Toyota strengthens itself to take on Tesla in High-Tech Auto Software

Toyota Motor Corporation is developing an operating system that will go up against Tesla Inc.’s after tapping a star Silicon Valley roboticist to help put the final touches.

James J. Kuffner Jr., an American roboticist and the Chief Executive Officer of Toyota’s new technology research arm, Woven Planet Holdings, is working on a system called Arene, which allows new features to be installed in a car’s existing hardware over the air and provides a platform for developers to create software. Kuffner is a former Google engineer.

When it comes to over-the-air updates of a car’s OS, Tesla is already the big player. The OS controls everything from braking to Wi-Fi, locking, and lights. The American Electric Vehicles maker has been upgrading its EV’s battery range and autonomous functions remotely via updates since 2012. On an earnings call last week, CEO Elon Musk said Tesla is willing to license its software capabilities to third parties and is already in talks with Original Equipment Manufacturers (OEMs).

“There are many choices, which is a good thing,” Kuffner, who is in charge of Toyota’s digital activities, said at a briefing last Friday, according to Bloomberg. On being asked whether Toyota is interested in licensing Tesla’s operating systems, he said, “we have a competitive product that can run on many different types of hardware, so maybe in the future, Arene can run on Tesla hardware.”

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James Kauffner. Image: Toyota
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Toyota, which overtook German carmaker, Volkswagen AG, as the world’s top-selling automaker in 2020, is turning out to face the same challenges as all legacy carmakers as the lines between technology and automobiles become increasingly slim. While mechanical engineering and hardware are the forte for legacy carmakers, they’re facing competition from tech giants like Alphabet Inc., Amazon.com Inc., and Baidu Inc. that are pumping billions of dollars into new areas of intelligent and connected mobility. Tie-ups between the companies are becoming commonplace.

According to some estimates, conventional automakers might take about three to five years to offer over-the-air updates like Tesla’s that go beyond improving a car’s maps and entertainment systems. And proceeding into the new domain of software development is also costly, which is why global automakers’ R&D budgets have roughly doubled over the past decade.

Woven Planet’s creation has, to some extent, signalled Toyota’s movement in the opposite direction, betting it can take on tech giants at their own game. In January, Woven Planet was created from a tech-research company originally established by Toyota in 2018 and funded to the tune of 300 billion yen ($2.9 billion). An $800 million fund that will invest in early-stage tech companies is one of its several subsidiaries.

In June last year, Kuffner, part of the initial engineering team that built Google’s self-driving cars, was brought onto the Japanese automaker’s board, underscoring the wager Toyota is taking on the tech veteran’s ability to lead its software push.

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