Electrification and mobility are reshaping the automotive industry

February 20th, 2020

As we enter this brand new decade, I’d like to share with you some of the breakthroughs and innovations that have already begun reshaping our society. But more importantly, I’d like to share my thoughts and views on electrification and mobility in 2020, and how these emerging trends are set to radically transform the automotive industry beyond recognition.

Automotive trends that have been reshaping the automotive industry

Over the past five years, most of the developments in the automotive industry have revolved around these four trends:

  • Autonomous driving is all about the decisions that are made in the vehicle. Historically the majority of these decisions have been made by the driver, but all that is changing. Fast.
  • Connectivity basically means the vehicle is connected to a range of services and solutions, via customized interfaces and usually to cloud-based services.
  • Sharing includes any type of service or solution that enables you to share a vehicle, i.e. car sharing providers, leasing, rental, corporate fleet, etc.
  • Electrification is fundamentally about the physical shift from combustion-powered to electric-powered engines.

Up until now, each of these developments have essentially been progressing independently of each other. And the market has seen some pretty extreme investments in each area, no question. But what is happening now is even more interesting. Because the resulting synergistic effect of these four developmental building blocks has paved the way for the emergence of another, more ubiquitous, more all-encompassing trend: mobility.

Before I go into more detail about mobility, however, let me first explain the relevance here of electrification and the software-defined car.

Electrification and the dawn of the software-defined car

Traditionally, vehicles powered by combustion engines have consisted of roughly 3,000 components. And, in recent years, car manufacturers have been adapting these traditional models into hybrids and mild hybrids by adding a further 1,500 or so electrification components. When building fully electric models, however, you only need about 70% of the original components that were required to build a traditional, combustion engine-powered car. Simply because their functions can be replaced by software.

This means that the automotive industry, which has always been an archetypical manufacturing industry, is drifting further and further away from manufacturing. Instead, it is quickly morphing into a software-defined industry. From mechanical to digital, hardware to software, vehicle to device.

Electrification, and the developments that ensue as a result, will make it much easier to manufacture a car. That said, it won’t be anywhere near as easy to produce and maintain the necessary software to keep it running. And although there are a lot of challenges with this type of seismic shift, there are also a lot of benefits. For example, with a software-defined product you can update it, modify it and add completely new functionalities as and when they are invented. Instantaneously and without necessarily having to upgrade to a new model. In other words, electrification is opening up a whole new world of possibilities for the automotive industry. Like mobility, for example.

Why mobility is going to radically transform the automotive industry

As consumers, we’ve already grown accustomed to the type of services that have emerged as a result of connectivity, autonomous solutions and sharing. And as the majority of cars being produced are destined for the B2B market, it makes perfect business sense to incorporate these same functionalities and services into cars being bought for sharing, leasing, rental or corporate fleets. Such as a user-friendly sharing solution, mileage monitoring, a fleet management interface, driver behavior analysis tools, congestion charge monitoring, etc.

As I said at the start of this article, mobility is already reshaping the automotive industry, not least for car manufacturers themselves. And it’s something we are going to be seeing a lot more of.

Producing competitive electric vehicles requires a completely different skill set

Car manufacturers are now rushing to electrifying their cars in order to survive. One of the challenges they are facing, however, is finding people with the right skills and experience to help them achieve that. Because, at the moment at least, most of their employees simply do not have the requisite software skills to build electric vehicles.

Initially, car manufacturers will of course be able to develop some of the new components themselves. But eventually things will start getting slightly more complicated. Like integrating the various components with the wider ecosystem, for example. That’s when they are going to lack the necessary resources and skills. And without a highly compatible ecosystem for their connected services, they will struggle to keep up with the competition.

At WirelessCar, we work closely with car manufacturers to help them to build highly compatible systems. By creating an agile ecosystem for their connected services, they are able to easily manage and capitalize on the flow of information between the various components and the rest of the ecosystem.

Mobility and the dawn of the general operator

In addition to these ongoing developments, there are a couple of other trends I very much hope to see emerging soon. The first is the dawn of the general operator. You see, in order to really make mobility a concept that works for consumers, we need a mobility operator that can integrate the various elements of mobility into one solution. These days, people don’t want an app for their car, an app for each train or bus company, several rental car apps, several different scooter-sharing apps, etc. Imagine then, if all those apps were linked together in larger mobility ecosystems. Somewhere we could manage all of our travel plans at once.

Unfortunately, this would have to be an extremely sophisticated solution. And it would require one or more organizations to step in and take a wider responsibility. But right now there simply aren’t any general operators. Yet.

Smart, personalized services and the collapse of the app

The second trend I envisage is the collapse of the app. General operators or not, thanks to predictive technology, everything is only going to get smarter and smarter. This includes many of the functions we control via our phones. Which means we might not actually need applications at all in the not too distant future.

Our applications and data collection systems have already amassed so much information about how we use the things they control. Take my car app, for example. It should be able to predict, with 99.9% accuracy, when I’m going to need my car next. So it could quite easily send me a push notification before I usually drive to work asking me, for example, if I need the car climatized in time. All I would have to do is answer yes or no. And that type of smart functionality is becoming more and more common, thanks to machine learning and AI.

Smart, personalized decision-making services will replace the need to interact with so many applications. And all of these services, I hope and believe, will soon be available within a single, smart ecosystem that is personalized for each and every one of us.

I hope you enjoyed hearing my thoughts about electrification and mobility in 2020, and how developments are reshaping the automotive industry. If so, I can warmly recommend these other recent blog articles: Connected fleet management unlocks the business potential of shared mobility and How does edge computing benefit connected cars? And if you would like to know more about our work with mobility and electrification, or how our solutions can help you stay ahead of the global trends that are transforming the automotive industry, please don’t hesitate to contact me at martin.rosell@wirelesscar.com or visit our website for more information.