The Future Of Cars: A Few Thoughts On Innovation In The Automotive Sector

Despite the innovation in the automotive space, another argument is that the actual concept of the car might need to change for global sustainability.

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The recent deal, then no-deal, between Apple and Hyundai got me thinking about the future of cars. After 100 years of incremental innovation in the automotive industry, it seems like this is the decade for real change to happen.  

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Apple wants into the market, and it has done so since 2018. It first started talks over a car partnership in 2018, another person familiar with the matter previously told Reuters. Although the no-deal with Hyundai is no doubt a setback for Apple, it will be interesting to see how quickly it can progress with its plans to overcome this challenge, with the determination it needs to succeed.

At the same time, Tesla sees 50% average annual growth in vehicle deliveries, with 2021 expected to be faster than that pace. In 2020, deliveries grew 36% to 499,647. The company reported adjusted earnings of 80 cents per share, missing estimates of 90 cents. Still, earnings leapt 95% from the year-ago period, and it was its sixth straight quarter of profitability. Revenue jumped 46% to US$10.74 billion, topping estimates of $10.1 billion.

General Motors (GM) made its first big play to compete with new car models by airing an ad during Super Bowl 55, where Will Ferrell promotes electric vehicles. Over in Norway, over half of all cars sold are electric; however, in the US, that figure is just 4%, according to GM's data. It’s clear that GM wants to get US citizens excited for a whole range of new electric vehicles coming by 2025, so they can jump on the bandwagon like Norway.

From a telco perspective, innovation in cars means more connected devices on the road that are dependent on the networks the industry provides. The challenge for telcos will be to be part of this innovative ecosystem and partner effectively to get in the game. It’s a diverse and multifaceted market, so telcos will need to expand their skillsets through partnerships, and define the role they want to play in the market.

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When it comes to connectivity, manufacturers will have to provide a tamper-proof digital identity for all vehicles on the network. The flow of data across multiple mobile networks enables easy tracking of insurance, driver safety, predictive maintenance, and fleet management, but is also a vulnerability. A secure 5G mobile ecosystem is fundamental to the growth of innovation in automotive. I also think the internet of things (IoT) is going to play a huge role in this. Cars are becoming sensor-laden mobile IoT devices. It isn’t just telematics; IoT is playing a role in vehicle to everything (V2X) connectivity.

An interesting example of this tech in use is Savari, a Californian startup that is making use of V2X technologies. It is developing software and hardware solutions for vehicle manufacturers to equip vehicles with dedicated short-range communications (DSRC) sensors and V2X applications. This is ideal as it increases traffic safety and efficiency by connecting cars to other cars, traffic lights, smartphones, and pedestrians.

Despite the innovation in the automotive space, another argument is that the actual concept of the car might need to change for global sustainability. The question is whether we should be encouraging single occupant vehicles to create traffic jams in the future. Should that concept be blown up and totally reimagined?

A totally-pedestrianized city is set to create 380,000 jobs in Saudi Arabia as its Crown Prince Mohammed bin Salman launched The Line, the latest piece of the $500 billion smart city project, Neom. Once complete, the carbon emission-free city aims to contribute almost $48 billion to the Saudi economy, but it is purpose-built to not include cars. Neom is an ambitious project, but it has the benefit of being a purely greenfield site, while much of the world doesn’t have the luxury of starting from scratch.

A similar “carbon-neutral” future is the end game, but until then, I look forward to what Tesla, Apple and GM can do in reimagining what has been a very conservative industry for a very long time. I’m excited to see how the industry evolves and the continued intersection of technology, transportation, and networking.

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Hany Aly

Written By

Hany Aly is an executive and investor focused on the startup ecosystem in the Middle East. For more than 20 years, he has created and executed strategies to support innovation, digital transformation, and the growth of telecoms and information communication technology (ICT) organizations across the region.