March 30, 2015—An increasing amount of automakers are setting up research offices in Silicon Valley, according to a new report in the Wall Street Journal (WSJ).
According to IHS Automotive, 10–25 percent of the cost of making cars and light trucks is now linked to software, and this figure is expected to increase.
“What happened with the mobile industry with the smartphone is about to happen with the car,” said Jen-Hsun Huang, chief executive of chip maker Nvidia Corp, to the WSJ.
Most major automakers and many top auto suppliers now have Silicon Valley research outposts, according to the report. Ford also recently moved into a new Palo Alto, Calif., office and plans to quadruple its staff there this year.
The location gives them access and close proximity to many of the area's technology companies, including Google and Apple.
“The real frontier of the automobile is here,” said Ewald Goessmann,who runs Volkswagen’s Belmont, Calif., office, according to the WSJ.