We are redefining German engineering

Our cars are evolving from mobile commodities into digital multi-talents. They know who is taking a seat in the vehicle and which seat setting the occupants prefer, know the shortest route to the supermarket they trust and can pay for the electricity at the charging station independently. At the same time, the road to the software-defined vehicle poses numerous challenges for the automotive industry – both, OEMs and development service providers. We asked Cariad CEO Dirk Hilgenberg and IAV CEO Matthias Kratzsch about the latest developments in software, autonomous driving functions and cyber security.

What strategies are manufacturers adopting in order to make the leap to software-defined vehicles as soon as possible?

Dirk Hilgenberg: All of us in the industry have realized that our customers have new demands on us. They will continue to change in the coming years – for instance when we think about autonomous driving functions. Our primary goal is, of course, to meet and exceed the demands of our customers. In the Volkswagen Group, we have decided that this change can only be sustained in the future if we develop a large share of the software ourselves, always with the aim of being able to offer the customers of our brands functions in the vehicles that set them apart from the competition.

Matthias Kratzsch: However, the manufacturers’ efforts to set up their own organizational units and drive the development of software solutions in-house also involve huge investments. They have realized that it is no longer sufficient to be “automakers” alone. To master software as a key technology and tap into the new business areas, it is essential for OEMs to create their own digital portfolios and optimally link their vehicles to these services. At the moment, we see that many manufacturers are looking for individual technological and also organizational solutions for this, which increases the development and integration effort. If the manufacturers find the right development partners, the tasks ahead can be mastered collaboratively and the high investment volume can be managed together.

To what extent does the development of an OEM.OS make any sense at all for the individual OEMs?

Hilgenberg: Of course, you could decide to buy in solutions from external suppliers. This would save time and effort in in-house development. But in the next step, you would then be inextricably bound to this external system, with all the often underestimated integration efforts that this entails. At Cariad and the Volkswagen Group, we have chosen to retain sovereignty over central, strategic control points, from our own software platform and electronics architecture to the cloud.

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«We are redefining German Engineering – through German software engineering. We determine what we develop ourselves and what we embed.»

Dirk Hilgenberg — CEO of Cariad

Already in areas such as over-the-air updates, security, diagnostics, monitoring and logging, an end-to-end software solution is needed – instead of implementing these functions redundantly in different versions.

What influence does the emergence of OEM.OS have on IAV's strategy?

Kratzsch: For IAV, it is strategically important that we participate in the development of OEM.OS, to  co-develop and deliver the technology. Over the next few years, technical progress will bring about new standards, also across OEMs, for example in the area of cyber security. This means more complexity.

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«As a tech solution provider, IAV makes this complexity manageable. We offer holistic software solutions, from the initial concept to the development stage ready for series production.»

Matthias Kratzsch — CEO of IAV

Our responsibility by no means ends with the market launch but goes far beyond that – for instance with the topic of digital lifecycle management in the form of over-the-air updates. We will develop and deliver our own solutions in and around the OEM.OS, so that mobility projects are easier to integrate and to get off the ground. Real tests and prototypes are another cost factor, in this respect, we are already outsourcing prototypes and hedging to the cloud. Another point in favor of our services is our expertise regarding the comprehensive and partly market-specific standards of such solutions. Here, we can inform, coordinate and accelerate the exchange with the relevant authorities.

Examples of such standards are UN R155/R156 and ISO 21434/24089. What solution strategies do you see and what role do software update management systems play for you here?

Hilgenberg: The UN regulations R155 and R156 provide important impetus for the entire automotive industry to implement standards for the security aspects – similar to the safety regulations. However, our understanding of sustainable security goes beyond the important basis of UNECE and ISO. To this end, we strongly follow the developments in the IT security sector, such as endpoint detection and response tools. We develop products for our vehicle architectures which, in addition to detecting anomalies, also enable us to carry out corresponding analyses and reactions. Our focus lies on protecting drivers from attacks in the best possible way. Software update management is a helpful tool for us to close vulnerabilities that enable attacks on the entire vehicle fleet much faster than before.

Kratzsch: The Security monitoring already mentioned here will in future become a legal obligation over the entire lifecycle of the vehicle. That is why we at IAV have developed the Automotive Cyber Defense Center (ACDC), which detects anomalies and attacks on individual vehicles, the route infrastructure or cloud services at an early stage and can take countermeasures. This solution can be used for instance for small series, fleet operators and island mobility structures. This way, they meet the legal requirements and can benefit from the expertise we have gained through our OEM solutions.

Since we are already talking about future requirements, where do you see the industry in the areas of OEM.OS, autonomous driving functions and cyber security in 2030?

Hilgenberg: Mobility is set to change fundamentally over the next decade. Individually used vehicles will remain the leading means of transportation in 2030. Many of them will already be automated, at least in defined areas, and some will also be autonomous. It is therefore crucial that vehicles are well connected with each other. At Cariad alone, we expect up to 40 million vehicles to be connected to the Volkswagen Automotive Cloud by 2030. Vehicle software and its safety will therefore play a central role in 2030, even more so than they already do today. They will become a completely new value driver for the automotive industry.

Kratzsch: The speed of development and technological progress, as we can see already today, is immense – and higher than ever. I expect to see a market consolidation due to the increasing cost pressure in vehicle development and production and for securing market share. Several mobility providers will use common systems for highly automated driving or OS solutions/platforms, as we are already seeing with mobile phone OS and mobile phone marketplaces. For this process, a coordinating player is needed who fully penetrates the topic technically  and understands the interplay between the various technologies and players. IAV will assume this role. We are very well positioned to face these challenges and have been successfully developing engineering solutions in both fields (autonomous driving systems and security) for more than 15 years. , with over 15 years of experience gained from developing engineering solutins in both fields (autonomous driving systems and security).