Car makers have traditionally been secretive about their developments in a ruthlessly competitive marketplace, but they are being forced to open up and partner with technology companies who can help them extract more value from consumers through on-demand in-car services, for example. The traditional auto industry is all too aware that Uber, Tesla, Google and Apple are snapping at their heels, along with innovative start-ups, all keen to get a share of the wider connected and autonomous automotive market.
The most unlikely partnerships are springing up as car makers vie to get off the starting grid ahead of the pack.
BMW is working with start-up DOVU to pilot blockchain to track mileage in leased vehicles; Jaguar Land Rover (JLR) is supplying 20,000 electric vehicles to Google’s self-driving car spin-off, Waymo; and BMW is collaborating with its direct competitor Daimler AG on car-sharing services.
Toyota has gone one step further and unveiled an electric concept vehicle, dubbed e-palette, partnering with Pizza Hut, Amazon, Mazda, Uber and Chinese ride-hailing giant Didi Chuxing. The concept goes beyond robo-taxis, as Toyota envisages that e-palette could be a mobile pizza parlor, shoe shop or office. Speaking at its launch, Toyota president Akio Toyoda said, “Our competitors no longer just make cars. Companies like Google, Apple and even Facebook are what I think about at night.”
Toyoda’s comments put into perspective an industry that is preparing for an uncertain future where it will need to partner to succeed in what will be a very crowded marketplace.
Connected cars: inside and out
The global connected car market is forecast to increase by a staggering 270 per cent by 2022, with 125 million cars with embedded connectivity to be shipped between now and then, according to the Counterpoint Research IoT Tracker. It will initially be driven by rising adoption of connected cars in China and the European Union’s e-call mandate, which is designed to provide rapid response to motorists involved in a collision in the EU.
Counterpoint Research expects 4G LTE to account for nearly 90 per cent of connected passenger cars with embedded connectivity by 2022. 5G connectivity is likely to start in 2020, but penetration will remain low until beyond 2022.
Consumer interest in connected cars has pushed automotive makers to seek commercial applications. Ford, for example, has partnered with Verizon Telematics to embed connectivity over Ford's SYNC Connect, which includes a preinstalled 4G LTE modem and enablement for field service management. The Ptolemus Usage Based Insurance Global Report predicts that nearly 50 percent of the world’s vehicles will be covered by telematics policies by 2030.
While these initiatives will open up lucrative new revenue streams for automotive makers, partners and new market entrants, they will also create a rich data source. This will provide visibility into ‘black boxed’ vehicle bases including performance metrics for determining recalls, estimating churn and locating vehicles types based on age, for example, according to 451 Research.
Security: must be baked in
End-to-end security is crucial both for safety and to build consumer confidence in connected and autonomous vehicles.
Car makers and their suppliers are currently working with standards organizations to create structures and architectures to address the increased attack vector that connected cars are creating. The increase in lines of code and electronic control units that require over-the-air updates presents additional challenges and security vulnerabilities, according to 451 Research.
Recently cybersecurity firm Computest, for example, found vulnerabilities in Audi and VW infotainment systems by using its WiFi system. Under certain conditions the researchers could listen to the driver’s hand-free phone conversation and even track the location of the car through its navigation system.
Some high-end car makers are actively using built-in telemetry. The Bugatti Chiron, for example, can transmit data between the car and factory 24/7 as long as there is smartphone coverage. The telemetry system monitors 10,000 different signals, including lights, engine and infotainment. When an alarm is triggered, one of three Bugatti ‘flying doctors’ is despatched, anywhere in the world, to fix the problem.
Car makers will need to follow a mantra of “security by design” when it comes to the connected car as they become a more lucrative. In-car digital payment services are on their way. IBM and Visa, for example, are working on embedding payments into car technology. Serious data or safety breaches will dramatically dent consumer confidence going forward. Baked in security at the design stage will be crucial when it comes to autonomous cars.
AI: the starter for self-drive
AI is central to the development of the autonomous car industry. The speed at which AI technology is developing in this sector is creating much cross-pollination between traditional manufacturers and tech companies due to its complexity. Apple’s CEO Tim Cook has described the challenge of building autonomous vehicles as “the mother of all AI projects”. Apple is developing technology for self-drive cars.
Self-drive solutions are built on a multifarious landscape of algorithms, cameras and sensors that are programmed to address a gargantuan catalog of variables on highways and in cities.
Self-drive isn’t the only user for in-car AI. Car makers are examining AI to monitor driver emotion behavior, for example. Affectiva, spun out of MIT Lab, has already come up with an AI system that can monitor driver fatigue and drowsiness from the face and voice. Honda is already looking at producing an emotionally aware car.
The convergence of disrupting technologies is set to transform the automotive industry beyond recognition. The auto makers that flourish will be those that partner, put technology and safety first and work out a strategy to differentiate their services in what is set to be a gold rush.
Jan has been writing about technology for over 22 years for magazines and web sites including ComputerActive, IQ magazine and Signum. She has been a business correspondent on ComputerWorld in Sydney and covered the channel for Ziff-Davis in New York.