Big tech has made a dazzling entry onto the turf of legacy automakers by investing in technologies that have the potential to upend automakers’ business models. Electric vehicles, autonomous driving, connectivity, and shared mobility are challenging major OEMs to adapt to the fast-evolving consumer space.
Tech giants are now active in the automotive space at a momentous pace. With recent massive investments in startups across the auto and mobility sector by Amazon, Apple, Google, and Microsoft, their services are getting integrated across virtually every automaker. This trend is only expected to grow, as big tech is seeking to extend its reach into the automotive ecosystem.
Are these tech giants trying to become automakers, or transform the very definition of what a car is supposed to be? The latter seems to be a likelier outcome, as Silicon Valley with its appetite for disrupting industries is taking over the future of mobility. So, what’s in store for legacy automakers, who are building strategic partnerships with the big tech players.
The Story So Far
Amazon has been focused on EVs as part of company’s commitment to reaching carbon neutrality by 2040. The tech giant is transitioning to a fully electric logistics fleet and has been working closely with the EV startup Rivian. Amazon is also interested in autonomous vehicles for last-mile delivery and passenger applications. Vehicle voice assistant, which was traditionally built-in at the point of manufacture, changed after the launch of Amazon’s Echo Auto in 2018. Since then, Amazon has partnered with Audi, BMW, Ford, and Toyota to enable Alexa in the vehicles.
Microsoft’s has been focused on connectivity, through partnerships with major automakers such as Nissan, Volvo, and Toyota to deploy its Azure-based connected car platform. Most recently, the company announced a strategic partnership with GM and an expansion of its existing partnership with VW for development of autonomous driving. Ford, Volvo, Toyota, and heavy-duty truck maker Paccar are also using Microsoft’s HoloLens VR set, enabling engineers to use AR and VR in vehicle design, without needing to build a product speeding up the development of new models.
Google, already a player in the automotive space with its self-driving subsidiary Waymo, has been investing in-Vehicles connectivity. It has integrated its Android mobile platform into vehicles with Android Auto, available in more than 400 car models across brands like GM, Hyundai, Volvo, and most recently Ford. Google has also invested in mobility services, which positions the company favorably for its future plans of scaling its commercial robo-taxi service.
Apple ambitious auto plans had been in motion for years. The company first launched Project Titan; its auto-focused unit in 2014. Since then, potential partnerships with Hyundai, Kia Motors, Nissan, and US-based EV startup Canoo have taken off. Apple’s CarPlay, a platform similar to Google’s Android Auto has also resulted from Apple’s push towards the sector.
Facebook has been the only inactive one in the auto space. In her words, COO Sheryl Sandberg had said, “We’re the only company in Silicon Valley that’s not building a car.” Although the company has taken small steps in auto retail, mapping, and advanced manufacturing.
The Big Tech Advantage
Given the recent footprints of big tech in the evolving mobility sector, legacy OEMs are experiencing disruption on multiple fronts. The operational relevance of manufactured and process-oriented hardware has been dented. The urgency to shift to the Cloud has overshadowed custom-built solutions that once drove the mobility industry. With sustainability as a central focus, the world is listening to the clarion call of big tech. It’s time to counter, pivot, or lose for legacy automakers.
Big techs have the advantage of a carefully guided strategy that can build critical mobility infrastructure for tomorrow. Electric vehicles are going to define an auto manufacturers intent to diversify their portfolio, and survive. Big tech is also eyeing customer service relationships, as vehicles are now seen as a control point to access platforms.
Mobilize & Capture
Technology companies can curate and use valuable data to catalyze growth and new opportunities. But real change happens when technology directly enables a consumer to make better choices. In a pandemic-affected world, customer expectations have been changing rapidly. Data-driven insights stimulate the market’s mood and guide consumer satisfaction. Adapting quickly to newer technologies is the challenge automakers are facing today. The core of the mobility sector has changed.
01 Autonomous driving technology
Autonomous driving technology includes companies designing autonomous vehicles, or developing full-stack self-driving solutions, and the components that help train and guide autonomous vehicles. DrivebuddyAI, has been delivering as a value multiplier in mobility, insurance, fleet management, and road safety. Its intelligent driver safety system is built to empower fleets and logistics companies to manage operations seamlessly while ensuring safety.
02 Connected cars & fleet management
Moving beyond a simple internet connection, developing systems that communicate to the outside world is the latest challenge. To make cars intelligent, technology companies prefer to integrate computer vision and AR capabilities for an extra layer of safety.
03 Electric vehicle technology
With Tesla’s rise, entrepreneurs worldwide are fueling the EV revolution. A consistent and accelerated rise in the global EV market is expected for estimates up to 2030.
Mobility-as-a-Service or MaaS, integrates various transport services into a single mobility service, accessible on demand. With the advent of MaaS the need for personal ownership of a vehicle is set to become obsolete. The rise of ride-hailing services globally has lent critical velocity to MaaS.
The Automakers’ Response
Technologies are at the heart of the mobility revolution. Software driven vehicles, and a product-to-service business model is transforming the automotive experience. Some of the strategic steps taken by major OEMs include:
- GM, and Renault Nissan Mitsubishi, have preferred to build strategic partnerships with tech companies to compensate for missing technological competencies. This approach proved to be adaptable enough to provide consumers with immediate solutions.
- Volkswagen Group has invested heavily in developing their own operating systems. Volkswagen created its own automotive cloud and new electric vehicle architecture.
- The GENIVI Alliance is a non-profit automotive industry alliance, which several automakers and suppliers have joined to develop an open-source solution based on Linux.
Rapidly changing consumer interests have made it difficult for automakers to adjust. But a concrete starting point for self-assertion is through multiple personalized offerings, targeting users seeking a fully automated experience. Automakers must offer customers digital services, and create a positive brand perception through value-added services for maintaining their loyal customer base.