It’s pretty clear that the next wave of automotive innovation won’t center on gas guzzlers operated by drivers prone to human error. Instead, the world’s largest automakers are designing electric and autonomous vehicles to drive them into the future. So, does it make sense for a startup to chase this trend?
For Byton co-founder, chairman and CEO Carsten Breitfeld, the answer is “yes.” Sure, as a startup building fully electric cars from the ground up, Byton faces some pretty tough competition. But its vehicles are positioned as the conduit for offering subscriptions to a wide range of apps, such as in-car entertainment or health monitoring, which sets Byton apart from the legacy automakers. “Connectivity and artificial intelligence will make cars smart…it changes the business model by creating a platform to sell digital services and shared mobility to customers,” he says.
On the outside, a connected car doesn’t look really different from what’s on the road today, but imagine a different driving experience inside—one studded with big screens, rotating seats, tablets, and a host of digital services like entertainment and health apps, built around the driver and passenger.
“Today, cars are used between 3% and 5% of the time. Companies sell a lot of cars that are not used, just sitting around, creating a burden on society,” Breitfeld says. In the future, as much as 50% of the industry’s revenue could come from mobility-as-a-service and other apps that build on connected vehicles, he estimates.
Like most auto companies operating in the fast lane of innovation, Byton will need to move quickly to stay ahead. One advantage that startups have vis-à-vis legacy automakers is the ability to create a corporate culture from scratch that will motivate employees and create a common vision, Breitfeld says. “For some big companies, the timeline to develop, tool, assemble and test a car can take up to five years because there is too much time spent on discussions,” he says. As a small startup, Byton can make faster decisions than big automakers, and as CEO, Breitfeld says he is surprised how much employees can produce without restrictions.
Watch the video above for more from Fortune’s interview with Breitfeld.