CEO and Co-Founder at Innoviz Technologies. LiDAR expert with 18-plus years of experience driving cutting-edge technologies.
Today, very few companies produce the products they sell end to end. The design, production and sale of a single product involves many companies contributing components or services to its creation. This is especially true in automotive manufacturing — dozens of individual manufacturers from all corners of the globe contribute the 30,000 parts that make up a single vehicle.
These manufacturers are organized into tiers that roughly describe how close they are to automakers (original equipment manufacturers, or OEMs). Tier-one suppliers assemble several components (e.g., infotainment system) and provide systems directly to OEMs. Tier two supplies subcomponents (e.g., speakers) to tier one, and tier three supplies subcomponents (e.g., cables) to tier two.
High-tech suppliers to OEMs have largely held an unclear position in this tiered system, sometimes working with OEMs, sometimes with tier one and sometimes functioning as semi-independent arms of an OEM itself.
In today’s automotive market, cars are no longer assemblies of mechanisms, frames and panels but sophisticated computers on wheels. Due to that reality and new use cases and crises, like Covid-19, impacting vehicle production, OEMs and tier-one suppliers need to shake up the tier hierarchy and work directly with high-tech companies — the ones that produce the hardware and software that are essential to today’s and tomorrow’s cars and trucks.
The complexities of integration and testing
Integrating advanced software and hardware into a vehicle’s physical structure and systems is a complex process that’s getting more complex as OEMs load more and more technology into each vehicle they produce.
The modern vehicle’s user interface accounts for much of this complexity. As the dashboard (literally or otherwise) for controlling multiple advanced systems, a single centralized interface must be linked to and compatible with disparate technological components of a vehicle. There are many ways to create a functional interface and command and control network between components in the vehicle, but none of them is simple enough to act as a single plug-and-play solution.
Sensor hardware adds another integration challenge. Different types of sensors, from radar to LiDAR to cameras, all come with different needs for effective operation and different constraints on how they can be mounted and used in the vehicle.
Furthermore, there are multiple universally accepted standards for the testing and validation of vehicle technologies for OEMs to follow, but none that are specifically designed for relatively new but ubiquitous technology like LiDAR. Even though they must function with harmony and precision for drivers, the technological components of a vehicle are tested separately from each other, increasing the time and resources required.
The many layers of technology in a vehicle, whether they’re visible to (touch screen controls, ADAS features) or hidden from (diagnostics) its driver, are integral to every operation it performs. By working together step-by-step with technology companies, OEMs and tier-one suppliers can facilitate more efficient integration and testing for all parties and allow for steady progress on joint initiatives.
New platforms and use cases
The connected, autonomous, shared and electric vehicles (CASE) trend has been the hallmark of OEMs’ design and planning in recent years, and it continues to dominate the industry. At the same time, the move toward CASE vehicles is creating new challenges for OEMs, which are struggling to fit those future-oriented functionalities into the vehicles of today.
If CASE vehicles are the future, how can OEMs match their functionalities to the minimally autonomous, single-owner, internal combustion vehicles they are making now? What are the use cases for CASE vehicles today?
The answers lie in approaching each CASE element individually and making the right combinations for the right functions and models. Automotive technology can match the right combination of CASE capabilities to each OEM and vehicle model; the companies that provide these technologies can work best when they are closely integrated into OEMs and their planning and decision-making processes.
These technology providers can also help OEMs accelerate the pace of innovation in their companies and better prepare for changing market conditions that affect vehicle production — everything from new use cases to crises like Covid-19 that can scramble the intricate logistics calculations of the industry.
Descriptions of “connected” vehicles often carry a futuristic air, but most of the cars we see on the roads today are already connected — to the internet and to each other. The evolution of the shared mobility market is also rapidly evolving, due to their asset-light business models and the ability to rapidly deploy across the globe. The companies that are making these use cases possible are now directly supplying, integrating and/or collaborating with OEMs, given the primacy of technology in vehicle design, operation and branding.
Partnerships for the future, outside the tier system
Many OEMs and tier-one suppliers can see a shift coming but might underestimate the extent of the changes they must make to join the automotive sector’s future. For example, they’ll need to integrate nascent tech and test differently to ensure the functional safety of autonomous vehicles.
With the automotive technology space constantly advancing and increasing in size year by year, it makes sense for OEMs and tier-one suppliers to bypass the long-held tier system and go directly to the source: technology companies. In doing so, they will still benefit from competition in the technology sector while streamlining their own operations and aligning internal priorities with those of the market and their customers. With deeper integration, the best technologies will come to market as seamlessly as possible, expediting the path to a high-tech automotive future.
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