Five 2020 trends for the automotive industry
While the automotive industry has been traditionally slow to innovate due to the complex development environment, the landscape has changed drastically in the past decade—and even in the past year. With rising consumer expectations and new revenue stream opportunities, manufacturers and suppliers will have to implement innovative, software-based solutions to stay relevant and withstand disruption. Looking to 2020, here are the top trends to expect for the automotive industry:
1) Software-defined vehicles will open new revenue streams: As OEMs continue the transformation toward completely software-defined vehicles, they‘ve started building in-house software capabilities to own and drive the innovation of value-added services. Following a connected services approach, the vehicle effectively becomes a software platform, simplifying service development, integration, and deployment. When the vehicle is software-defined, the service is always upgraded, always relevant, and always controlled by the service producer without compromising the vehicle safety and security.
2) Open source will be essential to unlocking innovation: Open source software—like the Xen hypervisor, AGL, and GENIVI—is gaining more traction in the vehicle itself. Considering the industry’s long development cycles, function consloditation with different levels of safety can help accelerate business value for automotive. Open source is also key to building cloud and edge computing solutions for secure shared and connected vehicles. In the coming year, open-source projects will become essential for automotive, especially as the whole industry refines the software-first approach as a competitive differentiator.
3) Car OEMs will shift from selling data to providing and monitizing services: As the automotive industry continues transitioning into a software-defined model vehicle, OEMs will shift from selling data to providing their own services and through third-party development environments, monitizing vehicle onboard computing capabilities similar to exisiting public cloud providers.
4) Google Android Automotive Embedded OS will enable new applications and services development: Google’s Android Automotive Embedded OS are a significant step toward enabling the vehicle as a platform, as well as empowering the Android developer’s community to create applications that can be effectively deployed in vehicles.
5) More EVs will enter the market: The individual mobility model must change to become more environmentally sustainable and more reliable for private owners. As battery costs continue to go down and battery capacity continues to go up, it’s expected that 55% of all new car sales will be for fully electric vehicles by 2030. Electric vehicles are inherently less mechanically focused, making it the next logical step for OEMs to leverage the software-defined offerings that are steering automotive’s future.
Automotive companies must start thinking beyond their traditional service offerings and overcome the obstacles standing in the way of quick adoption. Successfully bringing innovative connected vehicles to market will open new revenue streams as well as offer more efficient, more cost-effective, and more customized transportation opportunities for consumers. Ultimately, when the vehicle is an open software platform, this enables connected vehicle services producers to create and operate many different types of future mobility services. 2020 will certain be a telling year for the future of the automotive industry, and we look forward to seeing what unfolds.