Information technology companies, with their dazzling speed of innovation, keep coming up with crazy ideas. It may be true that the world needs mad men to stay interesting, but stop and look at how they want to change the face of China’s carmaking business.

Consider these developments. This month, e-commerce giant Alibaba launched a 1 billion yuan (US$161 million) fund with domestic carmaker SAIC for a concept called Cars on the Internet. Search engine provider Baidu announced research on a self-driving electric car to rival Google’s. And the ongoing Super Electric Automotive Eco-System, or SEE project, of Internet entertainment provider Letv was endorsed by Miao Wei, minister of industry and informatization.

During the recent National People’s Congress plenary session, the minister said China will encourage companies like Letv to develop electric cars because they have what it takes to establish a new manufacturing model for the industry.

Slow progress in China’s grand plans for a nation of electric cars has led the central government to seek help beyond the traditional realm. Last November, the National Development and Reform Commission drafted a policy allowing companies without carmaking backgrounds but with carmaking-related expertise to apply for licenses to make electric cars.

“They can outsource the manufacturing,” Miao said. “For instance, Foxconn doesn’t make its own brand phones, but it makes iPhones.”

The idea sounds a bit crazy. After all, orders for car models don’t come in the same millions as smartphones and may not produce the economies of scale needed to make money. Beyond that, how can a new carmaker with no experience earn a reputation that can be converted into brand premium?

Lower threshold

Still, the threshold of becoming a carmaker has been lowered and that will have repercussions. In a sense, that’s how low-speed electric cars, an “invention” by nonentity manufacturers, have managed to thrive in the eastern province of Shandong.

There, with electric motors and batteries ready for procurement, all the cars require is a shell and assembly. Technologies are elementary, creating cars with maximum speeds of no more than 80 kilometers an hour.

These versions sell quite well. They are cheap to buy and highly cost-effective for short-range transport in rural areas or short city commuting.

So does that mean the carmaker of tomorrow needs only a good strategy and marketing plan?

I rather doubt it. But that happens to be what IT companies do best. They create a “new story” and make a fortune selling it on financial markets.

One case in point is the tripling of Letv’s stock price since late December, after the company announced its partnership with domestic carmaker BAIC on the SEE project.

A good story is one thing. Executing it quite another. No details have emerged about what kind of cars the new partnership is planning to manufacture nor how they will go about doing that.

A vision more within reach is a car to be launched by SAIC next year, integrated with Alibaba’s input from e-commerce, finance, digital entertainment, maps, communications and the YunOS operating system. The greater ambition is to build a network of smart cars, based on cloud computing and big data, capable of vehicle-to-vehicle, vehicle-to-road and vehicle-to-infrastructure communications.

While this idea has captured the imagination of IT companies, there is scant public discussion about what benefits it really offers.

Is it to build a private space for digital life on wheels to enhance the fun of driving? Is it to make transportation safer, more efficient and less energy-consuming?

The first notion seems to dovetail with the ambition of IT companies associated with the Internet of Things. But in reality, those companies may soon find their role is little more than supplying fancy add-ons for car interiors. Be it browsing social networks or booking restaurants while on the road via in-vehicle infotainment systems, this idea still comes in second to driving, the priority for motorists before a car can really take full control of itself. And full autonomous driving is almost a mission impossible to run as a program.

There are too many unpredictable variables for programmers to take into account. It is only in sparsely populated areas of California where Google’s self-driving car is allowed to do test runs, at speeds of less than 40 miles per hour. That’s a speed most drivers would laugh at.

If the whole Internet car thing is about second vision, about perfecting a car’s function, then there is really little that the specialties of IT companies can contribute.

But they are not likely to think that way. With the Internet way of thinking — whose definition is still open for debate — they dare to try anything, even rewriting the rules of an industry.

As representatives of the information age reshaping the world, IT companies have cast themselves as the fastest learners and the most daring innovators.

Keeping calm

In the face of such provocation, carmakers are keeping calm and carrying on at their own stubbornly unchanged pace.

Volkswagen, with its modular production system, can produce electric car variants for most of its models. But it chooses to start with just a few. The market is not ready for this new technology, the carmaker says, and the technology is not available to bolster economies of scale — the soul of manufacturing profit.

Semi-automated technologies like advanced cruise control capable of steering can be seen only in prototypes made by auto technology suppliers like Valeo. Carmakers are still very concerned about bringing them to the market with potential safety risks.

They have much a lower tolerance for error rates than IT companies. That is the biggest obstacle for IT firms to advance in carmaking.

Users may have the patience to deal with an occasional “blue screen of death” on a computer by rebooting. But the thought of that happening to a computer controlling a moving car is too horrendous to contemplate.

Any malfunctioning of a car endangers not only the life of drivers and passengers, but also other road users and pedestrians. Carmakers cannot be too careful. Research and development on a new engine can take as long as two years. And even if making cars is apparently as easy as assembling parts from suppliers, the vehicles still have to undergo strict testing to validate durability, performance and emissions.

The development cycle for consumer electronics is 12 to 18 months. That’s a big gap from the 4-5 year window of carmakers. The difference between the two industries is hard to reconcile in any partnership of equal footing.

One is daring, easy-going and discernible to the public because of its grass roots. The other is discreet, a little fussy and proud of its elitism.

One treats consumers like equals — walking in their shoes, trying to give them what they want.

The other keeps its nose up, telling consumers to take what’s on offer with confidence that their interest has been looked after well.

What if a car driver wants to load his mobile phone apps onto a display screen in his car to play games during heavy traffic?

Such tricky risk management questions keep popping up. Can this mixing of can-do spirit with romanticized ignorance continue?

Li Shufu, founder and chairman of China’s biggest private carmaker Geely, once bragged about his simplified description of carmaking: putting two rows of sofas on four wheels.

As years went on and Geely struggled to break into the ranks of quality carmaking, Li never mentioned that again.

This business is too complicated, and there is no cram course for it.

Of course, there are teams of auto experts IT companies can hire. But will they adapt the same mindset and style of working to their time-consuming obsession with quality, precision engineering and attention to details?

It is a question that conflicts with another critical one: Can they afford to let their investors down?

The Internet way of thinking in China has become a cult culture that holds promise of overnight solutions and quick successes, especially on financial markets.

Taking a leading position in carmaking may not be the best outlet for the style of perennial market hype by IT companies. But their vision of the future is certainly an interesting one to watch.

Yan Feng, applications development director of infotainment system, SAIC

What SAIC will build with Alibaba is a new service platform that will cover SAIC’s existing inkaNet infotainment system, though it is technically not compatible with Alibaba’s YunSo operating system.

SAIC wants the platform to enhance the driving experience and the user experience. No details are available for sharing, though.

The Car on the Internet is a market bigger than one party can handle. Carmakers cannot fight alone. Many parties will be recruited to build an eco-system of services, including insurance and maintenance providers. SAIC is open to all partners, but the fund it is establishing with Alibaba will remain closed for awhile.

The Car on the Internet project will be developed over the long term to cover traditional internal combustion-engine vehicles as well as new energy cars. Discussions about whether to launch a separate dedicated brand for the project are ongoing.

Cui Dongshu, deputy secretary-general of the China Passenger Car Association

Electrification and digitization are irreversible trends for carmaking.

IT companies can enter the carmaking market through their user-centered way of thinking about convenience and functionality.

Individualized software may become key differentiators for cars, while hardware, or the mechanical system, may be left to more standardized, modular production. That would give auto parts suppliers a more dominant position in the industry vis-a-vis carmakers.

The life cycle of an IT car will be shortened because of faster upgrades and changing user behavior.

Carmakers should stop thinking they are too big to fail. Nokia is their best lesson to learn from.