Automakers will have to react quickly to stay competitive in an industry increasingly shaped by digital mobility and software.
What it takes to be a software-defined vehicle leader
Tesla, Nio have the early advantage because of their digital-first focus.
It's no longer a case of which automakers produce the best vehicles. Instead, to be successful, automakers rapidly need to become agile, digital enterprises focused on delivering the best all-round user experience, experts say.
Timing and speed are of the essence. While all automakers recognize that vehicle software is going to be critical for their future, those likely to emerge as winners will already have an execution plan in place and be able to accelerate their transformation. The losers will be those that are tentative about change.
"The race is still open and it's not too late, but I wouldn't expect those who are still hesitant to end up being winners," said Deloitte consultant Elmar Pritsch in an interview with Automotive News Europe. "The technology is there, and the benefits are obvious, so it's time to act now. Those who act faster will be rewarded."
Most automakers recognize the need to transform. At the same time, many see their R&D governance models as ill-prepared when it comes to building and delivering software-enabled services, according to a recent Accenture report on software-defined vehicles (SDVs).
In other words, incumbents are struggling to match the operational performance and agility of their digital rivals. This is affecting their bottom lines.
Nio wins customers
Between 2017 and 2022, new players such as Tesla and Nio maintained stronger revenue growth and market capitalization than legacy automakers, Accenture said.
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"Nio is a great example of a new player that is combining a customer-first mindset with that of a software company," according to Accenture research.
Firstly, the Chinese startup has introduced a series of vehicles with a focus on creating a unique user experience. Secondly, customers are targeted as fans, not simply as buyers, with an emphasis on user feedback and on resolving customer complaints. Inside the vehicle, there is a digital personal assistant equipped with artificial intelligence, which Nio calls Nomi.
In the future, Nio aims to equip vehicles with AR/VR glasses, sound and motion technology to create a 3D cinema experience and generate new revenue streams.