What do car manufacturers need to learn from Silicon Valley?

Just as I was planning to write this blog about Silicon Valley and the car manufacturers (OEMs), I came across an interview with Prof. Dudenhöffer, Director of the CAR Center Automotive Research by Thomas Schmidtutz of Merkur.de (https://bit.ly/2EGUIb1) discussing this very topic.

There was a discussion of Tesla’s rather underwhelming “Battery Day” announcements and a general discussion of most European OEMs embracing of the EV. The interview finished with Prof. Dudenhöffer saying that he believed that Tesla’s main advantage over OEMs is the speed at which it can work rather than any technological edge. The professor described OEMs as being like tankers moving at a snail’s pace because innovation is accompanied by seemingly endless presentations, strategy discussions, board meetings, production workshops, etc.

In comparison the professor called Tesla “a kind of speedboat”. He believes that the main competitive advantage Tesla has is Elon Musk, who drives fast decisions on innovation in the same way that Steve Jobs drove Apple. With the result that Tesla is sprinting away from the competition.

When I last talked about Tesla in August this year (https://bit.ly/33eCur4), I talked about how OEMs are adopting the practices of Silicon Valley, with the end goal of being rated by stock analysts as Silicon Valley stocks like Tesla rather than being rated as a manufacturer of steel boxes. And asked the question: Might Tesla be the OEMs best friend?

If Prof. Dudenhöffer is right, I guess my questions this time around are: Can car companies take decisions and drive innovation as fast as Elon Musk at Tesla? And what happens if they don’t?

I can’t answer these questions. However, my hunch is that the answer is to adopt the best practices of Silicon Valley, while keeping the best features of the OEMs culture. All I’m certain of is that it’s going to be fascinating watching how the OEMs compete and attempt to overtake Tesla.

Published by ACCESS Europe

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