The automotive market is currently in a tech revolution that has barely started. Most notably, the cars of the future will be electrified, autonomous, connected, smart and shared.
Key industry drivers
All car OEMs are investing in autonomous car technologies. Some of them are moving directly to level 4 (high automation) where the car drives by itself almost all of the time. Others believe it is important to first develop semi-autonomous level 3 (conditional automation) cars where the driver is expected to intervene from time to time. Regardless which one of these approaches the car OEMs prefer, the whole car industry has agreed on the importance of moving towards autonomous cars. A large number of various sensors are needed in order for the car to see, i.e. detect what is going in its surroundings. Artificial Intelligence (AI) then helps the cars to understand this information and make adequate maneuvers.
Safety standards & driver assistance
Standard organisations worldwide are continuously mandating various technologies in order to decrease the 1.2 million road fatalities and 50 million traffic injuries that occur every year. About 94 percent of these car crashes are related to human error. This drives the need for Advanced Driver-Assistance Systems (ADAS), i.e. technology that helps the driver in the driver process. Similar to self-driving cars ADAS also require an increasing amount of sensors and AI.
Environmentally friendly electric cars
Just like with self-driving technology all major car OEMs have an electric vehicle strategy and most of them are looking to go fully electric.
Smart connected cars
Cars are becoming connected “computers on wheels” as they get equipped with internet access/W-LAN, allowing cars to communicate and share information with each other. This also open up all of the endless opportunities in the IoT space, one example being controlling household electronics from the car like e.g. the fridge telling the car that it is out of milk.
Sharing economy & ride-sharing
According to several market pundits owning a car will be less common in the future. Instead cars will be shared and rented as a service.
Even though the trends above are structural trends that will play out over many years to come one should note that the lead times in the automotive industry are long and the entry barriers high, which is related to the platform strategies of the car OEM. Car OEMs manufacture are consistently trying to optimize costs by manufacturing more car models on fewer platforms . The different car models on a platform therefore share most of the technology. Thus, the companies that win the ongoing procurements have a good chance of delivering their technology to, not only one car model during its 5-7 year lifetime, but also to its sibling cars on the platform.