Background: The automotive industry is currently facing one of its most significant transitions ever in terms of sustainable development, as it is estimated to account for 15% of total greenhouse gas emissions. To address this challenge, innovation has been argued as a necessary factor. However, understanding how organizations can enhance their innovation ability and implement new approaches for sustainability has been stated as a research gap. This study investigates the barriers hindering progress and factors that influence successful implementation of sustainable innovation.

Purpose: The purpose of this study is to explore how automotive companies can manage innovation in their transition toward a more sustainable industry. 

Method: The study follows an interpretivist approach with a qualitative multiple case study. Semi-structured interviews with eight relevant participants were conducted with inductive reasoning and aimed to gather data from three perspectives within the automotive industry. The empirical data was analyzed through a coding procedure where themes emerged from the data, resulting in the creation of a conceptual model.  

Conclusion: This study suggests that for automotive companies to succeed with sustainable initiatives through innovation management, it is important to consider the organizational context, leadership, operational strategy, and external organizations. It concludes that automotive firms can adopt a holistic and systematic approach to managing innovation in order to successfully implement sustainability and derive long-term value.