Detroit carmakers looking to Silicon Valley for new car business models image

General Motors Co and Ford Motor Co are looking towards the California’s Silicon Valley and beyond for innovative ideas and technology that could transform the car business.

While the two carmakers are looking at a similar range of advanced technologies, from Internet and mobile connectivity and infotainment to self-driving cars, GM is spending heavily; Ford is not. Following the practice refined in Silicon Valley, GM established a corporate venture capital group in 2010. Now it is providing critical early-stage funding to entrepreneurs and offering to be the first customer to startups in a wide variety of sectors, from advanced materials to alternate fuels.

Ford folded its corporate venture arm 10 years ago, having been an early investor in satellite radio pioneer Sirius and other tech startups. These days it is more cautious, favoring partnerships over ownership and focusing primarily on technologies that enable or enhance what it calls “the next-generation consumer experience in the vehicle” – shorthand for a consolidation of mobile apps and advanced electronics in cars.

Several broad trends are in the view of the car manufacturers: one is the ongoing integration of smartphones and apps into automobiles and another is the realization that both consumer tastes and cutting-edge technologies are evolving at a rapid pace — typically over months, compared with the auto industry’s traditional five-year design and engineering cycle.

GM Ventures has funded nearly 20 startups from a $200 million war chest, including investments in solar energy systems maker Sunlogics, advanced battery developers Sakti3 and Envia Systems, biofuel developers Coskata and Mascoma, and electric bus maker Proterra.

On the other hand, Ford in recent years has taken a more subdued approach to technical partnerships, following well-publicized technical glitches in its voice-activated SYNC communication and entertainment system, jointly developed with Microsoft and released in 2007. The carmaker set up a small research operation in Palo Alto in early 2012, focused primarily on mobile devices, connectivity and other unspecified transportation-related applications, the lab has concentrated on partnering with local entrepreneurs.

Via Reuters