Why are Electric Vehicles at the Forefront of Vehicle Tech?

EVs often feature more robust infotainment and Human-Machine Interface (HMI) systems, higher automation levels, and more advanced connected experience than their Internal Combustion Engine (ICE) counterparts. Considering the vehicle's powertrain has a marginal relationship with some of these areas raises this question: how does electrification intersect with other major automotive trends?

Most EVs fall within the premium and high-end categories, require connected services for convenient ownership and improved lifecycle management, and offer more opportunities for driver and passenger entertainment during charging. However, these only partially explain the intersection between electrification and other automotive trends.

Instead, the high correlation between electric powertrains and next-gen infotainment, HMIs, and Autonomous Vehicle (AV) capabilities results from the use of consolidated and powerful Electrical/Electronic (E/E) architectures with headroom that carmakers can repurpose for additional applications to drive higher sales.

Due to the several cons of traditional vehicle architecture, carmakers are transitioning to more centralized and zonal architectures to decrease complexity, power consumption, and vehicle weight. Although this is a general automotive trend regardless of the powertrain, it is notably more beneficial to EVs because it provides a lower Electronic Control Unit (ECU) count and weight reduction, minimizing design complexity, improving battery range, and decreasing Bill of Materials (BOM).

Consolidated E/E architectures are characterized by centralized domains powered by powerful Systems-on-Chip (SoCs) that offer headroom for sophisticated applications. As the excess compute is already available in most EVs, carmakers are constantly looking for ways to use it with features that can be upsold to consumers at low implementation costs and make up for the tight EV margins. These features are often in the realm of infotainment, as it is the easiest way of delivering value to final consumers. Moreover, due to the lack of engine and optimized number of components, EVs feature more spacious interiors that easily accommodate large displays.

Infotainment-related functionalities debuted or more commonly found on EVs include passenger displays, pillar-to-pillar displays, Augmented Reality (AR) Head-Up Displays (HUDs), Artificial Intelligence (AI)-based personal assistants, video and gaming streaming, and biometrics-based authentication and payments. In China, there is a growing trend of rear-seat displays with mechanical functions, such as motor down from the ceiling or switching from portrait to landscape to entertain passengers, especially for gaming. The trend is also reaching Western countries. Tesla allegedly updated the Model S with a factory-equipped motorized swiveling center display, and BMW debuted Theatre Screen, a rear-seat 31-inch 8K display unfolding from the car's ceiling.

The headroom can also be used for Advanced Driver-Assistance Systems (ADAS) and AV functionalities, such as surround-view systems, invisible bonnet, transparent surfaces, and automated parking. L2+ automation is rapidly gaining traction among EV startups (e.g., Tesla and NIO), and that is due to their smaller vehicle lines and no dependency on legacy platforms.

In summary, electrification prompts carmakers to redesign their vehicle platforms as centralized systems, and the combination of readily available headroom, elimination of restrictions from legacy vehicle designs, increased cabin space, and EVs’ tighter margins foster innovation at a much higher pace than ICE vehicles. This results in opportunities for the entire value chain, especially in infotainment and HMI.

The improved headroom of EVs gives carmakers opportunities to upsell additional functionalities, establish touchpoints with the final consumer, improve lifecycle management, and develop business models based on the delivery of new functions on demand. Nevertheless, this is only possible when the vehicle hardware and software architectures are fully redesigned.

Original Equipment Manufacturers (OEMs) are implementing more centralized architectures, but adoption is still in a nascent phase and struggling to gain traction among traditional carmakers because they have legacy platforms or complex matrices of backward compatibility that would have to be discontinued or radically changed. So far, traditional OEMs have been transferring their EV developments to their mainstream platforms as a conservative strategy to preserve sales based on existing models. Consequently, innovation focused on systems' discrete elements, which is an opposite force to consolidation.

While this approach accelerates EV deployments, its compromises make it unsustainable in the longer term. Aware of the risks of losing their market hegemony to new entrants, such as Tesla, Rivian, Lucid, and NIO, traditional volume players, such as GM, Ford, and Stellantis, have all announced plans to migrate to completely redesigned EV architectures based on consolidation and software-defined vehicle strategies. These vehicles, expected to take off by 2025, will provide carmakers and their suppliers with opportunities derived from an entirely new digital and electronics architecture, serving as a blank sheet for innovations.

With many carmakers giving priority to their EV platforms and launching innovations only into their EV lines, the question that arises is whether innovation will cease in ICE platforms.