$125.24bn Current market capitalisation of Sony (11 March 2022)
Why Honda-Sony deal matters Creation of joint EV brand shows how car makers and tech giants can join forces
H
onda has dreamed the impossible dream and agreed to do something established car makers have resisted for years: be a contract manufacturer. The agreement between Honda and Sony to jointly create a new EV brand “aligns the technological assets of both companies”, according to Honda, as they work to launch their first car in 2025. In doing so, the Japanese pair have made a bold move to marry the skills of a technology giant with the engineering and manufacturing know-how of a vehicle company. The combination is one that is being investigated globally as cars become more defined by software than hardware. Most notably, it’s happening in China. Examples include Geely’s link-up with tech giant Baidu to
create the Jidu brand for selfdriving EVs, with Geely taking the lead on engineering and manufacturing aspects. Stellantis’s partnership with Apple iPhone maker Foxconn to develop digital cockpits and connected services through the new Mobile Drive division is another good example, said Jonathan Davenport, an analyst at consultancy Gartner. “There’s this coming together of automotive and consumer electronics and software that consumer electronics brands think they can leverage,” he explained. Sony announced its interest in cars at the 2020 Consumer Electronics Show in Las Vegas when it revealed the Vision-S 01 electric saloon. It was that rare thing in automotive: a genuine surprise. It wasn’t so much the smoothly generic design
that wowed showgoers but the the smartphone market, but its completeness of the concept. experience selling PlayStation Sony tried to deflect by video game consoles will saying the car was primarily provide useful carry-over, with a showcase of some of its tech, shared hardware elements such as cameras, but it was like chipsets and digital clear the interest was there. services such as downloads Sony then returned to CES and over-the-air upgrades. this year with the Vision-S O2 Sony will develop a “mobility SUV, before Honda and Sony platform” for the new EV brand made their joint announcement that it is creating with Honda. in early March “to establish The company actually makes a joint venture to engage in PlayStations itself, rather than the joint development and outsourcing, but designing and sales of high value-added building cars is several orders battery-electric vehicles of magnitude harder. and commercialise them in “A vehicle with all the conjunction with providing associated functional safety mobility services”. and ADAS requirements Sony’s entry is complex to create into the new but especially to software-defined create at scale,” automotive era said Davenport. PlayStation 2s sold, makes sense. Tesla is often the most successful It may not have held up as an console ever much of a share in example of the
157.7m
(Source: Statista.com)
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first mover responsible for many new car industry trends, and it definitely has been a leader on the software side. But for tech firms and other automotive newcomers, it has also been a clear example of how not to get in the business. “[Tesla boss] Elon Musk didn’t think he would need to partner with the Fords of this planet with their supply-chain experience,” said Neil Endley, a director at quality consultancy Trigo. “He said ‘I’ll go do that myself’ and then suffered like hell with lack of product to the plants.” Tesla’s slow and agonising production ramp-up is one big mistake made by automotive newbies. Underestimating the cost of engineering is another – one that Dyson suffered just before it abruptly shut down its electric SUV project in 2019.
