Developing the connected car would be a relatively straightforward task for OEMs if all it involved was providing vehicle occupants with a set of online services. Needless to say, there’s more to it than that – services need to be completely safe for drivers, who until further automation arrives will have little time to take their hands off the wheel and their eyes off the road, and connected systems need to be robust enough to deal with cyber security threats.
The challenges are enormous, but Mike Tinskey, Director of Connected Vehicle Emerging Services at Ford, is in no doubt the automotive industry can pull it off. Speaking at Connected Car Detroit 2016, Tinskey said that OEMs now are being presented with significant opportunities to address tomorrow’s mobility challenges.
There will be challenges, or what you might call opportunities, that the connected vehicle can really address
Cities around the world are experiencing an “incredible amount of growth,” he told attendees. By 2025, it is expected that there will be 28 megacities, i.e. cities with populations of over 10 million, in China alone. “This trend and many others are going to lead to congestion issues, and air quality issues. There will be challenges, or what you might call opportunities, that the connected vehicle can really address.”
Jonathan Weinberger, a Vice President at the Alliance of Automobile Manufacturers (Auto Alliance), added that the industry was united in this area, suggesting that the connected car consolidated several areas that would always be of interest to OEMs. “We’re looking at safety issues, convergence issues, environmental issues, fuel economy issues. These are all part of a connected ecosystem – a mobility system.”
Chief among priorities, he added, will be ensuring that the technologies developed will be able to face up to tomorrow’s cyber security threats. “It all comes down to safety and security – security by design, and figuring out how to make the ecosystem,” he said. “It’s a patchwork of regulations, laws and technology, so that’s a big challenge.”
Going mainstream
Supervisory Special Agent Tom Winterhalter, Supervisor at the Federal Bureau of Investigation (FBI) Detroit Division’s Cyber Squad, warned that as with any technology, the more mainstream the connected car becomes, the more ways nefarious entities such as criminal organisations and terrorist groups might find to exploit it – for financial gain or otherwise.
In the intermediate period, Winterhalter suggested that nation states could present a more immediate threat, in their attempts to collect information on how to exploit connected technologies. “They want to try to take advantage of all the research and development the industry and its suppliers have put money into,” he said. “They want that information for free, and to find ways they can benefit from it going forward.” Co-operation with law enforcement will prove essential in this area – OEMs will be keen to avoid a repeat of incidents such as that in 2013, when a former GM engineer and her husband were found guilty of attempting to steal hybrid vehicle technology to pass on to Chery.
We as an industry are transitioning from a phone-based world to an automotive and phone-based world
In a global business such as the automotive industry, he said, baby steps were preferable to ensuring the long-term viability of a company than doing something haphazardly for the sake of bringing things to market quicker. Co-operation between industry players will be key in “baking” safety into the connected environment.
Questions have been raised over whether OEMs are taking the matter seriously enough. Weinberger argued that members of the Auto Alliance, which represents 12 OEMs and around 77% of automotive manufacturing in the US, are so keen to move forward on connectivity that the Auto Alliance has established a new division, the Innovation and Technology Division, which Weinberger now leads.
The group has already made progress, he said. A cyber security working group has developed a best practice framework for cyber resiliency. He pointed to the formation of the Information Sharing and Analysis Centre (ISAC), with current participants including all 12 member OEMs, and now due to take on Tier 1s and third parties that could provide further assistance.
We have trained analysts who sit in the operation centre 24 hours a day, scouring the deep web and dark web and wherever else to see where the threats are coming from. Once identified, these are shared among ISAC members
“It has tremendous participation,” he said. “ISAC has been set up proactively, and is not a response to some sort of catastrophic event. We want to share cyber threat information. We have trained analysts who sit in the operation centre 24 hours a day, scouring the deep web and dark web and wherever else to see where the threats are coming from. Once identified, these are shared among ISAC members.” Companies can also anonymously share threats directed at them on the portal. These might include extortion threats, or intellectual property theft threats. This crowd-sourcing approach is already working – threats are being shared on the portal.
“Connectivity amongst partners and the value chain is absolutely key,” added Tinskey. “We as an industry are transitioning from a phone-based world to an automotive and phone-based world.” The way consumers get content, he said, could be changing. Securing this will be vital, particularly if OEMs want to survive in what some see as their new role – service providers.
Making it pay
Tinskey was adamant that this was a role OEMs could take on without compromising on the main task at hand – making cars that are safe, and great to drive. Ford Smart Mobility, which researches ideas around connectivity, is a limited liability corporation (LLC), and the work it produces, he said, is viewed as “complimentary.”
A number of recent announcements suggest that the industry will look to ease the challenge through collaboration with third parties. Visa has partnered with Honda to demonstrate its Visa Token Service, which aims to streamline payments for goods such as fuel and parking. Accenture and Seat have partnered on connected technology that allows home-vehicle connectivity, as well as driver behaviour monitoring.
Questions remain over how the connected car will be monetised. OEMs, said Tinskey, may be moving towards a similar business model employed by Apple – that of a hardware, software and services provider. “The largest growth in Apple’s revenue has been on the services side,” he said. “They sell the customer a device for between US$300 and US$500, and then they have three platforms that generate tremendous amounts of revenue – the App Store, US$15bn a year, iTunes, US$5bn a year, and Apple Pay, which has upward potential to produce significant growth.”
Customers, he explained, spend huge sums after they walk out of a dealership on costs such as toll-roads, insurance and gasoline. These monetisation opportunities, said Tinksey, are potentially even bigger than what Apple has taken advantage of. “Out of a US$500 purchase, Apple may generate on average around US$25 or US$30 a year from that customer in services,” he said. “In the auto industry, I would venture to say our customers spend between US$3,000 and US$5,000 a year on other services.”
OEMs, said Weinberger, will face competition from start-ups and companies outside of the industry also looking to profit. External devices such as dongles and data-collectors, which rely on Internet-of-Things (IoT) technology, could make connected services available. “I think OEMs would rather have their own ability to monetise the technology than a third party,” he suggested.
Connecting everything
Some of the biggest benefits the connected car will bring will be societal, including reduced congestion and better air quality. Smart navigation will be able to re-route commuters away from particularly busy areas, and vehicles involved in collisions and other disruptive events will be able to warn others. This will depend on connected devices being able to talk to each other across the IoT.
NHTSA allowed us to put together a working group and develop cyber resiliency best practices, and to develop autonomous vehicle regulation with the patchwork of differing state regulations
However, Weinberger said that connected vehicle technology was developing far more quickly than the connectivity ecosystem needed to enable vehicle-to-infrastructure (V2I) and vehicle-to-everything (V2X) communications. “Governments and regulators can’t keep pace,” he said. “One of the positive things we’ve heard from NHTSA [National Highway Traffic Safety Administration] is that they recognise they can’t keep pace. So they’ve allowed us to put together a working group and develop cyber resiliency best practices, and to develop autonomous vehicle regulation with the patchwork of differing state regulations.”
OEMs, he continued, will need to find ways to work with regulators, legislators and lawmakers on how they can be freed to develop and implement technologies that could improve quality of life, prevent accidents and help the environment. He referred to Google’s recent testimony to the US Congress, in which Chris Urmson, Director of the tech giant’s self-driving car programme, urged the Senate Commerce Committee to grant authority to the US Transportation Department to allow testing. Google and others have reacted badly to actions taken by California in December 2015, when it proposed draft laws that would bar autonomous vehicles without human controls and a licensed driver. Connectivity is widely considered an enabler of autonomous driving.
Looking to the future, it’s unclear just how developments will unfold. Without co-operation, says Weinberger, drivers may end up in situations where they own vehicles they can’t drive outside of their own States. “How do you allow the industry to flourish, and to move?” asked Weinberger – but he remains optimistic. “I don’t think the government wants to get in our way much. So we’ll see.”
This article is part of an exclusive Automotive World report on connected cars. Follow this link to download a copy of ‘Special report: Connected cars‘
