Why Tech Companies Keep Trying (and FAILING) To Build Cars?

It seems like every three months, some tech company, who’s never built a car before, announces they’re going to build a car. Years go by and we never hear about it again. Why is that? Is it ego? Overconfidence? As cars become more tech heavy, it makes sense that a tech company could make a great car, right? The answer is more complicated than you might think. In this blog, I’m going to give you a timeline of tech companies getting into cars. The various reasons why they’ve done it. How some of them have missed the mark. And how others have prevailed.

So a few weeks ago you probably heard about vacuum manufacturer, Dyson, and their failed electric car. And if you didn’t, here’s a short rundown. Back in October of last year, Dyson announced that they were cancelling their electric car program. Apparently the Dyson SUV made 538 horsepower, had room for seven people and frankly look pretty good. And this wasn’t just a vaporware project. They had a running prototype with a range of 600 miles. That’s amazing, but it came at a price. James Dyson had put in 500 million of his own British pounds for one car. The project just wasn’t sustainable, so they pulled the plug. Surprisingly though, Dyson wasn’t the first appliance company to attempt their own car, which is where our story begins, over 100 years ago.

Chapter one: the early days.

The earliest example I could find of a tech company attempting to build a car, was Westinghouse in 1905. The highest of the high tech was the Steam Turbine Generators that Westinghouse was building to produce electricity in the early 1900s. But in 1905 Westinghouse unveiled their Model 40 gasoline powered car. The Model 40 made a very appropriate 40 horsepower, twice that of the Model T, but also costs $7,500. Or about 194 grand today. You can buy something like nine Model T’s the price of a Model 40. Obviously selling a car that expensive, even in the early days of the automobile, was unsustainable. And Westinghouse stopped building the Model 40 just two years later in 1907. But this wouldn’t be Westinghouse’s last brush with building cars.

In 1967, Westinghouse debuted the Marquette. It used 12 six volt batteries for a range of 50 miles. Top speed, 25 miles per hour. With arrow like that I’m not surprised at all. Westinghouse built the Marquette in response to legislation that promoted EV development, cut down pollution and congestion in big cities. But enough about Westinghouse.

Let’s fast forward a few decades and talk about a company you might’ve heard of. Today Samsung is known for their high tech products, like laptops, tablets, and phones. Back in the early 90s though, Samsung was much like Westinghouse. Specializing in home appliances and electronics, until they saw an opportunity. Samsung chairman, Kun-Hee Lee, was the son of Samsung’s founder. After taking the reigns of the company, I think Kun-Hee he wanted to do his pops proud and lead Samsung’s ascent over there arch nemesis, Hyundai. How would he do that exactly? Cars(of course). There is just a one problem. They didn’t know how to build cars. So Kun-Hee did some business and got Nissan on board to help them produce a car.

In 1995, Samsung announced the formation of SMI, or Samsung Motors, which would produce re badged Nissan’s under license. The first Samsung mobiles rolled off the assembly line in 1998, directly into the chomping mouth of the Asian financial crisis, which was causing trouble all over the region. Not good timing. In the first half of that year, SMI lost $192 million alongside the 45,000 cars they sold. Most of which were bought by Samsung employees. Timing for the Samsung car was really awful and they lost a bunch of money. And ended up selling their automotive assets to Renault, in 2000, who renamed the company Renault Samsung Motors. Through the 2010s, they sold electric cars in Korea and the company was actually slated to have a big revival this year at the Manila Auto Show, which had to be postponed due to the current pandemic. Frankly, I’d like to see Renault Samsung finally get a win on home turf. But it’s not going to be easy. Hyundai was able to buy Kia during that financial crisis, which only made their foothold on the automotive market even stronger in Korea.

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