Navigating Digital Transformation: The Strategic Alliance as a Digital Catalyst for Corporate Digital Entrepreneurship in China’s EV Transition

Abstract

The global automotive industry is undergoing a profound and rapid digital transformation, driven by electrification (EVs), autonomous driving, and connected services. This represents a foundational shift away from traditional manufacturing and toward a model focused on Intelligent, Broadband, and Integrated Services (IBIS), where digital competence defines market leadership. This shift demands that large traditional manufacturers engage in sustained Corporate Digital Entrepreneurship (CDE). Firms must leverage dynamic capabilities to secure competitive advantage, especially within the specific and fast-moving context of the Chinese market. In this highly- evolving environment, competitiveness is determined not just by producing electric vehicles, but by the continuous entrepreneurial creation of new digital value streams within the corporation. Yet legacy automakers confront a major obstacle of entrenched organizational inertia combined with the urgent need to develop new digital competencies. This tension mirrors the classic trade-off between exploitation and exploration.Existing research tends to address this problem via two distinct pathways. The first relies on internal structural ambidexterity: established firms build independent exploratory capabilities (EC) to drive internal digital transformation. The second emphasizes external resource acquisition through Strategic Alliances (SAs), enabling access to required digital assets. However, both approaches present limitations: the internal one is slow and resource-intensive, while the purely external path often leads to temporary resource exchange without permanent organizational learning. In short, neither pathway fully captures how SAs can go beyond resource provision, functioning instead as catalysts that embed long-term CDE within a legacy firm.This ongoing study investigates how large traditional automakers can leverage strategically framed alliances as a Digital Catalyst to foster and internalize exploratory capabilities (EC), enabling sustainable CDE. We propose the SA-to-EC Catalyst Model, arguing that alliances act as intermediaries bridging resource gaps and triggering systematic internal transformation by formalizing knowledge transfer and imposing new digital performance metrics on the parent company, thereby preserving competitive relevance in a fast-evolving digital market.The research employs a holistic qualitative single-case design, examining a leading Chinese automaker transitioning from traditional internal-combustion-engine (ICE) production to a dedicated EV platform. The case selection is justified by the firm’s historically strong market position, which makes its organizational inertia a pronounced challenge, and its recent formation of a landmark joint venture with a pure-play tech company. The longitudinal observation spans five years (2018–2023), capturing the formative period of digital capability development. Data are triangulated via 30 semi-structured interviews with executives and managers in R&D, strategy, and operations; extensive archival analysis of internal documents, annual reports, and digital platform launch materials; and direct observation of the firm’s digital product development journey. Analysis proceeds via process tracing, mapping how the SA governance structure triggers cultural and structural change and leads to sustained CDE.Early findings indicate that the alliance; structured as a joint venture; functions as a “digital sandbox,” externalizing risk while offering managerial and technical templates that accelerate internal learning. This research contributes to digital-strategy scholarship by providing a process-oriented lens on how external partnerships evolve beyond resource exchanges to become deep capability catalysts. Specifically, it advances CDE literature by shifting the focus from internal organizational structures to external strategic mechanisms as the engine of entrepreneurial renewal. Practically, it offers a validated strategic framework for legacy firms in high-velocity sectors, such as automotive, to overcome digital inertia via alliances and achieve genuine CDE. It also aligns with evidence linking digital transformation to improved firm-level performance under supportive corporate cultures.

Keywords: Corporate Digital Entrepreneurship, Electric Vehicles, China, Strategic Alliance, Digital Catalyst

DOI: 10.54941/ahfe1007710