Cars today have a computing power of about 20 personal computers, incorporate over 100 million lines of code and generate up to 25 gigabytes of data per hour. Digitalisation and technology have previously only focused on optimising the vehicle’s internal functions, but now the attention is shifting to developing the car’s ability to connect with the world around it and also enhance the in-vehicle experience for users. The connected car is now enabled to optimise its own operation and maintenance as well as the convenience and comfort of passengers using onboard sensors and data connectivity. Cars are doing more than just transporting people and goods from point A to point B, they are increasingly becoming an e-commerce hub for services that are linked to the car such as infotainment services and usage-based insurance services that track the driver’s behaviour. The owner’s perception of a great driving experience now goes beyond the vehicle’s engine, to include vehicle personalization through connected services.
The Need for an Automotive Connectivity Ecosystem
Why is there a need for a connectivity ecosystem for vehicles in the first place? Gone are the days when the automotive industry mainly consisted of automakers, suppliers and dealers. With the rise of connected cars and mobility services, the ecosystem has expanded to include technology providers, service providers, infrastructure providers, smart cities and more. In the era of digitalisation, the world has become more connected, bringing people closer together. The automotive industry is undergoing the same transformation. Automakers are formulating strategic partnerships with technology and service providers with the objective of making the automobile a connected system, just like our home and workplace where we can be productive or indulge in leisure time. Connectivity does not stop at the ability to just tune in to the radio, today it has the ability to connect to many smartphone apps such as Spotify and Google Maps. Data connectivity in modern vehicles is mirroring the already familiar smartphone-based mobile experience and extending the consumers’ digital lifestyle into their cars. In the near future, connectivity will go beyond vehicle and cloud connectivity, cars will be connected to each other and also to the infrastructure around them.
As the software and data in vehicles are increasing, innovative software and data management solutions are being developed. To help automakers avoid costly burdens and vehicle owners to avoid unnecessary inconvenience, we now have over-the-air (OTA) services that enable the transmission of software updates and data between a vehicle and the cloud without having to bring the vehicle into the dealership. This means that with OTA technology, vehicles have the ability to update themselves to the latest software continuously throughout the vehicle’s lifecycle including the increasingly critical security updates. In addition to revolutionising vehicle software update and data management, OTA technology will also serve as a foundation for fully autonomous vehicles. As the driving wheel disappears from vehicles altogether, vehicle architecture and design will radically transform as automakers shift to accommodate additional technology developments like the introduction of artificial intelligence (AI), new transportation models and enhanced user experiences.
The Building Blocks of the Automotive Connectivity Ecosystem
The automotive connectivity ecosystem is driven by the flow of automotive data generated by the connected vehicle and the actions that can be performed based on this data. The Boston Consulting Group (BCG) has defined the connectivity ecosystem for connected vehicles as illustrated below.
The automotive connectivity ecosystem can be broadly categorized into two parts — (1) Data Sources and (2) Services and Platform.
- Data Sources: Data is first generated through vehicles (such as the exact location of the vehicle, the health of the vehicle, driver behaviour, etc.) and external infrastructure (traffic conditions, road conditions, weather conditions, etc.). These data sources are then connected to the ‘Services and Platform’ through cellular networks like 4G or, in the future, 5G communication networks.
- Services and Platform: At the core of this component is the Connectivity Platform made up of two distinct layers — the application layer and the data layer. All of the data generated from the data sources is accumulated in the data layer. With edge computing only the necessary data will have to be transmitted to this layer. The application layer acts as an interface for third parties and the automaker itself to draw on the data to create value-added services and apps, in many cases using other technologies like artificial intelligence and blockchain technology. The data layer is managed and maintained by the automaker’s back-end systems, sometimes outsourced to a third party.
Previously, automakers were only concerned about the vehicle, its design, its peripherals and sensors, its control unit and its user interface. With the evolving needs of connectivity, automakers need to focus more on the consumer and take on many more functions to operate effectively and beat their competitors in giving their customers a great user experience. They will have to manage the flow of data from a vehicle to the platform to an application and will require reliable communication systems to transmit the data securely. They will also require the right infrastructure including cloud-based platforms to support their new services and apps.
For the automotive industry, connectivity can provide new revenue opportunities. Implementing it effectively will be a challenging and complicated task, requiring a deep understanding of customer needs and a willingness to work in new ways with new partners. Automakers will need to become software companies. For example, they will need to bill customers in new ways, such as through monthly subscriptions or service-based payments. Many of these (to the automotive industry) new capabilities are unlikely to be found in-house and may be difficult or expensive to develop. By establishing a network of partners, automakers can get quick access to the resources they need. Time to market, risk and cost can all be reduced while quality and revenue increase.
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