Translation

Author: Michelin

“Be friends with time” rather than “selling anxiety”.

“People often use the phrase ‘It’s an era of chaos, various values are being disintegrated, and new values have yet to be established’ to describe this rapidly changing world, describing the life that has been disrupted by the pandemic.”

In fact, isn’t the automotive industry the same? From engines, transmissions, and mechanical buttons, to batteries, motors, and digitalization, the rules that were originally present in the automotive world are undergoing changes, and it’s not an exaggeration to describe it as “an era of chaos”.

Looking at the car companies in the vortex of change, I couldn’t sleep peacefully. After carefully reading through it in the middle of the night, I found that the whole article was filled with one word: anxiety.

Currently, car companies, just like you, me, and him working 996 with age and KPI pressures, are filled with anxiety due to innovative technologies, new demands benchmarked against smartphones, and challenges from cross-border contenders.

Time is the best remedy for anxiety

I’m not sure when the automobile turned into an industry racing against speed. A car from Company A has already surpassed 1000 Tops in computing power; Company B got the first global release of a certain AI chip; Company C became the first mass-production car with L4-level automatic driving… It seems like whoever is slow or not aggressive enough loses.

When huge waves roll in the sea, surfers compete not only in speed and courage, but also in their ability to read the waves. The automotive industry is the same. When the wave of change comes, compared to speed, it’s more important to grasp trends and their own rhythm. Of course, this requires the investment of time, energy, and capital.

In the recent controversial “auto-driving” incident, a protagonist frequently appears: LiDAR. Each company is rushing to equip cars with LiDAR, as if LiDAR is the life-saving straw saving auto-driving safety. Luminar, as a leading LiDAR company, has already announced its use in cars from multiple brands, and Volvo was the first automaker to extend an olive branch to them.

In 2018, Volvo invested in Luminar, which was the first investment of the Volvo Technology Fund. At that time, Luminar was still a relatively unknown startup, but their innovation in LiDAR and sensing technology still surprised many people.Until 2021, Luminar became the first laser radar technology company listed on NASDAQ, established partnerships with over 50 companies and 12 major car manufacturers, and even began to officially release models equipped with laser radar. Only then did Volvo “come late” to announce that it will integrate Luminar’s laser radar and solutions on its next-generation pure electric SUV in 2022.

It took more than three years from investment to implementation. In the fast-paced automotive industry, this move may seem a bit “slow”. However, it is precisely this more than three years of polishing that enables Volvo to combine Zenseact’s software with Luminar’s hardware to create a full-stack solution combining software and hardware. Luminar LiDAR laser radar can be seamlessly integrated into Volvo’s roof. Luminar CEO Austin Russell said in an interview that it was Volvo’s decades of mass production project experience that enabled them to create a comprehensive autonomous vehicle solution.

While using innovative technology, Volvo has not abandoned its core value of “safety”. The laser radar on Volvo’s next-generation models uses a larger wavelength, which increases the detection distance to 500 meters and enhances power and performance without harming human eyes. Innovation and safety are not mutually exclusive.

Just like Zhang Lei, the founder of Gao Ling Capital, said: “Find the best company, become friends with time, and for value investment, this is one of the best interpretations.”

Volvo’s attitude towards innovative technology is like “Value Investment” in the automotive industry: discovering technology trends, finding suitable startups, investing, researching, cooperating, growing, and waiting for the right timing and investment to apply their own products. This may not be compatible with the “fast-paced” automotive industry, bringing short-term returns rapidly, but it is after experiencing full rational judgment and risk awareness, using the traditional automotive attitude towards safety and responsibility to polish, that innovative technology can truly be integrated with its own products and needs.

When we talk about Volvo, we often think of “safety”, which is the accumulation of technology and experience, as well as strict standards that have helped Volvo customers establish a sense of security. In fact, car companies also need this sense of security. In this noisy era, restraining speed, finding their own rhythm, can avoid fear of the unknown and anxiety caused by fear.

Technology innovation has never been a one-man game.As mentioned earlier, in 2018 Volvo Technology Fund made its first investment in Luminar, and it was also the year when Volvo Asia Pacific Innovation Center was officially established, creating the Technology Fund. It can be said that at the beginning of the establishment of the innovation center, an open ecosystem was intended to be established.

After all, for the technological revolution of the electrification and intelligence era, it is obvious that no single enterprise can cope with it alone. The consensus in the automotive industry is that for high-threshold innovative technologies, it is better to join forces with others rather than stubbornly pursue self-improvement. Earlier, BMW acquired Nokia’s map department HERE, and jointly created the Sensoris vehicle sensing open platform with Mercedes-Benz and Audi. Rivian, an EV startup that was recently promoted by US President Biden, also received investments from Ford and Amazon at the beginning of its establishment…

So how to balance Volvo’s insistence on safety and acceptance of open innovation?

As mentioned earlier, just like the cooperation with Luminar, deep participation in the growth of startups, and joint polishing of new technology to promote its landing. To this end, Volvo has created the “Intelligent Automotive Co-Creation Acceleration Program”, jointly recruiting startups with Amazon for 11 real scenarios from automotive R&D and business needs. For example, the enhancement of map information algorithm, the enhancement of ADAS function on telematics, multi-party security computing, personalized intelligent cockpit adaptation, telematics smart center, carbon neutrality and carbon emission tracing, wireless charging, etc.

This is like a “cultivation system talent show” in the automotive technology field. Volvo and Amazon are like two mentors who form a “double pizza team”. One opens up its own cloud service channels and resources to startups, and the other contributes its own experience in landing a complete vehicle. Selected startups will go through a 3-4 month “acceleration process” and work with Volvo’s engineering and R&D, as well as Amazon’s cloud technology industry mentors. This will produce some concept-validated products (PoC), which will eventually have the opportunity to land on the car and even become a supplier to Volvo.Under this co-creation plan, start-ups can leverage their agility and innovation, while Volvo can contribute its experience in implementing solutions. From the co-creation accelerator program, including interviews, screening, months of “training and cooperation,” to Volvo’s investment and becoming a supplier, start-up products can be built around Volvo’s automotive platform. Volvo will also coordinate with start-ups in the early stages of vehicle platform design to ensure that innovative technologies are safe and reliable, rather than simply leaving an open source port in the later stage, which can be considered part of a “cultivation system”.

As for when the winning start-ups will become suppliers and when the technology will be implemented in Volvo cars, “Technology needs to be radical, but products must be pragmatic.” This can be seen from Volvo’s attitude to autonomous driving in the past.

Volvo has complete in-house ADAS R&D capabilities, an autonomous driving hardware and software full-stack solution, and promised in 2015 to assume legal responsibility for accidents under the condition of compliance with traffic regulations. However, in the process of product implementation, the focus is still on assisted driving functions, with the goal of driving safety.

Yuan Xiaolin, CEO and President of Volvo Cars Asia Pacific, has described autonomous driving as not something that can be achieved overnight, but rather a process. This process involves continuously subdividing autonomous driving scenarios, constantly validating cutting-edge technologies, and balancing innovative and personalized investments while maintaining the bottom line of safety, comfort, and sustainability, which are not contradictory.

Compared with the hot new car makers in the capital market, Volvo’s “calm” investment outlook may even seem a bit out of step. However, compared with this, Volvo’s consistent attitude of balancing tradition and innovation also allows radical smart cars to return to the essence of cars.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.