Why Modularity is a Gamechanger for the Software-Defined VehicleSeptember 29, 2022
It goes without saying that traditional vehicle architecture cannot sustain the customizations required by the next generation of cars. With greater demands for added functionality by drivers, vehicles are expected to provide customization and upgradability functionality that match what consumers have become accustomed to from their PC or smartphones. But current automotive software development and deployment is measured in months and years, creating a lead time that’s unacceptable in our modern, digital age.
Thus, the shift to zonal architecture will allow for hardware and software modularity, paving the way for easy installation of plug & play ECUs that can be switched out based on manufacturer updates or customer demands for added features, significantly shortening update cycles to weeks and removing the need for extensive re-testing of the entire system for every new change in the vehicle’s components and software.
While the development of the SDV is driven by changing customer demands and the need to produce vehicles that can be updated or modified in short development sprints to meet those demands, it also brings about significant benefits to automakers - particularly when it comes to modularity.
Benefit #1: Reduced Time to MarketBased on the current vehicle architecture, it can take months for a new feature to be added. This is because there are often dozens of different ECU suppliers for a single vehicle with each supplier using their own software. Any required maintenance or update involves changing the entire system - a logistical and managerial nightmare.
Here’s where modularity is a game-changer. With streamlined development, the code inside the vehicle will no longer be monolithic and will allow different model configurations during or after the production cycle that can be tested independently. This flexibility shortens the time to market for adding vehicle features down to a matter of weeks. Engineers can design functionality in a simpler and less complex way while resting easy that their business logic or code will not be obsolete by the implementation time.
The faster new features can be brought to market, the more drivers can benefit from unique customizations as well as over-the-air updates that will no longer be measured in quarters or years of waiting and require a trip to the garage. Automakers will be able to stay ahead of the competition with fast updates and keep their customers happy.
Benefit #2: Increased Vehicle PotentialModularization will allow OEMs to offer simple base models with a variety of exciting personalized add-ons that customers can choose in order to create their dream vehicle. Instead of producing a number of different models, each with its own set of features, customers can choose what to add on after purchase (much like buying apps on a smartphone) as new features are developed or as their needs change.
The vehicles can even “learn” from the drivers’ driving over time and offer up suggestions of software services or features that would benefit them the most. It will be more cost-effective for consumers to continue adding new features to their existing car over purchasing a new car simply for new features that historically could not be added post-production, and the residual value of the car might actually increase over its lifetime as additional features are added OTA.
Benefit #3: The Use of DataOngoing customer engagement is the key to repeat sales in most industries, especially in automotive. In fact, fostering the customer-brand relationship can result in a closing rate of 75% on future sales. The introduction of SDVs will increase the importance of customer engagement, as frequent software updates and added customization will be an indefinite part of the ongoing interaction between OEMs and drivers.
Businesses value quality over quantity. The quality of customer-brand engagement and the driver-behavior and preferences data collected by the SDV will provide OEMs with valuable information that will help ensure that future apps and new developments fit the needs and behaviors of the drivers. This data collected by the car is automatically stored in large data lakes that are accessible (with certain privacy restrictions in place) to manufacturers, engineers, and others to use specifically for improving the design of their products.
In addition to the more general data that can be used to inform the development of future features and products, specific driver data can also be used to enhance that particular driver’s experience. Drivers can be given personalized recommendations that match their needs to maximize their driving experience and vehicle ownership.
Benefit #4: New Revenue Streams
Hardware and software modularity provides automakers with a new level of flexibility and scalability, opening up ample opportunities for new revenue streams to turn drivers into subscribers of paid services.
Today, a customer makes a one-time vehicle purchase from an auto manufacturer, and that manufacturer has little to no additional revenue from the driver once they leave the lot. In the future, modularity in the software-defined vehicle will allow for the development and deployment of new features and applications that are constantly updatable via the cloud, prolonging the relationship and increasing the OEM’s profits.
For example, Porsche already offers owners to sign up for Porsche Connect and choose relevant subscription services while BMW has jumped on the bandwagon with its controversial seat warmer subscription plan. Drivers are happy to pay for these upgrades as they can choose which features they want and which they want to skip, making their vehicle a personalized device that perfectly suits their unique needs.
It will take some trial and error for automakers to learn which services will generate the most demand (and the most revenue). This is part of the natural development process when introducing a new type of product or service and time will tell which services the market will accept. By building hardware with future upgrades in mind, adding those changes later will be easier for the developers and more cost-effective for OEMs.
The New Relationship Between Drivers and OEMs
As the SDV becomes the prominent vehicle type, it will not only change the way cars are produced but will also change the relationship between OEMs and drivers.
The modular nature of software-defined vehicles will make it easier and more cost-effective for OEMs to upgrade existing functionalities and add new features as demanded by the customers. This will lead to a closer and longer-term relationship between OEMs and drivers, different from any that has existed before. OEMs will better understand drivers on an individual basis and will be able to respond to their needs quickly and efficiently. The automotive future enabled by software-defined vehicles will benefit everyone throughout the value chain and change the way drivers and owners relate to, and use vehicles.