Apple, Alibaba and more, all the technology companies that get on the electric car
While Apple agrees with Hyundai to produce the Apple Car, Alibaba has established a joint venture with state-owned manufacturer Saic
The big names in technology, both in the United States and in Asia, are multiplying their initiatives to invest in the market of electric, connected and perhaps autonomous cars.
Friday 8 January 2021 was a good day for 82-year-old South Korean citizen Mong-koo Chung and his 50-year-old son Euisun Chung. Indeed, that day, the long-time executive of Hyundai Motor and his heir, the president in office of the Asian manufacturer, saw their assets increase by 2 billion euros in a few tens of minutes. And all because of a simple rumor that Hyundai could produce the Apple Car on behalf of the apple company.
It was a South Korean newspaper that broke the news: Hyundai was approached by Apple to collaborate in the manufacture of an electric car and the development of batteries, the Korea Economic Daily announced. After initially confirming the information, the manufacturer quickly backtracked and, in a press release, embarrassedly assured that the solicitations "from various companies" remained "at an early stage." However, Hyundai's share price had already risen 25%.
The press echo had all the more impact since just fifteen days earlier a Reuters dispatch had already shaken the market: "Apple aims to produce a car by 2024 and is considering a 'new generation' battery technology" , titled the British agency. This time it was the shares of manufacturers of lidar, the sensors needed for autonomous vehicles, that rose more than 20% on the stock market.
"Beginning of a golden age for the electric car"
This surprising fever epidemic isn't just anecdotal. It has its origins in a fundamental movement: the growing interest of technology companies in the automotive industry. There was already Google, with its autonomous car subsidiary Waymo, and UFO Tesla, a prodigious manufacturer in Silicon Valley. This time around, all the tech giants are taking the wheel: Amazon, Microsoft, but also their Asian counterparts – China's Baidu, Alibaba and Didi, Taiwan's Foxconn, and Japan's Softbank and Sony.
Without forgetting, of course, Apple. With nearly $ 200 billion (around € 165 billion) in cash and a capitalization of 2,400 billion, can the company revolutionize the automobile? The company "does not comment on the rumors", but many believe it. “We are experiencing the beginning of a golden age for the electric car. And there is a convergence between the tech industry and the auto industry, ”says financial analyst Dan Ives. "Digital giants like Apple and Microsoft are not going to miss this opportunity by being spectators." For Wedbush Securities expert, the question is not "if Apple will enter the auto market, but when".
However, the company's ambitions in the automotive industry are not new. They've had their ups and downs. Already in 2014, he is launching his Titan project, already shrouded in secrecy. At the time, the press was thrilled with this desire to build an Apple Car that would be for the automobile what the iPhone was for telephony. In fact, the team of several hundred engineers, some of whom had worked for Mercedes or Tesla, was led by Steve Zadesky, the iPhone designer, who had also worked for Ford.
Technical challenge
In 2016, however, the project is reorganized for the first time: Mr. Zadesky leaves and is replaced by Bob Mansfield, an Apple veteran. This change reflects the relegation to the background of the vehicle construction project itself and the priority given to autonomous driving systems.
From 2017 to 2019, the press follows the gradual appearance of a fleet of 66 test cars on American roads. But this figure is still low compared to leader Waymo's. And Apple's project has a new inflection in 2019: the team is reduced by 200 members, in the wake of the acquisition by Doug Field, Tesla's vice president of engineering and former Apple employee, who returned to the company in the summer of 2018. .
The recent excitement marks a new phase in the Cupertino-based company's automotive ambitions, now overseen by head of artificial intelligence, John Giannandrea, according to Bloomberg. But core questions still arise, illustrating the ongoing debates across the industry: Will Apple have clean battery technology? Elon Musk, the founder of Tesla, did not fail to express his skepticism about the "revolutionary" techniques mentioned in the December 2020 Reuters dispatch.
Who would build the Apple Car? Hyundai, Chinese manufacturers Nio or Xpeng, or even Tesla, Volkswagen, or even Foxconn, the historic iPhone maker, putting itself in a battle order to produce electric cars for any customer? Would the car be autonomous, knowing that this technical challenge is not yet fully mastered? And rather than starting an expensive, low-margin business like construction, could Apple instead focus on software, as it started to do with CarPlay, its environment that replicates that of the iPhone in Renault, Ford, Audi or Peugeot?
"Long-term strategic partnership"
For analyst Dan Ives, Apple may be successful this time around because "past detours made it step back and realize it couldn't build a car on its own." And because the projected explosion in demand for electric cars, spurred by Joe Biden's election as president of the United States, is changing the game. “We will see more and more partnerships like that between Microsoft and General Motors [GM],” says Ives.
Microsoft, which until now has only offered data storage (cloud) to manufacturers, announced on January 19 that it was bringing more than $ 2 billion to Cruise, GM's autonomous automotive subsidiary, to build "a strategic partnership. long-term". A further sign of this euphoria around “techno-mobile” companies, Cruise (also backed by Honda and SoftBank) is now valued at $ 30 billion, or 40% of the value of its parent company.
For its part, Amazon is quite discreet, but it is also taking positions in the market. The company has twice invested in US electric vehicle maker Rivian. In addition to its pickup and a Jeep-style SUV, in October 2020 the manufacturer unveiled the delivery van it had designed for Amazon: a state-of-the-art delivery van with a large windshield, coated with sensors and covered by smiling logos of the e-commerce giant, printed right down to the door moldings. Jeff Bezos' company is in charge of the order book and has promised to buy 10,000 copies by 2022 and 100,000 by 2030.
"Appalling stock market valuations"
You can see it, through Apple's procrastination: one of the questions that plague tech companies is, "Should you develop your vehicle?" like a Tesla, whose 2020 stock market performance is the envy of many. Alibaba, the Chinese Amazon, cut the apple in half. The company created by Jack Ma, formerly an investor in electric vehicle maker Xpeng, founded a joint venture with state-owned manufacturer SAIC and pulled the veil on January 13 on a semi-autonomous, connected electric sedan.
Baidu, the Beijing equivalent of Google, and VTC company Didi Chuxing go even further. The former has just created a rechargeable vehicle unit with support from the automaker Geely (Volvo's parent company). The second designed an electric taxi in collaboration with battery-powered vehicle giant BYD. Sony in Japan created its electric vehicle prototype, the Vision-S.
Faced with this connected army, are conventional producers threatened? “The stock market valuations of new entrants are appalling,” notes a former automotive analyst, who is amazed. “We know about Tesla, which produces 500,000 cars and is worth 800 billion dollars, which gives 1.6 million per car, but we can also mention the Chinese Nio or Xpeng, which are worth 45 and 30 billion and produce a few thousand vehicles. For them, money is free. So either the market collapses and the bubble bursts, or the historic producers have something to worry about. "
"Revolutionary innovations"
“Just as traditional industrialists made cars to sell bank loans, some tech companies are thinking about making vehicles to sell stock,” says Bertrand Rakoto, a consultant for Ducker in Detroit, Michigan. Sure, but the Tesla model has its limitations, many observers argue. The company has had great difficulty in achieving its current industrial pace and its warranty costs are exploding due to persistent quality problems.
It does not matter. Financial markets believe the automotive promises of high-tech rather than those of centenarian industrialists. “Investors trust these newcomers to discover breakthrough innovations,” says Alexandre Marian, CEO of San Francisco-based consulting firm AlixPartners. "And then the tech players are better suited to a new clientele that pays more attention to connectivity than to aligning a door with the body."
As a result, Tesla would now have the means to buy Renault or Ford, and Apple would have the ability to buy an even bigger manufacturer. Meanwhile, the father and son Chungs, the founding family of Hyundai, to their great satisfaction, have not yet seen their share price fall. The "techno-mobile" bubble may not be about to burst.
(Article taken from the foreign press review of Eprcomunicazione)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/apple-alibaba-e-non-solo-tutte-le-aziende-tecnologiche-che-salgono-sullauto-elettrica/ on Sun, 07 Feb 2021 14:52:02 +0000.