The Electric Vehicle industry has caught up speed and everyone wants the benefits reaped by this fast-booming sector. With customer demand, this industry is creating its own space in revenue making. No wonder so many different sections want to get into this newly emerging sector. Even with the intensity of competition, there are big names ready to gamble in and accelerate in the race, including mobile manufacturers like Xiaomi, Apple, and others diving in to make their mark along with market leaders like Tesla, GM, etc.
Change in all areas of life is always welcome, and mobile manufacturers are taking this leap of change in their stride. Apple and Xiaomi came in with innovativeness and change and revolutionized the smartphones, giving wake to new horizons, after a stagnant moment faced by the mobile industry.
The car industry today is roughly where the phone industry was in 2009. It has passed its iPhone moment already in the form of Tesla, who emulated Apple’s business model by aggressively pursuing vertical integration and ecosystem building. Tesla has created the building blocks for EVs, created consumer demand and the rest of the industry is jumping in the same way to create the android moment, that is currently happening.
Every major smartphone company in the world from Xiaomi, Apple to Huawei, LG, Sony, Micromax, etc. is all entering the car business now and it is no coincidence that the smartphone revolution of the past is connected to the car revolution today.
Just like sharing components of the feature phones with the smartphones, did not necessarily aid enough to save the industry titans like Nokia & Ericsson, similarly, it’s far from certain that the new competitors will not give the established carmakers a run for the mill.
The cost perspective of cars is already on its way to becoming more consumer electronic items than merely a collection of engines and seats. Phones were almost entirely a hardware business at first but with digitalization and connectivity, along with software being available on app stores; third-party developers became an internet and software business too. Software is voraciously gulping the world and the car industry will see no escape either.
The iceberg is already visible on the horizon for the traditional car companies, who are desperately trying to avoid it by pouring in as many components as possible like electrification, self-driving, etc. to the cars.
Consumers will buy software-driven programs for their cars as much as they would choose wooden panels or heated leather seats. In other words, both the costs and revenues of the cars will be increasingly tied up with the tech going forward making the car business of the future more similar to the smartphone business of today.
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Smartphone manufactures are well aware of this revolutionary transition and are ready to apply the same in the car market given their prior knowledge and experience. Contract manufacturers like Foxconn are now entering the business of assembling cars on behalf of others, compartmentalizing, outsourcing, and collaborating to create innovative consumer-oriented products with the parent company. The company producing Electric Vehicle(EV) with this modus operandi would need to focus on designing and marketing the car. Sony, Huwaei, and many others are trying their hands on modern solutions already.
Even though cars currently account for only 1% of global vehicle sales, it is expected to rise to 10% by 2025 and mobile manufacturers see the potential growth along with their knowledge of compartmentalization and application in the Electric Vehicle( EV) industry and want to dive in to reap the benefits of the foreseen boom.