Delivering Discontinuous Innovation through Modularity: The Case of Chinese Electric Vehicle Industry

The emerging alternative engine technologies with high environmental performance have increasingly gained managerial attention in the global automobile industry during the past two decades. These technologies, incorporating with other components ones, give rise to the creation of new energy vehicles. This paper explores how to deliver discontinuous innovation through cross-industry integration of previously distinct modular technologies. In contrast to much current research on modularity or discontinuous innovation individually, we propose a strategic framework linking modularity with discontinuous innovation together based on case study. We argue that discontinuous innovation can be achieved by establishing an industry platform enabled by modular product architecture. The industry platform demands not only introducing new compatible technologies in essential components or subsystems of the whole product system in order to substitute for the counterparts in the existent dominant design but also establishing universal interface to re-architect the relationships between the new core components and other parts. We contend that discontinuous innovation involves variety of knowledge bases and technological capabilities spanning over a range of fields. We empirically examine this framework from the development of electric vehicle industry in China.