Why top automakers spend millions on concept cars they don’t plan on making

Concept cars are big hits at auto shows, but the most daring designs rarely make it to production.
They come in many shapes and sizes, are made for a variety of reasons, and can cost automakers millions to make.
Business Insider spoke with the design department of some of the top automakers to find out why automakers spend millions on concept cars they don’t plan on making.
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The following is a transcript of the video.

Narrator: Concept cars: a glimpse into the future. You may find them synonymous with outrageous designs, exaggerated interiors, and features that have never been seen in a production car, like this floating key. They’re typically revealed at auto shows where enthusiasts and the media "ooh" and "ahh" at the future of mobility. It’s no secret that these one-off designs can be expensive to build, sometimes with a seven-figure price tag. With so much invested in these cars, why does it seem like we rarely see these concepts make it to production? And why does it seem like the coolest elements are stripped away when they do? We spoke with the design department of some of the top automakers to find out why automakers spend millions on concept cars they don’t plan on making.

Ralph Giles: First of all, people don’t realize that concept cars, yes, we would show them at auto shows typically, and they’re there for the media to enjoy. But long after the media is gone, the auto show’s around for a couple weeks, and the public comes around, and they may not know much about the brand sometimes, and they go, "Whoa," and they come across this concept car that makes an unmistakable statement about where the brand wants to go with technology.

Narrator: That’s Ralph Giles. He’s the head of global design for Fiat Chrysler Automobiles. He’s worked on the design of the 2005 Chrysler 300, 2014 SRT Viper, and many more.

Ralph: So vehicles like the Prowler, the Jeep Rescue, and the Challenger, and even the Viper, all of those were concept cars at one time. And what happened there is again the public reacted to them in a visceral way, in a way that says, "You have to build that car." Sometimes, people will mail us checks, deposits to see this car through and very passionate letters. None of that would’ve happened had the concept not been there. So when we see that, we think we might’ve struck something here.

Narrator: Concept cars can also be used to hype up a model that is actually planned for production.

David Woodhouse: If we have a new launch of a new version in our portfolio, we would tease that with a specific type of concept that would be a slight exaggeration of the production car. So it would be slightly more idealized. And of course, that’s to generate interest but also awareness that this product is coming to market a year or two later.

Narrator: Like the Lincoln Navigator concept, it boasted gullwing doors and steps that deployed when the door lifted open, almost inviting the passengers in. These exaggerated features didn’t make it to the 2018 production car, which had standard doors and a single retracting step. But the concept did capture attention and brought excitement for the production version of the car.

David: Those really extreme ones are the hardest, but they would still have an influence on the market ahead. So you might not have seen them in the first couple of years after you first experienced them, but maybe the longer run, 10 years down the line, maybe they had a big influence on the trend of automotive design.

Narrator: Like BMW’s Vision Efficient Dynamics concept car in 2009, it was designed to be a high-performance hybrid, balancing speed and fuel efficiency. Five years later, it became the BMW i8. The design stayed intact, but some of the flashy features like the see-through doors and moving grill didn’t make it to production. The i8 was a success for BMW, and now we’re seeing performance hybrids from almost every brand. But concept cars aren’t just to gauge consumer interest or create excitement for a version of the concept that will be released. There’s yet another reason. Car companies use concepts to test out how new technology might work in cars of the future, even if the exact concept will never hit the market.

Taro Ueda: We are approaching, as I discuss, a more interesting technology innovation era, and then we will try out future potential. Using that technology means we are not just making the show car for the marketing purpose.

Narrator: Take driverless cars for example. That technology is popping up in almost every concept, yet the technology itself seems so far away. Turns out these concepts are testing out how driverless technology could respond to the way people interact with cars in the future. According to Volkswagen’s Klaus Bischoff, the way people interact with cars today is already different than how they used to. We have ride-sharing services like Uber and on-the-go rental services like Zipcar. Driverless cars could be the next step in the evolution of those services.

Klaus Bischoff: We are at the transition of a new era of mobility. Electric cars will only be the beginning. The concept cars today are the pioneers of this new age of mobility.

Narrator: So concepts today are paving the way for how we ride in cars tomorrow. Take the Renault EZ-GO concept as an example. The designers imagined a future where passengers hopped in a driverless car and take them to their destination. Will the car of the future look exactly like this concept? Probably not, but we know automakers are working on a future where these types of services could be possible.

Ralph: I think many of what you see will ultimately make it into production. Again, elements, it’ll take time. Concept cars are a great way for designers to explore the ideas and in a way compare notes ’cause as more and more competitors show their work, they travel the internet. But at the end of the day, I think it keeps… it raises the bar. It really does make us go back and wanna compete that much harder.

Narrator: Concepts are complex. They come in many shapes and sizes and are made for a variety of reasons. From testing public opinion to testing the latest technology, concept cars are the first step in moving the auto industry forward. Without the opportunity to explore innovations and see what other automakers are experimenting with, cars would simply stay the same.