At CES on Tuesday, Sony announced that it was launching an electric vehicle (EV) division called Sony Mobility, with plans to build and sell its own vehicle. It would be easy to dismiss Sony's announcement as just another company jumping on the EV bandwagon.
After all, Sony first rolled out its Vision-S concept car two years ago at CES 2020. At the time, the company wasn't planning to sell the vehicle, but intended it as a showcase for the company's sensor technology--something it hoped would be adopted by other vehicle manufacturers. The fact that the company introduced a second concept, the Vision S02, and says it actually plans to sell it to customers is why I think dismissing the company's latest effort would be a mistake--especially if you're Tesla's CEO, Elon Musk.
Sony's announcement comes after Volkswagen and Toyota, the world's two largest automakers--at least in terms of vehicles sold--separately laid out plans to spend $170 billion on their EV efforts. It's clear they're no longer content making gasoline-powered vehicles while leaving Tesla to dominate the EV market.
Add in the fact that more than a handful of consumer electronics companies are moving toward selling EVs, with most focusing on vehicles that can drive themselves, and Tesla is about to face real competition for the first time. In addition to Sony, Apple has long been rumored to be working on an autonomous car, with some analysts thinking a product could come in the next five years.
Here's why this is interesting, and why it should worry Musk: There's no question that Tesla has a huge lead, but that's largely by default. It's had the entire market to itself for the better part of a decade.
Most legacy car makers--until now--have seemed to have little interest in building EVs as anything more than a public relations exercise, or to satisfy regulators who are cracking down on internal combustion engine cars. California, for example, has said it would ban the sale of cars that burn gasoline by 2035.
Sony, on the other hand, is already a leader in building the types of sensors and cameras needed to give a car the information it needs to navigate busy city streets. That's the real goal. It's no longer just about building a car powered by a giant battery; it's about building a car that you can sit in, take a nap, and wake up at your location, without having to do anything.
That's not a small thing--Tesla hasn't exactly mastered the art of keeping its "autopilot" feature from steering into parked emergency vehicles, for example. I'm not suggesting that Tesla's cars aren't good. They certainly are, and considering that the company started from scratch a century after its competitors, it made up the ground incredibly quickly.
I am, however, suggesting that Tesla's dominance isn't entirely due to its making a better EV. It's because it's the only company that has put the effort into mass producing any EV.
Even companies like Lucid Motors, which not only competes directly with Tesla's flagship Model S, but also poached away a significant number of executives and engineers from Musk's company, are a long way off in terms of posing a real threat.
I'm still not even sure Sony's real goal here is to sell vehicles to consumers. That's a very different proposition than selling, say, OLED televisions or cameras. It already sells its camera sensors to other manufacturers, including Apple, which uses them in the iPhone.
For Sony, the real opportunity is in being the tech that helps automakers build viable EVs that people actually want. The real opportunity is taking what it's really good at, and selling it to companies that so far haven't shown that they're good at it at all, or even that they care enough to try.
That is why Musk should be worried. Once automakers like Volkswagen, Ford, Toyota, and General Motors get serious about building EVs, Tesla won't have the market to itself. It will have to compete on something other than the fact that it's the only real option for anyone serious about driving a car they can charge in their garage overnight.