How Big Tech Could Shake Up the Car Industry

The automotive industry is currently undergoing a significant technological transformation, with electric vehicles, autonomous driving, and software-defined vehicles becoming increasingly prevalent. According to a research report from IDTechEx, it is projected that electric cars will account for more than 23% of new car registrations in 2023, and there is also a rise in the adoption of autonomous features and software-defined vehicles. This evolution presents potential opportunities for major tech companies to enter the automotive manufacturing sector.

Tesla has already made a substantial impact on the market by selling a large volume of battery electric vehicles and revolutionizing the traditional model of car purchasing and ownership. In addition to Tesla, other tech giants such as Amazon, Sony, and Huawei have formed strategic partnerships or joint ventures with automotive original equipment manufacturers (OEMs) in order to leverage their expertise and enter the automotive industry.

While there are challenges in integrating the strengths of the tech and automotive sectors, major tech companies possess the financial means to establish the required manufacturing infrastructure and acquire industry expertise. For instance, Huawei is collaborating with Chinese automotive OEMs to develop technology and manufacture drive units for electric vehicles, while companies like Foxconn and Xiaomi are also making significant advancements in the electric car market.

The question arises as to whether automotive OEMs or tech giants will encounter greater difficulties in adapting to the future consumer landscape. It is likely that partnerships will be crucial in the short term, but there may be potential for more significant displacement in the long term. It is evident that the automotive market is poised for substantial evolution in the coming years.

IDTechEx’s market research reports offer comprehensive analysis of the future automotive market, including detailed benchmarking and market forecasts. These reports provide valuable insights for companies seeking to comprehend and navigate the rapidly changing automotive industry.