Automotive Industry On Course To Disruption And Evolution

Consumers expect a lot from their vehicles. We expect vehicles to serve not only as transportation, but as hubs of entertainment and connectivity that can help us manage busy lives, or relax after long days. Someday, we may even expect our cars to do the driving themselves, without any human intervention. Automotive manufacturers consistently strive to meet these expectations by delivering high-quality vehicles while simultaneously developing new and exciting features that will drive excitement and brand differentiation. As consumers continue to expect more from their vehicles, automakers must continue to meet and exceed these demands.

The challenge is that expanded vehicle functionality translates to greater vehicle complexity. In addition, the cadence of innovation and development in the automotive industry has accelerated. Manufacturers are now in a position in which they have to manage the massive complexity of modern vehicles while reducing their time to market just to remain competitive. In the future, we can expect the challenge for manufacturers to intensify. The automotive megatrends of autonomy, connectivity, electrification, and shared mobility (ACES) are beginning to truly take hold in the industry. Vehicle complexity will continue to increase as vehicle functions expand to greater levels of automation, networking, and onboard processing (figure 1).

Figure 1: The automotive megatrends of autonomy, connectivity, electrification, and shared mobility will drive greater vehicle functionality and complexity.

It’s not just that vehicle complexity is increasing. Major automotive OEMs and suppliers have decades of experience and knowledge in engineering and building cars that are primarily mechanically operated. Now, the industry is arriving at an inflection point in which electronics and software will displace mechanical hardware as the most critical and valuable vehicle components.

Legacy development methodologies will strain under the pressures and challenges of engineering the vehicles of tomorrow. Vehicle architectures common today will not be able to support the features and functionality expected in the cars of the future. And the traditional automotive business model based on volume manufacturing and vehicle sales will no longer be the most effective means of generating revenue and turning a profit. In the next ten years, we will see vehicle architectures adapt to support more sophisticated vehicles, and we will see automotive companies transform through digitalization and vertical integration in strategic technologies or features.

Architectural change
Today’s vehicles contain up to one hundred electronic control units (ECUs) that are distributed around the vehicle to manage various functions and sub-systems. The distributed nature of this architecture means that it takes miles of wiring, weighing hundreds of pounds, to connect the ECUs to the components and systems they are designed to manage. A highly distributed architecture will not scale to support the vastly increased electrical and electronic (E/E) content of a future vehicle. In particular, automated safety systems and autonomous drive are expected to require an additional forty to fifty sensors alone, placing a tremendous burden on the E/E architecture and the wiring harness.

Automakers will need to explore new architectural philosophies to enable the abundant functionality of tomorrow’s vehicles. Overall, these architectures will consolidate to feature fewer ECUs with greater computational power that support a wider array of features and functions per ECU. Each of these ECUs will support multiple software stacks, firmware, and sockets. Such architectural consolidation combines previously distributed components, reducing the need for physical wired connections and thus the weight and cost of the harness. Consolidation also reduces latency around the vehicle as related functions are integrated into the same ECU.

The growing prevalence of electric powertrains will also contribute to architectural changes. Multiple voltage architectures, with support for 5V, 12V, 48V, 600V and even 1000V power supplies, will become necessary to allow the various electrical and electronic components to operate at maximum efficiency and performance. The battery and electric motor, for example, require high voltage connections to supply power to the motor efficiently and preserve drive range. Electric powertrains will also require sophisticated battery management systems (BMS) that can monitor the current, voltage, temperature, and other metrics to ensure safety, reliability, and performance.

Finally, automakers will need to consider the security of their architectures from the beginning of vehicle development. Connectivity, software complexity, and the increasing use of electronic control systems each open new attack vectors into a vehicle. The exploitation of a vulnerability in any one of these systems could prove disastrous, especially in the case of a self-driving car. Automotive security, therefore, will need to be approached from a holistic perspective covering external connections, gateways, networks, processing units, and more.

Ultimately, future architectures will succeed by providing scalability across vehicle platforms, flexibility to new technologies and features, and reliability and security over extended lives in the field. Well-designed architectures allow manufacturers to bring new products and features to market quickly and cost-effectively, enabling agile responses to industry pressures (figure 2).

Figure 2: OEMs must create flexible, scalable, and reliable E/E architectures to overcome the new pressures in the automotive industry.

New business models/ supply chain evolution
The impacts of automotive technological and market trends are not limited to the design and engineering of vehicles. These trends will have far-reaching consequences in the automotive industry; they will drive fundamental changes in the business models and the organizational and operational structures of major industry players. Firstly, critical brand differentiators are already shifting to software and electronics-enabled features such as advanced driver assistance systems (ADAS) and infotainment capabilities. This shift redefines how value is derived from a vehicle, both for the consumer and the manufacturer.

Automotive companies will seek to maintain control over the aspects that provide the greatest potential for differentiation such as the central ECUs, base-layer software platforms, and optional upgrades. Much of the vehicle hardware will commoditize as vehicle functionality is separated and abstracted to software, driving new purchasing and supply strategies for automakers. As supply chains alter and expand, robust requirements and change management processes, as well as comprehensive verification, will become critical to ensuring time-to-market and product quality. Furthermore, over-the-air updates will allow automakers to generate new streams of revenue after vehicle sale by offering software upgrades and new features directly to consumers. This may come to mirror the application ecosystem of today’s smart phones, albeit with much greater standards for third-party developers due to the safety requirements of passenger vehicles.

These market trends will push automotive manufacturers to alter the very structure of their organizations, vertically integrating software engineering, integrated circuit design, and information technology capabilities to best position themselves for the future automotive market. Some companies are already beginning this transformation. Tesla announced it was developing custom chips for its vehicles in 2017, revealing its completed ‘Full Self Driving Chip’ in April of 2019 (Vincent, 2017; Hollister, 2019). Then, in June of the same year, Volkswagen announced a new software development group that will create basic uniform software functions across the company’s brands, and eventually consist of five-thousand software experts and engineers (Automotive News, 2019).

Other organizational changes will focus on meeting the engineering challenges of vehicles as they become highly integrated systems of mechanical, electrical, electronic, software, and network components. The numerous engineering domains involved in vehicle development have traditionally operated within silos, only comparing notes with the other domains at key program milestones. A separated approach to vehicle development will not be sustainable as vehicle complexity rises, both within and between domains. A cohesive, integrated, and holistic vehicle development methodology that facilitates collaboration between the many vehicle domains will be mandatory for success.

Conclusion
The road forward for automotive manufacturers and suppliers remains lengthy and confusing. While full vehicle autonomy is a popular topic, highly impactful technologies will reach maturity long before true self-driving is achieved. Automotive companies are faced with the challenge of integrating these new technologies into their vehicles to create unique and exciting offerings. To make the most of these opportunities, automakers are undertaking dramatic reorganizations to enhance their capabilities in the key areas of software and electronics, and to remove traditional boundaries between engineering domains.

Figure 3: The Capital software suite for E/E systems engineering is one example of a comprehensive digital twin solution that supports the entire flow from definition through production and maintenance.

Automakers will also need to adopt digitalized and integrated engineering software solutions to optimize their efforts as they prepare for the future of mobility. Transitioning to integrated, digitalized engineering solutions, such as the Xcelerator portfolio from Siemens, will enable closer cross-domain collaboration and a continuous digital thread throughout development and manufacturing. Previously a best-practice, these capabilities will become a competitive necessity as automotive giants, newcomers, and suppliers evolve to develop and launch new vehicles and features faster than ever. The automotive landscape is wide open; OEMs of all sizes will need to engage in a combined effort to innovate technologies and processes to thrive.