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AEK 2023 - OEMs Showcase their Tech Credentials but Risk Leaving Consumers Behind

The Automotive Elektronik Kongress (AEK) is one of the most prominent automotive conferences in Germany, with a 27-year track record of bringing together top OEMs and suppliers to discuss major technical trends. This year saw keynote presentations from various established OEMs (Audi, BMW, Mercedes-Benz and Stellantis), disruptor OEMs (Nio and VinFast), Tier-1s (Bosch, Continental, Marelli), Chipset suppliers (Infineon and TSMC) and Tech Giants (Amazon AWS, Baidu and Google).

Chipsets - We are through the worst of the supply crunch, but challenges remain

There was a strong presence at AEK from Chipset suppliers, reflecting how important they are to automotive strategies. Both OEMs and Chipset suppliers pointed out during various sessions that a lack of honesty and transparency between the two sides made the recent chipset shortage worse than it needed to be – something that is now gradually being improved.

But there remain major areas of misalignment – chipset suppliers like TSMC warned that OEMs need to transition to newer chipsets or face further shortages, fairly pointing out that automotive only accounts for 15% of total chipset sales (making it hard to justify keeping legacy production lines running). On the other hand, OEMs like BMW explained that they don’t need the latest chipsets for some of their basic ECUs.

Despite this, when questioned by the audience on whether BMW would move vertically down the stack and start developing their own chipsets, Christoph Grote (SVP Electronics & Software at BMW) was sceptical of the need to do so.

E/E Architectures - Simplification is taking longer than expected

Both Audi and Mercedes-Benz talked about their latest E/E Architectures:

  • Audi announced v1.2 of their E³ platform, developed in partnership with CARIAD and expected to be initially launched on the Q6 e-tron (it will also be used by Porsche)

  • Mercedes-Benz shared more insights about their MB.OS EE 1.0 platform, including their shift towards zonal architectures with more agile contracts between ECUs and functions.

The common direction among German OEMs is towards implementing five domains (ADAS, Infotainment, Body/Comfort, Driving and Connectivity), each with their own High Computing Processor (HCP).

However, progress towards simplifying the legacy of ECUs and networks below those HCPs is slow. Audi still has 186 control units within their new architecture, and Ulrich Herfeld (Head of Vehicle Development) admitted that the process of simplification has been more challenging than initially expected. And it isn’t just ECUs – Jutta Schneider (Director of MB.OS EE-Infrastructure at Mercedes-Benz) emphasized the need to simplify and slim down the harness wiring across the vehicle.

As Heiko Schilling (SVP of Software and AI Engineering at Stellantis) stated – this is less a technical challenge than a challenge of shifting mindsets and culture within very large organizations.

Onboard Software - OTA metrics are improving but developer toolkits are key to scaling up

There were plenty of metrics and statistics thrown around to demonstrate progress towards more advanced Over The Air Updates (OTA) capabilities:

  • Frequency of OTA updates: Nio announced they provide updates every 2-3 weeks, while BMW claimed that over 100 new features have been delivered to their cars since 2019.

  • Reach of OTA updates: Audi claimed 100 of their ECUs are now updateable, while BMW and Nio said all their functional domains are updateable.

  • Update speed: Audi announced their new architecture can support <40 min OTA updates, while BMW claimed their update speed is <20 min.

But these statistics hide a tough reality that still plagues most OEMs: coding large amounts of software consistently and efficiently is hard. One common message from many of the presenters was the need for better toolkits for developers – after all, a happy developer is a productive developer.

To that end, BMW proudly showcased the suite of 3rd party toolkits they use to help their developers, but highlighted the need for more homogenization of the CI/CD tool chain across the industry.

Wendy Bauer from Amazon AWS also talked about how important toolkits are to scaling up software development within the automotive industry, and explained how their AI-enabled AWS Code Whisperer tool is helping developers code 57% faster by auto-suggesting improvements and fixes.

Cloud Computing - BMW discusses the importance of Vehicle Operating Centers and Vehicle Shadows

BMW was the most vocal OEM when discussing cloud strategies. With 20 million connected vehicles and 10 Billion daily requests, they are among the most experienced OEMs at shifting microservices to the cloud.

During his presentation BMW’s Christoph Grote introduced their concept of their Vehicle Operating Center (VOC), which he said is a key part of their strategy to shift from simply manufacturing vehicles to operating fleets. Their VOC proactively identifies issues within their fleet and automatically fixes them before customers complain. This also aligns with their ‘Vehicle Shadow’ platform, which collects 1.6 Billion data packages per day.

To support further expansion of the cloud in managing vehicles, Christoph Grote reinforced the need for initiatives like COVESA to continually define and refresh vehicle data specifications.

Eco-system - Shift to Software Defined Vehicles forcing eco-system realignment

The underlying question for all the different stakeholders at the conference was: What should our role be in the future?

  • OEMs mostly struck a balanced tone despite the recent trend towards greater levels of in-sourcing. BMW spoke about only doing things themselves that they couldn’t buy off-the-shelf without risk of tie-in (according to BMW less than 20% of the software in their car is coded by in-house developers, and he doesn't see that ratio growing). Nio said they pick strategic areas like ADAS and Battery Management Systems to insource, but partner for the rest. Mercedes-Benz and Stellantis spoke about the need for OEMs to act as vertical integrators rather than full-stack players.

  • Tier-1s like Bosch, Continental and Marelli all talked about how their role is changing. Bosch positioned themselves as an independent software player, showing how their Vehicle Motion Management (VMM) could support OEM’s X-by-Wire ambitions regardless of who they picked as hardware partners. Continental and Marelli talked about the need for more collaborative development workflows and co-ideation with OEMs.

  • Tech Giants were careful to position themselves as helpful partners rather than threatening disruptors. Amazon AWS showed off their toolkits (used by Toyota and Stellantis), Google showed off their Maps Platform (used by Mercedes-Benz) and Cloud Conversational AI (used by Toyota), while Baidu showed off the impressive progress they are making with their Apollo ADAS/AV platform (with a clear message to Western OEMs that the only viable path for higher levels of autonomy in China is through partnerships)

Although everyone agrees that collaboration is key, the boundary lines between these different groups of players is still highly fluid.

Consumer Experience - Risk that more technology won't lead to a better UX

It shouldn’t be a surprise that most sessions at a conference called ‘Automotive Elektronik Kongress’ focused heavily on the enabling technologies behind the much-anticipated mobility revolution. Despite this, established OEMs did reference consumers within their presentations:

  • Mercedes-Benz talked about how the goal of MB:OS is to give back time to customers, create continuous customer excitement and a seamless experience

  • Audi and Stellantis each spoke about creating a holistic experience that brings together all the sensory elements - sound, touch, light, etc

  • BMW talked about creating experiences that are connected, assisted, upgradeable and integrated with consumer’s digital lifestyle.

But most of the presentations focused much more heavily on building software defined vehicles, and using those vehicles to push new features to consumers - sometimes hundreds of new features (Audi boasted about their new platform being capable of supporting over 600 new functions).

Success is therefore still being measured by 'more' – not just more vehicle sales, but now also more software features. But do consumers want more features?

Interestingly, Nio and Vinfast spent much less of their time talking about the technical capabilities of their platforms or the quantity of features being launched (possibly to the disappointment of some in the audience), and instead spent most of time talking about their customer experience and brand values. Nio spoke passionately about the engagement tools they’re using to get closer to customers – Nio Houses (which receive 15,400 visitors per week), the Nio App (which has 300,000 active users) and the Nio User Advisory Board (where they directly connect development teams with a panel of active users).

Established car makers are gaining confidence in their ability to build Software Defined Vehicles. Their next challenge will be building the organizational culture and agility to use their new platforms to consistently and rapidly deliver meaningful improvements in the customer experience.

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