According to ABI Research, automakers are projected to pour in $100 billion globally to modernize the industry, including electrification and self-driving cars. By the end of the decade, this amount is expected to reach $238 billion annually.

The way drivers utilize their cars will change as they become more networked and autonomous, changing the economics of the entire auto industry. This helps to explain why automakers are spending so large sums on software and research in an effort to keep up.

As the automotive industry moves closer to a software-defined model, where over-the-air updates to the car's systems, like the infotainment or the driving assistance, define the value of a car instead of the metal, plastic, and leather it is made of, the change will only continue to accelerate.

The automotive industry is undergoing a period of great transition right now, and there are a few significant trends that will be important to the industry through 2023 and beyond.

Electrification

To fulfill the rising demand for environmentally friendly transportation options, an increasing number of automakers are making investments in the development of electric vehicles. Several automakers, including General Motors, Volvo, Jaguar Land Rover, and Aston Martin, want to switch entirely to electric vehicles in the near future. By the end of 2023, VW plans to have spent more than 30 billion euros ($32.2 billion) on the launch of more than 70 e-models during the following ten years.

Subscription-based Model

In the future, it's possible that people would only use their automobiles when necessary, spurring a trend toward vehicle sharing. The expectation that personalized features, like the steering wheel's position setting or a person's preferred radio station, will automatically synchronize across the range of vehicles to which a consumer has access, regardless of brand, model, or ride-hailing company, will result from this change in mindset. These consumer desires for synchronized ecosystems will force automakers to adopt more app- and subscription-based business models.

Additionally, the importance of apps and services will grow significantly for the automobile sector. Retail and business apps are anticipated to appear in cars as the vehicle transforms into an extension of the home and office. This is already clear since customers can download independent apps like Zoom on the Mercedes-Benz E-Class 2024. According to McKinsey, 95 percent of cars will be online by 2030, and video streaming and console-quality gaming will become increasingly popular entertainment apps. In the upcoming years, apps will give rise to new subscription-based business models for vehicle operators.

Autonomous Driving

Automakers and technology companies are making significant investments in the creation of autonomous vehicles. While more than a dozen autonomous driving pilot projects are being funded by the German government, more than 80 companies are testing 1,400 driverless vehicles in the US. Additionally, Pony.ai and Baidu have introduced driverless taxis in Beijing. By 2030, autonomous vehicles are anticipated to make up 10 percent of all road traffic.

Road traffic laws may appear easy to a human driver to interpret, but it is considerably more difficult to assure an adequate degree of understanding in Autonomous Driving software. Engineers and developers may now test their algorithms in virtual situations without endangering the safety of actual drivers, thanks to digital twins and the tremendous advancements in the field of artificial intelligence (AI).

Digital twins are redefining the way AD software is designed, especially when combined with virtual desktop infrastructures and high-performance computing.

 

Connected Driving

Automobiles can connect with their environment by connecting to the Internet. Automakers must therefore think a lot like software firms. Cars are able to communicate wirelessly with other vehicles, traffic control systems, and cloud services in real time by integrating infotainment systems, driving assistance features, and wireless technology. This enables the integration of smart home technology, personalized services, and real-time traffic data. Additionally, it widens the market for car makers. The passengers are now the main focus instead of the driver. Future customers may want digital entertainment in their cars, whether through nooks for reading or karaoke parties.

The field of automotive design is also benefiting from networked work. Future automotive designers will work totally online to efficiently develop the cars of the future from a distance. Thus, car manufacturers' in-depth software competence will become a critical differentiation.

AI-based Generative Design

AI-based generative design can produce ideas that human designers would not have considered. AI can generate tens of thousands of designs depending on given parameters with the use of algorithms. The designer then evaluates the options and makes adjustments to the design. Toyota, for instance, employed this technology to create a lighter and more environmentally friendly vehicle seat frame. 

These developments will fundamentally alter how designers, engineers, and fabricators operate. To get the workforce to embrace the disruptive change, management will need to communicate carefully. Change management ought to be the most crucial instrument for all managers in the automobile sector, in addition to all the software solutions experts will need to grasp in the future in order to put more power on the roads of tomorrow.

Fleet Management

The multiple advancements in the sector will probably cause a significant change in how vehicles navigate urban areas. To manage the numerous new autonomous, highly functional, and connected vehicles roaming the streets and optimize the flow of products and people, fleet management services will be more crucial than ever.

The quantity of battery charge in an electric vehicle's battery will be considered, as well as weather and road conditions. For customers to get to their destination without delay, this will aid in determining the optimum routes and guarantee that cars have the right battery levels before being deployed to them.

It will be even more crucial for shared vehicles to manage swift ride rescheduling based on optimized routing and deploying the closest available vehicle to consumers as soon as possible.

As a result of predictive maintenance, which is fueled by sensor data processed by ML models, automakers will be able to foresee possible issues and improve the longevity and maintenance of their vehicles. As time goes by, this also means that because of the enormous amount of maintenance and performance data collected from vehicles on the road, future vehicles will be better constructed.