Why are tech companies venturing into EVs

Introduction –

Sony’s recent announcement at CES 2022, Las Vegas to form a mobility unit took the world by storm. The world took the notice and realized that Sony was not kidding around when they first showcased an EV prototype at CES 2020. But the real question is why Sony wants to enter this space at the first place. And interestingly not only Sony, tech giants like Apple, Foxconn, Xiomi, to name a few, also have shown their interest in the EV mobility space. Let’s understand the rationale behind this motive of theirs.

ICE/ IC Engine Vehicles

A typical conventional Internal Combustion Engine (ICE) vehicle mainly consist of its structural parts (chassis & sub-frames), many electronic components, wire harnesses and the heart of vehicle – Engine. For an ICE vehicle, engine is the most complicated thing and out of all the parts used in an ICE vehicle, almost half of them goes into making the engine and its peripheral assemblies like cooling systems and muffler systems and thus making an engine seriously is not a cake walk. Over the centuries and the recent past, only legacy players in automobile industries are successfully able to make such a complicated masterpiece as we called it – engine.

EVs/ Electric Vehicle

On the other hand, an Electric Vehicle (EV) do not require a complicated engine and related peripheral systems. It is just as electric motor delivering power to the wheels. Of course, for an electric motor to run, you need to house batteries in the vehicle. So now it’s electric motors & batteries in place of complicated engine.

So an EV is now all about electronics, batteries, wire harness and some structural components of course. Modern EV rely heavily on programming – be it battery management system (BMS), vehicle drive modes, vehicular control systems & thermal system etc.

Reasons to enter the EV space

So why these tech companies are interested in making an EV. This is simply due to the fact that as EVs are more reliant on batteries, wiring, electronic technologies and programming in lieu of IC engines, these electronic companies feel that they have enough knowledge and expertise to crack the code into the EV space. Also since they were somehow directly or indirectly involved in EVs, venturing into EV space is easier than past for them.

Let’s break down the nuts and bolts as to why tech companies are so confident in the EV mobility space –

  • Li-ion Batteries –

Li-ion batteries are used for powering modern day EV. These are the same batteries which run our daily tech drivers such as smartphones, tablets or laptops. While these companies can’t even think of making an ICE, but making an EV is well within their area of expertise due to Li-ion batteries which they already design & manufacture.

  • Electric motor –

Electric motors are a more familiar area for tech companies to play around and not to mention, these motors are far less complicated than ICE. With far less parts involved and easier tech, tech giants are now more confident in their entry into EV market.

  • Technology –

These electronic conglomerates have a ton of expertise in making tech products for their consumer electronics stuffs and the same can be easily brought to an EV. Fancy interactive dashboards, voice controls etc. The whole vehicle can be controlled with one touch over your phone. And you think over that, it already looks like that EVs have come to share the same DNA as that of a smartphone.

  • Eco-system

Imagine that you have a Sony/Apple/Xiomi car and you come close to your car, it automatically unlocks itself for you. As you enter and fastens the seat belt, the car automatically starts and awaits your commands for next action. The car gets connected with you smartphone and your favourite podcast starts playing or a saved playlist in your smartphone starts playing in the car seamlessly without your much intervention. This is all possible due to the same eco-system of products which is now limited to laptop/PC, smartphone, tabs etc but the same can be easily translated to an EV. Well this was just an example while the possibilities are endless with this eco-systems. Since tech giants already have their own ecosystems, why not a loyal customer want to but their EV.

  • Capital –

And last, but not the least, required for producing any EV is investment. The tech giants are already cash heavy and a good infrastructure is required for manufacturing facilitates and assembly lines of EVs. For example, Tesla’s expansion of its Model 3 sedan nearly bankrupted the company due to the chokehold that delays in scaling production put on cash flow. Large electronics companies already have that upfront capital to start and invest with.

Conclusion –

Sony’s advance into the EV mobility space proves that in the age of electric vehicles, anybody can build cars as long as the basic electronic parts and components can be procured. This will give a confidence to other tech companies to enter into the EV space and have a fair share for them. We also need to see how quickly these companies manage to bring their products to the market and how they compare & compete with conventional players. At the ends it’s the customer who is winning this race.

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