Electronics expedites auto tech evolution
The pace of vehicle technology evolution is accelerating aided by electronics and software. Vehicles are changing in response to consumer taste and expectations, higher safety standards, and the drive toward a low-carbon future. When considering changes in automotive technology that support the “greening” of transportation, most people think first about advanced powertrains, materials and electronics. These three technology sectors play a significant role in the transformation of the automotive industry.
Technology for vehicles will continue to increase at a rapid rate. Today, electronics accounts for 30% of a vehicle’s value and it is growing day by day. The tri-state region is poised to benefit from the research and development, design, engineering, and systems integration side of the electronics used in vehicles, but the area may lose jobs to other automotive regions that are stronger in electronics manufacturing, particularly producers in Europe and Asia.
Five years ago, vehicles were merely a means of transportation, but today cars have become the ultimate connected device. By 2020, 90% of new cars will be enabled through extensive connectivity platforms. Automobiles that are increasingly intelligent are changing the concept of mobility to consumer-driven preferences that extend beyond the vehicle itself.
As the boundaries of the auto industry blur and as new competitors enter the fray, the traditional industry participants are learning to thrive despite technological disruption. Electronics, telecommunications and insurance companies as well as emerging start-ups are joining the race to find new ways to attract and excite consumers to elevate their experiences with cars.
Connectivity is just the first step in providing a new experience. Many companies can enable connectivity, but just how useful is connectivity without the ability to derive new insight? Many opportunities remain untapped as connectivity and the Internet of Things expands. The key building block comes from volumes of data flowing from one point to another. This data volume remains the most pressing challenge for the auto industry: tapping into this data, combining it with other information and uncovering actionable insights through cloud operations and investment in building new business models that generate value for customers.
Connectivity, and later autonomous technology, will increasingly allow the car to become a platform for drivers and passengers to use their time in transit to consume novel forms of media and services or dedicate the freed-up time to other personal activities. The increasing speed of innovation, especially in software-based systems, will require cars to be upgradable. As shared mobility solutions with shorter life cycles will become more common, consumers will be constantly aware of technological advances, which will further increase demand for upgradability in privately used cars as well.
In domains like the internet and communications, traditional high-tech players such as Microsoft and Qualcomm contribute most of the innovation. Consequently, the engineering ranks of car manufacturers are still predominantly composed of mechanical and electrical engineers rather than software and electronics engineers. And, even though more than 75% of automobile innovation stems from electronics, car manufacturers have not yet fully embraced electronics. Even so, almost every car company has acknowledged that future success lies in creating vehicles that are differentiated by electronics and software, rather than just by design and branding. Numerous initiatives, such as BMW’s Connected-Drive, exemplify this industry-wide vision.
Stricter emission regulations, lower battery costs, more widely available charging infrastructure, and increasing consumer acceptance will create new and strong momentum for penetration of electrified vehicles (hybrid, plugin, battery electric, and fuel cell) in the coming years. The speed of adoption will be determined by the interaction of consumer pull (partially driven by total cost of ownership) and regulatory push, which will vary strongly at the regional and local level.
Industry sources say that, in 2030, the share of electrified vehicles could range from 10% to 50% of new-vehicle sales. Adoption rates will be highest in developed dense cities with strict emission regulations and consumer incentives (tax breaks, special parking and driving privileges, discounted electricity pricing, et cetera). Sales penetration will be slower in small towns and rural areas with lower levels of charging infrastructure and higher dependency on driving range.
A top official of an OEM said, “Through continuous improvements in battery technology and cost, those local differences will become less pronounced, and electrified vehicles are expected to gain more and more market share from conventional vehicles. With battery costs potentially decreasing to $150 to $200 per kilowatt-hour over the next decade, electrified vehicles will achieve cost competitiveness with conventional vehicles, creating the most significant catalyst for market penetration. At the same time, it is important to note that electrified vehicles include a large portion of hybrid electrics, which means that even beyond 2030, the internalcombustion engine will remain very relevant.”
In many ways, the automobile and high-tech industries are very different. Both industries have transformed the world and employ millions of people globally, drive economic growth, spend tens of billions of dollars in R&D every year, and are founded on rigorous innovation. Moreover, the line between the automobile and high-tech industries is blurring. As evidence, cars and trucks are now one of the most popular attractions at the Consumer Electronics Show (CES), the world’s largest electronics event, held each year in Las Vegas.
At CES 2018, the emphasis was still electrification, with flashy EV launches from the likes of Byton and Fisker. There was also a doubling down on autonomous driving technology. Companies are now getting confident about demonstrating their self-driving cars, including some without any human controls. Mercedes sent a smart vision EQ for two concept back and forth along a portion of the Las Vegas strip to show what a ridehailing service of the future could look like. This shows, manufacturers are more eager than ever to tell you autonomous, electric cars are the future, and that they’re helping make it happen.
Some of the most talked about developments at the show concerned car makers using artificial intelligence to power new dashboards and infotainment systems. The big names here were Hyundai and Mercedes, each with a different take on how drivers will control the vehicle of the future.
Hyundai took the wrapper off its Intelligent Personal Cockpit, which amounts to a new kind of dashboard that uses AI to dynamically display information and telematics to the drive as well as manage voice recognition and a system that’ll keep track of the driver’s vital signs in case of emergency.
Mercedes called its smart cockpit the MBUX, which stands for Mercedes-Benz User Experience. A little more visual than Hyundai’s solution, the MBUX was shown during a presentation to have three-dimensional digital displays and also respond to voice control and a touch screen. The system would add new features via overthe-air updates. The whole thing is nicely designed with minimalist displays that Mercedes hopes will make it easier on drivers to understand their vehicle’s inner workings—something the company’s cars are definitely not known for today.
Other intelligent cockpit concepts were on display from many thirdparty makers, including Denso and Pioneer, but most are still in the early stages of concept design. Both Hyundai and Mercedes hope to have their implementations in the real world in the next year or two. Many other makers announced autonomous vehicle projects either from their own R&D departments or in conjunction with third-party vehicle operating system makers, like Intel’s Mobileye and Nvidia; these include BMW, Fiat-Chrysler, Honda, NIO, and SAIC. Autonomous cars are by definition connected cars and the amount of data that needs to be moving between an autonomous car and its immediate environment, its maker’s data and control centers, as well as its driver’s control and infotainment resources is, in a word, huge. Not only that, many of these data transfers need to happen with little or no latency, something that’s beyond today’s 4G LTE networks.
Fully autonomous vehicles are unlikely to be commercially available before 2020. Meanwhile, advanced driver-assistance systems (ADAS) will play a crucial role in preparing regulators, consumers, and corporations for the medium-term reality of cars taking over control from drivers.
The market introduction of ADAS has shown that the primary challenges impeding faster market penetration are pricing, consumer understanding, and safety/security issues. Regarding technological readiness, tech players and start-ups will likely also play an important role in the development of autonomous vehicles. Regulation and consumer acceptance may represent additional hurdles for autonomous vehicles. However, once these challenges are addressed, autonomous vehicles will offer tremendous value for consumers (for example, the ability to work while commuting, or the convenience of using social media or watching movies while travelling).
Software competence is increasingly becoming one of the most important differentiating factors for the industry, for various domain areas, including ADAS/ active safety, connectivity, and infotainment. Further on, as cars are increasingly integrated into the connected world, automakers will have no choice but to participate in the new mobility ecosystems that emerge as a result of technological and consumer trends. With innovation and product value increasingly defined by software, OEMs need to align their skills and processes to address new challenges like software-enabled consumer value definition, cybersecurity, data privacy, and continuous product updates.