60 Minutes aired a piece last tonight detailing the race to build an electric car. The piece revealed an number of interesting details about both GM and Tesla. Most interesting of all though, the story began to hit on the true revolution coming to the auto-industry: software.
During an interview with Lesley Stahl, GM chairman Bob Lutz revealed that the Chevy Volt was a direct answer to Silicon Valley startup Tesla Motors:
Lutz is the man in charge of developing GM’s new products, and he says he owes Tesla and its Roadster a debt of gratitude. “If a small Silicon Valley start up believes that they can do a commercially viable electric car, are we going to sit here at General Motors and say, ‘Well, a guy in California can do it, but we can’t?’ Well, that didn’t sound very good.”
While the story made it very clear that “old dumb Detroit” may not be as dumb as tech geeks would like to believe, it also made it clear that start-ups are starting to radically impact the way Detroit does business.
Lutz even made the point that “The real trick on the car [the Chevy Volt] is software.” While i doubt he understood the bigger implications of this statement, the transition from physical to digital is clearly well on its way.
This trend has been visible for years, as cars have increasingly replaced physical parts with computer technology. Until now, though, cars have been anchored to primarily physical design by the internal combustion engine. As cars become all electric though, this last barrier disappears, replaced instead by drive-by-wire systems that are controlled by software.
In practical terms, this means that the competitive advantage that a car will offer may soon be derived directly from software. Much like PCs, car bodies will eventually serve as shells that are only as good as the software that powers them.
While this may ultimately play out as a seamless fusion of hardware and software, or a standard body with plug and play software, a big question remains for the auto industry: will Detroit become a software industry, or will the software industry become the next Detroit?