Nowadays, we are being treated with multitudes of news in which multinational companies are investing into automotive startups as well as established firms. Some firms are even developing their own cars. Does this mean that automotive businesses are under threat from new players?
It depends on the approach of automotive businesses in question. Earlier this year, Amazon invested between $1 and 2 billion in American startup Rivian Automobiles. Rivian is developing an electric SUV and a pickup truck powered by electric motors.
Waymo is one of the leading companies foraying into autonomous vehicle development. Interestingly, it has no history or background of dabbling in the automotive industry.
Amazon has also invested in US-based autonomous vehicle startup Aurora Innovation. While the actual figures of investment were not disclosed, the company raised $530 million in its latest round of investment.
Across the Atlantic, UK-based Dyson is also hard at work developing an EV designed for urban use. Dyson is associated with world-class vacuum cleaners. Not many people would have imagined a company steeped in the success of its products would venture out into automotive. But here we are, with Dyson on the cusp of making its first EV commercially available by 2020.
The automotive world is ever-evolving, and the car is but one element of a mobility system, governed by extensive regulations, need for fuel, and dependent on roadways and parking spaces. In such an ecosystem, there is a lot of potential for new firms to mark an entry in. Amazon, Dyson, and similar companies have recognized the potential, making the move to secure their future positions in the industry.
Dyson makes excellent electric motors that power its range of vacuum cleaners. It only made sense that these motors could power a car too.
Google has also floated Waymo, a company researching into autonomous drive systems. The firm has already clocked more than 16 million kilometres, and is gathering heaps of data to make autonomous cars safer, intelligent, and as close to conventional cars as possible. Uber, the world’s biggest ride-hailing firm, does not own a single cab. Yet, it is actively testing autonomous taxis as well as buying into long-distance autonomous trucks for its Uber Freight operations.
Does this mean that automotive companies could lose a chunk of their profits? There is another way of looking at it. With the entry of new players such as the ones mentioned above, the automotive industry can explore new ways of conducting business. Truck and car companies can receive fleet orders from Amazon, Waymo, and Uber.
Additionally, the wealth of information and best practices the automotive industry has collected over the past century and a quarter is crucial for newcomers to the business. Automotive firms can trade their data and knowledge with the new players in the industry, and set up an inclusive ecosystem that benefits all that is within.
The advent of ACES (Autonomous, Connected, Electric, Shared) vehicle technology has opened up the automotive industry to firms that were hitherto distanced from vehicle production or development of any sort.
Rivian is on the fast track to offering USA's first electric pickup truck, now backed by Amazon.
The proliferation of non-automotive firms in the industry does not have to threaten existing players. Striking the right deals with the right partners will result in opening up new opportunities in the industry. And who knows, these players might bring something truly revolutionary to the game, benefitting automotive players in unforeseen ways. As has been claimed by so many people so many times, change is the only constant. Those who embrace it willingly, profit the most.