Key adjustments to service offerings to accommodate product innovations: The Case of electric vehicles

This paper is positioned at the intersection of servitization and product innovation, addressing an important research gap regarding the key adjustments required in service offerings when introducing product innovations. We focus on electric vehicles as an eco-friendly product innovation often associated with high technological turbulence. Through a single case study of a truck manufacturer and eight confirmatory cases of other commercial vehicle manufacturers, this study examines how these companies adjusted their service offerings (e.g., financial services, parts and repair services, fleet management services, and connectivity services) in response to the launch of new product innovations. When introducing product innovations, these manufacturers adjust the scope and sophistication of their service offerings—for instance, by advancing financial services, parts and repair services, fleet management services, connectivity services, and by adding charging infrastructure services. Meanwhile, services for existing products also evolve in terms of scope and sophistication (e.g., adding product life extension and fuel optimization services). Surprisingly, these adjustments mostly occur within existing organizational structures. At the same time, they contribute to a potential increase in the share of service revenue, reflecting the growing share of electric vehicles in commercial vehicle sales. These insights offer important theoretical and managerial implications for integrating servitization with product innovation.