Instead Of Becoming Detroit, Silicon Valley Is Re-Inventing Detroit
from the so-if-michael-dell-was-the-henry-ford-of-computers... dept
There’s been a lot of hype lately about a new Silicon Valley automotive startup called Tesla Motors, which is producing a powerful, electricity-powered sportscar. Considering the high level of VC activity in green technology, it makes sense for a company to tackle one of the chief polluters, the automobile. But while it remains to be seen whether this attempt at an electric vehicle actually goes beyond the failed efforts in the past, Tesla Motors may already be re-inventing the auto industry. In recent years, the big automakers have slowly moved to procure more of their parts from independent parts suppliers. Still, they remain highly integrated manufacturers. Tesla’s business model more closely resembles that of the tech industry. It focuses on engineering and design, while acquiring many of its components from the niche, high-tech parts manufacturers that have sprouted up to service the big automakers. In the past, comparisons have been made between Silicon Valley and Detroit, suggesting that the former is as dependent on a single industry as the latter. But the case of Tesla demosntrates the flaw in this comparison. The tech industry isn’t about selling a specific product, it’s about applying ingenuity to solving problems in any industry, something that will always be needed. Even if Tesla fails, it likely marks the beginning of a likely shift in the automotive industry, towards a method of production more familiar to electronics companies, and the markers of their components.