“Running Smartphone”
The Developments of Japanese Automobile Manufacturers Surrounding the “Running Smartphone” Concept
There have been reports about the acceleration of SDV (Software-Defined Vehicle) development, but it remains uncertain whether Japanese manufacturers can compete effectively with new economy manufacturers.
The value of automobiles, like smartphones, is increasingly tied to software, with forecasts in Japan suggesting software will account for about 40% of total vehicle value by 2040. However, this projection is overly optimistic. The pace of change has accelerated from "three years being a long time" to "two years being a long time."
CATL, the world’s leading battery manufacturer, recently unveiled a cutting-edge, ultra-safe EV chassis. It is said that the development cycle for new models by new economy manufacturers has halved to 1–1.5 years from the previous three years. BEVs (Battery Electric Vehicles) drastically lower the barriers to entry into the automotive industry, turning vehicles into something akin to assemble-yourself PCs. In contrast, the development period for new Japanese models remains 3–5 years, despite being shortened. Additionally, these vehicles often involve triple the components and double the manufacturing processes.
Meanwhile, China’s NIO has achieved groundbreaking suspension performance, as demonstrated by its ET9 model, which can drive over rough roads with a champagne tower of five tiers on its hood without spilling a drop. This matches the capabilities of Mercedes-Benz’s flagship Maybach models with their advanced active suspension systems that negate road vibrations.
Many Japanese underestimate the potential of AI, and such overly optimistic forecasts are a primary cause of Japan’s major decline. The prediction of BEVs accounting for 40% by 2040 is highly likely to be realized as early as 2030, a full decade ahead of schedule.
Efforts by Japanese Manufacturers:
Toyota: Strengthened partnerships with NTT and the three major telecom companies (KDDI, SoftBank). Collaborating with NTT on AI-based traffic safety support infrastructure. Investing in TSMC and Rapidus for semiconductor procurement. Woven by Toyota employs 2,212 people, has built an independent development system for its "Arene" OS, and is actively recruiting software talent (over 20% of total workforce). Software-related job postings grew from 105 in July 2021 to 338 by February 2024, marking a threefold increase.
Honda: Partnered with SCSK in 2023 for system development. Plans to double in-vehicle software personnel from the current 10,000 by 2030.
Nissan: Collaborates with India’s Tata Consultancy Services for in-vehicle software development. Aims to standardize in-vehicle software with Honda and launch mass-production vehicles by 2030. Currently in merger talks with Honda.
Global Trends and Intensifying Competition:
China:
Xiaomi launched its "SU7" EV, receiving approximately 90,000 reservations in one day.
Huawei is advancing EV development under a new brand, aiming for rapid global expansion starting in 2025–2026.
United States: Tesla leads with OTA (Over-the-Air) updates and has a strategic edge, driven by Elon Musk’s three key principles:
Speed: Tesla operates at speeds 10 times that of Panasonic and continues to accelerate, dominating competitors in product development and market introduction. Success hinges on rapid decision-making and execution.
Resource Allocation: Tesla invests heavily in R&D, production facilities, and talent, leveraging economies of scale to enhance cost competitiveness. A single Tesla AI development data center surpasses Toyota’s entire software development budget. Tesla’s highly skilled engineers (earning $500,000–$1 million annually) produce value equivalent to 1,000 average employees. Tesla’s FSD software team has only about 150 engineers.
Flexibility and Innovation: Tesla redefines product design and business models without clinging to sunk costs. Examples include shifting its focus from car manufacturing to AI robotics and integrating energy storage systems with EVs.
Traditional economy companies struggle to match Tesla in these areas. For instance, Volkswagen failed in self-developing software, leading to its CEO’s resignation and reliance on Chinese firms. Similar challenges plague Japanese manufacturers.
Conclusion:
Based on the latest global trends, Japanese manufacturers face extremely slim chances of competing effectively on the world stage.