Gartner, Inc. identified five major technology trends for 2022 that directors of information companies need to consider to better prepare for the software, hardware, and digital transformations taking place in the automotive sector.
“For the past 100 years, automakers have focused on the mechanical side of car development and have largely left the software to other parties,” said Pedro Pacheco, Gartner’s senior research director. “As digital technology becomes the car’s differentiator, software will become a major driver of automotive profitability growth. Ultimately, the goal of original equipment manufacturers (OEMs) will be to turn into technology or software companies. ”
Five major trends in automotive technology for 2022:
Trend 1: Automakers are reconsidering their approach to equipment sourcing
Automakers are overestimating their long-standing inventory strategy by following the principle of exact time (JIT), which has led to OEMs and Tier 1 vendors not having buffer stocks that could be used during various chip deficits. As a result, automakers are reviewing how they work with chipmakers, and considering developing their own chips.
Gartner predicts that by 2025, 50% of the top 10 automotive OEMs will develop their own chips and establish direct, strategic, long-term working relationships with chip companies by abandoning JIT inventory management practices.
Trend 2: Digital giants are integrating the car into a holistic ecosystem
In 2022, digital giants such as Amazon Web Services (AWS), Google, Alibaba or Tencent will be constantly expanding their footprint in automotive technology. “These technology companies are bringing the car closer to their ecosystems, which in turn is opening up new services related to vehicles,” Pacheco said.
Gartner predicts that by 2028, 70% of cars sold will use the Android Automotive operating system, compared to less than 1% today.
“Because developing technology and software on your own is difficult, car companies can either work with digital giants to succeed in turning software into a major earner of money, or create vast own resources to achieve this largely on their own,” Pacheco said.
Trend 3: Open data and open source collaboration models are gaining momentum
In 2021, several technology companies have created open source operating systems and a platform for electric vehicles (EVs). This approach to adopting new partnership models in the automotive sector will be strengthened in 2022.
In addition, car companies will increasingly look at data in a similar way as in the world of technology. “Their goal is not to sell data, but to create or integrate ecosystems that will allow them to access a wider variety of data in order to develop more attractive features or digital services,” Pacheco said.
Trend 4: Well-known automakers are building OTA as the main channel for digital revenue
Last year saw major changes in the automotive over-the-air (OTA) market when several car manufacturers began offering software upgrades.
As most automakers have upgraded their car hardware to include software upgrades, they will now begin to move to a revenue model that is based on services rather than selling assets.
Gartner analysts predict that by 2023, half of the top 10 automakers will offer unlocking and upgrading capabilities through software upgrades that can be purchased after the car is sold.
Trend 5: Autonomous vehicles – more regulation in place, but barriers to commercialization persist
As sensing technologies improve, perception algorithms become more sophisticated, and rules and standards progress, developers of autonomous vehicles continue to struggle with the scale of autonomous operations in new cities or regions.
Automakers have begun announcing Level 3 autonomous vehicles and are working to deploy Level 4 self-driving trucks and commercial robotic taxis. However, proving the safety and effectiveness of stand-alone technologies is time consuming, and extensive real-world modeling and testing make commercialization slow and expensive. In addition, issues such as liability in the event of an accident, related legal and social considerations, such as how man-made vehicles will interact with a car driven by artificial intelligence, add to the problem.
“The very high research and development costs associated with robotic taxis or Level 4 trucks hinder the speed of implementation in terms of coverage, but also to ensure a return on investment. This is ironic, considering that one of the main advantages of autonomous drive is the reduction of operating costs for transportation, ”he said. Jonathan Davenport, Director of Gartner Research.
Gartner analysts predict that by 2030, Tier 4 autonomous robots will be four times more than in 2022.
Gartner customers can read more in the report “Top 5 Automotive Technology Trends for 2022”.
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Gartner for Information Technology Managers provides executives for information and IT and IT leaders with relevant and objective information to help them lead their organizations through digital transformation and drive business growth. More information is available at www.gartner.com/en/information-technology.
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