Technical Insight
HOW NEW-AGE COMPANIES ARE REDEFINING THE AUTO INDUSTRY INTO A SOFTWARE DRIVEN INDUSTRY UDIPTYA PAL Teradata
The Shift Tesla is not a typical automaker. In most ways it closely resembles a Silicon Valley technology start-up. Traditional Auto companies, “the metal benders” are adept at making complex reliable products at massive scale, but the software experience in those products is still not as sophisticated as we experience every day in our mobile devices, gaming consoles, smart wearables etc. Very soon, we may see well known Auto brands – the likes of VW, Toyota, FCA, GM join the list of Silicon Valley technology companies. But why? Why can’t auto companies focus on building good cars and let their tech partners/suppliers build the software for the cars? The reason for this paradigm shift in the auto industry is the competition from clean sheet companies who are changing the rule of the game - Tesla, Lucid, Rivian, Nio. They have embraced technology at their core. This has completely changed the relative importance of software vis-à-vis hardware in a vehicle. The customer and market acceptance of this new future paradigm is also reflected in the market valuation of some of these companies.
The Learning Car We have been used to consider the car as a depreciating asset, where the car starts getting degraded from the day it is driven out of the showroom - it is a downhill road. But not anymore. Companies like Tesla are improving the performance of their cars over time by intelligently using the data collected
30 | Telematics Wire | April 2022
and through frequent over the air updates (OTA). One recent example is Tesla increasing the performance of its Autopilot system significantly over a period of 18 months (refer figure). The Autopilot performance almost doubled in the period of 18 months, whereas the performance of active safety features remained almost the same. This is their true edge; the software core turns every Tesla car into a learning machine. Their global fleet of cars have collected data of 3bn+ miles, have identified multiple edge scenarios and done over 120 OTA updates since 2017, that’s on an average one update every 16 days. These updates have added new features like Smart Summon (valet service), added performance like additional 40 BHP to Model-S, added support for new content like Netflix and fixes and updates to systems like BMS, braking, Autopilot etc. This is a huge game changer. For other car companies, these would
have meant expensive and messy recalls and update or may not be simply possible in the existing vehicles. This concept of products getting better over time is not at all new – we are so used to it in our smart phones, smart TVs, tablets, PCs – they add functionalities, content, bug fixes through updates. But the automotive industry was alien to this concept till recently – almost all car models used to deteriorate from the time they roll out of the show room. Also, these products were disconnected from our digital life, unlike our other smart devices.
The ship is turning The ICE industry has grown by outsourcing subsystems, including software and the processing compute hardware. Some of the major OEMs have outsourced nearly 90% of the software which goes into their cars. To make software and data analytics as the core of the industry, it calls for a significant
