Abstract

This paper studies the factors that lead automotive manufacturing firms to invest in Ultra Low Emission Vehicles (ULEVs). ULEVs are vehicles that emit extremely low levels of harmful gases compared to other vehicles. In contrast to studies that examine aggregated patterns on the market (such as sales levels, new launches and issued patents), this study 'moves into the mind' of individual car firms following a social-psychological approach to identify the barriers and drivers. As an example of a ULEV, we report on the drivers and barriers for car manufacturers around the development of hydrogen engine technology. The study reveals that different firms deal differently with hydrogen vehicle development. Broadly, three groups of firms were distinguished concerning their willingness to invest in ULEV: uncertain firms, unwilling firms and optimistic firms. It addition, it was found that the level of technological and organisational capabilities is highly correlated to the willingness of firms to engage in hydrogen technology development. Based on an integrated sustainability assessment that takes into account technological opportunities, business perceptions and policy options, we argue that current policy should strongly focus on supporting R&D capability in manufacturing firms. © 2009 Inderscience Enterprises Ltd.