A stronger focus on software, in-house chip design and diversification of hardware supply – what are the current megatrends?
Trend 1: Automobile manufacturers are rethinking their approach to hardware procurement. Automobile manufacturers are rethinking their long-standing strategy of just-in-time (JITJIT – Just-in-time inventory management – means that companies order their materials only in the needed amount. That way they save storage costs. More) inventory management.
Gartner predicts that by 2025, 5 of the top 10 automakers will develop their own chips and establish direct, long-term working relationships with chipmakers. In parallel, the practice of JITJIT – Just-in-time inventory management – means that companies order their materials only in the needed amount. That way they save storage costs. More inventory management will be largely abandoned.
Trend 2: IT leaders integrate the car into their ecosystem
Tech giants such as Amazon Web Services (AWS), Google, Alibaba and Tencent are increasing their efforts to continuously expand their presence in automotive technology. These tech companies are bringing the car closer to their respective ecosystems, which in turn opens up new services connected to the vehicle.
Trend 3: Open data and collaboration models gain momentum
In 2021, several technology companies have developed open-source operating systems for vehicle architectures and open platforms for electric vehicles (EVs). This approach of introducing new partnership models in the automotive sector will increase in future.
In addition, automotive companies will increasingly look at data in a similar way to the tech world. The primary objective is not to sell data, but to build or integrate ecosystems that allow them to access a wider variety of data to develop more attractive features or digital services.Gartner predicts that 70% of vehicles sold will use the Android Automotive operating system by 2028. Currently, the figure is less than 1%.
Trend 4: Established car manufacturers expand OTAOTA – automotive over-the-air- is the new way cars use to automatically update their firmware and software. The manufacturer uploads the update data to a cloud, which is then forwarded to the car via a mobile connection, where it must be confirmed by the car owner, then installed, and finally feedback is sent back to the OEM. More as the most important digital revenue channel
The past few years have seen major changes in adoption of over-the-air software (OTAOTA – automotive over-the-air- is the new way cars use to automatically update their firmware and software. The manufacturer uploads the update data to a cloud, which is then forwarded to the car via a mobile connection, where it must be confirmed by the car owner, then installed, and finally feedback is sent back to the OEM. More). As most car manufacturers currently have hardware in the vehicles to enable software updates OTAOTA – automotive over-the-air- is the new way cars use to automatically update their firmware and software. The manufacturer uploads the update data to a cloud, which is then forwarded to the car via a mobile connection, where it must be confirmed by the car owner, then installed, and finally feedback is sent back to the OEM. More. Now they will move to a revenue model based on services and feature enhancements.
Gartner analysts predict that by 2023, half of the top 10 automakers will offer unlocks and feature upgrades through software updates that can be purchased after the vehicle is sold.
Trend 5: Autonomous vehicles – more regulation, but still hurdles to commercialisation
Although sensor technology is improving, perception algorithms are becoming more sophisticated, and regulations and standards are advancing, developers of automated and autonomous vehicles continue to struggle to expand autonomous operations to new cities or regions.
Automakers have begun to offer Level 3 automated driving cars (Mercedes), and are working to introduce Level 4 self-driving trucks and commercial robotaxis. However, proving the safety and effectiveness of the technology takes a long time, and extensive simulations and field tests make commercialisation slow and expensive. In addition, there are issues such as liability in the event of an accident and related legal and societal considerations, e.g. how human-controlled vehicles will interact with an AI-controlled vehicle, which adds to the challenge (clarified by legislation in Germany for Level 3).
