Winning in the Future Automotive Market

As the automotive industry races toward the overall electrification, autonomy, and connectivity of vehicles, the related technologies are transforming from predominantly hardware-based systems to software-driven electronics. This is driving a fundamental shift in production and focus for OEMs, who are ramping up capabilities with these technologies that may soon be their primary differentiators.

Of course, today’s premium cars are already operating in this new software-dominated landscape. The modern premium vehicle contains 125 million lines of code —compared with the two million lines of code in an F-22 fighter jet, 15 million in a Boeing 787, and 62 million in Facebook. When you combine a current premium vehicle’s capabilities with that of near-future electrification, autonomous driving functionality, and connected technologies like vehicle-to-vehicle communication, you’ll soon be looking at more than 300 million lines of code. Automobiles are quickly becoming super computers on wheels.

This evolution from hardware-driven machines to software-driven electronic devices will forever change our industry; even now the content of electronics and software per vehicle is growing rapidly. The increasing use of electronic content is a major factor driving the automotive software market growth. For example, 56 percent of the content in the Chevy Bolt EV, for example, is made up of electronics and software manufactured by LG.

Rising demand for electric vehicles and for improved safety features, such as automatic emergency braking and driver monitoring systems, are being driven by consumers and regulators. These safety-related functions pave the way for new convenience features like highway pilot or traffic jam assist systems such as the GM Super Cruise and the Tesla Autopilot systems.

Navigation and infotainment systems can require as much as 50 million lines of code in a vehicle today.  That’s not including the additions associated with advanced driver assistance systems and autonomous driving capabilities, electronic propulsion systems and connected cars — meaning the requirements for these software systems is driving extraordinary growth.  Many industry forecasts estimate software will total 30 to 40 percent of the content of the vehicle by 2030 and is expected to grow at the compound annual growth rate of 20 percent during the same period.

Practically, this means a radical shift in the way we think about the skills required to produce vehicles.  Electric vehicles need fewer moving components in their propulsion systems, so the masses of manufacturing laborers and engineers needed to assemble traditional internal combustion engine vehicles (ICEs) could soon be significantly reduced.  The great big void that exists today in our industry are software engineers, designers, developers, and all their requisite skills which are in short supply.  OEMs and suppliers are now fighting for these resources to build the cars of the future; however, they are competing with tech and consumer companies as those established sectors look to add new technologies like 5G, connected homes, and smart cities. 

Think about this challenge in this context.  Aptiv, an automotive supplier that spun off from Delphi, is designed to be a pure end-to-end autonomous vehicle or “new mobility” company.  The company boasts more than 6,000 software development engineers globally.  How will the organization need to transform as software content grows over the next 10 years? 

Over the next decade, we expect artificial intelligence, scale, and efficiency gains in embedded software to add much-needed productivity to the software development competency of the organization.  However, despite these efficiencies, we can still expect the number of software-related employees at Aptiv will need to grow over the next 10 years by three times, to total more than 18,000 if the company is going to attempt to keep pace with the expected industry growth.  This critical resource will need to increase even more if this business wants to “out-pace” the growth of the industry.

Electrification, autonomy and connectivity all have the opportunity to create new disruptive opportunities for our industry—however, this future is uncertain, hard to predict and creates new challenges for automakers and its suppliers. These companies now have to go head-to-head with tech companies for unique market positions in the automotive landscape they once dominated; they have to figure out how to beat the tech giants at their own game. This will require them to amass large amounts of new talent, skills, and other resources, and to become software-driven car companies.

It certainly won’t be easy, but it will be necessary for those who want to win in the future automotive market.