Silicon Valley and Detroit need each other more than anyone thinks

At the Consumer Electronics Show in Las Vegas this week, we’ve seen the unveiling of Chevy’s electric car, heard Ford say its going to go big on self-driving technology, and learned that General Motors bought a big stake in a ride sharing app.

In other words, the auto industry is starting to sound a lot like those Silicon Valley upstarts that want to change the world.

This is about self preservation. With Tesla, Apple, Google, Uber, and now newcomer Faraday Future all entering the “mobility” market the Fords and GMs of the world have a lot to contend with.

After all, tech companies have swept away or substantially remade legacy industries over the past 20 years, with faster, cheaper gadgetry and software.

But there’s several reasons why the auto-industry won’t be disrupted so easily. The biggest is simply that building (safe, reliable, and affordable) cars, and delivering them to customers across the nation is difficult, and expensive, and the auto industry’s been working out how to do it for the past century. Tesla’s challenges are the best evidence of how difficult that is to replicate.

And of course, there’s the scale of the auto market. Even if Apple, Google, and Faraday Future rapidly enter the fray — it will take decades for them to displace the big auto brands. In the US alone there are nearly 300 million cars on the roads and people don’t buy new ones as quickly as they buy new mobile phones.

Google selfdrivingcarGoogleWhat a software engineer thinks of when he thinks of a car.

Tesla, the furthest along of any newcomer, is struggling to hit its production targets, and can only ship 50,000 very costly units a year right now. As impressive as Faraday Future’s CES concept car was — it was still a concept car, a dream machine that will never see an actual road.

The Google Car is a real car, but it’s not the kind of car that the vast majority of people will want to use. At this stage, it’s a test platform and a proof-of-concept play.

And the Apple Car isn’t even a car. At the moment, it’s a minivan with a sensor array strapped on top.

Working together?

So for now, the tech industry needs the auto industry. And the auto industry seems to have figured this out.

But its also not operating under the assumption that it can ignore the tech industry either. At a CES interview with my colleague Ben Zhang, Ford’s chief technology officer praised a partnership with Google, and Mercedes-Benz VP of strategy Wilko Andreas Stark said the auto industry is going to have to make nice with rivals to make connected cars.

“It’s very important that we will have to team up with our frenemies to accomplish this,” he said. “On one hand they are our competitors on the other hand we have to cooperate with them to achieve our goals.”

After a record year for sales in the US, Detroit in particular has its confidence back. GM isn’t fooling around with the Bolt, for example. The vehicle demonstrates that a big car company can rapidly develop a disruptive product.

Ford Sync 2016Ethan Miller/Getty ImagesFord’s Sync 3 communications and entertainment system is displayed during a Ford Motor Co. press event for CES 2016 at the Mandalay Bay Convention Center on January 5, 2016 in Las Vegas, Nevada.

If you already know how to build cars, there’s nothing inherently difficult about building an electric car. You just have to commit. GM has done just that.

GM also made a $500-million investment in Lyft, figuring that the Uber rival is cheap by comparison with its competition. In the instance, it’s easier for GM to acquire a stake in on-demand mobility than it is to build an Uber-like service from scratch.

Reading into all of this as some kind of massive shift would be a mistake. The problem with CES is that, by its nature, it makes us view everything through the lens of the new. And then it invites us to assume that the new will arrive tomorrow, because technology is fast.

But changing the way we move around is going take a long, long time to completely reinvent.

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