In the 1991 film Sleeping with the Enemy, the protagonist, Laura (played by Julia Roberts), indelibly burns into the anxious viewer’s brain that the title’s cliché is an undesirable, dangerous path. She lives in constant fear of her controlling, abusive spouse, searches for chances to escape and eventually fakes her own death to elude her previously-chosen mate. All bad. Nothing good.

Such drama has not always been the peril of automotive companies seeking to “sleep with the enemy” by cooperating with the competition, but certainly there have been both pros (e.g., lower development costs, lower operational costs) and cons (e.g., lesser differentiation, difficult leverage) over the past 100+ years.

But what I was struck by while curiously attending an Elite Experts Conference’s podcast interview of Jörg Brandscheid, Chief Technology Officer of Polestar, was that these complex waters might be navigated to a more amenable endings than Laura’s marriage given better strategies.

Fewer Costs

Rebranding and/or joint development between competitors has arisen in all shapes and sizes. The bottom line almost always comes down to the bottom line: costs. Those could be research dollars, production volume discounts on suppliers’ parts, fewer quality clean-ups (since the white labeled product may have already shouldered the launch improvements), and even reduced facility costs. As an example, the Big Three struggled to make affordable, smaller cars in the early 80’s so the 1985 Toyota Sprinter was essentially rebranded and marketed as the infamous “Chevy Nova.” These were designed for manufacturability and “… reached an unusually high level of quality and production speed … compared with US factories.”

With the current high costs of desired, step-function changes like electrification and automation, competitors are once again turning to each other for shared upfront spending, e.g., Ford and VW agreed in 2019 to share the costs of self-driving. Per the New York Times, “… hard-pressed carmakers have little choice but to join forces to fend off Silicon Valley challengers and avoid obsolescence.”

This is especially true for mid-sized companies or brands: shared research and development costs are almost necessary. “You can imagine that [when] developing a new technology, there’s a huge investment,” mentioned Brandscheid. “We are not the biggest. We have ambitions to grow, of course, but not yet so we are always looking for partnerships with 3^rd parties; even with competitors. From a business point of view, there are no limits with regard to collaboration if there’s some outlook for a win-win situation.”

Along those lines, Polestar has collaborated with the much larger Geely and Volvo – both, in this instance, being parent companies rather than “enemies” — for performance and battery optimization. “We all belong to one family, the family wants to be efficient … and to prevent redundant work,” states Brandscheid.

Lesser Differentiation

Easily maintaining differentiation is the most difficult trap: reusing the same ingredients can decrease the “gotta have it” (a.k.a. secret sauce) of your product offering. The cheeky quote of Shakespeare in the 2013 Forbes article entitled “Same Car, Different Brand, Hugely Higher Price: Why Pay An Extra $30,000 For Fake Prestige?” pointed out exactly the conundrum when comparing the $45,000 Aston Martin Cygnet and the $17,000 Toyota counterpart, “What’s in a name? That which we call a rose, by any other name would smell as sweet.”

Such differentiation does not have to be the whole vehicle. General Motors white-labelled its OnStar service to multiple competitor vehicles (e.g., Acura) from 2000 to 2006. When studies demonstrated to GM that “buying an OnStar-equipped vehicles” was a top reason for customers to enter their dealerships back then, they were forced to revisit the strategy and stop offering telematics to customers. Therein, differentiation can affect billions in revenue, even if it’s only one feature.

And so one key to symbiotic relationships is maintaining other key differentiators such that the cost efficiencies don’t dilute your strategic selling points. For instance, one of Polestar’s stated, focused separation points is recharging speed. “Our sustainable approach is downsizing [and we’d] rather focus on charging performance and executing the charging process quicker. This is actually another focus point currently where we try to win with some partners.”

While answering questions about innovation and collaboration in the Polestar 6 (due out in mid-2025), Brandscheid was very clear, “We have three main DNA elements at Polestar: design, sustainability … and performance; particularly the dynamic behavior that’s not [just acceleration but] user experience when you drive the car actively.” Having that clarity about where a product must stand apart is a must when collaborating with competitors.

Difficult Leverage

Manufacturers have leverage over their supply base; improvements potentially bring future business, and degradation risks ongoing revenue. But competitors don’t naturally have such control, which can cause co-development or cycle plans to struggle. For example, “The Mazda B-Series withered [in 2008], and Mazda could do little to help its truck [since the Ford Ranger platform didn’t evolve],” as chronicled by Cars.com.

“With regard to collaboration, it’s [about generating] the win-win situation,” argued Brandscheid. “That requires a lot of discussion; a lot of intensive reviews about commodities in the car, and really finding the touchpoint where there’s desire and, on the other side, there’s a solution. This is usually not a given directly. You need to have intensive pre-discussion that takes some time … but when it is transparent [and] where’s there’s a will, there’s a solution and you find something.”

Additionally, manufacturers are not used to thinking of themselves as a Tier 1 or Tier 2 supplier, so development rigor can wane. But with proper oversight and leverage by the competitor, better delivery and quality can be realized. “When you are the deliverer of a technology … you need contracts … maybe a similar scheme as you [would have] with a regular supplier,” asserts Brandscheid. “Then you have this contract in place between OEMs which guarantees warranty, which guarantees change management and whatever. All of this needs to be fixed in the contract, and there are frameworks available. It’s just a matter of if there’s acceptance then by both parties .. [and] willingness to agree on a certain scenario on how to proceed.”

Maybe then the marriage won’t end poorly like Laura’s.