Post-covid: Is the automotive industry back on track?
Pre-covid, the auto industry was progressing towards a connected car vision. During the pandemic, it forced the whole market to reconsider, slow down and re-think mobility and transportation. So what does the post-covid scenario look like? According to the Financial Times Future of the Car Summit, we are getting back on the road. Together with leading car manufacturers such as Ford and McLaren and industry experts, we looked closely at the technology, consumer, and business models needed to shape the post-COVID car industry. According to the consulting firm Boston Consulting Group, by 2025, the share of connected vehicles on the road will be 53% – with a surge to 77% by 2030.
Realizing connected vehicles with 5G
The way we are transporting ourselves and products is in transition. Business conversations about car innovation, mobility, and the manufacturing and supply chain for the automotive and transportation verticals are more crucial than ever. Vehicles are getting connected, electrified, redefined, and more automated. Car connectivity is now considered a requirement from the start. The transition to this intelligent, connected car is already happening as the vehicle is now our smartphone, map, traffic reporter, and personal DJ. Thanks to network connectivity, the car is becoming a more personalized and customized transportation method, but there are still many challenges ahead.
As 5G networks continue to be deployed, the Ericsson Mobility Report* outlines that the automotive industry is expected to be among the top four industries for 5G enabled service provider opportunities by 2030. With the continued roll-out of 5G, coupled with access to 4G LTE services, the connected car will transform once again and become a software-defined, network-aware, ultra-connected car that will transmit data and “interact” with the road and every other vehicle around it.
Advantages of a 5G software, network-aware connected car
With software updates throughout the car lifecycle, the car can always be at its best. In the same way that smartphones and computers are updated, a vehicle can also receive updates regularly. Car software update services can fix issues, upgrade the car, improve security or add new functionalities without visiting a car repair shop.
With a 5G connected car, data insights and analytics can be used to understand customer needs and provide predictive maintenance. Car manufacturers can manage connectivity and cost with one Standard Level Agreement (SLA) contract. Universal connectivity for automotive is one solution for seamless connectivity for connected vehicles and smooth integration with relevant ecosystems.
Optimizing smart data uploads and downloads at off-peak times and locations gives OEMs control of costs. The optimization of the data transfer in terms of time, quality, cost of the connection, the possibility to differentiate the type of traffic, and scheduling optimal conditions can save costs for OEMs.
Providing advanced connected services to meet market demands can lead to increased revenue. For example, in a recent Ericsson Consumer and Industry Lab report about the future of commuting, consumers expressed a willingness to pay for premium driver assistance and safety services.
Our market outlook
Ericsson approaches the market building on our technology leadership in 5G and IoT. Our Connected Vehicle Cloud solution combined with Universal Connectivity for Automotive offers a cloud-based platform. Together with the Ericsson IoT platform, our solution delivers a seamless and unified experience of mobility services in, to, and from the car; and we currently connect over 4.6 million vehicles across 130 countries. Capabilities enable vehicle telematics for remote locking and unlocking, heating control, engine start-stop capabilities, and automatic emergency calling direct to a call center.
Another value is fleet management, enabling effective automation and management of large-scale connected fleets by collecting, consolidating, and unifying data. Service innovation helps car manufacturers launch services in a fast and easy way. Advanced driver assistance systems put connectivity into a contributing sensor, enabling vehicles to see around corners, avoid hazards, collaborate, and interact with their environment more intelligently than ever. Roads become safer!
The power of partners
But Ericsson cannot do it alone – we rely on and actively encourage innovative partnerships and collaboration. Ericsson already partners actively with the mobility ecosystem, including suppliers like Veoneer, electric autonomous vehicle pioneers like Einride, and the 5G automotive association to drive cellular standards in the industry. In addition, Ericsson is part of MobilityXlab, a collaborative platform where young companies with pioneering ideas partner with legacy industries to explore future mobility innovation. We recently announced the line-up for the next group of startups we will work with!
A holistic approach
Partners also include society and cities. At the recent Kista Mobility Day, we talked about re-engineering cars and roads and city infrastructure systems. Digitalization is a foundational building block to enable connected cars and autonomous vehicles. We have a significant opportunity to close the gap between a car ride and a bus ride and capture the future flexibility of public transportation. We need to lower the barriers, accelerate building the ecosystem, establish the infrastructure for 5G across the board, especially in city centers.
In this new era where all transportation will be connected, autonomous, shared, and electric, 5G is vital. This will make vehicles accessible to more people, more environment-friendly, and less expensive, resulting in transportation that ultimately is much more convenient to all of us. And OEMs should be at the starting gate to realize this future vision of mobility.
*Ericsson Mobility Report, November 2019: IoT automotive
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