Lang Aftermarket iReport: ‘Big 5’ companies intend to ‘disrupt’ vehicle market

“Five powerful tech companies intend to disrupt the car and light truck market, at both the OE and aftermarket levels: Amazon, Apple, Google, Microsoft & Tesla. The potential for these Big 5 companies to significantly change the vehicle market stems from their long-term mobility goals and immense technical and financial resources.

“Changes in vehicle design, operation, and use will be determined largely by software, alternative propulsion systems and connectivity. The Big 5 are dominant players in these key areas of mobility evolution.”

— Jim Lang, publisher, Lang Aftermarket iReport

Car Guys Now Have a Tech View

For more than 100 years, “car guys” have largely determined the design and engineering of cars and light trucks in the U.S. However, a new breed of car guy is emerging, one which aims at combining software with alternative powerplants and artificial intelligence to change the mobility landscape.

Financial Titans

The Big 5 tech juggernaut consists of five financial giants: Amazon, Apple, Google, Microsoft & Tesla. Their combined market value tops $5 trillion, which is many times greater than the total market value of all the world’s automakers combined.

Currently, control of the mobility market’s future development is financially tilted dramatically in favor of the new Big 5. Today’s automakers could quickly become only minor players in determining the evolution of mobility.

Driver-Assisted & Driverless Vehicles

Driver-assisted vehicles (driver assistance required) and driverless vehicles (no driver) are a primary mobility focus of the Big 5.

Apple is near agreement with an existing automaker to produce an Apple-branded autonomous car in the U.S. within several years. Google (Waymo) is regarded by many as the leader in autonomous car development, and no other company has logged as many fully autonomous miles as Google.

Eliminating the driver would change the relationship between consumers and vehicles. It would remove the driver experience, reduce the relevance of vehicles to consumers’ self-expression, and alter the nature of vehicle ownership.

Microsoft Focuses on Connectivity

Connectivity between vehicles Depends on handling immense quantities of data and is a key requirement for both driver-assisted and driverless vehicle operation.

Microsoft is positioning itself to be the leader in using artificial intelligence (AI) to manage and use the hundreds of gigabytes that an autonomous (and driver-assisted) vehicle will generate in just a few minutes. Since the storage and productive use of this data cannot be performed onboard the vehicle, Microsoft is developing a cloud-based resource to help cars drive better and more safely.

Alternative Propulsion

Tesla is the leader in putting electronic vehicles (EVs) on U.S roads. Tesla also has programmed self-driving features into many of its vehicles. Other members of the Big 5 are each engaged in developing or using electric or other types of vehicle propulsion systems in their mobility programs.

Amazon Electrifies Its Delivery Fleet

Amazon has taken a leading role in advancing the electrification of delivery vehicles, a key step in EVs getting a foothold in the U.S., by ordering 100,000 vans (delivery by 2024) from Rivian, an American electric truck maker, in which it has made a large investment.

Amazon differs from the other members of the Big 5 in its unique position as an investor in electric vehicle companies, a user of electric vehicles, and a major player in the development of electric and autonomous vehicles and their operating systems.

Amazon’s multiple roles in the evolving mobility market give it a leading and unique position in shaping mobility’s evolution.

Radical Changes

With each of the Big 5 focusing on different aspects of changing the nature of vehicles and their relationship to consumers, the combined activities of the Big 5 could lead to radical changes in vehicle design that would alter the nature of vehicles, as well as their use, ownership, and maintenance.

Aftermarket Impact

These potential changes in the mobility market and the rate at which they might be achieved would have great impact on the aftermarket, far beyond any changes that have occurred to date in vehicle design and ownership.

Much attention has been given to the potential impact of power plants (electric and other) on the aftermarket in terms of eliminating certain mechanic components.

However, less attention has been paid to the significant aftermarket changes that would occur if and when the conventional relationship between consumers and their vehicles is fundamentally changed.

Six Major Takeaways

  • A new Big 5 tech juggernaut is emerging in the mobility market. These financial titans have a combine market value topping $5 trillion, many times the combined value of all automakers worldwide.
  • Amazon has recently acquired several companies that provide it with leading-edge technology for the development of electric and autonomous vehicles. Amazon differs from the other members of the Big 5 in its unique position as an investor in electric vehicle companies, a large user of electric vehicles, and a major player in the development of electric and autonomous vehicles.
  • Google (Waymo) and Apple are focusing on driverless vehicle development, which will change the relationship between consumers and vehicles, remove the driver experience, and change the social significance of vehicles to consumer status and self-expression.
  • Microsoft is positioning itself as the leader in AI assisted cloud-based data computation and storage for the immense amount of data that driver-assisted and driverless vehicles will generate. In this way, Microsoft can provide the resources for vehicle connectivity, which is a key requirement in the efficient and safe operation of driver-assisted and driverless vehicles.
  • Tesla, the leader in the development of electric vehicles, has programmed driverless features into many of its vehicles. Tesla is the leader in putting EVs on U.S. roads.
  • The aftermarket impact of these vehicle changes on which the new high-tech Big 5 are focused could influence the volume, nature, and location of vehicle repair and maintenance.

Copyright 2021 by Lang Marketing Resources, Inc.

NOTESpecial thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.