AUTOMAKERS GEAR UP FOR THE BIGGEST AUTOMOTIVE CHANGES IN A CENTURY
At the Financial Times Future of the Car Summit last month, automakers, startups, carriers, investors and journalists all gathered in London to discuss how the automotive industry will manage the unprecedented changes in store for the industry over the next few years. Magnus Gunnarsson, Ericsson’s head of business development, strategy and product development for connected vehicles, was there, and he brings us the key takeaways from the event.
It was clear just a few minutes into the first presentations of the Automotive Industry’s premier temperature gauge – The Financial Times Future of the Car Summit in London — that the industry is now truly ready to gear up for the future: millions of highly connected, fully electric vehicles on the road within the next five to seven years.
For example, Volkswagen opened up online pre-orders for the new all-electric VW ID.3 in May, and said at the show that they are aiming to sell 28 million units of their new EV platform, the MEB. This platform will underpin 70 different vehicle models across the VW Group.
Meanwhile, Volvo Car’s CEO Håkan Samuelsson said that he expects half of all of its vehicles sold to be fully electric by 2025. Samuelsson went on to say that, “The volume of batteries we will need in 2025, and we are not comparably a very big automaker, equals the entire world output of batteries this year.” Clearly, the electric car is rapidly moving from the premium and early adopter segments into a true mass market product. As a result, the industry is about to undergo its biggest change since Ford’s introduction of mass production more than a century ago.
Automotive transformation -- More than just electrification
Electrification is part of that massive change, but there’s a lot more going on than moving from the internal combustion engine to battery-powered vehicles. There are four simultaneous megatrends — connectivity, autonomous drive, shared mobility and electrification — that are completely changing the automotive industry, the vehicles it produces and ultimately societies themselves.
The electric cars that will hit the street over the next few years are essentially new designs from the ground up, and they include advanced connected services such as autonomous driving, over -the-air software updates, personalized infotainment services and car sharing. Younger generations are demanding a very different automotive future. As Samuelsson said, “We now see how younger generations are happy to pay a premium monthly service fee, but reluctant to take on ownership.” This is a sea change for the industry, which will require a wide array of advanced mobility services.
The vibrant automotive startup ecosystem
Accelerating this already fast pace of automobile innovation is a vibrant startup ecosystem of small, nimble, entrepreneur-driven companies that is forming alongside the vehicle makers. These startups are creating solutions and products that will fill the vehicles with new services, and it’s a challenge for automakers’ product planning to keep up with them. At the conference, Gothenburg-based startup accelerator Mobility Xlab, cofounded by Ericsson, presented their unique model for start-up partnering that has resulted in accelerated innovation for start-ups and vehicle makers alike. Volvo Group’s Senior Open Innovation Manager, Philip Wockatz, said at the conference, “We have fundamentally changed the way we look at innovation, and initiatives like MobilityXlab speeds us up.”
Ericsson outlined our own vision for the future of mobility at the summit. These new automotive services require round the clock connectivity in all weather conditions without interruption. As the leader in 5G network technology, we’re ready for the challenge of bringing the unique benefits of the new technology into the vehicles and helping startups and automotive giants alike to thrive in this exciting new automotive world.
Author: Magnus Gunnarsson, Ericsson’s head of business development, strategy and product development for connected vehicles.