Here's why Nio and Polestar turn smartphone producers

When we think of car manufacturers, the image of shiny new vehicles and vast assembly lines comes to mind. Yet, a novel trend is sweeping through the automotive world, specifically in China – automakers are dipping their toes into the smartphone arena.

Nio surprised many by announcing its first smartphone model last month. A starting price of RMB 6,499 (approximately $890) gets you the Nio Phone, a top-tier Android device. This isn't just another smartphone. Nio emphasizes a holistic connection between the phone and its electric vehicles. Imagine a smart car key granting remote car control and an impressive suite of over 30 features – that's the Nio Phone for you.

Not to be outdone, Polestar, the Swedish electric vehicle brand, hinted at its intention to launch a premium smartphone in China come December. Its approach seems even more expansive. While Nio focuses on a single product, Polestar intends to stamp its mark on a broader spectrum of consumer electronics, including smartwatches. This aggressive strategy aligns with its vision of embodying a chic tech brand.

Market research firm Canalys shed some light on this unexpected turn of events in a recent research note. So, why are companies that traditionally produce vehicles suddenly interested in making calls? Two words: Brand Exposure. By manufacturing smartphones that flawlessly merge with smart cockpit systems, these automakers can cultivate their distinct ecosystems and curate unparalleled user experiences.

But there's more to this story. With advancements in assisted driving and the evolving habits of drivers, smartphones have emerged as essential tools. These devices enable car manufacturers to keep a finger on the pulse of changing driver needs. As the adage goes, knowledge is power. And in this context, understanding is the key to innovation.

The stats back this up. Canalys highlights that come 2024, L2+ assisted driving systems are projected to penetrate 4.7% of the Chinese market. Fast forward to 2025, and we're looking at an anticipated L3 penetration of 4.6%. Introducing smartphones – devices we interact with incessantly – to the electric vehicle ecosystem equips automakers to grasp the intricate necessities of drivers.

Integrating smartphone features could translate to substantial savings for automakers. Think about it: why spend vast sums on research, development, and the launch of new automotive-grade features when you can achieve a similar user experience at a fraction of the cost via smartphones?

Yet, as with all things, the proof of the pudding is in the eating. Canalys suggests it boils down to usage. If these smartphones offer functionalities parallel to popular devices and align with the brand's essence, they're on the right track. Enhancing user experience, offering intuitive controls, and integrating the smartphone into the cockpit are crucial. Achieve this, and automakers might just hit the jackpot, gaining rave reviews for both their cars and phones, thus amplifying their brand's reach.

Canalys sums it up perfectly: If the smartphone production experiment by automakers flourishes in China, we might be on the brink of witnessing a global adoption of that approach.

Via