As the relationship between Detroit and Silicon Valley matures, automotive manufacturers are increasingly connecting IT projects out west to their global operations.


Silicon Valley tech centers such as Honda’s in Mountain View often bridge the gap between the high-tech region and headquarters (Photo: Honda)

While remaining in ‘research’ mode for projects is a feature of virtually all Silicon Valley-based automotive centers, the work done here also benefits from having access to the engineers, facilities and capital of large manufacturers. A recent trip through America’s foremost high-tech region underscored how both sides benefit from each other. At the BMW Group Technology Office, for example, Simon Euringer says his team can provide startups with fleets of vehicles, a wider network of test tracks and validation processes across its global IT links.

John Moon, managing director, strategic partnerships at Honda Innovations, says that maintaining links with the carmaker’s North American R&D engineers is key to how Honda Developer and Honda Xcelerator, two open innovation programs, support software developers and startups. The Mountain View center has also broadened collaboration with other corporate entities, including across production, sales and distribution, and directly with Japan.

Some Silicon Valley offices oversee technology and software integration through to the start of operations, or implement new services from conception through product release. Moon says that his team works both on models planned years in advance, as well as those approaching serial production. “I spend half of my time with the vehicle development guys, and half my time with IT teams trying to solve those problems,” Moon says.

At Mercedes-Benz, the carmaker’s team in Sunnyvale, California, played a major role in developing MBUX, the infotainment system in the new Mercedes A-class. The BMW software development team in Mountain View, meanwhile, is currently working in ‘production mode’ to integrate vehicle assistant services, such as Amazon Alexa and Google Assistant.

Porsche’s Santa Clara center is also working on services that will be rolled out soon. The center, which includes engineers, software developers, UX designers and corporate venturing, supports new ideas or startups, and draws on Porsche’s corporate resources, from engineering through to marketing, says Porsche Digital’s Thilo Koslowski. Along with a number of recent investments in the the area of artificial intelligence (AI), he points to the upcoming launch of a service that will enhance the driving experience based on a digital framework developed in California.

Ford connects startups

Ford’s Palo Alto center and the US carmaker’s global R&D have direct links, as the center reports to the group chief technology officer. However, its work is uniquely separated from other facilities by focusing on core strengths in Silicon Valley, notably software, sensors and compute power, says Dragos Maciuca, the center’s technical leader. Palo Alto also plays an important facilitation role with talent in Silicon Valley and the company’s IT teams. “When we don’t have the talent in the office, we can connect a startup directly with engineers or plants in Michigan,” he says. “But we stay engaged, because the difference in how a startup and a traditional manufacturer works is still large, and we have to help both sides.”

That can also include introducing startups to partners elsewhere in Ford’s supply chain. “A lot of time we might find an interesting technology, but the startup can’t deliver to us in production; that is when we might hand it over to a tier 1 supplier,” he says. “In that case everyone wins, because Ford delivers the technology to a tier 1 that it trusts, the startup wins by getting its technology adopted and the supplier knows it has a customer in us.”

At BMW, partnership with tech and automotive players is important to the work it is doing in Silicon Valley. Its autonomous team is based both at Mountain View and co-located with Intel and Mobileye in Santa Clara. Other companies including FCA, Continental, Magna and Aptiv are also working with BMW to use the system.

IT innovation through the value chain

Honda’s Moon, who worked in the mobile and tech sector before joining the Japanese carmaker, says his team also plays an important role in managing and translating expectations and work practices between the tech and automotive sectors. For example, tech companies don’t always understand that the supply chain and certification processes for vehicle production mean that change management has to be carefully carried out.

Taking such care can help avoid having to scrap millions of dollars worth of obsolescent inventory in the supply chain. “We have to educate tech companies so that they realize we can’t just turn around a project in a month, while at the same time we help Honda be more flexible and move quickly where possible,” he says. “Over time, we see both sides are learning to adapt and learn from one another.”

The integration of consumer electronics in vehicles has perhaps been the most visible work of Silicon Valley automotive centers for cars on the road today. Connected mobility and autonomous driving are now the most powerful forces for investment here. However, IT, software and computing from Silicon Valley touch many parts of the automotive value chain, from engineering and manufacturing to retail, in areas like cloud computing, data capture, virtual and augmented reality, 3D printing, energy storage and cyber security.

Ford’s Maciuca points to tech scouting in Palo Alto that has led to collaboration as far upstream as manufacturing, and downstream through to advertising. He gives the example of one production-related startup that was the ultimate Silicon Valley cliché: three guys in a garage. The innovation center helped develop the company’s ideas together with Ford production teams in Michigan, which led to a one-month pilot. “Now we are working on getting them into the plant for good as part of production,” he says, declining to give further details at this point.

Direct links

There are also direct links between Silicon Valley and carmakers’ business divisions. At BMW in Mountain View, for example, the newest team at the office is focused on IT innovations, and forms part of BMW’s global Group IT organization, reporting to CIO Klaus Straub. This team works on topics that include data compression and analytics for autonomous vehicles, and identifying charging patterns for electric vehicles. One project focuses on vehicle-to-energy grid integration, called BMW Charge Forward, which addresses volatility in energy demand together with a local power provider in California.

The team is studying ways to incentivize customers not just to plug in the battery every night or second night at home, but to plug it in at off-peak times to feed energy back into the grid. “The team studies the analytics of driver behavior to influence their decisions without forcing them,” Simon Euringer says.

At Hyundai Cradle, John Suh, who heads the innovation center, points to investments in new technology that is also geared towards business operating units, notably for manufacturing and supply chain. Examples include advanced robotics, new materials and processes like 3D printing. “We want to make sure that manufacturing remains a competitive advantage for Hyundai-Kia,” he says. “We invest in technology that strengthens that.”