The automotive industry is currently undergoing a revolution, where hardware is becoming software and traditional business models are no longer enough to survive the competition.
Recently, the Swedish newspaper NyTeknik published an interview with Svante Svanberg, Strategic Segment Manager at Telenor IoT. Svante Svanberg believes that innovative partnerships are necessary for the industry to keep up with the rapid development.
The automotive industry has been discussing the big trends for several years, known as C.A.S.E, which stands for Connectivity, Autonomous, Shared, and Electrified. One can also add D for Digitalization, and all these trends contribute to the vehicles of the future. According to Svante, connectivity is what will enable all these trends, and together with partnerships, it will be a critical part of success. For the automotive industry, it’s a matter of win or die.
Some vehicle manufacturers have already started working on technical collaboration platforms where a third-party supplier can contribute software to the vehicle. One can draw parallels to a smartphone and the easily accessible third-party apps available on it. According to Svante, there is a noticeable difference between the established vehicle brands and those founded in recent years.
The difficult thing for traditional automotive giants is that in many cases procurement and lengthy processes are required to create collaborations.
There, it is easier for Tesla and other newer players who do not have old systems and deep-rooted processes. The automotive industry’s strength is and will continue to be that they are good at building vehicles, but as the vehicles contain an increased volume of software code, they need help with IT and connectivity to broaden the vehicles’ benefit for the customer. They must enter partnerships with new software players to succeed.
Connectivity is what will enable all these trends, and together with partnerships, it will be a critical part of success. For the automotive industry, it’s a matter of win or die. Svante SvanbergStrategic Segment Manager at Telenor IoT
Today, there are some collaborations between Google, Microsoft, and vehicle manufacturers that contribute to a form of technology standardization. Together with the vehicle manufacturers’ interfaces, it builds a basic structure for other more local suppliers to contribute software to the vehicle.
“If we take Google as an example, they will be an enabler, but probably not to create a local parking app or charging app outside Sahlgrenska in Gothenburg. It is the smaller, local actors who will do it. The same in other cities and countries.”
Svante sees many opportunities with digitalization and that more and more software is integrated into our vehicles. One concrete example is that it will transform traditional service and maintenance services. When vehicles become electrified, things like changing the oil disappear. What will remain is the service of certain vital parts for driving a vehicle such as brakes, the rest is software.
“It is usually said that the car should be possible to OTA, that it should be able to be repaired and updated “over the air.” IoT connectivity is critical to perform maintenance regardless of geographical location. Currently, vehicles are sold where all hardware is included, but not activated. For example, the heating in the car seat is included but is part of a subscription. If you want to activate it, it may cost an extra fifty dollars a month and is activated OTA (over-the-air)”, says Svante and continues. “Vehicles are also becoming more integrated into the household. Payments will become increasingly seamless. Let’s say you go to McDonald’s. Then you will not have to pick up the card when you pay, but the car “pays for you” when you have entered your card into the car’s system. It becomes an ecosystem centred around the car.”
Svante repeatedly emphasizes the opportunity and importance of vehicle manufacturers forming partnerships with software manufacturers and building platforms, tools, and systems for seamless integration of collaborations.
IoT connectivity is an enabler. Vehicle manufacturers and those who manufacture, for example, cranes for vehicles, need IoT companies such as Telenor IoT. It may sound cocky, but connectivity is the glue for all new services and will be a non-issue going forward. “Good and smart connectivity is a must to succeed”, concludes Svante.