AutoTech Europe: The Software-Defined Vehicle

BERLIN – Software and the software-defined vehicle dominate the first day of AutoTech Europe’s 2023 event with experts exploring both the challenges and opportunities facing a rapidly changing automotive landscape.

Right from the start the SDV was clearly seen as being on the front line of the industry’s looming battle for sales with the new brands from Chinese automakers entering Europe. In the presentation, "A focus on strong brands and their software-defined-vehicles - success factors of Chinese OEMs in Europe," Augustin Friedel, senior manager at the Porsche company MHP, met the challenge of new players in the European auto market head-on, saying there are important lessons.

Friedel explains: “We need to shift from product shifting to a lifestyle experience as the Chinese automakers are doing. They get more users into their ecosystem engaging on a regular basis, something a western automaker can only dream about.” He points to a global survey of about 5,000 consumers his company conducted asking prospective car buyers for their opinion of the new brands from the Far East.

“We saw 60% agree that they would buy or consider a Chinese brand. Some of the automakers at the IAA Frankfurt were nearly crying over how good the quality of the Chinese cars was at the show. They come fully loaded for the price with infotainment systems that mean so much these days to the consumer.”

Friedel’s survey also asks consumers whether new technology systems are important to them and they respond that they definitely do want more. Responding to his own question of how can European automakers narrow the gap with those from China, Friedel answers: “One way is through software-defined vehicles that could provide a customer-centric feature-led approach. We also need to decouple the hardware development from the software to allow faster upgrades when people want them. We need to balance the cost of putting bigger compute and storage in the car against potential revenues from providing extra features. We know from smartphones that things must be able to upgrade when new services and features are available.”

The topic of competition also features heavily in the fireside chat "The International Looking Glass" where EV car-sharing service GreenMobility’s CFO Anders Wall welcomes the opportunities of more brand competition for auto sales. He explains: “As things emerge it offers up new opportunities. We can engage directly with Chinese OEMs and it enables us to go into new markets. The Chinese have a different perspective about offering software and are open and willing to explore how we take this further.”

Obviously, failure is part of the process in this challenging new environment but it brings with it new learnings. Wall adds: “That’s what the game is in China. Look at Geely with all its brands and while they may close a brand, overall they end up ramping up their sales.”

Delving deeper into what constitutes a SDV is a panel discussion, "Being Software Defined."

Shafiq Urrehman, technical lead for artificial intelligence and machine learning at Geely subsidiary China Euro Vehicle Technology (CEVT), stresses the important role of the SDV in delivering a valuable user experience to the consumer but not without its own challenges.

He says: “The cloud has been matured a lot and has good architecture as opposed to on-board security. However, we see a challenge in the amount of different suppliers involved in the process and how to make it work and work securely. How do you manage multi-cloud strategy because data is being pushed from many different devices and their own cloud data?”

Meanwhile, Stefani Poßner, chief technical officer with Mercedes Pay, highlights the personal advantages of the modern SDV when she loaned her 296-hp Mercedes-Benz to her nephew to take friends to a music festival. She says, “I was able to change the car’s power output, limit its speed to 130 km/h (80 mph) and soften the acceleration response all online so that I could sleep soundly at night!”

China also featured in the subscription revenue panel discussion "Transitioning to B2C Business Models" where Reno Marioni, director of product for digital services for Ford, extolled the virtues of a European focus through the vehicle’s technology offerings. He explains: “When you look at China, the services will be very different than for consumers in the western culture. While we piggyback on top of Google and Apple, we have to recognize what consumers want and understand their culture.”

He accepts that European consumer privacy regulations can place limits on some ways automakers engage with consumers but adds, “However, these are all sorts of things we can experiment with and it’s interesting to see the differences in differing regions.”

He points to Ford’s success with the BlueCruise subscription service especially for commercial customers. He says: “For fleet customers you have managers wanting to maximize their efficiency.”

On-board entertainment features are probably the easiest identifiable advantage consumers will have from the SDV and this is explored in a fireside chat entitled "Entertainment on Wheels - Exploring the Video/Entertainment Automotive Opportunity" with the BBC’s car strategy lead Eli Sessions.

He believes the case for entertainment while charging battery-electric vehicles is uncertain, arguing that most owners will accomplish this overnight at home. So, rather than offering just feature-length movies, an entertainment provider would be better advised to provide a diet of short programs and news items suiting short breaks on a journey or commute.

Looking to the future, Sessions envisions a much more agile service for in-car consumption. He explains: “Our vision is to give audiences the next piece of content they want at the right moment. Maybe that works with the car scenario and, also, let them access all the stuff they were looking at in the home and make it instantly available in the car.

“We need a shared-data and open relationship with the automakers. Let us know the potential size of our future market growth and work together on future projects to know what the consumer wants. We can observe what consumers do and help provide the solutions they didn’t know themselves.”