This excellent post by Philippe Chain ‘Code, on wheels‘, explains how software is becoming the main differentiator in the automotive industry. And that the industry is becoming ripe for disruptors not originally from the automotive industry.
“Software will play a central role in the upcoming car revolution. Unless legacy carmakers quickly reinvent themselves, new players will fill the gap to provide an OS and an app ecosystem.” The author explains how Tesla is actually run as a software company at its core, upending the traditional organisation and approach of historical automotive companies. More than half of Tesla engineers are software engineers! Software updates are performed on a continuous basis in pure agile style.
This is very different from the traditional approach where everything needs to be specified in advance, and where development is split between various suppliers which need to be strictly coordinated.
The industry begins to understand that the company that will build the standard for the next automotive operating system will have a substantial competitive advantage. Seeing the danger, VW has announced that it gets in the race. Cars have today 100 million lines of code and very soon 200 to 300 million! “the likeliest evolution for the car industry is to see a competition between traditional carmakers and tech giants — with Tesla as the maverick — to come up with a car OS that will set the standard for the entire industry“. Not to mention the possibility to have an app ecosystem built on those standard OS.
The automotive industry is ripe for a revolution and not too many historical players may survive. Exciting times ahead!
