When we talk about hurdles in the auto industry, things always come up: sky-high interest rates, pesky inflation, supply chain issues, and the ongoing talent hunt. But here’s the plot twist. Electrification and softwareization are the true game-changers shaping the future of the automotive industry.
Car manufacturers are rising to this challenge, especially in the electrical sector. Name the model, and customers are taking notice as a hybrid option is likely available or in development. In 2022, 8% of all new cars purchased In America it was electric. Globally, this number is even higher, with electric models expected to account for 14% of new car sales by 2022.
Softwareization has been a hurdle because of how automakers view themselves. Legacy automakers have a rich history of hardware innovation. But software, and the use of software in place of traditional hardware to perform certain functions, is not necessarily in their DNA. The learning curve for implementing and monetizing software is steep.
Fortunately, more automakers are rising to the challenge. Artificial intelligence is already being used in design and planning. The same goes for production, operational assistance, warranty management, risk assessment, and customer service, just to name a few. In fact, the amount automakers are spending on AI is expected to grow at a compound annual growth rate of 22.7% from 2023 to 2030.
Deploying generative AI at scale
At least some of these funds will be allocated to research in generative AI. It has already been proven to increase productivity, foster creativity, enhance decision-making, and deliver new business in almost every industry, including automotive. Tesla is using AI at vehicle scale to increase the rate of innovation. In June, the company announced plans to use cutting-edge generative modeling techniques across multiple camera views to predict likely outcomes.
Tesla isn’t alone in its efforts. In China, passenger cars with combined driving assistance accounted for 42.4% of total passenger car sales in the first half of 2023. More importantly, the country’s automakers have made great strides in applying his AI-based models to fix many problems with autonomous driving. As of June this year, Chinese technology company Baidu’s fleet of self-driving cars, Apollo Go, had provided more than 3.3 million services to the public.
The potential of generative AI is not lost in China, and Chinese automakers are poised to advance the technology even faster and further than their competitors. Most, if not all, companies operating in this field have the technology base and engineering talent to produce amazing results in this field. By leveraging softwareization in design and manufacturing, automakers can deliver greater value and affordability throughout a vehicle’s lifecycle.
Overcoming AI obstacles
For some automakers, hardware is an obstacle to getting the most out of generative AI. Most cars leave the factory with enough computing power to handle basic functions, making it impossible to run a software sandbox on every vehicle that leaves a parking lot. After that, all performance data is lost. These data are essential for developing and testing new features in the real world. You’re missing out on a treasure trove of information that can drive innovation and speed up new features while keeping risk low.
Better computing and generative AI will allow automakers to analyze driving behavior and personalize and perfect the overall driving experience for the person behind the wheel. Data has long held the potential for personalization. So there’s no reason why new cars should become more out of sync as buyers get used to them. It’s all a matter of technology and can be a compelling selling proposition.
Additionally, vehicle-specific data is essential to improve customer support. With just a few clicks of a button, service personnel can capture details of the driving experience and understand exactly what issue the customer is facing with their vehicle. Talk about meeting individual needs. If the automaker chooses, the customized message can then be sent via text, email, or directly to the vehicle’s display screen. It’s not out of the realm of possibility.
Like electrification, softwareization is also the future of the automotive industry. Today’s vehicles are becoming more like computers on wheels as connectivity becomes core to the driving experience. It is only a matter of time before customers come to expect the capabilities that AI brings to every vehicle, including not just self-driving capabilities but all the bells and whistles. The first challenge many automakers must overcome is how they view themselves. The road is open from there.
thomas muller (Photo, top left)is vice president of Wipro Engineering and is responsible for Wipro’s automotive engineering and innovation services, including software-defined vehicles, autonomous driving, 5G, and cloud native engineering.