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Case Study

Michelin and the electric power train revolution

By Jean-Philippe Deschamps

19 pages

October 2010

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Reference: IMD-3-2170

Michelin, the world’s second largest tire manufacturers, has developed a broad range of power train systems and components for zero-emission electric vehicles. These systems include: Motorized wheels (wheels integrating an electric drive motor); “Active wheels” (wheels integrating an electric drive motor and an electrical intelligent suspension system); Fuel-cell systems; Auxiliary power solutions (combination of batteries and super-capacitors); Electric motors; Power electronics; Gas storage systems (for hydrogen storage in fuel-cell vehicles). These systems have been extensively tested and successfully validated by the company on internally developed vehicles. Michelin has also launched joint development and testing projects with two small French car specialists and the two leading French car manufacturers. However, no business or partnership agreements have yet been signed beyond these prototype development projects. Patrick Oliva—Corporate VP in charge of sustainable business development at Michelin—is conscious that (1) Michelin is entering a completely different emerging industry, and (2) to win adoption of its new systems by automotive manufacturers, it will have to devise completely different business models than for its traditional tire business. Michelin will need to capitalize on the trend for electric vehicles and convince car manufacturers or mobility operators to enter into partnerships despite the fact that the company’s systems might reduce their own value added. Oliva is now exploring strategic partnering and business model options with different types of partners, depending on their size, interest in electric vehicles, geographical locations and expected willingness to partner with the company.

Learning Objective

1) Assess the strategic and business model options of a component manufacturer wishing to introduce a breakthrough system innovation which requires partnering with OEM customers. 2) Understand how different types of OEM customers, in terms of their size, resources and geographic location are going to react on an innovation which is going to dramatically alter their value chain. 3) Reflect on leadership skills and attitudes that are required to build successful partnerships and establish win-win partner coalitions to introduce a radical innovation.

Keywords

Breakthrough Innovation, Partnership, Business Model, Automotive, General Management, Strategy

Settings

World/global
2010 onwards

Type

Field Research

Available Languages

English

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