Adjusting The Finish Line In Auto Electronics

There are two big hurdles in automotive electronics. One is developing autonomous vehicles, and the other is the electrification of those vehicles. In both cases, the development time may be a lot longer and more costly than anyone expected, and the impact may be much more far-reaching than the initial effort would suggest.

For automakers, the key question in all of this is how they will differentiate what they’re selling, particularly when all fully autonomous vehicles move at the same speed and get people to their destination in the same amount of time. Will the differentiation be brand name, seating, cabin amenities, and the overall appearance? And will people even own cars? So far, no one is quite sure, and the real value for automotive companies may be a package that includes everything from guaranteed uptime — after all, this is a computer on wheels — to insurance, service, and possibly even time-share management. The rumble of the engine and gas mileage may evoke good memories for today’s drivers, but they’ll be meaningless for the next generation of autonomous vehicle passengers.

Already, the competitive barriers between carmakers are beginning to weaken. It’s expensive to develop AI systems for autonomous vehicles, and the payback is uncertain. This is why Ford has teamed up with Volkswagen on electric and self-driving vehicles, and why Daimler (Mercedes Benz’s parent company) has teamed up with BMW. Those consolidations will continue, and eventually standards will be set that focus on what works best, and from there it will be a matter of reducing costs and squeezing suppliers. That strategy will continue to pay dividends for automotive companies.

For electrification of vehicles, the second big hurdle, the outcome is a bit less obvious. Improving the efficiency and range of electric vehicles is relatively simple in comparison to setting up the necessary infrastructure around the globe that can make this attractive for all car owners. None of this works if the range that cars can drive per charge is too short, or if it’s difficult to find a place to charge the car. Case in point: It used to be easy to find a spare charging station in most office buildings in Silicon Valley. These days they’re in use most of the time, and if a car doesn’t have enough power to get home from work then the whole model fails.

Work is underway to charge batteries faster, and to extend a BEV’s range by improving efficiency across all components. But for the most part, people with electric cars today have a dedicated place to charge them at night, and those who can afford it have a second internal combustion-powered car for longer trips. In some locations, the ability to install charging stations isn’t even feasible.

But there’s also a whole new opportunity that will open up around this industry, and this is where things get really interesting. This includes 5G communication, autonomous service for module replacement, and a slew of consumer electronics options that are distracting to drivers today, but good for passengers in an autonomous vehicle. We tend to think of vehicles designed for agility and acceleration, but autonomous vehicles will have a very different purpose.

At the same time, traditional repair shops, auto insurance brokers, dealerships, and even traffic cops might disappear, but they also might stick around and have completely different roles to play. And there will almost certainly be entirely new services and add-ons that we’ve never even considered.

Taken as a whole, this will provide years of new opportunities for the tech industry in general, and chipmakers in particular. But not everything will continue to provide opportunities at the same pace, duration, and at the time in every segment of the market. And while the race is on to make all of this work, the players at the finish line may look a lot different than the ones who started the race, and the finish line may look less like a line than the various players might expect.