The Chip Revolution: Major Carmakers Expected to Become Tech Companies

Automakers will take over the chip designing process 6 photos
Photo: General Motors
GM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plant
A growing number of tech giants, including Apple, Huawei, Xiaomi, and others, are already working on their expansion in the automotive market with their very own cars, and this essentially turns them into direct competitors to traditional automakers.
While projects like the Apple Car certainly sound ambitious, analysts expect these investments in the automotive sector to also speed up the transition the entire industry makes to a high-tech future, relying even more and more on new systems, technology, and autonomous implementations.

In many regards, this was something to be expected, but on the other hand, there’s one big problem that automakers are working on dealing with as we speak.

The chip shortage makes this transition to a completely digital future much more difficult for traditional carmakers, not only because they don’t have the inventory to invest aggressively in this direction but also because they lack the know-how and the required resources to rapidly gain traction here.

As a result, more and more car manufacturers are expected to become tech companies in the long term, a report from Gartner indicates, with the majority of the big producers likely to take over the chip designing process by 2025. In other words, they want more control not only over the production process but also over the capabilities that are powered by the chips they design.

The report indicates that 50 percent of the top names in the auto industry will handle the chip design on their own by the middle of this decade, especially as they prepare the switch to more advanced EV and self-driving technology.

Gartner says the price of new cars is therefore expected to grow substantially. The average sale price will exceed $50,000 in the United States and Germany, so in theory, this would make more customers stick with their existing vehicles for a longer period of time, and many would instead search for aftermarket upgrades to get new functionality.
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About the author: Bogdan Popa
Bogdan Popa profile photo

Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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