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River Davis and Inajima Go, Bloomberg News

(Bloomberg)-James Kufner once reprogrammed the Prius to turn it into Google's driverless car. Now, he is an executive of Toyota Motor Corporation responsible for hacking the car manufacturing business.

The 50-year-old technology industry veteran was carefully selected by President Akio Toyoda. His mission as chief digital officer is to keep the world's number one automaker in the lead as cars become more like computers.

The shift to electric self-driving cars is the most disruptive force sweeping the entire industry, with Apple and other major technological challengers joining in. The risk for Toyota is a global manufacturing empire that produces more than 10 million cars a year. After using the Prius to show the world the road away from gasoline, Toyota is doubling down on its bets, investing billions of dollars in everything from hydrogen and battery-powered cars to entire cities built around self-driving cars.

"The potential of technology to change the mobile field is amazing," Kuffner said in a recent interview, calling it "the absolute most exciting time to work in this field."

In terms of experience, it is clear what attracted Toyota to Kuffner. This jeans-loving, patent-holding executive co-founded Google's robotics department and helped develop the technology company's self-driving car project, which eventually evolved into the autonomous department Waymo. He received a doctorate degree. From Stanford University and teaching at Carnegie Mellon University, these two institutions enjoy a global leadership in autonomous vehicle research.

Despite Kuffner's experience, it remains to be seen how much Toyota can handle Silicon Valley-style disruption. He is the only non-Japanese internal director of this 84-year-old company.

This is why currently, Kuffner leads a wholly-owned subsidiary called Woven Planet Holdings, and keeps a distance. This somewhat strange name is reminiscent of Toyota's roots as a manufacturer of textile looms and associates it with the idea of ​​stitching together cars, robots, cities, data, and computing power.

The mission of Woven Planet may not be easy to grasp, but the idea behind it is relatively simple. When the biggest leap in automotive technology does not come from mechanical progress, but from the line of code, Kuffner and Akio Toyoda are betting on the future.

This approach is embodied in the automotive platform Arene developed by Kuffner and his team. Like the operating system of the iPhone or personal computer, Arene is designed to work as software in the car, but is also connected to a larger cloud network.

Although Tesla and other companies have deployed new features on cars to improve battery performance or automated systems, Arene’s goal is to go beyond that. The ultimate goal is to allow cars to collect and share large amounts of data, which in turn can be used to improve performance. This is a method pioneered by Kuffner in the field of robotics. Arene will also be provided to rival automakers.

"We are really working hard to create the best programming mobile ecosystem in the world," Kuffner said. "Woven Planet's ambitions really surpass Toyota." 

To achieve this goal, Kuffner and his team developed the Arene platform even before any vehicles could run. This "software first" approach is Kuffner's vision of the future of car design and assembly-designing the car's mechanical structure around its underlying software, rather than writing code for most finished products.

This represents a fundamental departure from the way Toyota has built cars for nearly a century. The company actually invented modern automobile manufacturing through concepts such as "kaizen" or continuous improvement and timely assembly.

And there is no shortage of new entrants betting that the dramatic changes in the industry will create new opportunities. Not only does Tesla and Google's parent company Alphabet Inc. intend to popularize electric self-driving cars, Apple is also secretly taking a share of the US$5 trillion global auto market.

This will be a bumpy journey. Volkswagen’s flagship ID.3 electric vehicle released last year is full of loopholes, highlighting the fact that even for Toyota’s biggest competitor, decades of manufacturing experience cannot always be transformed into a competitive advantage.

"You need to quickly strengthen your software push; the value of your products is changing," said Lei Zhou, a partner at Deloitte Tohmatsu Consulting, when talking about traditional automakers. He said that recruiting top talent from Silicon Valley is a way for them to find adaptation. The most recent example is that Ford Motor Company hired the person in charge of Apple's car project. 

Woven Planet has also adopted the approach of its Silicon Valley counterparts: acquiring employees, or buying smaller start-up companies to acquire their technology and talent. This year alone, Woven Planet has invested in or acquired five companies, including the $550 million acquisition of Lyft Inc.'s autonomous driving division it reached in April.

Given that Woven Planet's vision goes beyond automobiles, the in-house upstart embarked on one of its largest and most ambitious projects to date, and in February broke ground on its smart city under construction at the foot of Mount Fuji. After opening for the first time around 2025, the city will become a test bed for self-driving cars, transporting people, delivering packages and acting as a mobile storefront for thousands of residents of the city. 

Read more: Toyota is building a complete city to test its self-driving cars

In order to pay for all this, Toyota also adopted a new method. Earlier this year, the automaker issued a US$4.7 billion "Weaving Planet Bond" to fund the project and next-generation R&D activities.

Kuffner's Prius adventure eventually evolved into Waymo, which is now leading Alphabet's entry into automated transportation. If he succeeds in turning Woven Planet's vision into reality, he will be the ultimate hacker: turning Toyota into something new. 

With this, the youngest member of Toyota's board of directors may one day become a strong candidate to lead the company, although Kuffner carefully downplays this possibility.

Kuffner said in the Woven Planet factory office in central Tokyo: "We are trying to use our existing profitable business to completely subvert our development methods." "I will do my best and try my best to change the status quo. ."

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