New business models, incl. data monetization and circular strategies, could add another $1 trillion to Automotive Revenues by 2030. Find the biggest opportunities with the Automotive Trend Radar.

The automotive industry is undergoing massive change driven by digital transformation, automation and energy transition.

New business models, incl. data monetization, shared mobility, and circular strategies, could add another $1 trillion to Automotive Revenues by 2030, according to McKinsey.

Change creates tremendous opportunities, as demonstrated by the waves of new market entrants, such as tech giants, and the proliferation of start-ups, among other indicators.

The Auto2x Automotive Trend Radar helps you scout and invest in opportunities with the highest market potential, business readiness and technological maturity to unlock new revenue pools, advance product development or help you innovate and find best-fit partners for commercial or technology development.

It is a crucial tool to empower technology scouting, partner discovery, strategic planning and execution for Corporate Strategy, Innovation, New Product Development, R&D and Engineering teams.

How does the Technology Radar work?

Auto2x’s Automotive Trend Radar Radar uniquely synthesises innovation metrics for incumbent and emerging technologies, business data: market sizing, market share, growth rates; and interviews with experts, such as CEOs, entrepreneurs and academics.

Auto2x leverages a taxonomy of +1400 technologies in Automotive, including AI, Connected, Autonomous Driving, Electrified powertrains & Circular Mobility

✅ Check which Technologies in AI, Autonomous Driving, Connected Cars and New Business models present strong Market Potential
✅ Understand the Technology Readiness to help you time the market
✅ Find best-in-class suppliers and innovators to partner with, invest in or source from.

The basic principle is to develop a robust scouting methodology that captures technological disruption and market movements and prioritises the identified items into Act, Prepare and Watch.

• Act: These technologies or opportunities are your top priority when investing in or leveraging to build new products or find partners to enter new markets.
• Prepare: the action point here is to position yourself to take advantage of the upcoming development or emerging opportunity.
• Watch: the time horizon for these innovations or items doesn’t require immediate action.

The Automotive Trend radar assesses the score for each opportunity based on 3 Parameters:

1. Market Potential to show how big the market is, how fast it’s growing, what is the level of competition;
2. Technological Maturity: Technology Readiness Level (TRL, Patent and Scientific Literature)
3. Market Strategies, which covers business readiness metrics.

Who is it for?

• Innovation teams can use the Radar to build insightful technology roadmaps and understand what new functionality or new products they can bring from the evolution of technology;
• Strategy teams can identify opportunities and prioritise them to allocate resources better and improve ROI.
• Investment and Venture Capital teams (VC) can use the Radar to scout for attractive investment targets, for example, finding start-ups operating in a segment with high potential that aligns with their investment thesis.
• Finally, the Radar also serves as an outside-in perspective to help shed light on your blind spots

Auto2x leverages a taxonomy of 1400+ technologies in Automotive, including AI, Autonomous Driving, Electrified powertrains and Circular Mobility.

The comprehensive taxonomy allows you to deep dive into your area of specialisation.

1. AI in Automotive: captures the impact of advancements in Computer Vision, NLP, Generative AI and other technologies on EVs, ADAS, etc.
2. Connected Cars: the digitalization of the vehicle interior services, connectivity (5G-6G), Human Machine Interface (HMI) & Software-Defined Vehicles (SDV);
3. Autonomous Driving captures hardware (sensors) and software, business models for cars, trucks, motorbikes, shared mobility and other use cases.
4. New Business Models, such as component-as-a-service, data monetization, automated ride-hailing, electrified car-sharing, and multi-modal transport;
5. Electrified: Future of Powertrain, such as BEVs, PHEVs, HEVs, FC, clean ICE, Electric Vehicle charging, fuel cells, batteries, e-motors, and other;
6. Circular Autos or Climate-Neutral Cars include sustainable materials, Circular Mobility, and sustainable manufacturing, among others.

Artificial Intelligence Driving Automotive to the Future. AI Assistants are expanding beyond consumer electronics and vehicle infotainment systems to sales, marketing and engineering across multiple industries, including Healthcare, Sales, Messaging and Human Resources. Auto2x has identified 42 companies active in this space which have attracted $578 Million in funding.

Autonomous Driving Technologies and Opportunities to Act on from the Automotive Trend Radar. New ADAS features for better perception, customer experience, digital wallets and electric AVs will contribute €21 Billion by 2025 together with increasing sensor content.

Next-generation Digital vehicles must integrate new, diverse technologies and complex logical operations; the hardware architecture has to support advanced software functionality and upgradability.

Car-Metaverse enables in-cabin features, remote access and virtual development for immersive-reality experiences powered by XR (VR & AR).

Electrification of passenger cars and commercial vehicles will play an important role in the journey towards a carbon-neutral society.

Find the biggest opportunities with the Automotive Trend Radar.

Software-Defined Vehicles (SDV) are the automotive industry’s term to describe a new generation of vehicles which feature advanced technologies to be continuously updated on demand and enable true connected and automated driving. Auto2x

Software is the answer to the Digitization of Automotive Industry but delivery is still challenging

Electrification, automated driving, shared mobility and connectivity push for more dedicated software development, while a large part of hardware-oriented systems becomes more standardized and commoditized.

Software & AI represent new value pools. Major Tier-1 Suppliers are already monetizing the growth. For example,

• Bosch has already been building Vehicle super-computers for ADAS & Automated driving and received more than €2.5 Billion worth of orders in this domain in 2020. They expect the market to be worth €20 Billion by 2030.
• Renault creates a new mobility unit and expects that it will account for 20% of their revenues by 2030

Bosch expects Software-Defined Vehicles will generate €200 Billion by 2030, a 3-fold increase from 2020

The digitization of the Automotive Industry demands a shift to SDVs, but challenges remain

• Learn about top innovation clusters across major technological building blocks of SDVs:

• 1. EE Architectures: Assess the roadmaps of leading carmakers and suppliers in the development of centralized architectures and their partnerships;
  2. CarOS: Learn about the rising adoption of Google’s Android Automotive OS and the competitive offerings from MBUX and other players;
  3. Open-source software development: In May 2023, General Motors joined the Eclipse Foundation, an open source software foundation, and announced its own software protocol called “uProtocol” to streamline software creation
  4. Cloud: the emergence of automotive cloud as a key enabler for cloud-based ADAS development, development of offerings from carmakers and the role of Microsoft, Amazon among others;
  5. Over-the-Air-updates (OTA), and the opportunities for features-on-demand;
  6. Digital Twin
  7. Artificial Intelligence, e.g. AI voice Assistants

• Understand the progress of regulation and how to overcome the challenges of continuous homologation and certification of new vehicle features through OTA updates;
• Assess the strategies and capabilities of leading carmakers, suppliers and emerging start-ups;
• Discover forecasts of adoption and scenarios for the evolution of competition.

Cars are becoming Software-Centric which creates opportunities and challenges in development cost, complexity, security and monetization

One of the biggest challenges facing today’s vehicle networks is the vast amount of data that is produced—and will exponentially increase as vehicles become increasingly autonomous and connected and are required to process vehicle-to-vehicle and vehicle-to-infrastructure communications.

SDV create new opportunities to reduce the complexity from the rise of features and variants, accelerate feature development time, streamline costs and enable SOTA updates on demand.

Lower software development cost is key for faster and more efficient automotive development. Re-usable software platforms are needed to lower development costs.

Finally, Android Automotive OS will become the mainstream operating system enabling carmakers to offer intuitive HMI and 3^rd parties to integrate connected services.

SDVs will unlock the potential of Cloud-centric development and lifecycle

The benefit of cloud-centric development is the virtual development of ADAS features, virtual Validation, as well as Cloud-streaming content for infotainment, such as game-streaming.

But players face challenges with Cloud integration.

“VW’s AC is expected to handle data from millions of vehicles per day, with the goal of delivering connected experiences to customers around the globe starting in 2022 – a key part of the Volkswagen Group strategy to become a leading automotive software innovator”. (Source: VW, January 2021)

Built in-house software systems for in-car and vehicle-related services to develop differentiating software parts

In an effort to replicate Tesla’s successful model of developing in-house SW systems, traditional car makers like VW, opt to develop their one in-house SW platform. This approach promotes harmonized integration of future embedded hardware and software systems but needs a large number of vehicles in order to mitigate the increasing per/unit development cost.

VW has recently announced that it will develop its own standard software platform and will boost the in-house share of software development, in order to achieve a 60 per cent in-house software production by 2025.

According to the Group’s announcement, by 2025, all new Group vehicles will be equipped with VW’s operating system “vw.os” and will be connected to the Volkswagen Automotive Cloud. In order to confront production complexity issues, emerging especially from the SW-HW integration, VW plans to produce a smaller number of versions in which the individual configuration will no longer be set through the hardware when the vehicle is purchased; instead, desired functions will be available on-demand at any time using the in-vehicle digital ecosystem.

Toyota has recently established the Woven by Toyota, a company that focuses on the development of a more agile “software-first” in-vehicle ecosystem for future Toyota vehicles. The company has developed the Automatic Map Generation (Geo) which aims at dramatically improve the resolution of road gradient information by utilizing Toyota’s vast amount of vehicle data and increase the frequency of 3D map updates from 6 months to the same day. In addition, Woven by Toyota, currently integrates Toyota’s operating platform Arene OS; in order to enhance its ADAS, connectivity and cockpit capabilities.

The current E/E automotive architecture has reached its scalability limits

The requirements for autonomous driving, connected cars and electrification are pushing for new vehicle architectures to address flexibility, cost, speed, and compliance.

Players are moving towards a Domain or Zonal E/E architecture to support mass-electrification and connected cars.

With the move from domain-based architecture to zonal-based architecture, 10G+ links (typically redundant) between the electronic control units (ECU) will be required.

To enable SDVs, a Service Oriented Architecture (SOA) is created that hosts applications and services that communicate and exchange data. New functionality in SDV can be easily added if SOA is present.

Software-Defined Vehicles will open new monetization strategies with “Features-on-demand” (FoD)

Data monetization is a huge opportunity for carmakers, but it’s hindered by currect architectures, connectivity and OTA. Automotive players need to identify the most suitable applications and guarantee owner / user privacy.

Tesla has already enabled FOD for its ADAS features. For the first time, Audi is offering its customers in  Norway and Germany the possibility to book selected functions on demand, even after  purchasing the vehicle. Customers can book functions in the areas of  lighting, driver assistance, and infotainment  flexibly and as required.

Domains such as vehicle or component repair, predictive maintenance, software over-the-air updates, and battery-as-a-service create new opportunities for players.

But compliance and regulatory challenges for continuous homologation need to be resolved

Continuous compliance of OTA updates is still a challenge because standards are vague.

What’s more, the regulatory framework for SDV features is not harmonized across the world.

A streamlined regulatory approval of newly-added features using robust certification frameworks could fast-track adoption and remove the roadblocks autonomous driving is facing.

Table of Contents

1. Executive Summary
2. Opportunities in SDVs from our Ranking of Attractiveness & Tech Readiness
3. Key Technology Trends driving Software-Defined Vehicles
   1. Role of Automotive Software in value creation
   2. Software development hurdles in the automobile sector
   3. Car OS: State of the art
   4. Open-source software
   5. Cloud
   6. OTA & mapping
   7. In-vehicle Networking / Ethernet
   8. Cyber Security
   9. AI in Automotive for Software-Defined Vehicles
   10. Evolution of E/E Architecture for SDV
       1. Different approaches to the evolution of EE Architecture for SDV
       2. SOA (Service Oriented Architecture) 
       3. Zonal EE
       4. Outlook for EE
   11. Software-Define Vehicles and Sustainability
   12. SDV-Feature economics & Monetization
   13. Evolution of SDV maintenance: repair, SW, OTA, Cyber, batterie
4. Player strategies
   1. BMW
   2. BYD
   3. Geely
   4. General Motors
   5. Mercedes-Benz
   6. Renault
   7. Stellantis
   8. SAIC
   9. Tesla
   10. VW Group
5. Benchmarking of SDV Suppliers by Strategy, Technology & Market Leadership
   1. Amazon
   2. APTIV
   3. Bosch
   4. Baidu
   5. Continental
   6. Huawei
   7. Valeo
6. Regulation for continuous homologation
7. Regional Hubs: China, USA, Europe and emerging hubs

Read this report to learn about

• The status of the regulatory landscape for the transition from Supervised to Conditionally & Fully-Unsupervised-Driving (SAE Level 3-5).
• The mandatory features of Active Safety, regulations for V2X, and ethical AI.
• Roadmaps and timelines of regulatory mandates and policies in Europe, the USA, China, Japan, the UK and other geographies
• The impact of regulation on market competition and technology adoption.

In this report, we define Autonomous Driving regulation or Autonomous Car regulations as the regulatory and legal developments regarding the transition from a ‘’driver-centric’’ regulation, which includes

• the “assistive” or “Supervised” ADAS / SAE Level 0-2,
• to “Conditionally” (SAE Level 3)
• & “Completely-Unsupervised” driving (Level 4-5) with or without driver controls, which are in the epicentre of regulatory developments because they will allow (limited to specific use cases or full) hands-off the steering wheel, eyes-off and eventually brain-off.
• In addition to approval and homologations, this framework also includes the transfer of liability from the driver to the ADS as well as issues around Automotive Cyber Security and V2V-V2I.

The lack of a harmonized regulatory framework for Level 4-Automated Driving restricts deployment

The lack of harmonization of Autonomous car regulations across major car markets remains the key roadblock to the deployment of L3-4 autonomous driving.

Carmakers and developers of autonomous driving technology face compliance regulatory requirements that are different across major car markets. For example, for countries such as Japan, China, and the EU members that are signatories of the UNECE regulation, there is no framework for type approval of Level 4.

• Germany, was one of the first countries globally to allow testing of L4 but this applies to robotaxis and autonomous shuttles, not private car ownership.
• On the other hand, the U.S. follows self-certification with relevant FMVSS & voluntary guidelines for L4 testing and deployment but there is no federal regulation in place.
• In Apr’22, Japan revised its traffic rules for Level 4 autonomy with enforcement from May 2023.

SAE Lv.4-Full automation describes the scenario where drivers can completely hand over vehicle control and monitoring to the Automated Driving System for specific driving scenarios under the Operational Design Domain of the systems, e.g. Lv.4-Parking Valet parking or L4.-Driving Cruising Chauffeur.

Until today, the only vehicles allowed to operate in Lv.4 Autonomous Driving are robotaxis from Waymo and others. In private car ownership, the highest level of autonomous driving available in the market is Level 3-Conditional Automation.

Regulatory amendment in UNECE finally allowed Level 3-Autonomy in 2021

After almost 3 years in the making, the amendment of UNECE Reg. No.79-Steering Equipment allows Level 3 in countries adopting the new rules called “Automated Lane Keeping System”.

The ALKS regulation applies to 60 countries including the UK, Japan, and EU member states since January 2021, to enable the safe introduction of ‘Level 3’ automation features in certain traffic environments. 

UN regulations manage pre-sale Type Approval, i.e. setting out clear performance-based requirements for car manufacturers before ALKS-equipped vehicles can be sold within countries ratifying the autonomous car regulations.

“UNECE’s Automated Lane Keeping System regulation is applicable for LEVEL 3, for low-speed (60 km/h) highway-only”

Global deployment of Level 3 is still fragmented

We see Europe and Japan benefiting from the changes in Autonomous car regulations due to the combination of technological capabilities in Level 3 from their domestic carmakers and the favourable political framework to remove roadblocks and establish their respective markets as key innovation hubs.

Finally, the world’s largest car market in terms of sales, China, released April 2019, national regulations on road tests for Autonomous Vehicles as a part of a broader drive to excel in the development of the technology and gain an advantage in the commercialization of autonomous driving technology. This comes after China halted Autonomous Vehicle trials on public roads until relevant standards for Intelligent Connected Vehicles (ICVs) come into force.

Challenges in the amendment of Autonomous Car Regulations

The transition from driver-centric regulation to Automated Driving Systems will allow the shift from Supervised driving to Conditionally (Lv3) & Completely-Unsupervised driving

Admissibility of automated driving functions depends on the driving and monitoring tasks, i.e. driver engagement, which can be derived based on the level of vehicle automation (SAE J3016 or BASt).

2016-17 saw a shift in the focus of regulation from approving pilots and testing of technologies falling under SAE Level 3/4 to discussion for amendments or event action to enable deployment of Level 3 on public roads. The most evident example was the amendment of the German Road Traffic Act which allows Level 3 from Sep’17, once these systems are type-approved by UNECE regulations.

1. As automotive and technology players race to develop and deploy higher vehicle autonomy to unlock enhanced safety in passenger cars and commercial vehicles, new revenues (pricing models of Lv.4, AMoD) and USPs, the slow amendment progress of regulation and the lack of harmonization create barriers for their commercialisation strategies
2. Autonomous car regulations need to transition from driver-centric to Automated Driving Systems (ADS) to allow today’s Supervised driving (SAE Level 0-2) to shift to Conditionally (SAE Lv3) & Completely-Unsupervised driving; (Lv.4-5). But lack of regulatory standardization across major car markets will create regional hubs (aka “islands”, such as cities where technology is allowed) and require design variation from OEMs
3. The vehicle automation mix is changing with the proliferation of Lv2 driving features. In 2020, Euro NCAP released the ratings of 10 Lv.2 / Highway Assist systems marking Audi’s Q8, BMW 3, and GLE as “Very Good”.
4. With the introduction of Lv.3 allowing Conditionally-Unsupervised driving and vehicles with different levels of autonomy co-existing on the road, clear safety requirements are needed in the form of standardized, international Autonomous car regulations which could mitigate scepticism of higher vehicle autonomy.

We expect Autonomous car regulations to accelerate as key car markets boost their efforts to lead the global Autonomous Vehicle scene -but also guarantee safe and secure deployment.

Level-1 Active Safety Regulations will push ADAS penetration & passenger monitoring

Upcoming regulatory & market requirements push for the expansion of monitoring from drivers to occupants & drive holistic cabin sensing

Since mid-2022, all motor vehicles (incl. trucks, buses, vans and sport utility vehicles) in the EU must be equipped with Driver Monitoring Systems to mitigate drowsiness and distraction.

The regulations will apply 30 months after entry into force with a longer application date provided for a limited number of features in order to allow OEMs to adapt their production to the new requirements.

Automotive Cyber Security becomes mandatory

Over the next decade, as transportation progresses from Connected and Partially-Automated to Highly and Fully-automated, Smart and Shared Mobility, the addition of new sensors and ECUs, new architecture, more Connected devices and V2X will significantly enlarge the vehicle ‘’attack surface”.

Identifying, mitigating and responding to cyber threats will not only be paramount for physical road and vehicle safety but also a prerequisite for the transition towards self-driving cars.

Autonomous car regulations such as the ALKS R157 will also need to comply with cyber-security and software update requirements set out in two other new U.N. regulations. In more detail, two new regulations on automotive cybersecurity and software updates to establish clear performance and audit requirements for OEMs are coming into effect in Jan’21.

The first is the “UN Regulation on Cybersecurity and Cyber Security Management Systems” and the second the “UN Regulation on Software Updates & Software Updates Management Systems”.

Table of Contents

1. Executive Summary
   1. Regulatory amendment in UNECE to ALKS finally allowed Level 3-Autonomy from 2021
   2. Germany passes Autonomous car regulations for Level 4 to bring robotaxis & autonomous shuttles to market
   3. The U.S enhances the clarity of AV testing with the expansion of its AV-TEST INITIATIVE
   4. Automotive Cyber Security is becoming mandatory
   5. China’s commitment to ICVs could fast-track regulatory changes
   6. Data Storage to help insurance claims from accidents in L3 automated mode
   7. Active Safety Regulations will push ADAS penetration and passenger monitoring
2. Autonomous Driving Regulation for SAE LEVEL 3 Systems
   1. Automation “language” barriers confuse drivers about the capabilities of vehicles
   2. Inherent differences in regulatory process delay harmonisation
   3. How does regulation affect deployment? Favourable geographies for L3 deployment
   4. Europe: the amendment of UN R79 to R157 vs a Horizontal regulation
   5. Germany to lead AD deployment in Europe driven by supportive Autonomous car regulations
   6. Opportunities for the UK to compete as a global Autonomous Driving hub
   7. Flexible Autonomous car regulations in the U.S. but concerns over discrepancies among states
   8. China’s Regulation for Intelligent & Connected Vehicles (ICVs)
   9. Japan’s Autonomous car Regulations
   10. Summary of AD regulatory developments in other leading markets
3. Active Safety regulation for ADAS L1 & NCAP Lv.2 rating
   1. The problem with driver distraction, confusion or misuse because of ADAS UX/UI
   2. UN GSR2 mandates Active Safety equipment to tackle distraction
   3. EuroNCAP’s 2024 rating of Highway Assist / SAE Lv.2 features
4. Data recording & liability in L3-Conditional automation
   1. Learn why need Automated Driving-Event Data Recorders
   2. Regulatory guidance on data recording & storage for L3
   3. Three drivers for Data-based business models
   4. L3 automation presents challenges & opportunities for the insurance value chain
5. Automotive Cybersecurity Regulation in the major car markets
   1. The new regulations will push for the adoption and standardisation of Auto Cyber Security
   2. UN Regulation on Auto Cybersecurity: EU & Japan
   3. Two new UN Regulations on Software Updates & their Management Systems
   4. ISO/SAE 21434: a joint standard to harmonise Auto Cyber Security
   5. Automotive Cyber Security Regulatory Action in the USA
   6. What regulatory/legal action is needed to secure Connected Cars?
   7. Cyber Security for V2X Communications
6. V2X – Vehicle to Everything (V2V, V2I) regulation
   1. How could V2V and V2I communications help towards road safety?
   2. V2V isn’t a technical prerequisite for HAVs but can enhance safety
   3. Comparison of the V2X tech: DSRC 802.11P vs. C-V2X
   4. State of the art: V2V & V2I are already on the road today
   5. V2V-V2I regulatory roadmap: UN, USA and China
   6. Security and privacy in DSRC-based V2V and V2I
   7. Insights on the regulatory activity for V2X with CTO of Autotalks
7. Regulation for Artificial Intelligence in Automotive
   1. European Commission’s first attempt to regulate “high risk” AI
   2. Ethics Regulations for AI: BMW Group & Continental