Mobility Services and Vehicle-as-Platform: How Disruptive to Product and Industry Architecture?

Résumé:

Mobility services are almost as old as the vehicle itself: as early as the mid-1920s, many automakers were offering financing services to their customers to facilitate the acquisition of a new vehicle. At the beginning of the 1970s, when the car was installed as a consumer good, automakers multiplied their packaged offers integrating the vehicle and its financing (purchase and lease) but also its servicing. At that time, these services had almost no impact on the architecture and detailed design of the vehicle, whereas most automakers relied on their own financial structure and distribution network’s partners to offer and implement them.
Nowadays, the anticipation of great disruption for the global automotive industry is based not only on the CASE technologies (Connected Autonomous Shared Electric) but also on new mobility services. The latter, whether it is e-car sharing, carpooling or even automated ride hailing, to name a few, have a great impact on the usages of mobility and may have a great impact on the architecture of the vehicle and the architecture of the automotive industry. Of course, there is still room for services without any impact on the two architectures, such as, for example, the usage-based insurance program, where an insurance company just needs the data collected by the driver's smartphone to offer him a contract tailored to his needs and driving behavior. On the other hand, offering a more seamless mobility service, such as, once the contract is established, simply using a smartphone to locate, open and start (the engine of) a rental car requires profound changes in vehicle architecture and detailed design, as well as a new type of coordination between automakers and car rental operators.
The automotive industry has a persistent trend to integrality, with some modularity, and almost all automakers apply a closed platform strategy. Moreover, automakers do not have a strong track record of providing in-vehicle services, despite limited success with telematics and connectivity. Many consumers prefer connecting their phones to a central display in their vehicles and drawing all functionality from smartphone applications. This trend has placed a premium on having a well-designed screen and user interface – and has provided the first inroads for tech giants Apple and Google via their CarPlay and Android Auto platforms that facilitate smartphone integration.
But what is at stake today is how to redesign a vehicle as a platform for software-based mobility services which requires to implement a vehicle operating system and apply a "software-centric" design approach. This approach, pioneered by Tesla, totally breaks the usual vertical vehicle hardware / software architecture where, schematically, a given function is implemented in an ECU (e.g., the ABS/ESP ECU). What will happen as mobility applications get integrated more deeply into a vehicle’s software system? Will incumbent automakers develop software capabilities to do this in-house, or will they open the door to a larger role for Apple and Google platforms?
Software is supposed to be highly modular while the vehicle, as we pointed out, is still highly integral. How will the product architecture of future vehicles be affected – and the shape of mobility ecosystems going forward? We assess the relative power of incumbents vs. new entrants and automotive firms vs. tech firms and provide a typology of mobility services along a dimension from low to high integration with vehicle hardware to help project future competitive dynamics.