Technology is flooding the automotive industry with the promise of autonomous driving, electrification, and connectivity solutions. Those auto companies that want to avoid drowning in the transition must search for the best benefits of technology partnerships for their business. The auto industry is swimming against the tide as big tech corporations enter the scene and take center stage.
The line between traditional automotive and technology corporations entering the market is blurring. Where is the future of car manufacturing going? This question has yet to be answered as big tech is riding between partnering with traditional auto companies or going it alone. In this sense, the opportunities and challenges are tremendous, and those that can achieve an early stronghold will lead the way.
In the following lines, we'll present the opportunities and challenges that are coming with the fourth industrial revolution. Industry 4.0 is disrupting all industries, a paradigm shift moving into the interconnectivity of the digital and physical. This reality must be closely studied and approached holistically to gain the most benefits from partnering with a tech company. For the auto industry, there are three innovations taking place, as mentioned above:
The beginning of the fourth industrial revolution was ignited by the immense potential technology has to deliver: cost-efficiency, sustainability, safety, and new revenue streams. But we must remember these technological promises are still just that; a promise waiting to happen. Let's look at these potentials in more detail because although the significant goals in car manufacturing are autonomous driving, EVs, and connectivity, these are intrinsically connected.
Cost efficiency is fundamental to all business models, and technology has a huge say. Digital transformation is data-driven, and the embedded systems' connectivity is generating an overwhelming amount of data. Data that, if correctly managed, signifies the potential to accelerate autonomous automation in manufacturing processes, reducing workforce necessity.
A workforce that can be reeducated to perform new digital tasks that can be much more lucrative for the business. Data is also shining bright in maintenance; embedded AI's capacity to analyze vast amounts of data moves care from the reactive and preventive to the predictive. Implementing predictive maintenance offers accurate timelines to act upon machinery before it breaks down. Therefore, downtime gets reduced drastically, and the life expectancy of machinery increases.
Another benefit data provides is sustainable workflows; as the life cycle of machinery is optimized, the carbon footprint decreases. The supply chain benefits as real-time connected embedded systems deliver accurate stock inventory to decision-makers, eliminating surplus or shortages. Resulting in transportation optimization mitigating unnecessary trips by trucks, and consequently, the transportation's CO2 emissions decrease. The same goes for material usage; AI historical analysis indicates precise material volumes needed to perform tasks.
Workforce safety also benefits from embedded systems via sensors and devices; dangerous processes are closely controlled. Wearables indicate workforce positioning and alert of hazardous environments, decreasing the possibility of accidents in the automotive industry. The new revenue streams digital transformation offers to the auto industry; come via connectivity. As cars are being installed with SIM cards, the possibility of adding a subscription to base packages supplying services like news, weather, and traffic conditions provides potential revenue. In addition, Spotify, Apple CarPlay, real-time traffic information (RTTI), and even digital keys are sources of potential recurring revenue.
Self-driving cars are still a process; there are many projects, but the only autonomous driving today is semi-autonomous. What is apparent is that for cars to drive fully autonomously, tech partnerships are fundamental, as one of the bases for self-driving vehicles is artificial intelligence (AI). Therefore, car manufacturing corporations that are actioning projects to achieve cars that don't require human intervention must invest in solid tech partnerships.
Five leading technologies must be mastered to realize self-driving vehicles:
The electric vehicle market is increasing yearly, but the potential to become mainstream resides in three conditions: charging times, range, and price. Another important aspect is adapting the current infrastructure to accommodate Ev's mass adoption.
Presenting concrete figures, recent market research to learn when EVs will become mainstream indicates that mainstream electric cars for consumers depend on the following concerns:
As for the investment required for EV mass adoption in the U.S., a Boston Consulting Group study estimates that a model utility could reach $200 billion in grid upgrades. Lastly, there is concern about how green the manufacturing of EV batteries is and the conditions the miners of materials have to put up with.
As mentioned earlier, connected cars are common practice and are becoming a new revenue stream. There are various types of car connectivity:
The market value of these new revenue streams is projected to reach $225.16 billion by 2027, registering a CAGR of 17.1%. Remote diagnostics, predictive maintenance, online service scheduling, and over-the-air (OTA) purchasing are some of the services giving rise to these opportunities. To take advantage of this growing market partnering with tech companies is vital.
Every change brings challenges; today, these come from the capacity to manage the digital data generated by emerging technologies. In this sense, auto manufacturers must search for tech partnerships capable of overcoming the challenges of data management, which can be summarized as the following:
Currently, big tech companies offer centralized solutions to manage digital data generation, i.e., cloud service providers. In many ways, this service is a great solution to collect data, but the costs will continue to increase when it comes to massive connected embedded systems. Through centralized server centers, raw data gets moved to be stored, analyzed, processed, and delivered back to the source.
Automobile companies must pay for storage, processing, analysis, delivery, and bandwidth by implementing data management via server centers if a connected vehicle produces between 380 TB to 5,100 TB of data in just one year. In addition, autonomous cars are at level 2 (SAE International 6-tier system); when they reach level 5, the data generated will exponentially increase.
We still need to add the data from the manufacturing process, supply chain, transportation, workforce, etc. The numbers mount, resulting in more bandwidth, storage, processing power, and delivery services. A recent report indicates that the auto industry will spend over $168 billion in 2025 on IT; ten years earlier, IT spending was $38 billion.
It is a common challenge in digital transformation; cyberattacks are increasing in numbers and are more sophisticated. The cause of this problem is the growing attack surface as web-based connectivity is entering all industry verticals. Due to the centralization of web-based data management solutions, cybercriminals can access one entry point and infect the whole network.
The results of ransomware are economic and reputation catastrophes as whole factories are shut down, and data breaches publicly expose customers' sensitive data. The car manufacturing industry can't take these risks. Even worse is the case of a car being controlled by bad actors while drivers and passengers are in the vehicle. In 2015, a team of security researchers experimented with the vulnerability of autonomous cars by hijacking a vehicle. They took control of the brakes and steering wheel and shut down the engine completely.
Reports indicate that the cost of a cyberattack on a car manufacturer is around $11.5 million. In the same report, cyberattacks between 2017 and 2019 increased by 300%, and the vulnerabilities making cyberattacks continue to grow are:
The IT sector's carbon footprint is growing, and estimations indicate it could surpass aviation's and shipping's CO2 emissions by 2025. Considering that Industry 4.0 is data-driven and centralized data centers service data management, things will only worsen. One of the significant issues current solutions have is cooling the server farms, as 40% of energy goes to cooling IT equipment.
At this rate, by 2040, digital data storage estimates indicate that 14% of the world's emissions will come from cloud service providers. To put it into perspective, it is around the same carbon footprint the U.S. generates today. If we add the carbon footprint of the EV supply chain for batteries, transportation, and car manufacturing factories, the situation doesn't look very promising.
To realize the true value of data, the auto industry must ensure real-time refinement of this data to reach decision-makers when required and as valuable information. Otherwise, the data is useless; it's like crude oil; the crude is worthless without refinement. When it goes through the refinement process, its value rises exponentially.
As we have already mentioned, data is managed by data centers, and these can be thousands of kilometers away from the car manufacturing assembly line or a driver using OTA. The risks here come through latency or bandwidth bottlenecks. For the car manufacturing assembly line, this could mean inaccurate information delivered to the supply chain creating downtime due to a shortage of materials.
In the case of a driver, customer satisfaction is on the line if OTA's functionality isn't up to standards. The worst case scenario can be GPS functionality going down, and the driver is left stranded, loses valuable time trying to find their whereabouts, or waits for the GPS connection.
The potential technology offers touches all aspects of a car manufacturing business. From customer satisfaction to workforce safety, digital adoption is critical to enhancing opportunities in the automotive market. But there are crucial challenges that current technology corporations face and are working to solve.
Therefore to benefit from technology partnerships, car manufacturers must assess current options to make an educated decision. Looking at digital adoption challenges, there are daily innovations producing tech solutions to overcome them. In this sense, auto companies must understand that digital transformation is data-driven and the data is generated on-premises.
So to action digital adoption, a tech partner must offer solutions to store, process, analyze, and deliver data on-premises. In other words, the movement of raw data must stay at the source, as this will eliminate most of the challenges:
Automotive companies must search for solutions that work at the edge to benefit from technology partnerships truly. Edge computing is one of these innovations that is improving daily. Big tech corporations offer these types of services, but in some way or another, data always ends up in server centers. Benefits of technology partnerships for the automotive industry:
There are many options to enter Industry 4.0 for automotive corporations, from big tech to startups; the array is vast. But if you want to become an industry leader and pioneer in the car manufacturing market today and in the data-driven future of the fourth industrial revolution, Eden is the way to go.
Internet of Everything Corporation (IoE Corp) has designed the Eden system specifically for the massive data generation connected embedded systems bring to the equation. A decentralized software infrastructure platform with blockchain security for data privacy and knowledge-based AI to manage data on-premises.
IoE Corp's technology partnership makes autonomous automation a reality and brings a sustainable computing approach to save megatonnes of CO2. Currently, via our Planet Partner Program, we are onboarding new partners with the vision and mission to help make the promise of technology a reality. Are you interested in being part of this breakthrough into the fourth industrial revolution and entering ahead of the crowd? Apply to IoE Corp's Planet Partner Program.