Software-defined vehicles are at the core of new mobility: Evangelos Simoudis

The expert on AI, new mobility and corporate innovation talks about his new book, shares insights on emerging mobility patterns, and on how AI is transforming the automotive industry

By Anitha Moosath

Published: Jan 8, 2025 05:01:52 PM IST

Updated: Jan 8, 2025 05:05:38 PM IST

Evangelos Simoudis, author and an expert on artificial intelligence (AI), new mobility, and corporate innovation.

Evangelos Simoudis, author of The Flagship Experience: How AI And Software-Defined Vehicles Will Revolutionize The Automotive Customer Experience, is an expert on artificial intelligence (AI), new mobility, and corporate innovation. His firm, Synapse Partners, is investing in AI startups and advising senior management teams of large organisations on AI and new business models. In an interview with Forbes India, he explains how automakers can create a new experience around software-defined vehicles and drive higher customer loyalty. Edited excerpts:

Q. Could you give us an overview of the shift in mobility patterns and its impact on the automotive industry?

While overall mobility levels returned to their pre-pandemic norms, urban mobility patterns continue to change. Data from Inrix shows heavier commuting-related congestion during the middle of the workweek, an increase in active mobility (walking, biking, and use of scooters), and in the use of privately owned vehicles, with a simultaneous decrease in public transportation usage.

Increase in the use of privately owned vehicles would have been good news for the automotive industry. However, increasing inflation and interest rates and the high cost of the technologies that need to be incorporated into vehicles to address new safety- and emissions-related regulations – for example, EU’s Automatic Emergency Braking and the US’s latest emission standards -- are making new vehicles expensive.

In addition, significant layoffs in many industries, including high technology, retail, manufacturing, and others, resulted in decreasing new vehicle sales. Consumers keep their existing vehicles longer. When it comes to acquiring a new vehicle, there is a preference for leasing rather than outright purchase.

Q. What do you mean by ‘flagship experience’? How would you build a business case for it?

The Flagship Experience is a comprehensive customer experience blueprint that customer-centric automakers can offer with their Software-Defined Vehicles (SDVs). It covers activities inside the vehicle, such as personalising the cabin to each occupant’s needs, as well as outside the vehicle, such as predicting when the vehicle needs to be serviced to address a problem before it happens and how it will be serviced to maximise the owner’s convenience. The Flagship Experience revolves around the end-to-end customer journey that covers the entire relationship between the customer and the OEM, starting at the time the customer first interacts with the OEM’s brand and ending when the customer no longer owns any of the automaker’s vehicles.

The software-defined new energy vehicle is at the core of new mobility and is a big data generator. The generated data describes the state of the vehicle but also various behaviours of the cabin’s occupants. In addition, as transportation infrastructures are digitised, they become big data generators. More data is generated as SDVs interact with the digitized transportation infrastructures.

AI is a key ingredient to every aspect of new mobility, including the Flagship Experience. Data is the most important input for today’s AI systems. By properly and extensively applying AI to the data that is collected from all these sources, the customer-centric automaker can determine when to provide value to the customer, the form this value will have, and what to ask from the recipient of this value in return.

Q. How do software-defined vehicles compare with traditional ones?

SDVs are vehicles whose functions are primarily enabled through software. SDVs differ from conventional vehicles over five distinct dimensions. They enable continuous improvements of the vehicle and its in-cabin experience through over-the-air (OTA) software updates, support higher levels of driving automation, enhance their new energy powertrain through intelligent power management, enable the control, optimisation, and management of a fleet, and facilitate the vehicle’s interaction with the transportation infrastructure. A prime example of a SDV capability not found in conventional vehicles is the “autopark” self-parking function of Tesla vehicles, and the “gear guard” remote monitoring security system found in Rivian vehicles.

Also read: 5 Indian deeptech startups changing the auto industry with new tech and modern products

Q. Challenges traditional carmakers will face while transitioning to SDVs…

An SDV may be developed using a “clean sheet approach” or a “retrofit approach.” In the retrofit approach, a conventional vehicle architecture is transformed into a domain-based architecture on which the SDV is based. The Ford Mach-E was developed using the retrofit approach. In the “clean sheet approach,” a zone-based architecture is developed from scratch, bringing together the vehicle’s software and hardware platforms. It provides easier evolution of the vehicle’s architecture as computing power increases, easier OTA updates for the entire vehicle, better in-vehicle data management, lower manufacturing cost and increased manufacturing speed, and easier implementation of the Flagship Experience.

Incumbent automakers are ambivalent regarding how to proceed with SDV development. Clean sheet approaches require larger investments, hiring people with the necessary skillsets in areas in which OEMs have not traditionally excelled, such as modern platform software, organisational and culture changes, and the radical rethinking of the manufacturing process and partner ecosystems. The recent partnership between VW and Rivian provides a good example of the difficulties incumbent automakers have in developing clean-sheet SDVs.

Q. With tech giants entering the space, how do you see competition evolving?

Incumbent automakers are facing strong competition from Chinese and newcomer automakers. These competitors offer vehicles that address the pricing, technological, and environmentally driven characteristics consumers are looking for. This competition is playing out globally in real time. In addition, incumbent and newcomer automakers are adopting new partners to provide them with the necessary software, semiconductor, and cloud computing technologies for the SDVs they are developing. Companies such as Nvidia, Qualcomm, AWS, and KPIT are quickly emerging as prominent members of such partner networks.

Q. What is the role of collaboration in shaping the future of the industry?

Automakers and their suppliers, new and old, must navigate a new complex crossroads that requires hard decisions and radical transformations at the core of which will be partnerships between the industry’s members, and between industry and government. Many of these partnerships will be unorthodox. Partnering even with competitors can have multiple advantages. It will enable the partners to share the costs of innovation investments, shorten the time to address important market opportunities and learn critical new processes.

This will require investing in areas where each partner possesses differentiated and important competencies. For example, in addition to Rivian, VW recently partnered with XPeng to produce software-defined new energy vehicles with high levels of driving automation for the Chinese market. In both these cases, VW brings to the partnership its manufacturing prowess and global distribution capability, whereas Rivian and XPeng bring their software-defined vehicle technology strengths.

Q. What are the broader implications of this transformation in the automotive industry?

The automotive industry is undergoing its third major transformation in its one-hundred-and-thirty-five-year history. This can help automakers adapt to a new mobility landscape whose formation was accelerated by the pandemic.

Customers want vehicles that align with their values, address their needs, and fit in their lives. Governments can combine the data generated by the SDVs with the data from their intelligent transportation infrastructures to improve their urban planning, e.g., 15-minute cities, and traffic management, e.g., congestion pricing. Software-defined new energy vehicles fit these goals. This leaves automakers at a crossroads. Should they remain vehicle-centric during this radical transformation or use the transformation as an opportunity to become customer-centric and expand their range of partnerships?