Technology Disruptions In The Automotive Industry
The automotive industry has been no stranger to technological disruptions since Henry Ford's Model T in the early 1900s. Technological advancements in the design and development of the car, functional attributes like safety and comfort, to performance management on speed, control, and reliability have churned many disruptions in a highly competitive industry. Over the last decade, the industry has witnessed mass adoption of features such as automatic emergency braking, parking assistance, and lane departure warning systems. Manufacturers have also introduced features such as alcohol ignition interlocks and accident data recorder systems to provide additional safety measures in the industry.
The automotive industry is expected to undergo four major disruptive technology-driven trends: electrification, autonomous driving, connectivity, and lastly, immersive environments in the coming decade.
This trend is backed by growth in the share of electronic components in the car, which has increased from 16 per cent in 2014 to 35 per cent in 2020 and is expected to reach 50 per cent of the total costs by 2030. Electronic modules in a premium vehicle with a classic internal combustion engine (ICE) would increase to US$ 7,000 per vehicle by 2025. About half of the increase in cost would be expenditures on cameras, radio detection and ranging (radar) technology, light detection and ranging (lidar) technology, and ultrasound sensors that would facilitate the next set of technology disruptions
Software and information technology companies are working hand in hand with leading automotive manufacturers in the following way of disruption. Tech giants like Apple, Microsoft, Alphabet, and Meta are expected to spend an estimated 15 per cent-20 per cent of their massive R&D budget on "frontier technologies,” including autonomous vehicles, Metaverse, and quantum computing. Another estimate pegs 9 per cent of the investments made by the big tech companies to be for the automotive and mobility industry alone.
Some of the key technological innovations in the immersive environment are-
● Artificial intelligence (AI): Simulation of human intelligence with the help of software in the automotive industry forms the basis of artificial intelligence. AI is effectively implemented across the automotive value chain. The rapid development of Advanced Driver Assistance Systems (ADAS) is an example of the innovation enabled by artificial intelligence. ADAS provides drivers with parking and semi-autonomous driving features through a safe human-machine interface for increased car and road safety. Leading automobile manufacturers such as Tesla, Cadillac, and Mercedes-Benz have in-built advanced autonomous driving features in their latest models. For instance, Cadillac's supercruise and Ford's BlueCruise offer hands-free driving on pre-mapped highways in the US.
● Augmented reality (AR): AR technology allows users to see the real world overlaid with digital data supported by robust artificial intelligence systems. Artificial intelligence has been effectively deployed across the automotive value chain from design, supply chain, production, and post-production over the last decade. AR has commercial applications across the automotive value chain; for example, AR headsets train workers and showcase virtual standard operating procedures on the production lines. Additionally, AR headsets are used in quality control checks during production. Some infotainment systems have integrated AR as part of an augmented GPS navigation system, displaying holographic arrows on a live image feed from the front of the car.
● Digital twin: A digital twin is a virtual replica of an entire car or production line, along with its software, mechanic, and electronic and physical behavior of the car. Digital twins are used in product testing, simulation of real-time scenarios before the addition of manufacturing capacity, training of employees, and predictive maintenance of manufacturing equipment on the production lines. For instance, BMW has partnered with Nvidia, while Hyundai has partnered with Unity to build virtually accessible 3D digital twins for their factories. These digital twins would allow employees to collaboratively assess modifications and adjustments to production lines in the early planning stages. Digital twins find applications on the customer front as well. With a digital twin of a vehicle, a company can engage potential buyers to check out the car, analyze features and incorporate customer feedback before commencing mass production.
● Metaverse: Metaverse is a series of interconnected virtual worlds powered by AI, AR, and digital twins' technology. Metaverse is the culmination of these technologies with the potential to disrupt the way society function and interact with technology. Metaverse will redefine the way cars are designed, built, bought, and experienced.
Metaverse in the Automotive industry: An overview
Metaverse in the automotive world has a 6-layer structure. 'Infrastructure' forms the base layer as the enabler for human interface and endless use-cases across the automotive value chain. Devices like mobile phones, smart glasses, and wearable handsets form the second layer, i.e., 'Human interface,’ allowing humans to interact in the Metaverse world. 'Decentralisation' starts the third layer providing decentralisation of data.
On the other hand, edge computing facilities de-risk data aggregation abuse in the hands of a few mighty tech giants besides providing secured data sharing protocols in the metaverse world. Decentralisation attributes allow the creation of digital ownership records in the form of NFTs. 3D engines, geospatial mapping, and VR/AR/XR form the fourth layer, 'Spatial computing.’ This layer allows the creation of virtual worlds and geospatial profiling, which is essential for end-user applications. The last two layers, 'Commerce' and 'User engagement,’ constitute opportunities for commerce and immersive entertainment mode for passengers and drivers.
Metaverse in the automotive industry: Realm of endless possibilities
Metaverse technology finds applications across the value chain in the automotive industry from product design and development, supply chain management, sales and marketing, post-purchase customer experience, and in-car entertainment. Applications for Metaverse in the Automotive market have a market potential of US$ 1.4B in 2021, expected to reach a value of US$ 11B by 2028 at a CAGR of 40.5 per cent over the next seven years with applications in advertising, online car purchasing, designing, in-car entertainment, and others.
● Metaverse in design, development, and production:
Metaverse platforms are being developed to enable engineers to design, develop and test innovative shapes, materials, and components at an accelerated phase at a minimal cost. For instance, metaverse technology is used to effectively design and share 3D prototypes without having to manufacture one to see the fit, form, and function of the prototype, saving crucial time from design to mass production. BMW ran a 6-month simulation building virtual cars on a one-to-one scale in the Metaverse for their upcoming electric vehicle production line. The engineers quoted that about 30 per cent of what they believed was the world's best factory on day one of the simulations had to be changed during the entire process. Over time, BMW has built digital twins of 31 different factories, with photo-realistic 3D environments used for various functions from training robots to bringing designers from different geographies together to experiment on new production lines.
● Metaverse in a customer's purchase experience:
A report by Facebook estimated that 65-70 per cent of consumers expected to finalise a car of their choice before going to a dealership store. Automotive companies are increasingly leveraging Metaverse to disrupt the purchase experience.
Tech Mahindra, the Indian tech giant, February this year announced the development of DealerVerse – a Metaverse-based care dealership network. A robust simulation environment could create digital showrooms. Users can virtually visit the car showroom, sit inside the car's virtual model, and carry out a test drive. The technology allows all the car's functionalities to be replicated like a digital twin in the Metaverse.
Hyundai in South Korea is providing customers with the opportunity to test-drive the Sonata N Line virtually through a collaboration with Zepeto, a Metaverse platform.
● Metaverse in in-car environments
Investment in Metaverse by the world's leading technology enterprises is expected to accentuate the integration of Metaverse in in-car environments. Audi unveiled 'motion-synchronized voyage' through virtual worlds as a feature to address the common phenomenon of motion sickness experienced by passengers in a car. Additionally, Metaverse opens avenues for contextual advertising, helping car businesses tap into additional revenue generation streams. For instance, a passenger looking for a restaurant can be catered to with a listing of restaurants on their way to making a decision.
Holoride is a tech entertainment start-up developing a virtual-reality entertainment mode labeled "elastic content" that adapts to driving movements, journey time, and the driving route. Starting June’2022, Audi is bringing Holoride to customers with their third-generation modular infotainment toolkit. Back seat passengers can put on virtual reality glasses (VR glasses) and immerse themselves in games, films, and interactive content.
WayRay, a Swiss start-up, has developed a concept car, the Holograktor, described as a "metaverse on wheels" due to its heavy reliance on AR technology. The car's seats are equipped with joysticks that let the passengers select the amount and type of information projected onto the windscreen's AR head-up displays (HUDs). The joysticks can also be used to play games on the windscreens with others in the Metaverse. Holograktor could redefine ride-hailing services. With VR remote control, a qualified driver could operate a Holograktor remotely from a compact driving station. At the same time, the passengers can relax in the comfort of having a professional driver navigate a near-autonomous vehicle during their journey.
Nissan launched its Invisible to Visible (I2V) system at the Consumer Electronics Show (CES) in 2019. The design highlights obstacles not apparent to the driver through a display inside the vehicle to enhance safety and driver comfort. Additionally, the system allows 3D avatars of individuals to appear in the vehicle's passenger, who could be a family member or friend, to give the driver company on a long drive or a local guide to answer questions and give recommendations. Nissan intends to roll out the technology in its vehicles from early 2025.
● Metaverse in post-sales experience
Manufacturers are working on virtual repair guides and simulations of upgrades. Metaverse can be utilised for creating VR-supported driver training programs. Luxury vehicle manufacturers are using metaverse worlds to build immersive brand experiences and virtual assets tied to their real-world products. For example, Alpine racing, the F1 subsidiary of Renault, is releasing a virtual "Hypercar" in five exclusive liveries using NFTs for proof of ownership.
Metaverse today and tomorrow: concerns, promises, and success
Metaverse has demonstrated massive potential in the last few years. Leading automotive manufacturers and technology giants have piloted and launched several products and services at leading forums like the Consumer electronics show. Investments from luxury automotive players like Audi and BMW to value-for-money manufacturers like Hyundai and Honda indicate the belief in possibilities from Metaverse in the automotive industry.
While Metaverse holds immense promise in every part of the automotive value chain, there are imminent concerns on privacy, safety, and social construct. Metaverse opens the door to distractions for passengers and drivers, risking the safety of the people.
Automotive manufacturers must pay heed to security whilst looking to adopt Metaverse across the value chain.
Additionally, contextual advertising built on massive data mining leads to pervasive advertising cutting through an individual's privacy. Similarly, Identity hacking is another risk. The possibility of our digital avatars being hacked and stolen could wreak havoc in the virtual and real worlds. Thus, Metaverse in automotive would need governance to ensure the privacy and safety of individuals.
In conclusion, Metaverse has many applications across the automotive value chain with substantial initial success. The success of Metaverse beyond the walls of automotive manufacturers' premises would depend on the mainstream adoption of AR and VR technologies. While sales of VR and AR continue to grow, they remain a niche market. Hundreds of millions of consumers will have to invest in the technology for the Metaverse to be accessible to the larger public. For this to occur, significant investment would be needed to accelerate the technology to reach consumer expectations of virtual and mixed reality experiences.
