How Tier suppliers will capitalise on future connectivity and autonomous mandates, investigated by Siegfried Mortkowitz.

Despite running into unexpected roadblocks, some believe the development of the self-driving car is moving into top gear. While, for example, Volvo has significantly scaled back its Drive Me autonomous car project and Elon Musk postpones his much-ballyhooed coast-to-coast autonomous drive, the reasons for the delays have, in some quarters, been seen as positive in that they suggest a better and safer final product.

Still, the autonomous car is, in and of itself, only part of autonomous driving. Once the technology is fit to be marketed, it will need to be part of a V2X system that enables it to communicate with other autonomous vehicles and the road infrastructure, even in non-line-of-sight situations, such as behind buildings or around curves. This domain will not only offer a potentially lucrative market for Tier 1 suppliers but may also lead to their restructuring as autonomous hardware becomes ubiquitous and software will provide significantly greater return on investment.

For starters, suppliers of antennas are already gearing up to provide products for the specific needs of V2X development. Ultimately, it is assumed that most V2X communication will take place over 5G wireless networks, says Andrea Sroczynski, managing director of SBD Automotive’s new Germany office. “The beauty of that is that there are few extra costs on the communication side for the vehicle infrastructure needed for 5G V2X communication, as 5G is going to get deployed anyway by OEMS for infotainment reasons,” she explains. “For the road operators, the infrastructure upgrade costs for 11p (short-wave IEEE 802.11p) or 5G are likely to be similar, unless they can rely on the MNO’s 5G infrastructure to provide the data they need to manage traffic but this is still to be proven.”

However, because 5G is still some years away from rollout, the current 11p standard will have to be used, perhaps only temporarily. Sroczynski says that some carmakers, such as Volkswagen are already preparing for that eventuality. “From 2019, they will equip some vehicles with 11p, just to start, and then extend that to 5G when 5G is ready,” she explains. “Some antenna suppliers are looking into the possibility if both could be managed in one antenna to minimise the costs.”

Sroczynski says that legacy ADAS hardware providers, such as Continental and Bosch, will increasingly provide complete hardware systems, including backend and cloud platforms. “Because the hardware at one point becomes a commodity, as brakes and steering currently are, there is not much money to be made in the long term from these hardware sensors,” she explains. We see that the money will come from the software that delivers autonomy, or V2X, like data management to update the maps in real time and the larger Tier 1s will become software providers and potentially even data warehouse providers with a complete cloud platform, offering not only the hardware in the car but complete end-to-end service.” This transformation is already happening with Continental and Bosch recently both purchasing 5% stakes in mapping technology company HERE. “Hardware suppliers will eventually become mobility service providers,” Sroczynski predicts.

Krishna Jayaraman, head of connected car research at Frost & Sullivan, agrees. “Not only the hardware side but once the hardware is sold, then software as a service, either as a licensing model or a one-time selling model, would be the essential criteria that these players would be looking at,” he says. He cites the example of Continental, which announced in September they will be field-trialling cellular V2X technologies with the new Qualcomm 9150 C-V2X chipset. “All the Tier 1 manufacturers have invested a lot in the software side of things,”Jayaraman says. “It was about bolstering their software capabilities and all about how you have logical and algorithmic solutions ready for the next suite of communication technologies.”

Jayaraman also highlights advances in cellular communication in the V2X domain, saying: “Multiple automakers have invested a lot of money in the DSCR-based solution but cellular has now become an option which could be looked at in the future, because it can do what DSCR could do.” Because there is already a telematics modem in the car, because of the EU’s eCall mandate, scheduled to come into force at the end of March, and in the US it is already a commodity, offered by Ford, GM and other carmakers, “cellular could become a mainstay,” he says. “I wouldn’t say it will replace DSRC but it could become a big answer to vehicle-to-vehicle communication.”

Jayaraman says that chipset manufacturers like Qualcomm could, therefore, become big players “because they will build the chipsets which will be used by Tier 1s like Continental or Bosch to create their solutions based on the standards set by the industry.” He notes that, increasingly, “it’s getting clearer that, when you compare DSRC and cellular, the industry is turning to cellular.”

This is a big opportunity for Tier 1 manufacturers because of their telematics expertise. “Once the cellular models get mature, Tier 1 manufacturers will be a sort of ‘one-stop shop’, and offer not only an integrated solution that will take care of the customer side, such as infotainment, but also cover the communication angle, where the box will be capable of communicating with another car,” Jayaraman says. “Here is where the legacy Tier 1s can play a very big role by bringing the solution, especially as the industry is confused right now about what technology they should move into.”

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Connected & Autonomous Vehicles

14 May 2018 - 17 May 2018, Santa Clara, USA

From vehicle electrification and infrastructure to the evolution of ADAS and vehicle automation to enhanced connectivity and new mobility models, no rock will be left unturned.