Competition is increasingly giving way to collaboration in the auto industry. But partnerships between established auto companies and technology startups aren't always so simple.
Employees at startups often experience a case of "shock and awe" when they get their first taste of the demanding auto industry, Ian Simmons, vice president of innovation development, corporate engineering and r&d at Magna International, said Tuesday.
Simmons said Magna is making an effort to bring startup employees into the mindset of the auto industry.
"A lot of our time and effort is spent on educating them so they get to a happy medium, where they still feel they're active in the business, but they're meeting all the requirements of the industry," he said on a panel about partnerships.
Magna has partnered with the ride-hailing service Lyft, as well as with startup producers of lidar and radar technologies. In China, Magna has entered a joint venture with BAIC to build EVs there. It will be producing vehicles in a plant outside Shanghai in 2020, executives have said.
Such partnerships are needed to help achieve scale on developing expensive technologies, Simmons said. If they're going to be successful, one key is helping to nurture newer companies without stifling innovation.
"The reason they're successful is because they're outside the confines of your business," he said. "You have to be their mentor, their partner, and encourage them to move forward."
Even then, Simmons acknowledged, it's likely that some deals won't pan out as expected.
"We all have failures of technologies we invest in," he said. "You learn from it. We make lots of technology bets and some of them will fail and some will succeed. For all the due diligence you do, at the end of the day you're working with an early stage company and you're doing your best. Not all of them will make it."