Why car brands keep calling tech giants for help | The Dip

Key Concepts

• Levels of Autonomous Driving: SAE International’s six levels (0-5) defining the degree of automation in vehicles.
• Software-Defined Vehicles: The shift towards vehicles where software plays a dominant role in functionality and features.
• Infotainment Systems: In-vehicle entertainment and information systems, increasingly reliant on external tech providers.
• Nvidia & Mercedes Partnership: Collaboration to deliver downloadable self-driving tech updates to Mercedes vehicles.
• Humanoid Robots: Development of robots designed to assist humans in daily tasks, including healthcare and household chores.
• AI Integration in Automotive: The increasing use of Artificial Intelligence for autonomous driving, infotainment, and vehicle management.
• Data Centers & Chip Manufacturing: Nvidia’s core business, providing context for its automotive revenue.
• Aila (Sony Honda Mobility): A joint venture focused on creating vehicles prioritizing entertainment and connectivity.

Automotive Tech at CES & the Future of Self-Driving Cars

The discussion centers on the trends observed at CES (Consumer Electronics Show), particularly regarding automotive technology, and the challenges facing car manufacturers in the transition to software-defined vehicles and autonomous driving. The core argument revolves around the difficulty traditional automakers face in developing complex software and the increasing reliance on tech companies like Nvidia and Google for solutions.

The Software Challenge for Automakers

Traditional car companies are struggling with software development, a departure from their core competency of mechanical engineering. Steve, a correspondent covering the automotive industry, highlights this as a “big issue” because “traditionally they’re not software companies.” Initial attempts to develop software in-house, exemplified by Volkswagen, proved difficult, leading to partnerships with companies like Rivian. However, this creates dependency on the partner’s priorities and timelines. The pressure to deliver software updates alongside vehicle production is immense, tied directly to the bottom line and requiring flawless programming. As stated, “All of it dependent on whether someone can actually program this the way it needs to be.”

CES 2024 Highlights: Cooperation & Humanoids

CES 2024 didn’t feature a single standout product, but showcased significant cooperation between car companies and tech firms. Benjamin Alvarez Gruber, reporting from CES, noted a trend of “car companies cooperating with tech companies” and even competitors collaborating, particularly in the emerging field of humanoid robots. These robots are being developed for tasks like folding laundry and assisting elderly individuals with health monitoring. Healthcare applications are also seen as a promising area for these technologies.

The Shift to CES for Car Tech Announcements

Companies are increasingly using CES as a platform to announce car tech, especially software and self-driving hardware. This reflects the growing importance of software in the automotive industry and the need for automakers to showcase their technological advancements alongside consumer electronics.

Aila: Entertainment vs. Safety

The Sony Honda Mobility joint venture, resulting in the vehicle “Aila,” exemplifies the focus on in-car entertainment. The vehicle features extensive screens and gaming capabilities, raising safety concerns. Benjamin Alvarez Gruber questioned the safety implications of a full-screen infotainment system, contrasting it with restrictions on using GPS while driving. The question posed was, “What are the safety concerns if you're getting in a car?”

The Rise of Third-Party Infotainment

Automakers are increasingly outsourcing infotainment systems to companies like Google (Android Automotive) due to the difficulty of developing them in-house. This trend is expected to continue, with infotainment becoming a key area where tech companies provide solutions. As stated, “This is going to continue to be an issue… infotainment is going to be provided from outside from the tech companies who can do it.”

Nvidia & Mercedes: Owning the Tech Stack

The partnership between Nvidia and Mercedes is considered a significant development. Nvidia aims to “own the whole stack” – the software, hardware, and backend infrastructure – for autonomous driving. This strategy positions Nvidia as a key player in the future of automotive technology, potentially reducing automakers to simply providing the vehicle shell. The discussion highlights the potential for Nvidia to diversify its revenue streams and capitalize on the growing demand for autonomous driving technology.

Levels of Autonomy & Realistic Expectations

The conversation clarifies the different levels of autonomous driving (0-5) as defined by SAE International. Mercedes currently offers Level 3 autonomy, but its use is highly restricted to specific highways and speed limits (up to 95 km/h or 57 mph). Stellantis recently discontinued its Level 3 program due to limited market interest and the high cost associated with the technology. The discussion emphasizes that achieving full autonomy (Level 5) remains a significant challenge, and progress is likely to be gradual, initially focused on controlled environments like city centers and tourist areas.

The Promise & Challenges of Robo-Taxis

Robo-taxis, like those being tested by Whimo in London, represent a promising application of autonomous technology. However, the discussion acknowledges the setbacks and safety concerns that have hindered the widespread adoption of self-driving cars. A recent accident involving a Xiaomi autonomous vehicle in China highlights the need for caution and stricter regulations.

Notable Quotes

• Steve (DW Business Correspondent): “Traditionally they’re not software companies… trying to bridge that gap has been incredibly difficult.”
• Benjamin Alvarez Gruber (CES Correspondent): “It’s difficult to say [if there was one standout product at CES]. Unfortunately, Stephen, there were no flying cars.”
• Daniel (Host): “The most important thing is who’s going to make money off of these infotainment systems?”
• Steve: “This idea that somehow they missed it… They tried building out, they tried building out.”

Technical Terms

• SAE Levels of Autonomy: A standardized classification system for autonomous driving capabilities.
• Android Automotive: Google’s operating system for in-vehicle infotainment systems.
• Altobahn: German federal highway system, often used for testing autonomous driving features.
• Data Centers: Facilities used to house and process large amounts of data, crucial for AI and autonomous driving.
• Level 3 Autonomy: Conditional automation where the driver must be ready to intervene.
• Level 4 Autonomy: High automation where the vehicle can handle all driving tasks in specific conditions.
• Level 5 Autonomy: Full automation where the vehicle can handle all driving tasks in all conditions.

Conclusion

The discussion paints a picture of a rapidly evolving automotive landscape, driven by software and AI. Traditional automakers face significant challenges in adapting to this new reality, leading to increased reliance on tech companies like Nvidia and Google. While fully autonomous driving remains a distant goal, advancements in robo-taxi technology and the integration of AI into vehicles suggest a future where transportation is increasingly automated and connected. The key takeaway is that the future of the automotive industry is not just about building cars, but about developing and integrating sophisticated software and AI systems.