Silicon Valley's Push Into Cars Is Testing Aptiv's Tech Makeover
When General Motors Corp. filed for bankruptcy and reorganized in 2009, the makings of a Wall Street darling emerged from the wreckage. Aptiv Plc, which grew out of the parts unit spun off from the iconic automaker, soared to $48 billion in market value earlier this year after transforming into a savvy technology company built for the shift toward electric, autonomous vehicles.
Now, though, the industry is being upended anew in ways that could challenge Aptiv. Carmakers, taking lessons from the chip shortage and the playbook of insurgent rival Tesla Inc., are moving software and engineering tasks in-house. Silicon Valley giants are elbowing into the sector, with the likes of $Intel(INTC.US)$, $Qualcomm(QCOM.US)$ and $NVIDIA(NVDA.US)$ seeing opportunity in cutting-edge vehicles that are essentially giant computers on wheels.
Those forces are reordering the $1.3 trillion auto supply chain, creating openings for newcomers and threatening an entrenched industry pecking order that is dominated by carmakers and their direct, or tier one, suppliers such as Aptiv. At the same time, some automakers, including $Ford Motor(F.US)$, have been unhappy with Aptiv's automated-driving software, according to six people familiar with the thinking of those companies' executives, a potential impediment to its future growth.
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