This dissertation uses the historical explanation to engage in an abductive study of the early American automobile industry (1895-1918). The dissertation suggests that historical explanation is a valuable complement to abductive research. Historical explanation increases the number of hypotheses considered through the temporal perspective it offers and through contextualization. Historical explanation also adjudicates between likely hypotheses to determine the loveliest explanation by evaluating explanatory coherence and consilience. Further, the practical use of the historical explanation is demonstrated by analyzing the challenges that firms faced while attempting to scale manufacturing during the early American automobile industry (1895-1918). The analysis identifies metalworking knowledge as a specific pre-entry capability that mattered and demonstrates that process innovation is critical from a very early industry stage. Thus, this dissertation enhances strategy literature's understanding of why and how scholars should engage with historical explanation.