A theory of disruptive innovation was described in a 1995 Harvard Business Review article. Companies often fail to adapt to new technologies or changing market conditions. An example is Blockbuster failing to respond to a video streaming strategy pioneered by Netflix. Many believe Tesla is now disrupting legacy automaker today. This might be correct. Some legacy automakers like General Motors are responding, however.
GM announced it only will sell zero-emission vehicles by 2035. For a company reportedly making seventy-percent of its gross profits in North America from full-size pickup trucks and full-size SUVs, this is a disruptive commitment. GM recognized this potential disruption many years ago. In 2013 (only 3 years after the company’s post-bankruptcy IPO), then CEO Dan Akerson launched an internal study to understand Tesla’s impact on the automaker’s business. Since then, GM’s investments and business partnerships have all pointed to the company’s most recent zero emission announcement.
- Acquired autonomous driving technology company Cruise Automation in 2016 for $1 billion (now valued at $30 billion)
- Introduced the all-electric, +200 mile range Chevrolet Bolt in 2017 even before Tesla launched their segment-leading Model 3
- Last year, revealed an all-electric, autonomou, multi-passenger vehicle, Cruise Origin. Origin is a vehicle without a steering wheel or pedals to be use for commercial autonomous mobility solutions
- In 2020 revealed the company’s multi-vehicle modular propulsion system for electric vehicles powered by a proprietary Ultium technology
- Currently building a new battery factory to mass produce EV battery cells in a joint venture with LG Chem
- Announced a new electric vehicle commercial business (BrightDrop) that will electrify and improve the deliver of goods and services. FedEx is already an early customer.
- Entered into a long-term relationship with Microsoft to accelerate the commercialization of self-driving vehicles using cloud and edge computing technologies.
For GM, the foundation is being laid for a successful EV future. The above investments and partnerships will be difficult for many legacy automakers to quickly mimic. This headstart will give GM a fighting chance to compete with aggressive upstart companies like Tesla.