Increasingly, the future of the automotive industry is being defined by the advancement of autonomous and electric vehicles. These technologies will change the way that cars are designed, manufactured, and driven. While this may have an adverse effect on the branding and messaging around new EV cars, it will also allow them to gain market share from conventional vehicles. In addition, the car will become a platform, allowing drivers to interact with the vehicle through apps and other technology. Software competence will become an important factor in determining what a car should do, and add-ons and software subscriptions will likely become more commonplace.
Electrified vehicles will gain market share from conventional vehicles
Electrified vehicles are on track to gain market share from conventional vehicles in the coming years, with China, Europe, and the United States accounting for more than 95% of the global market. However, there is still a long way to go before all of the world’s car buyers decide to switch to EVs.
The market is mainly driven by regulation. The European Commission has mandated stricter emissions targets for automakers, requiring 60 percent of all new vehicles sold to be fully electric by 2030. There are also generous subsidies for consumers and investment in charging infrastructure. Incentives to buy electric cars also exist in several states, including California.
EV sales in the United States reached 3.4% of new car sales in 2021. In fact, the share of electric vehicles is predicted to rise to 65 percent by 2030, exceeding current regulatory targets.
Connectivity and autonomous technology will allow the car to become a platform for drivers
Whether you’re planning to buy a new car or you’re considering an upgrade, you may be wondering about connectivity and autonomous technology. These technologies will not only help you navigate your vehicle, they may also make driving safer.
Autonomous technology involves sensors, software, and other components that work together to control the vehicle. These vehicles have the ability to respond to questions, respond to other vehicles, and even control their speed based on the traffic conditions.
Connectivity is an additional sensor that autonomous technology needs to operate. It allows cars to share information with each other and with the infrastructure. This will help vehicles react to danger before it occurs. The more data that vehicles gather, the more nuanced driving decisions can be made.
Branding and messaging around new EV cars will lose distinctiveness over their green credentials
Despite the hype, branding and messaging around new EV cars will lose their luster once they gain a foothold in the mainstream. There are a number of reasons for this.
First, consumers will need guidance throughout the EV transition. They will need to know what to expect in terms of performance, charging, range, and safety. They will also need to be convinced that the new brand is different, believable, and maintainable.
Second, there are a number of new entrants to the automotive space. These include non-OEM online retailers who have received large sums of funding and made many acquisitions.
Third, a significant number of consumers would pay a premium for an EV. A survey by EY Mobility Lens found that over a quarter of consumers would pay a premium of up to 10% for an EV.
Software competence is becoming a key differentiation factor
Among the automotive industry’s many challenges, the software competence of its players is becoming an increasingly critical factor for future success. This requires a comprehensive transformation of its software R&D capabilities.
Many automotive companies fall short of the standards needed for software development. They are lacking an organizational framework that supports large-scale software development. They also fall short of key retention factors for software engineers. This puts them at risk of falling behind competitors, facing budget overruns, and falling behind new entrants.