ARMONK,
N.Y., Dec. 12, 2024 /CNW/ -- The IBM (NYSE: IBM)
Institute for Business Value today published its latest 'Automotive
2035' study which reveals an industry grappling with an erratic
transition away from current products and business models.
The study highlights that over the next decade, 80% of new cars
will have a powertrain that will be electrified to some extent,
according to respondents. The findings also reveal that:
- 74% of executives surveyed believe that by 2035 vehicles will
be software defined and AI powered
- 75% of respondents say the software-defined experience will be
the core of the brand value
- The auto industry is trying to shift its business model from
one-time car sales to a recurring revenue model for digital
services and products
The study is a data-led analysis of automotive and mobility
industries developments over the next 10 years and is based on 1230
interviews with senior executives from automotive OEMs, suppliers,
and surrounding industries across 9 countries.
"The shift to software-defined vehicles (SDVs) was cited by the
majority of industry executives as the key to future brand
developments," said Jeff Schlageter,
Automotive Industry General Manager IBM. "It is indicated that
vehicle value may no longer be limited to initial features and
functionality—it would be earned over the life of the vehicle by
continuously providing superior customer experiences with new
applications and subscription-based services for drivers."
The study highlights that the industry is preparing to offer
deeper, more personalized user experiences that are enabled by
digital capabilities. Currently just 21% of research &
development budgets are currently allocated to software and digital
developments, but respondents expect this to nearly triple to 58%
by 2035.
The research also reveals gridlock at the heart of SDV
developments. The traditional approach to vehicle
architecture—where software for a single domain (such as brakes) is
delivered separately from another domain (such as airbags) through
individual electronic control units (ECUs)—is no longer sustainable
for the SDV era.
To reach a future where cars are truly digital products,
automakers need a sweeping overhaul of current electrical and
software architectures. The technical challenge of separating
software and hardware layer is seen as the top challenge. 77% of
the senior executives say they are facing a lack of software
development tools and methodologies. Of equal concern, 74% of
respondents say a strong mechanical-driven culture is making it
difficult to switch to a software-driven product development.
Jeff Schlageter added, "By
harnessing the power of cloud combined with AI, automakers can
explore new ideas, test different software configurations, and
gather valuable insights to inform the development of innovative
SDV features. Using AI to analyze vast volumes of data, identify
patterns, and make predictions, automakers can accelerate SDV
enhancements and create personalized experiences for
customers."
The scope and scale of issues around the development of SDVs are
further discussed in depth in a LinkedIn Live broadcast today,
jointly hosted by IBM and General Motors in Detroit. A recording of the event can be found
here.
IBM's 'Automotive 2035' study represents the 4th edition of the
automotive industry longitudinal study which started with
'Automotive 2020' published in August
2008. The full report can be found here.
Study Methodology
The IBM Institute for Business Value (IBM IBV), in cooperation
with Oxford Economics, surveyed 1,230 C-level automotive executives
in nine countries in Q3 2024. 40% of the sample represented
automotive OEM and EV companies, 40% auto suppliers, and 20%
ecosystem players. Participants were asked a range of questions in
various formats. They were asked about their organization's
expectations, results, concerns, and barriers for transition to
software-defined, electrified future.
About IBM
IBM is a leading provider of global hybrid cloud and AI, and
consulting expertise. We help clients in more than 175 countries
capitalize on insights from their data, streamline business
processes, reduce costs and gain the competitive edge in their
industries. More than 4,000 government and corporate entities in
critical infrastructure areas such as financial services,
telecommunications and healthcare rely on IBM's hybrid cloud
platform and Red Hat OpenShift to affect their digital
transformations quickly, efficiently and securely. IBM's
breakthrough innovations in AI, quantum computing,
industry-specific cloud solutions and consulting deliver open and
flexible options to our clients. All of this is backed by IBM's
long-standing commitment to trust, transparency, responsibility,
inclusivity and service. Visit www.ibm.com for more
information.
Media Contact
Ken Saunders
IBM Global External Relations Manufacturing & Energy
Industries
saundken@uk.ibm.com
+44 7887 830 036
View original content to download
multimedia:https://www.prnewswire.com/news-releases/ibm-study-vehicles-believed-to-be-software-defined-and-ai-powered-by-2035-302329231.html
SOURCE IBM