by Nada Welker | Jul 20, 2021 | Automotive Industry, Future Trends, New Mobility, strategy in change
The automotive industry is undergoing a profound transformation. Digitization and artificial intelligence are the two drivers that, individually but also in combination, have the potential to fundamentally change the business models of this industry. Back in 2018, we pointed out in our article “Smart Mobility- where is the journey of mobility heading?” that traditional carmakers will have to adapt their business models, because components that cannot be digitally controlled or integrated are no longer relevant for automotive manufacturing today. “Smart mobility” as a key element of the “smart city” is the order of the day, i.e. the increasing networking of transport infrastructure and means of transport, and only vehicles designed to match this integration are still marketable today. OEMs are making correspondingly great efforts to keep pace with developments and to influence and shape them through technical innovations and the adaptation of their business models. However, in doing so, especially with regard to the all-dominant topic of autonomous driving, they are encountering fierce competition from established IT giants, which is ensuring that there is a growing willingness to enter into strategic collaborations in important fields.
As a result of the advancing digital transformation and the increasing use of artificial intelligence, the entire automotive industry and its whole supply chain is undergoing a transformation process of unprecedented proportions. In this process, artificial intelligence offers completely new possibilities for adapting to the individual needs of vehicle owners and drivers. Functions such as the designable on-screen cockpit, voice control, control panels or touch screens for controlling interior functions such as heating, seats or navigation play a central role here. These technical innovations contribute to the fact that the car has long since grown beyond the stage of a simple means of transportation.
Last year, the software and technology company CARIAD was launched, a subsidiary of Europe’s largest automaker, the Volkswagen Group. CARIAD aims to accompany Volkswagen’s transformation into a digital, software-based mobility provider. This includes, among other things, the development of driver assistance systems and the software for autonomous driving. Furthermore, the focus is on increasing VW’s innovation speed, which should initially lead to a new automotive experience that seamlessly integrates into our digital world.
“The transformation in the automotive industry over the next ten to 15 years will be incomparable to what we have seen so far” (quote Volkswagen CEO Herbert Diess).
According to the Volkswagen Group’s own statements, 4,000 developers, engineers and designers from Audi, Porsche and Volkswagen are currently working worldwide on a uniform, central software for the vehicles of the entire Volkswagen Group. The uniform operating system is expected to find its way into all Volkswagen Group models starting in 2025. By that year, the number of employees is expected to grow to around 10,000. Almost 2.5 million EURO will be invested annually in the CARIAD software.
Current challenges for the automotive industry
In addition to the transformation to electromobility, advancing digitalization is causing fundamental changes in the automotive industry. While electromobility is exclusively about CO2-saving drive options, digitalization represents a more profound change for customers and, beyond that, for the entire mobility industry. Consequently, business models will change fundamentally in the future. This also becomes clear when looking at statistics that show how the distribution of sales in the automotive industry will change by 2030.
The statistics shown clearly indicate that digital services as well as new technologies and software solutions, which previously played hardly any role in the automotive industry, will account for a significant share of global automotive sales by 2030.
Competition gives rise to strategic cooperation
In the mobility services sector, the two competitors BMW and Daimler are entering into a strategic alliance to cooperate in some business areas in the future. The aim of their cooperation is to drive forward automated driving. By networking the expertise of the two technology leaders, the aim is to generate tangible benefits for customers as well as cost savings. As early as 2025, the first self-driving cars from Daimler and BMW are expected to be on the road on highways and parking without human control, i.e. with autonomy level four of five of the so-called SAE levels. The SAE levels describe how independently and autonomously a vehicle can act in road traffic. Level four includes complete control and monitoring on highways and when parking – but in city traffic, the driver must still intervene himself, which is why the steering wheel and pedals must still be present.
BMW and Daimler board members agree:
“Instead of individual stand-alone solutions, we are concerned with a reliable overall system that brings tangible benefits to our customers” (quote Daimler CEO Ola Källenius)
Waymo was launched in 2009 as Google’s self-driving car project. For several years, Waymo has been involved in the future operation of autonomous vehicles and holds the leading position in this sector.
“We are building the world’s most experienced driver” (quote on Waymo website).
Waymo’s vehicles have already been tested several times on public roads, numerous traffic situations have been recreated, and the collected data from these journeys has been evaluated and used for further developments. This is therefore not a driver assistance system in which the driver is still actively at the wheel, but a fully autonomous technology. The “Waymo Driver” has full control from pickup to destination. Using a perception system that decodes complex data collected by multiple sensors and accurately captures the environment, it can detect and identify pedestrians, vehicles, stop signs and more. The goal is to make traffic on the roads safer and easier. Since April 2, 2018, the first self-driving vehicles, without a driver behind the wheel, have been registered in the US state of California – so far without any major incidents or traffic accidents.
Apple as a serious competitor of the future?
What is certain is that the software in the vehicle will become one of the most important revenue generators in mobility in the future. Autonomous driving will make an important contribution to individual mobility. For this reason, it would not be unlikely for the IT group Apple to enter the automotive industry. Its distinctive software competencies could open up new opportunities and doors for the technology company. Reports about the probably planned “Apple Car” have been circulating for 2 years already. When and whether an electric vehicle from Apple will actually reach market maturity is currently still written in the stars – but it is not unlikely!
[infobox headline=”Summary in a nutshell”]
- Traditional automakers will have to adapt their business models, because components that cannot be digitally controlled or integrated are becoming less and less important.
- Artificial intelligence brings new opportunities for customization to meet the individual needs of the driver.
- The technology company CARIAD, a subsidiary of the Volkswagen Group, is taking its first steps toward transforming Volkswagen into a digital, software-based mobility provider.
- BMW and Daimler are entering into a collaboration to advance automated driving. As early as 2025, the first self-driving cars from Daimler and BMW are expected to be on the road.
- This is autonomy level four. It includes complete control and monitoring on highways and when parking.
- Waymo is engaged in the future operation of autonomous vehicles and takes the leading position in this field.
- It is a fully autonomous technology – so there is no need for a driver to be in the car.
- Digitalization is leading to a decisive transformation in the automotive industry – and we are right in the middle of it.
[/infobox]
If we allow ourselves a leap in time to the year 2030, the automotive industry could look like this:
- Mobility providers use higher-level traffic control to utilize traffic and reduce congestion.
- Autonomous vehicles make up at least 30% of vehicles in cities, including mainly buses and cabs.
- Extensive connected services and electric drives are implemented in new vehicles.
- Full synchronization of connected services in the car and smartphone apps.
- Possibility of switching on equipment elements for the vehicles.
- New production and logistics concepts: 3D printing of spare parts and components.
- Driver assistance systems have become so established and advanced that they can learn independently and individually from the respective driver through the use of AI and thus cover individual customer needs.
- At least 50% of business processes in the automotive industry are automated.
As a result of digitalization, the automotive industry is facing a decisive transformation: car manufacturers are being driven to adapt their vehicles to the spirit of the times and to rely on new digital business models. The trend toward autonomous driving is becoming increasingly relevant: Currently, we are still at the stage of partially automated driving using assistance systems. In some vehicles, you can already find functions such as automatic overtaking of other cars, automatic lane changing, and the ability to leave braking and parking to the vehicle without the driver’s influence. However, fully autonomous vehicles can so far only be used on test tracks with special permission. Yet, the full-scale deployment of autonomous vehicles is already being planned. But it is still uncertain when the necessary infrastructure and legal framework will be in place. We at magility will be happy to keep you up to date on further developments in the automotive industry. The transformation is picking up speed, and we are right in the middle of it. If you have any questions, please feel free to contact us!
by Nada Welker | Jul 1, 2021 | Automotive Industry, Future Trends, New Mobility, Technologies for new markets
Industrial convergence is described as “the demand-induced convergence of industries and goods markets from different sectors of the economy that previously had no or only sparse interaction”. Markets which previously had been clearly separated from each other, are now coming together. As a result, previously existing industry boundaries are becoming blurred. In some areas, new market segments are developing as a result of this merging, which means that customers can be offered new, hybrid opportunities. Cross-industry approaches also allow exciting new business models to be established.
When does industrial convergence occur?
Industrial convergence occurs “when innovations emerge at the interface of demarcated markets”, triggering structural changes and increased economic momentum. The logical consequence that arises in this context is the at least partial convergence of previously delimited markets.
The Foxconn MIH EV platform is a suitable example of the convergence of the industry. This is primarily about building an open platform for electric vehicles (EVs). On the platform, companies from a wide range of industries up that have not been in contact with each other until now can liaise. This is intended to accelerate innovation and development in the EV industry. According to the MIH website, 1,718 members are currently working on this common platform for electric vehicles.
4 main features of the MIH platform:
- The structure of the platform is fully modularized, scalable and easily customizable.
- The chassis is made of the latest lightweight materials with a unibody design that optimizes the EV’s performance.
- The platform provides a high-performance electrical structure for all application levels.
- The platform is designed to promote the development of autonomous driving technologies.
Risks of traditional automotive industry enable opportunities of MIH
According to its founders, the MIH platform represents the solution to some key problems of the traditional automotive industry. Three key issues are highlighted as challenges facing the traditional automotive industry:
- High development costs
- Long lead times
- Frequent lack of resources
The Electric Vehicle (EV) Platform is designed to help partners and third-party developers to evolve functional features and systems, which will strengthen the growth of the overall electric vehicle market. This can provide a foundation for developers to be able to create a complete ecosystem for the electric vehicle industry.
[infobox headline=”The most important”]
- Industrial convergence describes the demand-induced merger of previously separate goods markets from different sectors of the economy.
- Industrial convergence occurs when innovations emerge at the intersection of demarcated markets.
- Foxconn MIH EV platform aims to become an open development platform for electric vehicles
- The platform is expected to strengthen the growth of the overall electric vehicle market.
- Operational technology (OT) describes monitoring, controlling, and managing the processes of physical machines. The convergence of IT and OT paves the way for the further expansion of Industry 4.0.
[/infobox]
Industry 4.0 and the industrial convergence of IT and OT
The intelligent networking of products and information technologies represents the technological goal of Industry 4.0. It not only takes on the task of increasing efficiency, but also serves as a transmission channel for cross-technology and cross-industry business models. Briefly, Industry 4.0 takes over the digital networking of the entire economy. This requires the merging of IT and OT. Operational technology (OT) describes the monitoring, controlling and steering of the processes of physical machines. For a long time, these processes were not connected to networks – unlike industrial technology (IT). In order to establish a network between the processes of operational technology and thus to be able to achieve the goals of Industry 4.0, IT and OT convergence is unavoidable. It is necessary to develop a sustainable strategy and to analyze the opportunities and risks for the company and its respective market environment.
We at magility will be happy to advise you on new business models for your company. Get in touch with us!
by Nada Welker | May 22, 2021 | Automotive Cyber Security, Automotive Industry, Future Trends, New Mobility
The EcoMotion Week took place virtually once again this year, and unfortunately under the most unfavorable circumstances imaginable. Every year, the important startup fair in the tech metropolis of Tel Aviv brings together leading global companies and startups that are doing pioneering work in the field of smart mobility. This year, around 600 startups, quite a few investors, industry leaders, associations, universities, policy makers and other key participants, used the virtual space to take advantage of various opportunities for knowledge sharing, networking and business initiation. Under the theme of Smart Mobility, countless interactions have taken place in the field of innovative technologies from Autonomous & Connected, Mobility Services, Electrification & Energy, Drones & Aviation, and Supply Chain.
The EcoMotion Week stages – at the pulse of time
It started after the Opening Words on the first day with a virtual challenge stage. Here, various experts were able to exchange ideas on current mobility topics. The topics were given and were categorized into different core industries as well as countries. In this way, the resulting discussions were pre-structured and moderated.
On the Startup Stage, the high-tech startups were represented with virtual booths whose virtual rooms were unlocked at set times. The second day started with the “Opening Words” by Orlie Gruper, Executive Advisor of EcoMotion, on the main stage. This stage was followed throughout the day by fireside chats, interviews and presentations on the most important topics of smart mobility. VDA President Hildegard Müller was also a speaker, laying out the connections between the German automotive industry and the Israeli startup ecosystem. The content that followed covered infrastructure development, the new era of electrification, the shift to the new age of smart mobility, and of course a discussion about the new cyber security regulations of UNECE WP.29, which pose major challenges to the automotive industry, was not to be missed. We at magility have already reported on this several times. Our startup partner Argus Cyber Security, one of the world’s best-known automotive cyber security companies, has been preparing for these regulations for years and has already implemented the necessary measures in its products.
Groundbreaking technologies through connectivity
The conference continued with presentations on autonomous driving, e.g. how connectivity can be taken to the next level and the role of the aftermarket as a target market. The presentations repeatedly emphasized how important cooperations in a wide variety of fields are becoming today in order to accelerate innovations. It was also reported how a whole new area of value creation can be opened up through the networking of data, starting with development and continuing through production to the vehicle on the road or the condition of the road itself. What was clearly emphasized was how urban mobility is becoming the central theme of startups. Public-private partnerships are accelerating future mobility and EV solutions in this context, more and more flanked by political institutions.
Tracking electromagnetic radiation
Also under discussion were the increasing electromagnetic challenges in the automotive industry. The magility startup partner VHOLA from Israel, for example, is dedicated to this very special field of electromagnetic radiation.
The patent-pending VHOLA technology enables predictive maintenance of vehicle performance by permanently measuring magnetic and electromagnetic emissions throughout the life of a vehicle. From the permanent measurement, an algorithm is derived that leads to corrective actions for an emitting ECU, thereby also minimizing passenger exposure to high magnetic field levels. VHOLA’s solution provides continuous magnetic field feedback and shares all measurements and corrective actions with the car manufacturer via the telecommunication unit to enable continuous improvement and regulation.
Overview of other core EcoMotion Week topics
Many other core topics were discussed at the EcoMotion Week. These included automotive disruption and the Israeli smart mobility ecosystem. The question of how the transformation of public transport to Mobility as a Service (MaaS) could succeed was raised many times. Very closely related to this is the search for the shape of micromobility in the city.
The Corona pandemic with its effects literally forced the topic of the sustainability of automotive supply chains onto EcoMotion, with the question arising in this context of how logistics in all its aspects is to be generally redefined in the future. Smart Logistics is becoming a decisive factor for success. The exchange of ideas on the further spread of electromobility also took up a great deal of space, with particular discussion of global approaches to solutions for the necessary EV infrastructure, without the spread of which there is a threat of stagnation. In order to be able to master the challenges arising from the range of topics presented, enormous investments in mobility will also be necessary in 2021, whereby the safety of the interacting systems is of very central importance. Just one example is antiviral technology, which is the basis of all safe mobility already in the present and even more so in the future. And, of course, there is the question of the future interaction of cloud and edge computing, the answer to which is also important for the needs of autonomous driving cars of levels 4 and 5.
After a morning rich in presentations, there was room for B2B conversations on the Main Stage, and the Live Expo Morning Session opened on the Startup Stage. On the Open Stage, all community members of the fair had the opportunity to present themselves to the other fair participants with a 20-second video. At the Meet & Greet session, a limited number of virtual rooms were available for people to connect and discuss current topics as well as make new contacts and initiate collaborations.
Virtual booths and live demos
At the virtual booths, everyone could get up-to-date information about the startups, watch live demos as well as participate in interactive sessions at certain times. Via the internal B2B Area, all participants had the opportunity to network with each other, set meetings and chat live. We at magility also made intensive use of these opportunities and got to know many new technologies and high-tech startups, which we will be happy to report on in the next article.
The EcoMotion Week is and remains one of the most important virtual trade fairs for getting to know the latest innovations of startups and the players behind them, picking up fresh impulses and integrating them into new business models, so that we can continue to act on the pulse of smart mobility in the future. Please feel free to contact us about this.
by Nada Welker | Apr 26, 2021 | Automotive Industry, New Mobility, Technologies for new markets
Convergences should secure demanding and solvent customers
The term convergence is on everyone’s lips. Because on the one hand, digitized vehicles open up an almost unlimited market of services in the field of mobility. In the case of motor vehicles, this ranges from the constantly self-expanding safety system, as Tesla is doing by means of data networks, to built-in game consoles and to artificial intelligence and autonomous driving. On the other hand, car manufacturers are also forced to convince customers, who are strongly courted and demanding in many ways, of the value of their respective brands with ever more efficient products and attractive service offers. Those who can adorn themselves with the names of global companies such as Apple, Microsoft or Google by cooperating with them or acquiring shares in them hope to secure the brand-conscious and financially strong generation of tomorrow.
Convergences with IT giants are often billion-dollar deals
The emphasis is on the word “solvent”. Because everyone wants to earn: IT providers often let themselves be paid billions for their cooperation with car manufacturers. According to inside-it, VW will invest around 27 billion euros in digitalisation in general by 2025.
Microsoft and Google provide know-how for cash
According to VW’s head of software Dirk Hilgenberg, Microsoft is to help to accelerate the provision of applications in cloud computing and software engineering. Cloud services from Microsoft are to be used for this. VW is also interested in Microsoft’s developments in the field of artificial intelligence. The Wolfsburg-based carmaker’s quid pro quo remains monetary, as Scott Guthrie, vice-president of Microsoft Cloud, points out; his company does not get access to VW’s data.
Ford has also entered into a 6-year connected driving collaboration with internet giant Google in the first quarter of 2021. Google is to become the central provider of cloud services for Ford. In addition, the infotainment systems are to run on Android as the operating system from 2023. Ford’s own Sync. software, which ran Ford’s infotainment systems until now, will be dissolved. When announcing the cooperation, Ford manager David McClelland referred to Google’s expertise in machine learning and artificial intelligence and also emphasised that Google would not receive any data from Ford customers for further use.
[infobox headline=”Summary in a nutshell”]
- Convergences open up an almost unlimited market in the field of mobility.
- Mergers with IT giants cost carmakers a lot of cash.
- Car manufacturers hope that by cooperating with IT giants, some of the latter’s attention will spill over to them.
- Some car manufacturers do not further develop their own operating systems and instead rely on cooperations. Others go the opposite way and rely on the further development of their own operating systems in order to be able to exist independently on the market.
- Industry benefits from the innovative impulses of high-tech startups.
- magility networks companies with technology experts from all over the world.
[/infobox]
Cooperations are good – independence is better?
Even though the German car companies have just jumped on the bandwagon of convergence and are looking for cooperation with software developers – it does not seem to be in their nature to renounce independence in the long run. Daimler and VW are currently working flat out on their own operating systems with which they can survive on the market in the future without the intervention of Amazon or Google.
Experts from three corporate brands are developing a new operating system
At VW, the child already has a name: VW.OS is being developed by around 5000 experts from VW, Porsche and Audi. For this purpose, the company Car.Software.Org was newly founded, whose number of employees is to double again in the next four years.
From smartphone to electric vehicle
Meanwhile, one of the world’s largest smartphone manufacturers is starting up in China. Xiaomi is entering the smart electric vehicle business. Founder and CEO Lei Jun wants to invest around 10 billion dollars in a subsidiary over the next ten years to compete against rivals in a market that, according to Dan Ives, an analyst at investment firm Wedbush, will be worth 5 trillion dollars over the next ten years. Compared to that, the other products in Xiaomi’s belly shop look like peanuts. The Chinese giant makes electric toothbrushes and razors, light bulbs, watches, surveillance cameras and scooters on the side.
Convergences – Startups get in on the act
In addition to classic convergences, start-ups with their high-tech developments are increasingly playing a leading role in the industrial markets. Entire startup-driven industry segments are increasingly emerging. According to Speedinvest, investments in so-called “industrial tech companies” have increased almost ninefold across Europe from 2014 to 2020. For many years, we at magility have been accompanying high-tech startups as they enter the EMEA market. Our clients from industry benefit from the innovative impulses of our high-tech start-ups. We bring together traditional companies with the right technologies and specialists from the high-tech world. Feel free to contact us if you would like to expand your international network in line with your company’s business model. We at magility will be happy to help you.
by Nada Welker | Apr 15, 2021 | Automotive Cyber Security, Automotive Industry, Cyber Security Management, New Mobility
The standards in the automotive industry will be further expanded. In addition to the UN regulations on Automotive Cyber Security Management Systems and Software Updates, which we explained in our article on UNECE WP.29, there are now strict requirements for the use of Automated Lane Keeping Systems, so-called ALKS for passenger cars.
This Regulation No. 157, adopted by the UNECE’s World Forum for Harmonisation of Vehicle Regulations, is the first binding international regulation for so-called “Level 3 vehicle automation”. The World Forum for Harmonization of Vehicle Regulations (WP.29), operated by the UNECE, is the intergovernmental platform that defines the technical requirements to be followed by the automotive industry worldwide.
Safe introduction of automated vehicles
ALKS, once activated, take primary control of the vehicle and control the lateral and longitudinal movement of the vehicle. However, the driver is able to intervene and take back control of the vehicle at any time. The driver can also be requested to intervene by the ALKS system itself.
The new Regulation 157 is based on the UNECE framework and focuses on the safety of automated and autonomous vehicles. It takes a sophisticated systems approach that contributes to road safety by the use of advanced technologies, including the reduction of accidents. The aim of the regulation is to enable the safe introduction and operation of automated vehicles in different traffic environments. It is intended to contribute to a wider use of automated vehicles.
New requirements for the approval of Automated Lane Keeping Systems
The new regulation in its current form still limits the operating speed of ALKS to 60km/h. Under certain conditions, ALKS can be activated in road traffic, namely when cyclists and pedestrians are not allowed on these roads and oncoming traffic is separated by a physical barrier and thus cannot cross the lane.
[infobox headline=”The most important in brief”]
UN Regulation 157 includes administrative provisions for type approval, audit and reporting requirements, technical requirements and provisions for type approval and testing. The application for approval of a vehicle type with regard to the ALKS shall be submitted by the vehicle manufacturer or his authorised representative.
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UN-Regulation 157 and Human-Machine Interfaces
Regulation 157 also includes provisions relating to the Human-Machine Interface (“HMI”) in order to avoid misuse or misunderstanding by the driver. The regulation states, for example, that in the event of an overload message issued by the ALKS, all other displays of the vehicle offered to the driver for activities other than driving the vehicle are automatically suspended. This may be the case, for example, shortly before the end of a road section authorised for ALKS.
The process of handing over the driving task from the ALKS to the driver is also specified in the new regulation. For example, one requirement of this specifies that the vehicle must come to a stop if the driver does not respond to the ALKS handover request in accordance with the requirements. This means that the system must be able to check driver presence and assess driver availability. To this end, the regulations set out clear criteria that an ALKS must fulfil.
These include regulations and criteria to be met:
- for the sensor system
- for the driving mode memory
- of data elements to be recorded
- for data availability in compliance with the respective applicable national and regional legal provisions
- for protection against manipulation
- for cyber security and software updates
In summary, the regulation defines safety requirements for:
- Emergency manoeuvres in the event of an imminent collision
- Transition demand, i.e. when the system requests the driver to take back control
- Minimal risk manoeuvres when the driver does not respond to a transition demand (in all situations the system must minimise the risks to the safety of the vehicle occupants and other road users)
- Mandatory introduction of driver presence detection systems for car manufacturers. These systems check both the presence of the driver (in the driver’s seat with the seat belt fastened) and the availability of the driver to take back control.
Obligation to equip the vehicle with a “black box”, the so-called Data Storage System for Automated Driving (DSSAD), which records when ALKS is activated.
Car manufacturers will therefore have to fulfill clear performance-related requirements from now on before their Automated Lane Keeping System-equipped vehicles can be sold in the countries that stipulate the regulation.
The detailed specifications, activation criteria for an Automated Lane Keeping System and all other requirements of “UN Regulation No. 157 – Automated Lane Keeping Systems (ALKS)” can be viewed on the UNECE website. An internationally agreed German translation is not yet available.
Recently, one of our start-up partners, Cognata Ltd. from Israel, which develops full product life cycle simulations for developers of ADAS and autonomous vehicles, collaborated with Five, a company that develops autonomous vehicle systems. Together, the two companies are working to provide a modular, cloud-based, end-to-end development and testing platform for automatic lane keeping systems ALKS that complies with the new UNECE Standard 157.
The market is accelerating and for car manufacturers it shows once again that the convergence of the industries is continuing.
