Industry
Manufacturing
Future-Ready Manufacturing: Partnering in your journey to a sustainable manufacturing enterprise
Highlights
- The future of sustainable transportation will be built around mobility consumer experiences, both in-vehicle and outside the vehicle in a changing mobility ecosystem.
- Solving for a consumer experience linked to sustainable mobility will require hyper-personalization for specific contexts, knowing who the customer is, what the customer wants and when.
- The EV ecosystem and software-defined mobility will catalyze the development of new customer experiences through continuous innovation and the creation of new partnerships.
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DISRUPTING MOBILITY MODELS
As quantum leaps in autonomous, connected, electric and shared (ACES) vehicle technologies continue to disrupt conventional mobility models, propositions for the mobility consumer have never looked more promising.
However, the environmental costs linked to the historical development and deployment of the machines that have made mobility possible, have been significant enough to force the industry to rethink where it goes from here. The European Environment Agency (EEA) cites the transport category as responsible for a quarter of the EU’s total greenhouse gas (GHG) emissions.1 Hence, it is no surprise that the push for sustainability has made mobility transformation a key driver in the pursuit of a greener future.
If the future of mobility is to be truly sustainable, though, it needs to be built around the consumer. Green mandates can drive design and development, but building contextual, authentic experiences for the mobility consumer will form the bedrock of mobility businesses going forward.
Original equipment manufacturers (OEMs) and other mobility players need to leverage emergent technologies like generative artificial intelligence (Gen-AI) and high-performance computing to unlock value for the connected consumer. Sustainable mobility will then not only reduce carbon footprint but will enable modes of mobility that cater to evolving customer requirements, create richer engagement experiences, and enable integrated mobility journeys.
MOBILITY CONSUMER EXPERIENCE
In-vehicle experience has long been a focus area for automotive OEMs, from the earliest efforts to boost comfort and enhance interior design, to today’s advanced driver assistance technologies and immersive human-machine interface systems.
Digital cockpits are becoming a significant differentiator for luxury OEMs. The market for digital cockpits is expected to grow by more than 10% per year and reach $60 billion by 2032.2 While several automotive OEMs implemented digital displays, Tesla popularized the concept a decade ago with differentiating features such as a 17-inch touch screen to control every aspect of the vehicle, from air conditioning to steering feel and suspension.
Beyond digital displays, the focus on customer experience now extends to driver health and wellness. Harman, a global leader in connected-car technology, owned by Samsung Electronics, has recently introduced its Ready Care solution, which measures real-time driver cognitive load and employs tailored mitigation measures to reduce stress and maximize safety.3 It is evident that mobility companies have taken in-vehicle experience beyond aesthetic appeal to user-centric design that increasingly encompasses connectivity, convenience and safety.
But experiences outside the vehicle also matter. Customer service and maintenance are usually among the top reasons for dissatisfaction and eventual churn among automotive customers, even when there is superalative technology within the vehicle.
Across industries, business leaders recognize the importance of moving towards an engagement strategy in which every customer is seen as unique. Automotive OEMs and mobility service providers should recognize this as well. Engaging with customers across the vehicle life cycle at pivotal touch points like scheduled service or accident repair might not be sufficient.
There are several points in the mobility journey, like parking, charging, ride hailing, in-vehicle commerce, financial services, emergency response and more where the OEM has an opportunity to curate contextual experiences. Creating a mechanism for vehicle end-of-life management for the consumer is another opportunity, and it will not only increase brand loyalty and reduce churn, but also drive the mobility circular economy.
HYPER-PERSONALIZATION
The automotive industry has also arrived at a point where differentiation has become critical for business viability. We’re a century past the era when Henry Ford’s selling only black Model Ts showed how standardization could be efficient and profitable.
Now, it’s the narrative of the vehicle as an extended living space that is gaining prominence. Conventional propositions around mobility need to give way to differentiated features and services in the marketplace.
Hyper-personalization has evolved from the principle that every business that seeks to curate meaningful experiences for customers should build engagement mechanisms that are contextual and relevant. Hyper-personalization is now a familiar customer experience strategy in retail, media and finance. Intelligent recommender systems are enmeshed in the business model in these industries.
Customer segmentation and targeting have always been necessary elements for effective marketing campaigns. Bombarding customers with irrelevant products or services can be more damaging than beneficial. But establishing relevance is not sufficient.
When solving for a customer experience linked to sustainable mobility, the need for hyper-personalization lies in the importance of operating within a specific context. Knowing when a customer wants something is equally important as knowing what the individual wants.
For example, a contextual understanding of customer commuting patterns might enable a service provider to curate mobility options, reduce waiting times and optimize supply to meet demand. A micro-mobility service provider could intelligently alert a commuter to the locations of e-bikes or scooters, predict their availability, offer targeted promotions, and price trips dynamically.
EV ADOPTION
With the transformative advent of electric vehicles (EVs), mobility players must now rely on new kinds of partnerships and ecosystem integrations to build better experiences for their consumers.
Take charging infrastructure for example. A recent poll by the Energy Policy Institute at the University of Chicago revealed that 80% of customers identify charging networks as the greatest barrier to EV adoption. The U.S., where there are an estimated 130,000 public chargers installed today, will require millions within the next decade to meet its ambitious target of 50% market share for EVs. This will require a significant upgrade of electricity grid infrastructure.
This challenge, though, has morphed into an opportunity for players in other industries. We are seeing the emergence of charging ecosystems where retail, food, hospitality and a slew of other businesses are forming partnerships to help provide enhanced charging solutions.
Fast food and convenience store chains including Subway, Starbucks and 7-Eleven have unveiled ambitious plans to set up charging solutions. Walmart, the multinational retailer, which is also exploring this space, has a store within 10 miles of 90% of the U.S population, a factor that will give it unique advantages in scaling EV infrastructure.
There may be as many as 350 million EVs on the road worldwide by 2030.4 This suggests that the market for offering services to the underlying customer base of EV drivers, who need charging, will be immense. The question for players from outside the automotive industry is not if but how they can gainfully participate in the charging infrastructure ecosystem.
What all of this means for the mobility consumer is a new world of experiences. In the conventional car, the customer fueling journey is straightforward. A driver pulls up at a gas station forecourt, fills the tank and gets on their way in a few minutes. Charging journeys, thanks to the entry of new food and retail participants, will be a different experience altogether.
There are operational elements associated with EV charging such as the scheduling of slots for charging, optimization of supply and demand, identification of technical issues and inefficiencies, and management of payments, billing and loyalty. Addressing all these areas can reduce the additional time associated with the charging process and improve the consumer experience.
Service providers will have to engage contextually with this base of customers to make the experience meaningful and monetize the opportunity. As newer players enter the charging ecosystem, customers will have more options to make use of charging time, whether it’s shopping for groceries, enjoying a meal or watching a movie. Service providers who can effectively combine EV charging with a contextually appropriate service through intelligent recommendations will reap the most benefit.
The advent of bi-directional charging may mean EVs can become a monetizable asset. Tapping EV batteries at certain hours may be a sustainable way to balance load on the electric grid. Duke Energy, the North Carolina utility, has presented a plan to enroll customers who lease the Ford F-150 Lightning, an EV light truck, to provide power to the grid.5 Customers are rewarded with reduced lease payments.
SOFTWARE-DEFINED MOBILITY
Up to this point, conventional automobiles have always been built on platforms that are essentially mechanical. Technological advancements have seen a lot more electronics and software added atop the underlying platforms. But now, the software-defined vehicle (SDV) fundamentally alters the entire construct.
With its centralized software architecture, a significant portion of vehicle control, decision making, and functionalities is now offloaded to a central computing platform that enables real time processing, data analysis and decision making.
This is very similar to the smartphone we know today. As with the smartphone, experiences and propositions enabled through the software on the vehicle will differentiate the product. This creates a challenging scenario for OEMs. They need to reimagine the vehicle life cycle and the processes that go with it. They must quickly adapt to emerging technologies, both inside and outside the vehicle, to create sustainable mobility solutions for customers.
Software-defined mobility creates an opportunity to extend the mobility propositions outside of the conventional customer journey. Mobility companies need to partner with participants across industries to create new experiences in connected-vehicle commerce, entertainment, banking and finance, logistics and health services.
This is analogous to how the Apple ecosystem has evolved. The value of the entire ecosystem greatly exceeds the value of iPhone hardware sales. Likewise, the value of automotive software may be immense. To get there, though, will require likeminded partners that can co-innovate and co-create value propositions, similar to how developers have enabled Apple’s app store ecosystem, which generates some $1.1 trillion in annual revenue.
GM’s SDVerse, a platform focused on connecting buyers and sellers of automotive software, is a step in this direction. Such marketplaces are critical for building new customer experiences and will pave the way for new sustainable mobility models.
The SDV is enabling what was once considered to be a sheer impossibility in the traditional vehicle manufacturing context. Vehicle specifications and capabilities can be changed and improved over time, long after leaving the factory. For instance, Tesla recently introduced a track package for Model S sedans, enabling a top speed of 200 miles per hour for enhanced racetrack performance. This upgrade is delivered over the air through a software upgrade. Such upgrades can enable sustainable driving practices and vehicle ownership.
CONTINUOUS INNOVATION
An iterative and adaptive approach to vehicle development is critical to build distinctive mobility propositions. Rapid prototyping and iteration should allow for the refinement of features through real-world feedback, ensuring that only the most effective and user-centric elements get incorporated into SDVs.
Using AI to build the right algorithms may be critical to creating the right experience on the transactional platform, whether that’s an app or a screen in a digital cockpit. This will increase platform stickiness, while also developing the volume of transactional data necessary to help improve the next iteration. The data-algorithm-platform virtuous cycle is essential to hyper-personalization and becomes even more relevant now with the promise of generative AI tools.
Mercedes Benz was quick off the mark to adopt generative AI for in-car customer experience with its Mercedes-Benz User Experience (MBUX) Virtual Assistant.6 One of the first implementations involved a ChatGPT integration for natural human-like interactions that involved 900,000 customers for beta testing. But their roadmap for future iterations envisages a transformational integration with the lives of the mobility consumer.7
Mobility players intent on such an integration need to focus on transfer learning and fine tuning of pre-trained large language models (LLMs) on historic mobility data. The models must be able to process multi-modal input, including text, voice, image and sensor data, and be capable of reinforcement and continuous learning for model evolution that is driven by consumer interaction. A spirit of technology-led innovation coupled with a relentless focus on consumer experiences can truly drive the future of smart and sustainable mobility.
