Suppliers, auto makers in hot pursuit of new tech

A great upheaval is taking place in the global auto industry. Not just because the vehicles, parts, technologies and key players are changing, but also because those players are no longer certain about who will do what in the future.

Unprecedented opportunities are beckoning. But the unanswered question is, whose opportunities are they?

Picture a "smart city" in 2030, with a transportation grid that manages autonomous cars, steers driverless robotaxis and keeps passengers and pedestrians safe.

Who will manage the sensors, connectivity and data centers of that grid? Who will design the artificial intelligence that an automated car needs to choose its proper route? And who will design made-to-order interiors for robotaxi fleets owned by Uber, Lyft or China's Didi Chuxing?

The answers are up for grabs.

Today, smart transportation is a jigsaw puzzle beyond the expertise of any one car maker. And in response, over the coming decade, auto makers likely will form alliances with key technology suppliers to guarantee access to software, computer chips and sensors.

That trend already has begun.

BMW has partnered with Intel and Delphi to develop a self-driving fleet by 2021. Volvo is partnering with safety supplier Autoliv and Nvidia, while Toyota has teamed up with chip maker Renesas and Denso.

That's certainly only the beginning.

Robotaxi services under development by Uber, Lyft and Didi Chuxing may someday buy made-to-order interiors from key seat makers such as Adient and Faurecia. Technological smart cities will hire mega-suppliers such as Bosch to manage their parking garages, data centers and traffic signals.

Here's how three companies—Intel, Adient and Bosch—are preparing for this era.

Artificial intelligence

The car ads of 2030 won't promote horsepower. More likely, they will brag about the computing power of processors with names such as Xeon, Snapdragon and Drive PX.

The tech companies that make those chips—Intel, Qualcomm and Nvidia—enjoy economies of scale that are bigger than the auto industry. The chip business spans consumer electronics, transportation and anything else that requires artificial intelligence. In Silicon Valley, autos are just another market segment.

This lesson was driven home Oct. 17, when Intel announced it was shipping a processor dubbed Nervana to Facebook for evaluation. The Nervana chip, which is optimized for deep learning, will help Facebook find patterns in the mountain of data generated by its users. According to The Wall Street Journal, Intel also is touting Nervana for weather prediction, medical diagnoses, financial fraud detection and—last but not least—self-driving cars.

"Artificial intelligence is clearly one of our strategic pillars as a company," said Doug Davis, senior vice president of Intel's automated driving group. "It will position us not just for autonomous cars, but drones, buses, trucks and trains."

When BMW markets self-driving cars, its vehicles will get their artificial intelligence from Intel's Xeon chip, while its data centers might be powered by the Nervana processors.

Robotaxis

Consumers today tend to think of robotaxis as bubble-shaped little pods. But when the robotaxi truly materializes, the vehicles will have to accommodate a spectrum of users.

What sort of robotaxi would the passenger prefer? An office on wheels, perhaps? Or a rolling movie theater? Or possibly a party wagon for a group of high-spirited friends?

This means there is no one answer.

Richard Chung has begun to visualize this future as vice president of global design for seat maker Adient. Chung has assembled a design team to create concept interiors for autonomous cars. At the 2017 Detroit auto show, Chung displayed the AI17, a four-seat interior for a private vehicle. He followed up at the Frankfurt show in September with the AI18, a robotaxi interior optimized for two passengers.

Chung was tight-lipped about his next interior concept, the AI19, which will debut in Detroit in January. But he hinted that it might be for a fully autonomous vehicle—that is, no steering wheel or pedals.

These concepts are part of Adient's pitch to integrate a complete interior—seats, consoles, information displays, door panels and airbags—as a one-stop-purchase by an auto maker. This isn't the first time that proposal has been floated. Adient's corporate predecessor, Johnson Controls, pitched the one-stop idea to auto makers in the 1990s. It flopped, and JCI has now spun off its seating division.

But things have changed now, Chung said.

Creating autonomous vehicles will force auto makers to reinvent nearly every major component, including entire interiors, seats, dashboard controls, airbags and climate controls. Adient does not propose to design all of these components. Instead, it is forming alliances with other suppliers that will. Autoliv Inc. has agreed to design the airbags, while Yanfeng Automotive Interiors—a joint venture created out of another Johnson Controls spinoff—would produce instrument panels, consoles and door panels.

Yanfeng, in turn, is working with Kostal, a German specialist in cockpit controls.

This consortium of partnerships means that Adient is ready to fit the interior puzzle pieces together.

But Chung already is looking ahead to the next step.

Remember all those possible robotaxi interiors? What if transportation companies Uber and Lyft could order a basic vehicle platform for their unique fleets—powered by a modular electric motor and battery—and then order the complete interiors for them from a seat maker?

And what if the companies also could swap out the interiors to meet the changing demands of the marketplace?

This notion for the future might sound oddly familiar to antique-car enthusiasts. A century ago, an auto maker would deliver a basic vehicle, and a coach maker would turn it into a made-to-order passenger vehicle.

"It would be like going back to the old days, when cars were body-on-frame," Chung said. "We are anticipating scenarios in which that could happen. We are getting ready for that."

Smart cities

Reaching the next level of automotive activity—in which cars, car makers, drivers, communities and businesses are all connected under the umbrella of transportation—will take vast new levels of expertise and capital. It also will take partnerships to share the development and management of the emerging science.

In June, Robert Bosch signed an agreement with Tianjin—a Chinese port city of nearly 16 million people—to turn it into a smart city.

Bosch's portfolio of services there could include air-quality monitoring, connected parking, fleet management and electric-vehicle charging stations. The German mega-supplier has signed similar deals to manage pilot projects in Singapore, San Francisco, Stuttgart and Berlin.

These projects are a work in progress. But Bosch aims to provide the sensors, software and services to make them all happen in what it calls the 3S strategy.

Those elements will comprise the electronic network that could link together a smart city's EVs, robotaxis, parking garages, traffic signals and data centers.

Bosch will showcase its 3S strategy in January at CES in Las Vegas.

It likely will take a decade or more for automated vehicles and smart cities to become operational, but Bosch is starting to fit the jigsaw puzzle together.

In April, Daimler announced that Bosch and Nvidia will partner to develop the computer "brains" for its robotaxis. And in June, Bosch joined the Apollo project launched by Chinese Internet giant Baidu to develop software for self-driving vehicles.

Bosch has data centers, operates its own proprietary cloud and is building a $1.1 billion plant in Dresden, Germany, to produce semiconductors for vehicles, smartphones and anything else that requires a cloud connection.

Who's in charge?

Despite all these major initiatives, the key suppliers for them say they have no desire to replace their customers. Over the next decade or two, motorists will continue to own and use vehicles bearing familiar badges, such as Toyota, Chevrolet or Volkswagen, says Intel CEO Brian Krzanich.

"You won't buy or lease an Intel vehicle," Krzanich told Automotive News. "Our goal is to provide the technology. We'll provide the silicon and the [software] engineering."

But in a world of smart cities, EVs and robotaxis, the badge on the grille may not matter all that much. In 2030, auto makers will build the cars, but the suppliers will be creating the experience and making it all work together.

This is the third part of Automotive News' five-part series "Redesigning the Industry." The full project is available here.