IBM sees great potential to optimise the mobility experience through smarter software, writes Megan Lampinen
IAA Mobility 2021 marks a new direction for the automotive industry. With a new location in Munich and new focus on innovation over product line-up, the event has attracted more than 1,000 exhibitors, all keen to show their contribution to the future of mobility. The list of companies presenting at the show includes big name incumbents like Audi, BMW, Ford, Mercedes-Benz, Bosch, Continental, Faurecia and Siemens. Not surprisingly, the digital sector also has a notable presence with the likes of Volkswagen’s Cariad, Mobileye and IBM.
It’s all about software
The event is running under the heading, “What will move us next?” The answer to that question in many cases boils down to software. “The future of mobility is connected, autonomous, personalised and software,” asserts Dirk Wollschlager, IBM Industry General Manager, Global Automotive, Aerospace & Defense. “It’s all about software.”
IBM is located in Hall B2, and it is surrounded by other software players, including Volkswagen Group’s software company Cariad. Though estimates vary, forecasters agree that software will play an increasingly pivotal role in vehicles moving forward. The UK innovation agency Connected Places Catapult, for instance, predicts that for a Level 3 automated vehicle, software alone accounts for 35% of the vehicle’s value. That jumps to 50% for Level 4 vehicles.
But software doesn’t just shape the vehicles themselves; it also shapes the development process and the backend functions of the companies that make vehicles. In the future, it will facilitate the management of their energy requirements. IBM offers an interesting case study in how to apply software expertise to help automotive clients transform the mobility experience.
Products, operations and customer engagements
IBM has targeted software applications in three key transformation areas: products, operations, and customer engagements. By product transformation it means software engineering, and the company estimates that 19 out of 20 automakers today are using its software in vehicle development. IBM also developed a connected vehicle platform some years ago, now referred to as IoT Connected Vehicle Insights, and boasts around one million connected vehicles on the roads in Japan, India, Europe and the US. “We are providing backend services, analysing the vehicle data and sending data back to the vehicle,” explains Wollschlager.
Clients include Jaguar Land Rover, which it assisted with an R&D transformation, training 6,000 engineers in using new development tools. Truckmaker MAN has been using IBM’s product lifecycle management while Daimler relies on IBM’s requirements management solutions. The tech giant also built Honda’s connected vehicle platform.
When it comes to transforming operations, IBM is helping clients to effectively manage their production processes through efficient planning and supply chain demand forecasting. “That’s a particularly interesting topic at the moment due to the semiconductor shortage,” notes Wollschlager. Here it has lent its expertise to Daimler, assisting with supply chain solutions for its truck operations.
There’s tons of potential if players would only go beyond the traditional product-focused business model
The third focus area centres on customer engagement. “This is becoming increasingly important in the wake of the COVID crisis, as more people are shopping online—even for expensive goods, like cars,” he notes. “The expectation of the customer experience is even higher than in the past. The digital dealership is also taking on greater importance; if people go back to the dealer side they want to have the same experience as they have seen online.” In this area it has worked with the likes of Volkswagen Brazil, Honda’s Acura brand, Hyundai Europe and Audi.
Electric mobility advancement
Software expertise is also proving pivotal in the advancement of electric mobility, and IBM’s Energy, Environment & Utilities business is specifically looking at the electric vehicle (EV) charging process and energy storage. In the Nordic region, it has been involved in pilot projects exploring ways to store excess wind power in an EV battery, and then draw on that power at a time when grid prices are high. “That’s super complex, because it’s also a question of who is responsible for the lifetime and the liability of the EV battery,” Wollschlager cautions.
IBM has recently announced a new collaboration with E.ON to address some of the grid challenges that could arise as EV owners start feeding energy into the grid from their EV batteries. Specifically, the IBM Quantum team and E.ON will explore how quantum computing can optimise a decentralised energy infrastructure. One focus area will be E.ON’s vehicle-to-grid (V2G) project, where EV batteries are connected to the distribution grid as a flexible storage medium. The coordination and control of the system needed to balance renewables requires vast amounts of computing power, which is where quantum computing comes in. The agreement will give E.ON access to IBM’s quantum computing systems via the IBM Cloud along with IBM’s Qiskit quantum software developer tools.
IBM is also working with automakers on similar quantum applications. “Battery management is a super complex challenge, and that’s where we are working with brands like Daimler and Honda to analyse the charging data,” he says. “Traditional computers are simply not fast enough to do all this kind of analysis and prediction.” Work on this front has been taking place in Europe, California and Japan.
Despite the increasing complexity coming to the grid, Wollschlager believes “from a digital perspective, there are many technical possibilities today. But that’s where we need the utility companies, the energy companies, the automotive companies and their suppliers to all come together.” And when they do, they need to focus more on service than product. He believes the current segmented charging experience, with different charging tariffs and connectors, is the result of the industry’s focus on product. As the EV market matures, a host of supporting services will emerge, offering improved customer experience and lucrative revenue streams.
Service over product
He points specifically to smart energy storage and charging systems as a service area ripe for disruption. “I would be very happy to spend a significant amount for a device in my garage for renewable energy storage so I could drive truly green with my EV, but there is nobody who can explain this process end to end. Why are automotive companies not helping clients, with a team of experts here, how to manage or even operate this? It’s also a nightmare with all these different types of regulations.”
Today’s consumer nightmare could turn into a great opportunity for the industry. Charger route planning is another area in which Wollschlager sees potential for improvement with quantum technology. “This all needs to be optimised; there’s tons of potential if players would only go beyond the traditional product-focused business model.”
The good news is that established automakers and suppliers have heard the message and many are making concerted efforts to evolve their strategies. “More and more people are now thinking in a different way,” Wollschlager adds. “There is a stronger focus on software, definitely, and on digitalisation. The question is, how fast can they bring it to their clients?”