Although the transition to software-defined vehicles (SDVs) is challenging for all automakers, start-ups at least have the advantage of a ‘clean slate’ on which to develop their products. Incumbents, meanwhile, must find competitive and cost-effective methods to design new architectures while simultaneously maintaining their legacy technology.
However, the challenge isn’t just technological: SDVs also require a new mindset. Instead of producing finished vehicles that will not significantly change once they leave the factory, OEMs will be expected to create adaptable products that can continuously evolve for years. From management philosophy to supplier ecosystems, SDVs represent the dawn of a new way of working for automotive players.
The challenge and the opportunity go hand-in-hand. Derek de Bono, Head of SDV at Valeo, believes the immediate focus should be on finding a way to manage unchanging hardware and constantly updating software. “The industry has always dreamed of a car that could evolve with the customer, but hardware needs to provide a solid enough foundation for that dream to come true.”
SDVs require ecosystems
De Bono states that the complexity of SDV central compute units and their integrated software layers is such that no company can manage the transition alone. “An ecosystem of partners is necessary, each bringing their own expertise on a range of subjects—from AUTOSAR to system-on-chips and in-vehicle infotainment.” Success, he continues, will depend on agile, collaborative, and fast-paced work environments.
Both the projects and the associated challenges will be bigger than ever before, and automakers must accept that SDV development will redistribute their previously consolidated ownership of delivery to partners across the ecosystem. “Everyone will be invested in ensuring a vehicle goes to market in time and meets the same quality standards a brand’s customers expect.”
As a diverse smart tech supplier and partner, de Bono states that Valeo’s role in each SDV project could vary significantly. Although some might primarily consider it a hardware supplier, the company has also been involved in software for around 30 years. As SDVs gain industry momentum, Valeo is undergoing a “slight transition” to “shine a light” on what it can do in the software realm, too.
Co-developing, co-owning
There is an emerging consensus in the SDV space that hardware must be decoupled from software to maximise value. “Product lifecycles not only will be different, they have to be different,” says de Bono. “If the industry wants to ensure the safety and stability of a vehicle for 15-20 years, there needs to be a new understanding about how the changing (software) and unchanging (hardware) elements come together.”
On a practical level, this will impact how partner ecosystems collaborate: he emphasises that participating in the creation of an SDV requires an ability to adapt as the project evolves. At any time, Valeo might start by supplying hardware and then switch to integrating and validating its own or a third party’s software stack. The level of input each partner contributes will be determined by its ability to meet the needs of a highly diverse product.
Valeo’s portfolio of offerings—called ‘Valeo anSWer’ and based on three pillars: applications, middleware, and services—give it a wide range of competencies in the SDV ecosystem. This also means it can collaborate with automakers working towards important industry milestones, such as Renault’s pursuit of a mainstream SDV platform. “It’s important that SDV architectures don’t just stay in the premium vehicle market,” adds de Bono. Joining Google and Qualcomm, Valeo will supply Renault with a high-performance computer, as well as other electrical/electronic components, software packages, and testing and validation services.
SDVs, he continues, promise to change the concept of value in the OEM-partner ecosystem. Working with BMW, for example, Valeo is delivering a new domain controller in partnership with Qualcomm, a sensor set, and a parking stack. Meanwhile, it has also been helping to develop SAE Level 4 valet parking over the last two years. To do this, Valeo uses an aggregated cloud of data from in-built vehicle sensors to produce crowdsourced maps.
A truly successful SDV means evolving the vehicle with the buyer
The more collaborative nature of this product development subsequently changes the traditional ownership paradigm. Once BMW’s L4 functionality has been achieved, de Bono states that the resulting maps can then be sold to other interested OEMs and service providers. “That’s a completely new way of working. It’s not suppliers delivering for BMW; it’s everyone co-developing and co-owning the resulting IP.”
Economics of SDVs
New ways of working in the SDV era might ultimately be a matter of economic necessity. De Bono recognises that initial investment costs will be high: “A vehicle today has between 50 and 150 ECUs, and with those comes complex and expensive wiring harnesses. However, once installed, the architecture can be simplified over time to reduce the number of ECUs.” This not only generates savings in the first instance but also creates space for more hardware and functions down the line, an essential component of the SDV ethos.
“A truly successful SDV means evolving the vehicle with the buyer.” He uses the example of someone purchasing a vehicle while living in an urban environment. While the “basic lighting package” might be sufficient at the time, if that person later moved to the suburbs, where late-night driving in darkness became necessary, enhanced lighting would become desirable. “That could be achieved through an over-the-air software update. But the point is you need that hardware already present in the vehicle.” In electric vehicles, De Bono suggests the same principle could also apply to powertrain upgrades for vacations.
If the challenge of SDVs is how to make them financially viable for manufacturers, de Bono believes this ‘pay to unlock’ business model will create enough long-term value to justify automakers’ high initial investment. By saving money on what the customer doesn’t see—the architecture—OEMs can invest in more hardware that can be enriched through software. In the next 18-24 months, he expects to see the first wave of SDV products that capture this opportunity come to market.
