Gartner predicts that 70% of vehicles sold will use Android Automotive operating system by 2028, up from less than 1% today.
The technology research firm made this projection as it anticipates digital giants such as Amazon Web Services (AWS), Google, Alibaba or Tencent, further expand their footprint in vehicle technology this year.
“These tech companies are bringing the car closer to their respective ecosystems, which, in turn, opens new vehicle-connected services,” said Pedro Pacheco, senior research director at Gartner.
He added: “As developing technology and software on their own is difficult, car companies can either partner with digital giants to succeed in turning software into a main moneymaker or build vast in-house resources to achieve it mostly on their own.”
Software is king
Pacheco noted that for the last 100 years, automakers have focused on the mechanical side of car development and have mostly left software to other parties.
“As digital technology becomes the differentiator in the car, software will become the main profitability growth driver for automakers. Ultimately, the goal for original equipment manufacturers (OEMs) will be to turn into tech or software companies,” said Pacheco.
Indeed, Gartner sees that partnerships between tech companies and automakers will increase in the years ahead.
In 2022, this collaboration between these two sectors will gain momentum particularly in the areas of open data and open source, as several tech companies last year create open-source vehicle architecture operation systems and open electric vehicle (EV) platform
In addition, automotive companies will increasingly look at data in a similar way to that of the tech world.
“Their aim is not to sell data, but to build or integrate ecosystems that will allow them to access a broader diversity of data, with the purpose of developing more compelling features or digital services,” said Pacheco.
Automakers to ramp up OTA as main digital revenue channel
Last year saw major changes in the automotive over-the-air (OTA) software market when several car manufacturers began to offer software updates.
As most automakers have updated the hardware on the vehicles to enable software updates, they will now begin to shift to a revenue model that is based on services rather than the sale of the asset.
Gartner analysts predict that by 2023, half of the top 10 automakers will offer unlocks and capability upgrades through software updates that can be purchased after the sale of the vehicle.
Hurdles persist for commercialisation of autonomous vehicles
Despite sensing technologies improving, perception algorithms becoming more sophisticated and regulations and standards progressing, Gartner expects developers of autonomous vehicles continue to struggle to scale autonomous operations to new cities or geographies.
Automakers have begun to announce Level 3 autonomous driving cars and are working on the deployment of Level 4 self-driving trucks and commercial robotaxis. However, proving the safety and effectiveness of autonomous technology is taking a long time and extensive simulation and real-world testing are making commercialization slow and expensive.
In addition, issues such as liability in the event of an accident, associated legal and societal considerations, such as how human driven vehicles will interact with an AI-driven vehicle, are adding to the challenge.
“The very high R&D costs involved for robotaxis or Level 4 trucks hinder speed of adoption in terms of coverage, but also in delivering ROI. This is ironic given that one of the main advantages associated with autonomous drive is reducing operational costs of transportation,” said Jonathan Davenport, research director at Gartner.
Nevertheless, Gartner analysts predict that by 2030, there will be four times as many Level 4 autonomous robotaxis operating globally than there are taxis in 2022.
For more details on automotive technology trends for 2022, click here.