Technology and automobiles have evolved side by side ever since Henry Ford’s assembly line began rolling in 1913. Back then, the company’s Model T was completely assembled from parts manufactured by the automaker itself. In fact, Ford’s first vehicle consisted of all Ford-made parts.
These days, rather than going it alone, the auto industry is all about partnerships. Naturally, there are partnerships with parts suppliers, but increasingly, the auto industry is stepping out of the factory and forming relationships with high-tech companies to expand their offerings – and their bank accounts.
General Motors, for example, has been heavily invested in Lyft since its 2016 investment in the ride provider to the tune of $500 million. That investment paid off handsomely for the automaker, which owned over $18.6 million shares of Lyft when the company went public in 2019. According to Reuters, that meant GM’s investment instantly became worth over $1.16 billion.
More recently, it was reported that BMW and Daimler offloaded the ParkMobile section of their PARK NOW group, formed in 2019. The parking app was acquired by European firm EasyPark Group and, while the terms of the deal are being kept confidential, it would make sense that the group saw a profit through the sale – if not directly, then by cutting loose a distraction that may have kept them from focusing on their core business.
But automakers don’t just partner with high-tech firms to turn a profit. They also do so to expand their offerings and stay competitive. Ford and Google linked up earlier this year with a six-year deal that will allow the tech giant to bring more connectivity to the automaker’s fleet. This follows in the footsteps of a similar deal between Toyota and Microsoft in 2019. And Nissan has been working with NASA since 2018 to develop its own fleet of connected cars.
The next major partnership in the auto world looks like it will be between Apple and … someone. Talks of an Apple Car have been zipping around the ether since a self-driving vehicle was seen being tested in 2017. In keeping with Apple’s tradition of innovating and designing in Cupertino while manufacturing elsewhere, the company will likely need to form a partnership of its own to enter the auto manufacturing game.
It looked like that partnership was going to be between Apple and Hyundai, but that automaker first revealed a potential link-up and then quickly retracted it, backpedaling a reported deal with Hyundai subsidiary Kia, potentially worth $3.6 billion. A possible reason for the collapse of the deal is that Apple was angered by Hyundai’s spilling of the news. Equally possible is that Hyundai came to the same conclusion as other automakers that considered building Apple’s car: that they would simply become a manufacturing arm of Apple rather than a brand that stands on its own four wheels.
Since then, a more likely partnership seems to be developing between Apple and either Foxconn or giant U.S. auto parts manufacturer Magna. According to 9To5Mac, Bloomberg has quoted an anonymous Apple employee who says the most likely partnership will be with Foxconn. Such an agreement makes sense, as the Tawain-based company already manufactures a lot of Apple’s equipment and also has its hand in the autonomous vehicle market, thanks to its own partnership with Chinese automaker Zhejiang Geely Holding Group, which was announced earlier this year.
Whichever partner the tech giant decides to work with to bring the Apple Car out of the lab and onto the street stands to ride on the coattails of a major spike in Apple’s market cap, which is predicted to grow from $2 trillion to $3 trillion, according to Citigroup Analyst Jim Suva. What would Henry Ford have made of that?