Accenture Study: How Software-Defined Vehicles are Giving Rise to New Business Models

OEMs must redefine their role in the wake of the mobility transformation to remain competitive. In particular, software-defined vehicles, i.e., vehicles whose certain parameters and functions can be controlled via software, are in full trend. The primary targets here are new players in the automotive industry and technology companies seeking to explore this new world of digital mobility, experiences, and services.  

To find out how well-prepared the established OEMs are, Accenture interviewed senior automotive industry executives and conducted extensive secondary research as well as economic modeling. Accenture is partnering with IAA MOBILITY this year and is a platinum sponsor of the Main Stage in Hall A1 at the IAA Conference.   

OEMs Must Create a User Experience Inside the Car  

The result of the Accenture study: it's no longer about who sells the "best car" in terms of performance, hardware, and output. The companies that offer their customers the best overall experience with their mobility solutions—as fast as possible—will be the most successful in the future.  

Automotive technology stacks, i.e., the sum of technologies used to create and run software applications, often go far beyond the vehicle itself and encompass everything necessary for delivering connected, digital experiences and services. This includes cloud applications, V2X communication, UX, service applications like driver assistance systems, and vehicle and software platform applications. Accenture advises OEMs to clearly define how much autonomous control they want to retain in the development of technology stacks for their products. According to Accenture, OEMs have four options:  

1. OEMs build the entire technology infrastructure themselves – from the complete product to all services, from hardware to cloud backend.  
2. OEMs retain control over in-vehicle services and work with partners. For this, an open-source project is launched to create and deliver all software and services, and the development of software requirements is outsourced. According to Accenture, Mercedes-Benz and BMW are pursuing this path. They see no value in creating their own operating system or a cloud framework (e.g., for scalability reasons). Instead, they form partnerships with external providers like Google for Android Automotive or rely entirely on open source.  
3. The processing and analysis of the data that drivers need for software-defined vehicles require advanced data management capabilities as well as artificial intelligence (AI) and machine learning. Therefore, Accenture sees a sensible approach in OEMs directing their efforts towards developing highly specialized services that can also be operated with hardware and software from third-party manufacturers. Waymo and Pony.AI are examples of this approach. Each offers an advanced software stack that uses AI and machine learning to enable autonomous driving. Similarly, Baidu's Apollo aims to be an equivalent to a device operating system like Android but for software-defined vehicles.  
4. OEMs provide a platform for hardware, software, or a combination of both for others, or they open their own platform to others. Unbranded "white label" offers are sold to others who then market them under their own label. Accenture sees many different variants of this archetype, including those from providers like Flextronics and Qualcomm for autonomous driving systems.  

Accenture at IAA MOBILITY  

All approaches from Accenture’s report show: The automotive industry is undergoing changes on many fronts with software-defined vehicles. They all aim to create unique user experiences and drive the mobility of the future. However, to achieve all this and more, today's business models must be reinvented. Software-defined vehicles accelerate the shift in revenues from digital services, which will rise to 1.5 trillion US dollars by 2030.  

At the IAA MOBILITY, Accenture will host a panel discussion on September 6 from 2:00 pm to 2:45 pm on the Main Stage in Hall A1. The session will be led by Juergen Reers (Senior Managing Director Global Industry Sector Lead, Automotive & Mobility at Accenture) and will feature a panel of leading indusry experts from across the mobility ecosystem. They will discuss how data and AI can reinvent the transport of people and goods, and how digital services can contribute to defining the brand experience inside, around, and beyond the vehicle.