Jan 15, 2021 - Economy

The cloud-based car is arriving

Illustration of a car under a wifi symbol

Illustration: Annelise Capossela/Axios

The notion of the car as a "computer on wheels" is moving past the realm of hype and closer to reality, which will transform the driving experience and improve road safety, too.

Why it matters: The arrival of long-promised technologies like 5G connectivity and new high-performance computers means cars will improve over time, instead of depreciating the minute they leave the dealer lot.

  • With software updates, buyers will be able to add features or services that weren't available at the time of purchase or enhance their ride with customized apps.
  • And once 5G is widely deployed, cars will also be able to communicate with each other and with the surrounding ecosystem, providing situational awareness and helping to avoid collisions.
"Just like our phones and our televisions, the car is no longer this static, fixed product that you’re buying. Now it keeps getting updated. It’s part of the ecosystem. If there’s a new charging station built in your neighborhood, your (electric) car will know about it,"
— Nakul Duggal, senior vice president of Qualcomm Automotive

Yes, but: This is nothing new to Tesla, whose high-tech cars are already like mobile supercomputers. But for legacy automakers whose technology is finally catching up, it's nothing short of revolutionary.

Driving the news: At this week's virtual CES show — and at technology showcases timed to coincide with the event — companies were promoting what they call "software-defined vehicles."

  • It means software in the cloud — not the mechanical parts under the hood — will control both a car's operation as well as the passenger experience.
  • Panasonic, for example, touted a new head-up display enhanced with augmented reality — graphics projected on the windshield that provide real-time awareness about traffic, obstacles or directions.
  • Harman, meanwhile, introduced a new cloud-based platform that would let passengers turn their car into a video gaming arena or virtual concert venue.

Between the lines: It's all being driven by a convergence of big, important trends, explains IHS Markit analyst Brian Rhodes.

  • 5G has arrived. The first 5G-equipped vehicles are already on the road in China, and arriving soon in the rest of the world. With a fatter pipe, information can move more quickly in and out of vehicles.
  • Existing cars can't handle that data explosion, so carmakers are stripping out their existing patchwork of 100-plus individual control units for everything from airbags to windows, and replacing them with a few super-efficient, high-performance computers designed by big suppliers like Continental and Aptiv.
  • The shift to electrification means there's plenty of juice to run those new electrical architectures.

What to watch: BMW's iX, an electric SUV starting production this summer in Germany, will be the first 5G-capable vehicle in the U.S. It goes on sale later this year in Europe, and will arrive here in early 2022.

  • By 2023, nearly 5 million cars globally, representing 75 brands, will have 5G capability, according to IHS Markit.

The bottom line: Consumers expect their digital lives to follow them everywhere, including into their cars. The technology is finally here for automakers to deliver.

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