Navigant Research Blog

Automated Driving Space Threatens to Follow App Store Revenue Model

— July 27, 2017

Ride-hailing provider Lyft has shifted course and decided to develop its own automated driving system, joining most of the major automakers, suppliers, technology companies, and hundreds of startups in Silicon Valley and elsewhere. If the smartphone app economy is any example, this is not a good thing for any of the new players. The land rush into this space seems eerily similar to what happened in the years after Apple began allowing third-party apps onto the iPhone. Lots of early players made some money and many of them got healthy buyouts, but the vast majority never made a dime.

As of 1Q 2016, studies of Apple App Store revenue showed that the top 1% of publishers took home 94% of the more than $1.4 billion generated. The vast majority of apps in the stores of Apple, Google, and other companies have never earned anything. A 2014 analysis of the more than 1.2 million apps then available in Apple’s store showed zero downloads.

And the Automated Vehicle Market?

Most of the startups jumping into the automated vehicle space are focused entirely on developing the control software while using off-the-shelf hardware. Unfortunately, for most of these new entrants, the software side is quickly maturing. It seems increasingly unlikely that anyone is going to make a huge algorithm breakthrough that is going to justify a high purchasing or licensing price as these vehicles start coming to market in the next few years. A few more big acquisitions like Cruise Automation may happen, but it is rapidly becoming a buyer’s market for automated driving startups.

While the software will continue to evolve as engineers learn how to make it deal with edge cases, the real effort now needs to be focused on the hardware side. The cost of sensors and compute platforms must come down along with power consumption. Sensors must get more robust to withstand the rigors of daily use in the real world outside the mostly perfect weather bubble of Silicon Valley. Everything has to be integrated into the rest of the vehicle and made to work in all climates. These are expensive and time-consuming activities that startups are ill suited for.

The Right Moves?

Companies like Waymo are making the right moves in developing both the hardware and software as well the mobility services component for deployment. They are also forming partnerships with automakers to provide vehicles, rental companies for servicing, and network companies like Lyft for additional deployments.

Until now, Lyft has focused on partnerships with vehicle providers, including General Motors (GM), Waymo, nuTonomy, and Jaguar Land Rover. For Lyft to decide to develop its own automated driving stack seems like a needless waste of resources for a company that has yet to approach profitability.

Too Many Players?

Navigant Research’s Leaderboard Report: Automated Driving ranked incumbent OEMs such as Ford, GM, Nissan, and Daimler, along with suppliers like Delphi and newcomers like Waymo, at the head of the pack. There are already too many players in a transportation ecosystem that is likely to see significant consolidation in the next 2 decades. Anyone entering now is far more likely to be the next Color than the new Instagram. Venture capitalists considering putting money into self-driving startups that will probably part of the 80% with zero downloads are probably looking at a race to the bottom as that technology becomes commoditized. They should instead be focused on interesting new kinds of services that build on the data emanating from those vehicles.

 

48V Electrification Adoption Accelerates with 2018 Audi A8

— July 13, 2017

Adoption of 48V light electrification is beginning to accelerate in Europe with the debut this week of the fourth-generation Audi A8 at an event in Barcelona, Spain. After launching a 48V system on the high performance SQ7 SUV in 2016, the A8 becomes the first model from the brand to adopt the technology along with mild hybridization as standard fitment across the lineup. This comes just a week after Volvo announced that it would make 48V mild hybrid powertrains standard on all of its vehicles between 2019 and 2021.

48V Vehicle Sales

Navigant Research’s Low Voltage Vehicle Electrification report projects that more than 9 million vehicles will be sold annually with 48V electrical systems by 2025. Europe and Asia Pacific will be the primary markets.

Annual 48V System Sales by Region, World Markets: 2016-2025

(Source: Navigant Research)

The A8 becomes the first vehicle on the market to utilize the 48V architecture as its primary electrical system. It will still include a 12V subsystem to support the many components such as infotainment and lighting that have yet to be redesigned to support the higher voltage. While last year’s SQ7 used its 48V subsystem primarily to support the addition of an e-turbo to the diesel V8 engine, the A8 harnesses 48V technology much more deeply.

From the production launch in the coming months, all gasoline and diesel A8s will have a belted starter-generator mild hybrid system. In addition to providing some electric propulsion assist, the system provides enhanced auto stop-start at speeds up to 13.7 mph; it can recover up to 12 kW of power through regenerative braking. The system will enable sailing with the engine off at speeds between 34 mph and 99 mph. This technology will be applied through all five engines that are planned for the A8. Audi also plans to offer a high voltage plug-in hybrid variant with more than 30 miles of electric range and wireless charging capability, but no on sale date has been announced yet.

Fuel Efficiency and More

While mild hybridization will enhance the A8’s fuel efficiency, the increased electrical power of the 48V system will also enable several new features on Audi’s flagship sedan. Among those is a fully active suspension system that can move the wheels and dynamically change the ride and handling characteristics of the vehicle. Many OEMs offer variations of adaptive and semi-active suspension, but Audi has added a unique element to its system. When an impending side impact is detected by the sensors, the suspension automatically lifts that side of the vehicle, bringing the side rail up closer to bumper height and providing additional protection to vehicle occupants.

In addition to adopting 48V electrification, Audi is pushing automation in its latest vehicle launch. The A8 features what is claimed to be the first Level 3 automated system. The Traffic Jam Pilot can provide fully automated driving at speeds up to 37 mph in heavy traffic on divided highways. It utilizes radar, camera, ultrasonic sensors, and the first production lidar scanner in an automotive application. Like Cadillac’s upcoming SuperCruise system, the Traffic Jam Pilot is designed as a hands-off system and features a driver monitoring system to ensure the driver is ready to take over if needed. If the driver falls asleep or appears tired, the system will provide alerts. If the driver doesn’t respond, the car will automatically pull over and stop. The system only works in traffic; as soon as things clear up or speed rises, it returns control to the driver.

Increasing levels of driving automation and electrification are coming to market quickly, and the new Audi A8 is another step in that direction.

 

Volvo Adds Electrons Across the Board

— July 6, 2017

Volvo Cars isn’t the biggest player in the premium automotive landscape, but it seems to be one of the smartest in the years since being acquired by China’s Geely Group. Sweden’s sole surviving volume automaker has moved aggressively to reinforce its safety-oriented heritage with the development of automated vehicles. And the company just made the news, as CEO Hakan Samuelsson announced that the brand was going “all electric” from 2019.

Read Past the Headline

While this was an important announcement about Volvo’s environmentally friendly intentions, it also illustrates the importance of reading past the headline. Readers would be forgiven for thinking that Volvo wants to transform itself into the next Tesla. The reality is that between 2019 and 2021, all products from the Volvo Car Group will transition to having some degree of electric propulsion. That includes three new battery EVs (BEVs) from the main Volvo brand and two other BEVs from the high performance Polestar sub-brand.

But the internal combustion engine isn’t going anywhere just yet—it’s just getting an assist from electric motors and batteries. In 2015, Volvo introduced its Twin-Engine system, a plug-in hybrid (PHEV) propulsion system, on its large XC90 SUV and has since expanded availability to the other 90 series models, including a sedan and station wagon. The new midsize 60 series that shares a platform architecture with the 90s will also get this system.

Based on an animation released by the automaker, Volvo’s baseline setup from 2019 will be a 48V mild-hybrid that will utilize a belted starter-generator configuration. Along with a likely lithium ion battery with a capacity in the 0.5 kWh range, this should boost fuel efficiency by about 10%-15%. Navigant Research’s Low Voltage Vehicle Electrification report projects nearly 9 million global sales annually of 48V systems by 2025.

Engineering Made Easy

For a company that only sold a bit over half a million cars globally in 2016, this might seem like a lot of complexity. But Volvo only has three model lines going forward with several body styles, the compact 40 series and the larger 60 and 90. The larger vehicles share the scalable platform architecture and the 40s will use a new smaller platform. Across this range, Volvo is only using one engine family that currently has gas and diesel four-cylinder engines with natural aspiration, turbocharging, and combined turbo and supercharging. With a single engine family, engineering 48V capability should be straightforward. Even the PHEVs utilize this same engine with a through-the-road hybrid architecture that uses the engine with a conventional automatic transmission at the front axle and electric drive for the rear axle.

With a limited component set on only two core platforms, this transition should be manageable for a company of Volvo’s size. Geely can also leverage the technologies developed by Volvo, just as prior owner Ford did for many years. Numerous Ford vehicles, including the Taurus, Flex, and Explorer, still utilize a platform originally designed by Volvo in the 1990s. Geely can take both the powertrain and automation technologies developed by Volvo for its domestic brands, including the new Lync & Co. EVs.

For Volvo, utilizing light and strong electrification across its premium vehicle lineup will help it to meet increasingly stringent efficiency and greenhouse gas emissions standards in Europe and China, where it has seen significant growth. All automakers are looking at varying degrees of electrification as a strategy to meet these standards in a cost-effective way, as noted in Navigant Research’s Automotive Fuel Efficiency Strategies report. The difference is mostly in degree and configuration. As a premium brand, Volvo’s customers are also more likely to absorb the added cost of these technologies.

 

The Race to Control the Automated Vehicle

— June 14, 2017

Since the birth of the automobile, manufacturers have raced to claim the most power and best performance. The continuing evolution of the internal combustion engine has been a key component in that competition. That’s all about to change. As we begin the transition to automated and electrified vehicles that are programmed to obey speed limits and play nice with other road users, the performance benchmark for satisfying those in the vehicle shifts from the propulsion system to the computing platform, with both old and new players trying to grab a slice of the prize.

The situational awareness needed by highly automated vehicles (HAVs) requires data from sensors and communications links to be fused into a coherent, real-time 3D image of the space around the vehicle. Current semi-independent systems such as stability control, adaptive cruise control, and lane keeping assist each use discrete sensors, electronic control units (ECUs), and related software. More limited feature set and sensor inputs allow them to work with relatively low powered processors by modern computing standards.

Old Processors Aren’t Good Enough

Those aging, low power processors simply aren’t up to the task of managing HAVs. Thus, we have the integration of these systems under a single umbrella computing platform with more input signals than ever. During early development of automated driving, vehicles were packed full of server racks to handle the necessary processing. Production viability requires that to be condensed down to a much smaller package that consumes far less electrical power than the kilowatts used by those servers with reduced heat generation.

Best known for its graphics processors used in video games and editing, Nvidia has grabbed headlines with its Drive PX2 development platform. At just $10,000, this is an ECU for automated driving development utilized by many of the companies working in this space. It is currently too expensive for mass production. At the 2017 CES, supplier ZF announced that it would commercialize this platform as the ProAI ECU in 2018. Bosch made a similar announcement in March, but it will use a repackaged version that combines the graphics processing unit (GPU) and CPU into a single unit. Toyota recently announced that it too would use the Nvidia platform.

Intel Is Continually Making Strategic Acquisitions

Meanwhile, Intel is moving aggressively to expand its footprint in the HAV space. In 2016, BMW announced that it was building its automated driving technology using Intel CPUs and chips from Mobileye for sensor processing. Supplier Delphi is using the same combination with its own software in its multi-domain controller ECU. The current market leader in vision systems for lane keeping assist and collision warning, Mobileye’s next-generation chips are considered so capable that Intel decided to acquire the company for $15 billion. This follows Intel’s 2015 acquisition of Altera for its powerful field programmable gate array (FPGA) processors. Combinations of Intel CPUs, Altera FPGAs, and Mobileye sensor processors are now being made available to manufacturers as the Intel Go platform.

The traditional automotive chip suppliers don’t intend to be left out of the competition either. NXP, which was spun off from consumer electronics giant Philips, acquired Motorola spinoff Freescale in 2015 and is currently in the process of being acquired by Qualcomm as part of a larger effort to power HAVs. Japanese supplier Renesas already provides processing power for many driver assist systems and wants in on the HAV action as well.

With performance, reliability, and thermal management more important than ever in HAVs and the market projected to grow into the tens of millions of vehicles annually by the late 2020s, don’t expect to see any slowdown in the evolution of these computing platforms anytime soon.

 

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