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Toyota to take on Tesla?

Tech Edition

South Africa’s number 1 motor manufacturer – by sales and production – Toyota, is aiming to take on Elon Musk’s Tesla with a new and improved operating system developed by its new technology research arm, Woven Planet Holdings. 

Toyota Research Institute – Advanced Development, Inc. (TRI-AD) announced in September 2020 that it will create Woven Capital, an $800 million global growth-stage investment fund, to enhance the ability to achieve its vision of “Mobility to Love, Safety to Live.” In July  2020, TRI-AD announced that it will expand and strengthen its operations by forming a new holding company called Woven Planet Holdings, Inc. According to their website – “We are blending the best of Silicon Valley innovation with the quality-driven values of a trusted Japanese company to create world-class technology and build the safest mobility in the world.”

Called Arene, the system allows new features to be installed in a car’s existing hardware over the air and provides a platform for developers to create software. Woven Planet is led by CEO James Kuffner, a former Google engineer. The new company was born in January from a tech-research company originally established by the automaker in 2018 and funded to the tune of 300 billion yen ($2.9 billion). 

Kuffner, part of the initial engineering team that built Google’s self-driving cars, was brought onto Toyota’s board in June last year, underscoring the wager Toyota is taking on the tech veteran’s ability to captain its software push. Tesla is already a leader when it comes to over-the-air updates of a car’s operating systems, which control everything from braking to Wi-Fi, locking and lights. It has been upgrading its electric vehicles’ 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 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. He was asked whether Toyota is interested in licensing Tesla’s operating systems. “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.”

Toyota is facing the same challenges as all legacy automakers as the lines between technology and automobiles become increasingly blurred. Conventional automakers are about three to five years away from offering over-the-air updates like Tesla’s that go beyond improving a car’s maps and entertainment systems, according to some estimates. And venturing into the new realm of software development is also expensive — global automakers’ R&D budgets have roughly doubled over the past decade.

With the creation of Woven Planet, Toyota is to some extent signalling it’s moving in the opposite direction, betting it can take on technology giants at their own game.

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