Silicon Valley lost to the carmakers

While the press is still full of stories about self-driving cars, it is starting to look like Silicon Valley has failed to get behind the driving seat.

If you believed the tech press Apple, Google, and Uber were going to totally change the way cars were made and effectively take over.

But all that started to grind to a halt as Silicon Valley realised it was out of its depth. Last year Apple laid off most of the engineers it hired to design its own car. Google stopped talking about making its own car. And Uber, despite its sky-high market valuation, is still a long, long way from making its own autonomous cars.

The issue is that people outside of the auto industry doing realise what a can of worms making cars is.  Apple for example thought all it had to do was design a car and start making it.

But Tesla, which is the only successful automotive company to come out of Silicon Valley so far, has made only 80,000 cars last year and it’s been in business for nearly 15 years

Basically the tech industry, particularly Apple  thought it would monopolize the technology, then dictate terms to the traditional Original Equipment Manufacturers. But Ford, GM, Audi, Mercedes, Nissan and others launched in-house autonomous programmes. They also bought Silicon Valley companies to bolster their efforts, not the other way around.

Silicon Valley also runs on a different model. They expect a 40 per cent profit margin or they cannot be bothered getting out of bed. Car makers would only give them ten per cent if they were lucky.

According to AutoBlog where Silicon Valley is re-aligning, itself is into the field car-based data. Unlike automotive manufacturing, Big Data analytics driven by Artificial Intelligence does not require large capital investments in factories and equipment. That translates into 90 per cent profit margins.