From horsepower to code power

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How automotive companies are becoming technology companies

The Consumer Electronics Show (CES) could easily be mistaken for an auto industry event, and that reflects the larger trend in the industry of car manufacturers moving from focusing on horsepower to focusing on the software running the vehicles.

Technology is now a critical component of every new vehicle. It’s not unusual for new cars to contain more than 300 million lines of code. This software controls everything from entertainment and navigation systems to the data from the plethora of sensors and even small cameras that are integral parts of the vehicle.

Many traditional auto makers are showing technology-heavy new vehicles. This includes BMW, with its autonomous and electric Vision iNEXT crossover; Mercedes-Benz, presenting the very futuristic-looking Vision Urbanetic “self-driving transportation solution;” and Nissan, introducing the longer-range Nissan Leaf Plus, which can run for up to 226 miles between charges.

CES also featured electronics-industry leaders and solutions that will provide both the computing power and software to drive digital automotive innovation. Chipmaker NVIDIA announced NVIDIA DRIVE AutoPilot, a Level 2+ automated driving system it promises will be in production in 2020. (Level 2 refers to partial automation, in which the driver can make corrections if required. The Society of Automotive Engineers provides for five levels of automation.)

This system includes NVIDIA’s DRIVE AGX Xavier system-on-a-chip (SoC) and DRIVE software. To give a sense of the digital power under the hood, NVIDIA boasts that DRIVE AGX Xavier SoC can run 30 trillion operations per second. And that processing power is just to provide Level-2 functionality and some higher-level elements.

The best example of a car manufacturer that is really a technology company is Tesla. Tesla has reshaped what consumers expect in mid- to high-end cars and SUVs, yet the company faces a tough road ahead. On January 18, 2019, Tesla announced a reduction of its full-time employee headcount by approximately seven per cent, and founder Elon Musk said the company needs to produce more affordable models quickly if it is to survive.

In an email sent to employees, Musk outlined the gravity of the issue. “While we have made great progress, our products are still too expensive for most people. Tesla has only been producing cars for about a decade and we’re up against massive, entrenched competitors,” he said. “The net effect is that Tesla must work much harder than other manufacturers to survive while building affordable, sustainable products.”

The challenges faced by Tesla provide a good reminder that technological change is tough, expensive, and unpredictable. Technology companies have an edge in implementing digital systems for vehicles, but traditional car makers have decades of experience with the ups and downs of the market. That provides a significant edge, but they will have to retrench traditional strategies to keep up with the new players in the auto mobility industry.

To learn more about Capgemini’s automotive practice, contact me at michael.hessler@capgemini.com.

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