The line between the technology and automotive industries is blurring. The rise of rideshare companies such as Uber and Lyft means that transportation is being tied ever more closely to your cell phone, while autonomous driving technology is turning your car into a computer.
But these developments are expensive: carmakers’ R&D budgets jumped 61% to $137 billion from 2010 to 2014. To share some of the risk—and the cost—the incumbent automotive giants and their would-be disruptors are teaming up in an ever-growing, ever more complex series of alliances.
The prize is lucrative, and the carmakers want to ensure that software players don’t win the lion’s share of it. McKinsey estimates that rideshare and onboard-data services could generate an additional $1.5 trillion of annual automotive revenue by 2030.