Automotive-based R&D is going through one of it larg- est technological transitions ever. One of the drivers for this transition is going from an almost universally
implemented internal combustion (IC) drive system to an
electrical motor/battery drive system due the air pollution
and global warming effects of burning fossil fuels.
The other R&D driver is transitioning from manual control
of vehicles (human driver) to the implementation of autonomous systems due to safety and efficiency improvements. And,
of course, both of these technology drivers are occurring simultaneously—although they can be implemented in automotive
fleets in a staggered sequence and the autonomous systems do
not have to be usable 100% of the time.
The complexity, R&D costs and implementation resources
have often become too large for an individual car manufacturer
to accommodate on their own, especially for those companies
who started their system development later than other companies. As a result, there have been numerous acquisitions,
alliances, partnerships and collaborative investments.
On the autonomous side, Honda and General Motors have
a long-term multi-billion-dollar partnership. Toyota is working with ride-sharing companies Uber and Lyft. Volvo is also
working with Uber. Ford is working with self-driving startup
Argo AI. BMW and Fiat Chrysler are collaborating together
with Intel/Mobileye. Fiat Chrysler is also working independently with Google/Alphabet self-driving subsidiary Waymo. Hyundai and Volkswagen are
partnering with another self-driving startup,
Aurora Innovation. Nissan is partnering with
NASA. And Daimler is working with Bosch,
just to name a few.
Automotive companies are investing record
high levels of R&D with up to a third of the
investments going towards autonomous driving
alone—in part to compete with foreign technology companies and even large market Chinese
developers. Yet, while large car manufacturers
are investing record amounts in R&D, their resources still lag behind the R&D investments of
other non-automotive companies such as Google
and Apple who are investing in this booming
long-term market potential.
Toyota, for example, is worried about Volkswagen’s market inroads into China—the largest
car market in the world—and where Toyota’s
sales efforts are lagging. Toyota is trimming its
R&D efforts for conventional car development
and instead putting those investments in the new
technologies. General Motors and Ford as well
are slashing R&D investments in conventional
vehicle development—and in some cases, cutting
model lines and even production facilities—to
focus their available R&D monies to autonomous vehicles
and electric drive systems. General Motors is also creating a
new R&D facility in South Korea to support its four existing
production plants in that country and to add to their global
development of emerging new technologies.
Daimler is refocusing its R&D efforts with the creation of a
new R&D center in Beijing, China—its second in China—to
help accelerate localized development of Mercedes-Benz
vehicles in China, its single largest global market. The new
R&D center is scheduled to open in 2020; Daimler’s first China
center was opened in 2014.
Industrial R&D Spenders – Automotive (Billions USD)
2017 2018 2019
Toyota 10.369 10.848 11.327
Volkswagen 11.572 10.915 10.258
Honda 7.541 8.180 8.818
Ford Motor 8.000 8.305 8.647
General Motors 7.300 7.278 7.257
Total 44.782 45.526 46.307
Source: R&D Magazine Survey 2018
2017 Global 2017 U.S. 2018 Global 2018 U.S. 2019 Global 2019 U.S.
Automotive R&D Spending
35. 4 37.1 35. 9
Source: R&D Magazine Survey 2018