During my MBA in Technology Management, I have studied three approaches to Eco-innovation:

  • (1) Life cycle thinking
  • (2) Close loop production and
  • (3) Industrial ecology.

When dealing with an eco-innovation discussion for batteries or hydrogen cell of electric vehicles, it is my opinion that the primary approach is (1) trying to incorporate some elements of (2) when possible. Point (3) will be relevant from the point of view of the manufacturing process.

Nowadays, we already have car scrapping mechanisms that could be expanded and improved based on the lesson learned. Still, the main topic here is the recycling and disposal of car batteries or hydrogen cells at the end of their life, as it is a new element that was not covered before. We should note that the end of life of the batteries or cells can be shorter than the end of life of the complete vehicle, making it a priority to set a system to handle the devices’ lifespan.

With Tesla and Toyota approach, which released the patents as open license, it is essential that the design takes into consideration the manufacturing of the devices with the fewer pollutant materials available now and set a scheme for environmentally harmful materials to be either disposed of adequately or even better, used as raw materials in the manufacturing of new devices, as the closed-loop approach. This will require considering new materials and processes; recycling old batteries and cells could also reduce the cost of manufacturing new components while preserving the environment.

All these manufacturing mechanisms, disposing and recycling the devices, is not the main goal of a car manufacturer, which is to design and build cars, so opening their licenses allows new green companies to emerge and develop systems to handle this auxiliary market.

Nonetheless, the car manufacturers, particularly Toyota and Tesla, are very interested in these auxiliary companies’ success, as it will help introduce the new technology into the market and increase their sales and, therefore, their profitability.

Once the new companies start handling the batteries and cells, for their profitability, they will minimize the waste, and incorporating a scheme to collect used devices, will maximize the recycling. This will also allow the companies to be ahead of legislation and avoid penalties regarding waste production. The Eco-Innovation approach of being ahead of regulations will also introduce vehicles in markets with traffic restrictions inside cities due to high pollution levels.

Another advantage of this technology is related to society. It will create new jobs for highly skilled people to design new devices and methods for manufacturing, disposing and recycling, and jobs regarding transportation and storage of used cells or batteries.

An important point to take into consideration is the environmental benefits of this type of vehicle. As pollution and CO2 (the main contributor to the greenhouse effect) emission are two big problems nowadays, both issues can be diminished for the diffusion of ecological cars.

From the economic point of view, as the batteries and hydrogen cells become more mass-produced, they can be introduced in emerging markets, combining with renewable energy sources in charging stations or local hydrogen production, reducing the vehicle’s operational cost. Last, it is also in the car manufacturers’ interest that the new companies, which will manufacture and distribute the batteries or hydrogen-cells, use an Eco-Innovation approach, as it will improve the public image of the technology and therefore make their diffusion easier. The main challenge arises with the derived work license based on the patent of Tesla and Toyota.

Suppose the approach chosen for the improvements is to be open source as well. In that case, we should convince new companies to improve, via research and development, the systems released by Toyota and Tesla, even though that means that the knowledge will be public. Many companies could benefit even without the investment in R&D. The main point that the stakeholders should consider that being the first to develop new techniques or methods of production will help themselves, as the companies that did not invest in R&D will need more time to adapt their newly found knowledge.

On the other hand, is the improvements are made private, that could lead to a monopoly or oligopoly. The situation introduces the risk of a possible scenario in which few parties control the price. The expansion plan will be in the hands of only one or a few companies, which could lead to market penetration that does not benefit Toyota and Tesla. At least, it does not help and a complete open-source system.