MADISON, Wis. – The automotive sector has been going through something of a renaissance over the last few years. Electrification of vehicles, advancements of sensors and algorithms, and self-driving cars are the key impetus.
As the International Consumer Electronics Show demonstrated last month, a growing number of tech startups and traditional CE technology suppliers now target automotive as their next big market. As Egil Juliussen, research director and principal analyst at IHS Automotive, observed, “The Consumer Electronics Show has officially become the Automotive Electronics Show.”
The drivers of the automotive tech revolution momentum aren’t necessarily in Detroit — most are located elsewhere, particularly California.
Talking about “startups” and “automotive” in the same sentence seemed unthinkable just a few years ago, considering the long gestation period the automotive industry imposes on new technologies for testing, qualification, and certification. But startups gunning for the automotive sector are mushrooming at unprecedented speed.
Running out of places to go
Juliussen explained, “Part of the reason is that the high tech industry is running out of places to start and grow their business.”
On one hand, new product segments such as wearable and smartwatches, still facing a lot of uncertainties, aren’t established yet. The same is true with the medical segment. On the other hand, automotive and transportation are big businesses, with large potential to generate revenue.
Driven by “software, connectivity and the service [sharing] economy,” high-tech startups willing to take big risks are suddenly finding that “money is there to fund them” and automotive to be “promising,” said Juliussen.
Perhaps, there’s no better example than Apple. The Cupertino-based company, with annual revenue of $234 billion (fiscal 2015), has an “unbelievable” war chest, said Juliussen. But to expand its business just by 10%, Apple needs to crack a large market “where it sees a shot at changing the business model,” he explained.
The eagerness of Google and Apple to dabble into the automotive market is also fueling speculation about startups whose technologies are presumably associated with them.
EE Times picked the brain of IHS Automotive’s Juliussen and added several names from our picks to create a catalog of 34 auto-tech startups. The list includes a few public companies whose established technologies are increasingly relevant in the automotive sector. Please note that some companies on the list remain in a purely speculative phase as they currently offer scant public information.
To read the rest of this article, visit EBN sister site EE Times.