Market intelligence platform IDTechEx believes major technology firms may soon rule the automotive business as car manufacturers rely more heavily on third-party software and hardware.
In its “Electric Vehicles: Land, Sea, and Air 2024-2044” report, IDTechEx notes that vehicles are becoming increasingly technologically advanced. The industry is currently transitioning to electric powertrains while also juggling the implementation of self-driving systems, infotainment suites, and internet connectivity. While customers prefer these features, their growing prevalence is more due to the monetization opportunities inherent in these innovations rather than consumer demand. In a separate study, IDTechEx forecasted that software would generate more than $700 billion in automotive revenue over the next ten years.
However, these technologies require considerable expertise to manufacture and implement at scale, which is why many automakers have turned to partnerships with tech giants, including Google and Amazon. IDTechEx recalls how several major technology suppliers, such as Huawei and Foxconn, have leveraged their knowledge to start building automotive hardware, with some supposedly developing their own vehicles.
Although automakers have more experience building and distributing cars than these potential competitors, the more the industry deepens its reliance on big tech, the more insider knowledge they trade. IDTechEx cites the new partnership between Amazon and Hyundai to sell vehicles online as evidence of the technology sector’s rapidly growing interest in the automotive market. As time passes, the industry is likely to see a considerable transformation, not only in the products it sells but also in who sells those products.