Many consumer-centric technologies are disrupting the automotive industry, which will no longer be a monopoly of traditional carmakers in the near future.
Cars are the new frontier for tech companies and the distinct 200-year-old line between different industries is slowly fading away. With companies spreading out from their core business, many industry insiders have concluded that “anyone who can create the best cars will create them.”
As a result, existing competition is growing fierce. Moreover, in this era of globalization, the ventures that are backed by billionaires from all around the world are creating competition threats from all sides.
The most notable business with billionaires from various industries joining is the next-generation vehicle sector. Vehicles equipped with advanced technology can have several functions, such as an Internet connectivity, autonomous driving capability and eco-friendly electric motors.
Samsung Electronics announced late last year that it would create a special team to develop electric car components for Internet-connected and self-driving vehicles, and Samsung SDI currently produces batteries for electric vehicles manufactured by BMW and Volkswagen.
This is Samsung Group’s second attempt in the automobile-related business, after it backed out of the auto industry in 1998.
LG Electronics is one step ahead of Samsung, as it started to develop electric car components in 2013. The company is currently providing batteries for Apple’s self-driving vehicles and collaborated with GM to develop electric vehicle Chevrolet Bolt EV, commercially available from later this year. Moreover, the company recently obtained orders for electric car parts worth more than 15 trillion won ($12.6 billion).
Known for its core businesses of energy and telecommunications, SK Group‘s chemical unit SK Innovation is finalizing plans to build a battery plant for electronic vehicles in China. The new plant will boost battery production as SK secured a deal to supply battery cells to Mercedes-Benz early this year as a means to further expand into the electric vehicle industry.
While Korean conglomerates are focusing on car parts, companies abroad, especially information technology giants including Google and Apple, are investing heavily in creating next-generation vehicles.
Google first released a self-driving concept car in late 2014. The vehicle is currently under testing with a goal of commercialization within the next two to five years. Google’s car does not have a driving wheel, pedal or breaks, as it generates a 3-D map of its environment with sensors to create data models to allow itself to drive.
Apple on the other hand is speculated to be working on a project called “Project Titan” to develop a self-driving vehicle running on an electric motor. Largely boosted by investment genius Warren Buffett’s recent $1 billion investment, Apple supposedly hired over 600 engineers to develop the vehicle named “iMove” to launch its own automobile brand by 2020. It is further speculated that the $10 billion investment in the company’s research and development sector is for the secretive project.
Even, Robin Li, the chairman of Baidu -- sometimes called the Chinese Google -- announced that the company would be ready to produce self-driving cars by 2020.
However, the biggest competitor in next-generation vehicles is U.S. electric vehicle manufacturer Tesla Motors. With the recent introduction of the Model 3 with a driving range of 345 kilometers per charge, Tesla Motors emerged as a game changer in the electric vehicle industry. Although the model isn’t to be delivered until 2018, the company has already received over 400,000 preorders.
While prices for Model 3 start at a modest $35,000 -- half the price of Tesla’s existing electric vehicles -- the vehicle has autopilot and supercharging functions and can accelerate to 100 kilometers per hour in under six seconds.
With such progress underway, automobile companies are partnering with IT companies as well. Volvo and Nissan have partnered with Microsoft, and Toyota and Ford agreed to share information about smart cars.
Furthermore, Hyundai Motors formed an alliance with networking equipment manufacturer Cisco Systems to provide a high-speed network to send and receive data inside vehicles. After succeeding in becoming the world’s first to mass produce fuel cell vehicles in 2013, Hyundai Motor is expected to release a second-generation fuel cell vehicle in 2018. The vehicle that runs on fuel cells instead of an engine to power its electric motor has been dubbed a zero-emissions vehicle, as it emits only water and heat.
Even though the next-generation vehicle sector is mostly comprised of alliances and partnerships, once advanced car technologies stabilize, the sector has the potential to overturn the automobile industry, said an industry insider.
By The Korea Herald Superrich Team (
seoyounglee@heraldcorp.com)
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Hong Seung-wan
Cheon Ye-seon
Seo Jee-yeon
Yoon Hyun-jong
Min Sang-seek
Lee Seo-young
