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National Environmental Policy and the Global Success of Next-Generation Automobiles

Listed author(s):
  • Marian Beise

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Klaus Rennings

    (Centre for European Economic Research (ZEW), Germany)

In this article, we identify the most crucial factors for the potential world market success of different alternative car designs: fuel cell vehicles (FCVs), hybrid electric vehicles (HEVs), battery electric vehicles (BEVs), and conventional fuel efficient vehicles (FEVs). We first assess which vehicle concept is favoured under which regulation regime. We suggest that the global success of a certain technology critically depends on the ability of a regional lead mar-ket to leverage and transfer its local success, through large cost reductions or the international diffusion of a pioneering environmental regulation for instance. Although FCVs are still in the demonstration phase, the US has set the stage for a direct switch to FCVs. The Japanese regulatory regime favours HEVs as the next-generation engine design, while the development of the traditional combustion engine towards enhanced fuel efficiency is most likely in Europe. Due to the high cost of FCVs and the lack of strict regula-tion supporting this radical innovation, incremental innovations such as new versions of con-ventional combustion engines and hybrid cars have the best chances of becoming globally successful.

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Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number 154.

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Length: 17 pages
Date of creation: Mar 2004
Handle: RePEc:kob:dpaper:154
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  1. Rennings, Klaus & Beise, Marian, 2003. "Lead Markets of Environmental Innovations: A Framework for Innovation and Environmental Economics," ZEW Discussion Papers 03-01, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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