Toyota celebrated the 2025 Dakar Rally in January with both first and second places in the car category. Also in January, through its subsidiary Woven by Toyota, the Japanese motoring giant invested US$44.4-million into Interstellar Technologies.
This Japanese space start-up, with a focus on facilitating the mass production of rockets, will leverage Toyota’s manufacturing expertise to advance rocket development and support the growing demand for small satellite launches.
Space is central to Toyota’s long-term strategy. It started in 2019 when it partnered with Japanese space agency Jaxa to contribute to Nasa’s Artemis programme and the joint development of the Lunar Cruiser.
Other car manufacturers have also explored space-related ventures. In 2015, Audi collaborated with Part-Time Scientists to develop a lunar rover utilising Audi’s Quattro all-wheel-drive technology, although this project was not successful.
More recently, in January 2023, Honda advanced its partnership with Jaxa to build a prototype of a calculative renewable energy system. This advanced system combined Honda’s high differential pressure water electrolysis technology with a fuel cell system that enabled continuous production of oxygen, hydrogen and electricity from solar energy and water. Similar investments and partnerships have been announced by Hyundai, Nissan and Chrysler.
From Artemis to LEO constellations
Although Toyota’s – and other car manufacturers’ – partnerships with the Artemis programme and with LEO satellite rocket manufacturers are both space-related investments, their strategic roles are very different.
In the first case, investments related to the moon programme were primarily motivated by factors such as technology innovation and R&D opportunities, brand and image enhancement, cross-industry collaboration, and growth in sustainability and Earth systems.
In essence, car manufacturers didn’t view space programmes as immediate revenue streams but rather as platforms for innovation, branding and business expansion, while also aligning with broader sustainability and technological trends.
Investment partnerships by car manufacturers with players in the LEO industry are very different and directly impact strategic agendas, as well as revenue, on both sides of the business case. LEO constellations rocket and satellite manufacturer industries provide the prospects of new complementary revenue potential, while the LEO communication services provide the opportunities to drive the connected-car and other vehicle communication requirements.
LEO constellations and the car industry
While the shift from manufacturing vehicles to launching satellites might seem drastic, several potential avenues exist for aligning car companies and the LEO satellite sector, either directly or through partnerships.
Firstly, as customers for very-large distributed data demand: To drive connected-car models, car manufacturers could develop into one of the biggest end-user segments of the LEO constellations, offering sustainable long-term revenue. While LEO constellations are currently very much focused on consumer broadband services, price points in this sector, as is the case with Wi-Fi connectivity, will always be under pressure and expected to decline over time. On the other hand, high-availability communications services for industrial applications such as the connected car can offer an attractive long-term revenue segment for the LEO operators.
For example, car makers such as Ford and BMW have already formed collaborations with companies like OneWeb to ensure vehicle connectivity. Car manufacturers might even build and operate their own satellites, creating new revenue streams beyond traditional vehicle sales.
For example, GM and Honda have invested in new technologies such as 5G networks and autonomous driving systems. If a satellite-based solution (like LEO networks) becomes a critical part of their mobility services, they could push further into the satellite industry.
Read: Low-Earth orbit satellites – the way forward for Africa
Secondly, as suppliers of advanced items: Car manufacturers have significant expertise in engineering, systems integration and complex technology, which are key components of building satellites. If the need arises, car makers with established engineering capabilities could develop satellite technology.
For example, Tesla, with its strong focus on autonomous driving, could potentially expand into satellite communications for vehicle connectivity. Moreover, the increasing importance of sustainable technologies such as renewable energy and electric propulsion could encourage car manufacturers to explore their application in satellite technology.
Thirdly, investment and market diversification: Just as traditional car manufacturers are diversifying into areas like AI, robotics and energy (with companies like Volkswagen and Mercedes-Benz investing in battery tech), they could also see value in investing in satellite companies. Car manufacturers have enormous financial resources and could leverage their investments in satellite communications or infrastructure to enhance their vehicles’ capabilities and data services.
None of these options will be without challenges, with some of the notable obstacles including: a very high initial investment; regulatory compliance and industry competition; and a long-term view and commitment.
Conclusion
This introductory perspective on the LEO satellite communication industry from the car manufacturers’ viewpoint provides valuable context for considering and evaluating long-term LEO industry developments.
Firstly, it underscores the rapid growth potential of the LEO industry, which is estimated to reach between US$23.2-billion (Markets and Markets) and $32.1-billion (Virtue Market Research) by 2030. Considering that consumer broadband services may not be the most sustainable long-term revenue source, this creates opportunities for specialist communication providers to deliver high-availability and highly reliable services to sectors such as mining and industrials, finance and banking, retailers, and tourism and hospitality.
Secondly, it provides a possible scenario for a completely different industry landscape that includes large global manufacturers as constellation operators, or at least dominant strategic partners in constellations.
For reference, consider the impact on the current LEO industry business models if a powerhouse like Toyota, which currently manufactures more than 10 million cars a year and has an extensive global presence in physical goods and infrastructure and a long-term record of geopolitical stability, were to launch a LEO constellation to support its connected car strategy and then offer free in-vehicle Wi-Fi.
- The author, Dawie de Wet, is group CEO of Q-KON and its Southern African satellite broadband service, Twoobii
- Read more contributions from Dawie de Wet on TechCentral