Navigant Research Blog

Automotive Cyber Security Is Finally Progressing

— February 1, 2016

CarsharingstandortWhen I first joined Navigant Research as an analyst in August 2014, the very first entry I wrote for this blog came on the heels of the annual Black Hat and DEF CON security conferences in Las Vegas. Up to that time, automakers had been conspicuously quiet on the subject of security. Fortunately, in the past 18 months the industry has awoken to the very real problem of automotive cyber security and is taking steps to ensure that increasingly connected and automated vehicles will remain safe.

Over the past several years, security researchers have demonstrated a series of increasingly sophisticated hacks of vehicles. Back in 2010, we were seeing hackers connect to vehicle internal networks by way of wireless tire pressure sensors or from a back seat via a thick bundle of wires connected to a diagnostic port. In the first half of 2015, we saw cars from two different automakers remotely controlled after researchers were able to wirelessly connect to the telematics modules from a safe distance and take control of the brakes, acceleration, and steering.

White Hat Help

In that first blog I wrote, I called on automakers to embrace white hat hackers and security researchers who were trying to invade automotive electronic systems. Today, both Tesla and General Motors (GM) have official responsible disclosure programs where researchers can submit any vulnerabilities they discover. The automakers review those submissions and work to remediate the flaws to help keep customers safe. Tesla launched its program in mid-2015; GM followed suit in January 2016.

Unlike Tesla (and many technology companies including Google, Facebook, and Microsoft), GM is not currently offering any rewards in its program—though it has not ruled out doing so in the future. The GM program is administered through an online portal run by a San Francisco startup called HackerOne. HackerOne provides the disclosure portal free of charge and makes money by taking a percentage of any rewards paid out for verified vulnerabilities.

Industry Response

Another important step forward for the industry was the establishment of the Automotive Information Sharing and Analysis Center (Auto-ISAC). ISACs are now increasingly common in a wide range of industry verticals including utilities, healthcare, financial services, and more. The Auto-ISAC currently includes most major automakers from North America, Europe, Japan, and South Korea; its goal is to provide a platform to share information about cyber security threats and vulnerabilities that put both the general population and auto-industry at risk. The Auto-ISAC began operations in late 2015 and is likely to become a very important tool in the effort to prevent malicious attacks on the transportation ecosystem.

The mobility business is changing. Navigant Research’s Autonomous Vehicles report projects that there will be almost 85 million autonomous-capable vehicles on the world’s roads in the next 20 years and far more vehicles that will have some level of connectivity. Road safety is already a difficult issue to tackle without the problem of malicious attackers intruding from a distance. Fortunately, the industry is now tackling the issue head-on on numerous fronts via improved system architecture, more robust software development processes, and collaboration with anyone willing to step up and help.


GM Wants to Be a Carsharing Maven

— January 26, 2016

male hand using navigation system on car dashboardOver the past several decades, Detroit-based automakers have rightly been accused of regularly burying their heads in the sand and ignoring changes in the marketplace that would upend their business. The latest announcement from General Motors (GM) shows that is no longer the case, as the biggest American automaker has launched a carsharing service in Ann Arbor, Michigan that also leverages its established OnStar telematics service.

Navigant Research’s Carsharing Programs report projects that such services will have 23.4 million members globally by 2024, potentially eating into individual vehicle sales. Ford has had a longstanding relationship with ZipCar, BMW is behind the DriveNow program, and Daimler provides vehicles to Car2Go.

Maven, the new service from GM is the latest in a string of moves by the automaker including a $500 million investment in Lyft and the purchase of assets, including intellectual property from the defunct SideCar ride-hailing service. While SideCar shuttered its service at the end of 2015 after failing to gain marketplace traction against larger rivals Uber and Lyft, many of its staff will join GM’s efforts, and the automaker will access to a 2002 patent on determining an efficient transportation route and requesting rides from a mobile device. SideCar founder Sunil Paul declined to use the patent against competitors, and it’s not clear if GM will be able to sue. More likely GM will use the patent defensively if Uber tries to corner the market.

Maven will have the advantage of GM’s longstanding OnStar system, which launched 20 years ago as the first commercial cellular-based telematics service. Many of the same features that OnStar subscribers get through the RemoteLink smartphone app will add to the convenience of using Maven. Using the Maven app, subscribers can reserve and locate available vehicles and remotely start them up to 8 minutes prior to a reservation.

The fleet consists of the four Chevrolet models including the Spark, Volt, Malibu, and Tahoe, allowing users to select the vehicle that best meets their needs on any given day. Rental rates start at $6 per hour for a Volt or Spark to $12 for the Tahoe.

Increasing Autonomy

For now, Maven users will have to go where the vehicles are parked, 11 locations around downtown Ann Arbor and the University of Michigan north campus. However, as GM continues to develop its autonomous vehicle technology and the autonomous hailing service it announced with Lyft at CES, Maven seems likely to morph into this type of service. It’s probably not a coincidence that GM chose to launch Maven at a location directly adjacent to the Mcity autonomous and connected vehicle test facility.

With GM and Ford both extensively dabbling in carsharing and ride-hailing services, Fiat Chrysler is the only Detroit automaker that hasn’t publicly announced any plans in this space, but it’s likely only a matter of time before they jump in as well. With a 30-mile electric driving range, the Chrysler Pacifica plug-in hybrid minivan that was revealed at the recent North American International Auto Show would make an excellent platform for mobility as a service.


Automakers Protect Their Turf by Cannibalizing Themselves

— January 6, 2016

Time may heal all wounds, but for the auto industry, not enough time has elapsed yet to forget the pain caused by the 2008 financial meltdown. With that sales collapse still visible in its rear-view mirror, the industry is wary of another potential collapse due to innovations from Silicon Valley as it takes to heart the warning from the late Steve Jobs: “If you don’t cannibalize yourself, someone else will.

Jobs was talking to his biographer Walter Isaacson about how the then-new iPad had the potential to steal sales from Apple’s own MacBook laptop computers. With the mobility ecosystem on the precipice of a transformation stemming from a combination of automation, connectivity, car/ride sharing, and electrification, incumbent automakers have recognized the potential for a massive drop in future sales and are positioning themselves to take advantage of the new normal, whatever that might be.

Navigant Research’s Autonomous Vehicles report projects global sales of more than 40 million autonomous light duty vehicles annually by 2030, while carsharing programs are projected to have 23.4 million members around the world by 2024. Along with increasing urbanization, automakers see the combination of these trends potentially decimating sales of personally owned vehicles in mature markets like Europe and North America in the second half of the 2020s and beyond.

Industry Takes Note

Based on recent announcements from several incumbent automakers, automakers hope to partner with the technology industry to transform how they make money from personal ownership to on-demand mobility-as-a-service. General Motors (GM) kicked off the 2016 International CES with an announcement that it would invest $500 million in fast-growing ridesharing company Lyft while Audi is leading a Series C investment round in Austin, Texas-based rental firm Silvercar.

The GM-Lyft deal includes plans to develop a network of autonomous vehicles that can be summoned on demand by Lyft customers. In September 2015, GM announced plans for a pilot program with a fleet of autonomous Chevrolet Volts to be used as on-demand shuttles by employees at its Warren, Michigan technical center.

Airport rental startup Silvercar now operates in 12 cities across the United States with a fleet of identical Audi sedans. Like Uber and Lyft, customers get service through a website or smartphone app. A reserved car can be unlocked with a phone and the all-inclusive flat daily rate is also paid automatically through the app.

Like GM, Ford has thousands of employees that move among the dozens of buildings in its product development center and global headquarters in Dearborn, Michigan. Ford recently launched a dynamic shuttle service with a fleet of Wi-Fi and power-equipped Transit vans so that employees can stay in contact or work on the move. Rides can be summoned and tracked from a smartphone app, just like Uber or Lyft. While retirees from nearby Ford factories currently drive the vans, Ken Washington, Ford’s vice-president of research and advanced engineering, has not ruled out using autonomous vehicles at some point when the technology is ready.

With increasingly congested cities looking for ways to help people move around while reducing accidents and improving air quality, urban centers may well ban human-driven vehicles at some future date. Each of these investments point to a time when fewer people need or want to own a vehicle but still need a convenient way to get around. With companies like Google, Uber, and potentially Apple hoping to step into the breach, automakers are smart to look at ways to cannibalize their existing business in favor of a whole new way of making money.


Ford Seeks Advantage with In-House Cell Chemistry Development

— December 18, 2015

As automakers around the world have scrambled to develop more affordable and efficient electrified vehicles over the past decade, one common approach that almost everyone has taken is outsourcing battery technology. In particular, automakers are relying on companies with experience in developing and manufacturing cells such as LG Chem, Panasonic, Samsung SDI, and GS Yuasa to take the lead on developing lithium ion chemistries. Ford now appears to be one of the first automakers taking that approach in-house on a large scale.

Navigant Research’s Electric Vehicle Market Forecasts report projects global sales of approximately 3.1 million hybrid electric vehicles (HEVs) and 2.9 million plug-in electric vehicles (PEVs) by 2024. Virtually all PEVs and an increasing proportion of HEVs will be using lithium ion batteries in that timeframe.

Light Duty EV Sales by Scenario, World Markets: 2015-2024

Sam A Blog - Dec 17(Source: Navigant Research)

Tesla kicked off the outsourcing wave using the approach pioneered by AC Propulsion (ACP) on its tzero concept. Like ACP, Tesla chose to use commodity 18650 cells like those used in many portable computers for the battery pack in the Roadster and later the Model S and X. As Tesla has grown, it has worked closely with its main supplier Panasonic to further optimize cell chemistries for automotive applications.

General Motors (GM) has similarly developed a close working relationship with LG Chem since launching development of the original Chevrolet Volt in 2007. GM has a massive battery test lab at its Warren, Michigan technical center that is capable of testing everything from individual cells to full packs, but LG retains primary responsibility for developing the cell chemistry.

Ford currently relies on LG Chem and Panasonic to supply the cells used in its HEV, PEV, and battery electric vehicle (BEV) models, but that may well change as the company rolls out 13 planned new electrified models by 2020. The automaker recently refurbished the original Ford Engineering Laboratory (FEL) across the road from its main product development center campus in Dearborn, Michigan. The FEL was built in 1923-1924 and is now the new home of Ford’s consolidated and expanded electrified powertrain development efforts.

Research Continues

Thirty miles to west, on the University of Michigan’s north campus in Ann Arbor, researchers at the U-M Battery Lab, which was partially funded by Ford, are doing pilot-scale production of cells using Ford-developed chemistry. The lab is capable of manufacturing both the 18650-format cells used by Tesla and pouch cells similar to those produced by LG Chem for the Volt and the Focus Electric.

“Batteries are the life force of any EV, and we have been committed to growing our leadership in battery research and development for more than 15 years,” said Kevin Layden, director of Ford Electrification Programs.

Layden explained that Ford has no plans to use the smaller cylindrical 18650 cells for production applications but they are easier and less expensive to manufacture for use in testing and benchmarking new cell chemistries. Just as internal combustion engines have been an integral part of differentiating products for more than a century, Layden believes that owning the cell chemistry intellectual property will be critical to the success of automakers in the future. Ford doesn’t plan to get into full-scale cell manufacturing, instead preferring to work with suppliers to produce the chemistry it develops in-house.

Ford has already announced that the 2017 Focus Electric will get an upgraded battery that boosts range from the current 76 miles to more than 100 miles. It’s not clear at this point how much impact the efforts at FEL and U-M had on that vehicle, but many of the other new EVs should demonstrate what Ford can do.


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