{"id":37701,"date":"2024-01-19T23:28:56","date_gmt":"2024-01-19T19:28:56","guid":{"rendered":"https:\/\/autoscommunity.com\/?p=37701"},"modified":"2024-01-21T11:37:47","modified_gmt":"2024-01-21T07:37:47","slug":"idtechex-discusses-how-tech-giants-could-displace-automotive-oems","status":"publish","type":"post","link":"https:\/\/autoscommunity.com\/2024\/01\/19\/idtechex-discusses-how-tech-giants-could-displace-automotive-oems\/","title":{"rendered":"IDTechEx Discusses How Tech Giants Could Displace Automotive OEMs"},"content":{"rendered":"

The automotive market is a vast industry, and its evolution has spawned several giant corporations with many sub-brands, many of which are household names. However, the automotive industry is arguably undergoing the most significant technological shifts ever.<\/strong><\/p>\n

Electrification, autonomous driving, and a shift to software-defined vehicles. With these trends well underway, is there space for companies often associated with technology and consumer electronics to become a much more significant part of the automotive market and start making cars themselves?<\/p>\n

Electric cars are becoming a standard option with IDTechEx\u2019s \u201cElectric Vehicles: Land, Sea, and Air 2024-2044<\/a>\u201d report expecting that over 23% of new cars registered in 2023 will be electric (including hybrids), with battery-electric cars experiencing 4.8-fold growth between 2020 and 2023.<\/p>\n

Autonomous features have become increasingly common, with Level 2 autonomous vehicles now being the default, and Level 3 vehicles are now present on the road.<\/p>\n

Software-Defined Vehicles<\/h5>\n

Cars are becoming increasingly software-defined with the ability to provide updates over the air, subscriptions to new features, and create a new revenue stream for automotive OEMs. IDTechEx predicts in its \u201cConnected and Software-Defined Vehicles 2024-2034: Markets, Forecasts, Technologies<\/a>\u201d report that software-related revenue for software-defined vehicles will exceed US$700 billion by 2034.<\/p>\n

Historically, the automotive industry has not typically been quick to adapt, with development cycles that last several years and reliance on tier 1 and 2 suppliers. That is starting to change. Tesla<\/a> caught many off guard, bringing battery electric cars to the market in huge volumes, but also beginning to change how many view car purchasing and ownership.<\/p>\n

Vehicles can be purchased online, servicing can be initiated remotely via an app, and new features and recalls can be carried out over the air. This starkly contrasts the historic model, where everything is carried out at the car dealership, including updating navigation maps for a hefty fee.<\/p>\n

These new approaches are now propagating across the industry and, at the same time, providing even more excellent opportunities for tech companies. In late 2023, Hyundai<\/a> and Amazon<\/a> launched a strategic partnership to sell vehicles on Amazon.com<\/a>.<\/p>\n

Sony entered a joint venture with Honda to leverage Sony\u2019s experience with AI, entertainment, and augmented reality. But as the automotive industry electrifies, and the combustion engine is no longer the defining feature, is it possible that this trend could go beyond tech companies providing the infotainment for an automotive OEM and start producing vehicles themselves?<\/p>\n

\"The
The automotive market is evolving, becoming more electrified, autonomous, and software-defined. Source: IDTechEx<\/figcaption><\/figure>\n
Very Different Strengths<\/h5>\n

The critical challenge is that the two industries have very different strengths. This has been seen with some of the smaller startups that have attempted to enter into making cars, where the underlying technology is often state of the art. Still, the traditional aspects of manufacturing cars at high volumes with excellent quality control are where they have often struggled.<\/p>\n

However, these challenges can be overcome with some of the major tech companies that are much better financed to set up the necessary manufacturing infrastructure and obtain the needed industry expertise. Huawei<\/a> is partnering with several Chinese automotive OEMs to develop technology that goes into cars and produces drive units for electric vehicles.<\/p>\n

Electronics manufacturer Foxconn<\/a> (renowned for manufacturing Apple\u2019s iPhones<\/a>) has started producing electric cars and aims to take 5% of the global electric vehicle market over the next few years.<\/p>\n

At the end of 2023, Chinese smartphone maker Xiaomi<\/a> unveiled its first electric car<\/a> with plans to become one of the top 5 global automakers. Several rumours of automotive projects from other major tech companies have suggested more could be seen coming to market over the coming years.<\/p>\n

What is the more difficult route, an automotive OEM<\/a> developing the technology required for the future consumer or tech giants developing the manufacturing skills needed for mass-market automotive applications?<\/p>\n

The reality will likely lie somewhere between, where partnerships are sure to be a mainstay in the short term, but developments, acquisitions, and some displacement in the long term. One thing is sure: the automotive market has a vast evolution ahead of it in the coming years, with many significant challenges.<\/p>\n

IDTechEx<\/a>\u2019s market research portfolio includes reports on\u00a0Future Automotive Technologies<\/a>,\u00a0Electric Vehicles: Land, Sea, and Air<\/a>, and\u00a0Connected and Software-Defined Vehicles<\/a>. These reports deeply dive into the market drivers, barriers, technologies, players, and markets for the future of the automotive market and other transport sectors. Comprehensive benchmarking is provided along with granular market forecasts. Sample pages for all IDTechEx reports are available to download.<\/p>\n","protected":false},"excerpt":{"rendered":"

The automotive market is a vast industry, and its evolution has spawned several giant corporations with many sub-brands, many of which are household names. However, the automotive industry is arguably undergoing the most significant technological shifts ever. Electrification, autonomous driving, and a shift to software-defined vehicles. With these trends well underway, is there space for […]<\/p>\n","protected":false},"author":13,"featured_media":37706,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[11275,11742,7],"tags":[],"class_list":["post-37701","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-future-mobility","category-green-mobility","category-news-about-cars"],"yoast_head":"\nIDTechEx Discusses How Tech Giants Could Displace Automotive OEMs<\/title>\n<meta name=\"description\" content=\"The automotive market is a vast industry, and its evolution has spawned several giant corporations with many sub-brands, many of which\" \/>\n<meta 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