geographical space (Cooke, 2010) within which new practices and alternative ways of being emerge (as a form of ‘grassroots’ change).

It is not always clear how a single niche, or a linked cluster of niches, may come to displace an established regime, but there must be some compelling advantages (usually but not exclusively economic) to the adoption of the new practice at least within the niche concerned. Thereafter, and with further development, the emergent niche may simply be better than the incumbent regime along a range of significant parameters, and the regime is largely displaced – though enclaves and remnants may remain. Historically at least, this process has resulted in ‘superior’ technologies emerging but those technologies (and their associated practices, organizational forms, etc.) have not necessarily been more sustainable. In contrast, the contemporary concern within socio-technical transitions is to achieve progress towards more sustainable regimes but in some important respects the emergent technologies do not embody compelling advantages other than some environmental performance attributes. That is, compared with incumbent technologies and the expectations of performance that these technologies have engendered in social behaviours, market structures and other attributes, the emergent technology may be more expensive, less reliable or offer a reduced suite of performance attributes. Certainly in the realm of cars, pure battery-electric vehicles (EVs) may be quieter and smoother than their internal combustion engine counterparts, with faster acceleration, but have a more limited range, a much longer time needed to take more energy on board, with a limited tolerance for cold or hot climate conditions, more expensive, and in some respects, perhaps, are expected to be less durable (in terms of the battery at least).

If transitions are concerned with change, then inevitably there is an interest in the pace of change. It is surprisingly difficult to establish the appropriate temporal benchmark against which a transition’s progress might be measured. Inadequate rates of change then become the focus of analysis: what is preventing change or retarding the rate of change? Where and how might policy be best directed to lubricate friction points, dismantle barriers, in the transitions process? In complex socio-technical systems, is it possible to isolate and act upon individual causal agencies? What happens to pre-existing socio-technical systems? How fast do embedded regimes fade away and what influences this rate of decay? Some research has been directed at these questions, related to the issues of inertia and resistance in socio-technical systems because of the links with concepts such as path dependency (Steinhilber et al., 2013; Turnheim and Geels, 2013; Wells and Nieuwenhuis, 2012), but again the crucial issue of the rate of change desired seems largely absent.

EVs do not just require transition within an established quasi-autonomous socio-technical ensemble (i.e. automotive or automobility regime) but also in related proximate socio-technical ensembles that were previously distinct (i.e. mobile ICT services; electricity generation and distribution) (Roland Berger, 2011) and so the character of interactions between these meta-ensembles may be as significant as those where emergent niche activities destabilize an existing ensemble, in seeking to explain rates of socio-technical change. It might be broadly hypothesized that existing interlocking ensembles are more likely to exhibit inertia, and perhaps in a related manner that contemporary socio-technical systems are likely to be more entangled with each other than has historically been the case, creating a web of mutually reinforcing path dependencies. On the other hand, where a nascent socio-technical ensemble needs a degree of fusion with another ensemble in order to emerge viably, it may be hypothesized that transition is more difficult to achieve because it implies a more challenging task in terms of co-ordination or orchestration.

If the decline phase of the regime cycle is considered, then the critical issue is how long the technologies and social practices as embedded in capital investments, spatial structures, human skills and knowledge, and behaviours and expectations around products in use endure. This is a relevant consideration in particular for the displacement of existing socio-technical ensembles, a process that may be necessary to create the space required for sustainable transitions to occur (the process of creative destruction as it is termed in Schumpeterian analysis). In some cases, pre-existing infrastructures may simply be allowed to wither away, as may be seen in the urban decay that frequently surrounds contemporary life. The canal systems in the UK largely suffered this fate, or were relegated to essentially recreational functions. In other cases, the removal of an entrenched incumbent socio-technical ensemble may be a pre-requisite to create the space within which a (more sustainable) alternative is desired. In other instances, it may be that the incumbent organizations that constitute the core of a socio-technical ensemble are themselves (Bergek et al., 2013) the source of transition, or new entrants are not influenced by the destruction of incumbent organizations (Brown et al., 2013). Recent work in this area has started to explore why and how distinct socio-technical ensembles are able to endure or even actively resist change (Turnheim and Geels, 2013; Wells and Nieuwenhuis, 2012). However, this work is somewhat in a vacuum in the sense that there is no clear temporal benchmark against which to measure change or its lack thereof. Hence in seeking an understanding of socio-technical change, it is necessary to combine the analysis of regime creation with that of regime destruction, particularly where the two contesting regimes essentially occupy similar functional spaces. Such a combined analysis is presented in a simple form in this paper. Regime transition is constructed as a process of displacement, and hence we are interested to understand how quickly the entire stock of non-EV cars in use can be removed from circulation under different modelling assumptions. The growth of new EV sales is thus the growth of an emergent (more sustainable) niche, but the impact on the total fleet of vehicles in use is lagged by the rate of turnover of that total fleet, and by expansion in the total fleet before full EV coverage is obtained. In reality, history has shown that older technologies that formed the core of previous regimes tend to persist, albeit in niches. Thus, the much-quoted example from Geels (2002)