Creating the Japanese electric vehicle industry: the challenges of uncertainty and cooperation

The author analyzes the creation of the Japanese electric vehicle (EV) industry by focusing on how firms overcome barriers to bilateral collaboration and multilateral cooperation. The key to understanding this emerging industry is the evolution of interfirm relational skills under conditions constrained by uncertainty (for example, market failures compounded by bounded rationality and opportunism), yet which necessitate collaboration. The evolution of interfirm relations takes two forms: core firms and suppliers devise new means of bilateral relations in a situation where neither can invest in a committed relationship; competing auto makers and suppliers create and support multilateral institutions necessary to industry and market development. Evidence from EV auto-maker supplier bilateral relations and from auto-maker-supplier relations with multilateral institutions are analyzed for motive, mechanisms, and effect, and are categorized.