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Economy

Toyota v. Tesla, BMW or Bollore' - Who Will Cash In On The Car Of The Future?

Most carmakers know that the real money isn't in the car itself but in its parts and components, which are increasingly high-tech. Those who invest in development will win the revenue game.

Toyota's FCV hydrogen electric concept car
Toyota's FCV hydrogen electric concept car
David Barroux

PARIS — Ten, or even 40 years from now, the auto brands of today, from Renault to BMW to Ferrari, will probably still capture the imagination of car buyers. But who will cash in on the profits?

Most carmakers today know well that the value of a vehicle lies mostly in its parts and components, designed and made by French automotive parts manufacturers such as Faurecia, Plastic Omnium and Valeo — or foreign companies such as Bosch, Denso, Delphi, Mobis, etc. As the years pass, the market value and profits of these so-called "subcontractors" continue to rise, while those of car manufacturers seem to be on a constant rollercoaster. This trend is likely to continue as new heavyweights enter the automobile game.

When Toyota unveiled a hydrogen car, it was obviously hoping to earn brownie points from the public for its environmentally friendly image. But the Japanese carmaker is simultaneously trying to get ahead of its competitors in a race that will determine who will own the most patents on future forms of propulsion. Toyota, which has already established itself as the champion of hybrid technology with the Prius, could become a key partner for many manufacturers if its hydrogen-based technology becomes standard in the coming decades.

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Toyota hydrogen fuel cell at the 2014 NY Int'l Auto Show — Photo: Joseph Brent

Today, Toyota sells cars. And although it recently decided to make 6,000 of its hydrogen patents available free of charge, the company could tomorrow diversify by sellings other patents, components — and even engines — to its competitors.

Caught up by the digital revolution, the car industry is also gradually coveted by the giants of this new economy. When Google develops an unmanned car, it's not really because it wants to start its own assembly lines — it's more to assert itself as a strategic supplier of software solutions for automobile manufacturers.

Although the threat may still seem distant, manufacturers should be aware that if they don't invest now in their own development of major technologies, they are heading toward misfortunes similar to what PC manufacturers endured. While Dell, Compaq, IBM and Lenovo have finally managed to grab the attention of the buying public, Intel and Microsoft — respectively, suppliers of microprocessors and software — were the ones who got the lion's share of the profits for years.

Tomorrow, Toyota, Tesla, Bolloré, Google and others will try to impose themselves as key figures in the automotive universe, relegating car manufacturers to the role of mere box makers.

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FOCUS: Russia-Ukraine War

A First Look At Russia's Ukraine War Veterans, Struggling Back On The Homefront

Hundreds of thousands of Russians have taken part in the war. On returning, many face difficulties to return to normal life and finding work, as independent Russian news outlet Vazhnyye Istorii/Important Stories reports.

Image of a Man waiting in line at Military Employment Office of the Russian Armed Forces​

Man waiting in line at an employment office in Moscow

РЕДАКЦИЯ

MOSCOW — Since the beginning of the full-scale invasion of Ukraine, hundreds of thousands of Russians have taken part in the war. They range from professional soldiers, National Guardsmen, reservists and conscripts to mercenaries of illegal armed groups, including former prisoners.

The exact number of those who survived and returned home is unknown. In the past year alone, about 50,000 citizens received the status “combat veteran”. The actual number of returnees from the front is far higher, but it is often extremely difficult to obtain veteran status and veteran benefits.

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