Almost all top automakers have adopted autonomous vehicle technology to cope up with the changing dynamics and evolution in the auto industry. This disruptive technology has disturbed their business model from in-sourcing to outsourcing. Adoption of any new technology is associated with huge cost and technical expertise, this is believed to be the major reason behind the accelerated outsourcing in automotive industry. Few OEMs are outsourcing sensor technology and computing, while some are investing in the autonomous vehicle start-ups. While few companies including carmakers and tier-1 suppliers are joining forces to sustain in this technology disruption.

General Motors has invested $500 million in a ride sharing company ‘Lyft’ to secure its future vehicle sale. Lyft has outsourced cloud-computing technology from Amazon Web Services and mapping and navigation from Google. The company has also invested ~$159 million in U.S. based camera provider Nauto. Apart from this, GM has acquired Cruise Automation for around $581 million to further accelerate its autonomous vehicle development. Further, GM has partnered with Mobileye (SoC provider), IBM (AI provider), and Vodafone (data service provider).

Volkswagen has also partnered with top suppliers in the industry including NVIDIA (AI provider), Didi (ride sharing), QUALCOMM (wireless digital technology provider), Mobileye (SoC provider), and Kuka (Robot technology provider). Besides, the company has invested around $300 million in Tel Aviv based car-hailing start-up Gett and $180 million in Chinese AI start-up Mobvoi.

Ford is not behind in this race. The company is accelerating its autonomous vehicle capability by sensors, AI, mapping, and computing & software technologies. Ford has invested in well know LiDAR provider- Velodyne and 3D mapping developer- Civil Maps. The company has also invested ~$1 billion in AI start-up- Agro AI to speed up its AV development. Nirenberg Neuroscience LLC (Machine Vision provider) and IBM (Cloud Computing) have also partnered with Ford last year (2016).

Volvo along with Autoliv (tier-1 supplier) have together established a new company- Zenuity to focus completely on the development of advanced software integrated autonomous vehicles. The company has also partnered with giant suppliers such as NVIDIA, Google, Microsoft, and Epsilon. Volvo has invested ~$300 million in Uber, the leader ride sharing business.

Renault-Nissan has outsourced internet connectivity from DeNa, block chain technology from Microsoft and VISEO, and cloud-computing & software from Sylpheo. Daimler has also made noticeable acquisitions to maintain its brand value. The company has acquired an equity stake of nearly 10 percent of Tesla Motors Inc. for electric drive system. Daimler along with BMW and Audi acquired HERE from Nokia for $3.1 billion to access digital mapping resources. Besides, Yandex, NVIDIA, Uber, T-systems, and Bosch are its noticeable partners assisting the company in autonomous driving technology projects. BMW has strategized its AV business by partnering with Intel, IBM Watson, Mobileye, and Continental to successfully debut its fully autonomous car by 2021.

These major inorganic developments and technology outsourcing have already created high level of disruption in the automotive industry and more of this is expected in coming years.