Transcript 0:00 [upbeat music] Welcome back to The Peggy Smedley Show, your voice for our connected world, with your host, Peggy Smedley. Hello, listeners, and welcome to today's edition of The Peggy Smedley Show. 0:17 As always, I'm your host, Peggy Smedley. Today, we're gonna talk about $161 billion. Now, that's the estimated digital transformation spend for automotive manufacturing through 2030. Now, we're saying $161 billion. 0:34 Now, you're probably thinking, "What is that number?" This is more than double the $75.8 billion in 2025, according to ABI Research. 0:46 Now, we know artificial intelligence is driving all this growth, but so is devices and hardware, which accounts for roughly 55% to almost 60% total digitalization investment between, what I've just said, 2025 and 2030. 1:04 Now, if you think about it, industrial software is the second-largest segment. In the next five years, we will most certainly see the rise of digital twins, simulation software in the automotive industry. 1:19 In fact, we've already seen this happen in many cases. Now, if you were at CES earlier this month, then you know automotive is absolutely the talk of the town. 1:33 Everybody was talking autonomous, they were talking cars, they were talking about the future. Man, I remember when I gave my TED Talk, and we were talking about what would happen in the automotive industry. 1:44 We're still talking about, how do we get to that level five? And I'm gonna talk about that in a minute, but for the first segment of the show, we're gonna talk all things automotive. 1:54 And I'm really excited about it because the automotive industry is so exciting because we're always talking about it being an automotive industry or is it a mobility industry? Is it a software as a service industry? 2:05 Let's start talking about the automotive industry. Now, if you attended CES or if you l- read any of the articles coming out of CES, there was a lot of discussion. 2:17 Walking the show floor at CES always points to the biggest trends in technology. You see all kinds of things about sensors and if you watched or read anything, you saw we were all talking about robots. 2:30 We were all talking about all kinds of things, but it's always a good indicator of what's to come in the year ahead. 2:37 And it was exciting because it's no surprise, then, that some of the biggest announcements from this year's show surround mobility. 2:45 The automotive industry has moved away from being hardcore, just automotive, to really moving into a mobility industry, and we've seen that with what's happened with the car industry in itself. 2:57 Because in the past several years, we started to see manufacturers bring in and accelerate the amount of digital content vehicles. 3:06 And in some cases, you've seen me talk about how we've gone so much digital in the car, is it really safe? So this is causing a convergence of that classical mechanical and materials design with software design. 3:20 It's really exciting to see what's happening. And of course, safety is foremost always on the mind of these engineers, and I've interviewed some of the smartest and brightest engineers in the world. 3:32 But at CES 2026, there was a bevy of technology innovations for automotive, and it's exciting because when we think about CES, we saw some of these big announcements from... Let's think about some of the companies. 3:48 There were so many, but maybe just think about two of them: BMW and Mercedes. Let's talk what just from BMW. They presented the AI-powered BMW Intelligent Personal Assistant with Alexa+ technology. 4:04 Now, we're gonna talk about this for just a second because what I thought was interesting here, the I technology they used in the BMW Intelligent Personal Assistant is a large language model. 4:16 Now, most of you probably know this, but the generative AI understands language and is capable of formulating its own responses. So think about what that means now, what that means for all of us in these vehicles. 4:30 So this enables intuitive and intelligent interaction between any of the passengers and the vehicle in this natural dialogue. 4:40 Now, we've been thinking about this for years, but this interaction includes the operation of the vehicle functions as well as access to information and knowledge beyond the vehicle. [upbeat music] Hey, BMW. 4:57 [BMW jingle] Can you make my seat warmer, turn the massage on, and put the colors in the car to my favorite soccer team? Seat heating and massage are on. Red lights for your favorite soccer team. Great. Thank you. 5:12 Happy to help. Enjoy your cozy ride. Hey, BMW. [BMW jingle] What's the most famous painting there is in the world, and where can I find it? The most famous painting in the world is the Mona Lisa by Leonardo da Vinci. 5:27 It's housed in the Louvre Museum in Paris. It's been there since 1797. Excellent. Show me the way. [upbeat music] Navigation to the Louvre Museum set. You're all set for an art adventure. Can I charge on the way? 5:41 You've got one charging stop on your route. Great. Let's go, then. How cool is that? So s- this simply means passengers can ask multiple questions in just one single sentence. Just think about it. One single sentence. 5:57 So here we see an example of artificial intelligence coming into a car to improve the d- driver's overall experience.Just think, it's simple. Just think about what that means. 6:12 So certainly, convenience is a big driver of new innovation. We always want to make... In the connected car today, and we've been talking about the connected car for more than a decade. 6:22 So let's look at another example, because I think this is important. 6:25 Again, at CES, we also saw some big announcements from Mercedes-Benz, and Mercedes-Benz is always at the cutting edge of things, including collaborations with Dolby, and Xperia, and NVIDIA, to advance digital platforms and connected car solutions. 6:42 So Mercedes showcased the CLA features in the next generation of the MB.Drive technology powered by NVIDIA AI. So this was designed to create good driving assistance. 6:58 I guess that was the overall objective here. So NVIDIA is the partner for advanced driver assistance systems. 7:06 And basically, Mercedes-Benz is using NVIDIA's AI full stack Drive AV software, and the NVIDIA Drive AGX accelerated compute. Now, here, this is what we're basically seeing. 7:20 So we're seeing the driver assistance and navigation are merging to create this new and, I guess, safe driving experience. I guess that's what they're trying to articulate here. 7:31 But at the press of a button, this is really what we're looking at, the vehicle can assist anyone who's driving, anyone behind the wheel, to navigate through city streets, parking lots, or anything else you could think about with the advanced SAE Level 2 assistance. 7:50 So here's the rise of really more capabilities, but the bigger gist of this is that more autonomous assistance is what we're seeing in the car. 8:01 So candidly, what is probably one of the biggest trends that we're seeing right now is the elevation of what cars are doing. 8:09 I think the biggest automotive trends I think that we're all seeing at this event is what the cars are capable of doing from what they were doing, and I think that's what I like what we're talking about right now, is the advancement of what cars are doing with AI, what Mercedes is doing, BMW is doing. 8:29 So let's take a look at some other announcements in this area, which I think are interesting. 8:34 Separately, NVIDIA also announced the NVIDIA Como, I might be saying that wrong, family of open AI models, their simulation tools and data sets. 8:45 And I think it's really cool here, because this announcement specifically targets autonomous vehicle development, and this is where we can, can do all kinds of things when we're really creative and what designers can do when they're thinking about the future of what we want to do in our vehicles. 9:02 But traditional AV architecture separate perception and planning, which can limit scalability with new and unusual situations and how they arise. So think about this. 9:14 The Alpamanu family, again, I'm sure I'm not saying that right, introduces chain of thought, reasoning-based vision language action models that bring, I think, human-like thinking, and this is what's really cool, to AV decision-making. 9:30 Now think about that just for a second. So these systems can think through novel or rare scenarios step by step. 9:39 So what this means is autonomous driving was certainly a big s- topic of what we're all thinking about, but what we're setting the stage for is now a conversation at the next level of what we can do in our vehicles. 9:55 And I think that's what we're seeing with all these car makers, what all these developers are doing. So now the next big topic is what are we gonna do? 10:04 I think the conversation here at the event is what's the next big step we want to make? So 10:11 before we close out the conversation, let's take a minute here to think about how are we really thinking about what is truly autonomous driving? 10:21 We've been talking about where we're going, but as I kind of process in my head the conversation for us, let's take a step back here for a minute and really talk about what have we been talking about with autonomous driving. 10:33 Many of you know about the Society of Automotive Engineers' six levels of driving automation. But maybe let's review it briefly, because I always think that maybe there's some of you who might not. 10:46 So let's always recap, because I think that's important. Level zero is absolutely no automation. Level one is driver assistance. 10:54 Now, I've been talking to you about this for years, and maybe some of you don't know and you're new to the show with me, so I'm giving you a recap. Many cars today are really just at level one. 11:04 The older cars are really just at the beginning. Level two, if you think about it, is partial automation with speed and steering support. That's what we're talking about, right? 11:14 As mentioned, we're seeing some cars with that level two automation today, and that's what's exciting. We're seeing that push forward. 11:22 But now, when we start to get to level three is situational awareness, where eyes can be off the road in some situations. And now we're getting really exciting, right? 11:33 But now, when we get to level four, that is conditional automation, which can be driverless in fair conditions, and that's where we get to that really exciting point. 11:45 We say, "Of course, now we want to get to level five," and this is full automation and we're always driverless. Now, that's a world I want to know what you want to be with that. 11:57 If you walk the floor and you heard a lot of the companies seeking the dream of level five. Honestly, it's almost scary, right? But this is the direction we're heading, and I have to talk about that. 12:10 I don't know about how many of you want full level five.To me, it's still pretty scary. Now, I'm a little bit older and I think about that, but with all this in mind then, what comes next for autonomous vehicles? 12:24 We know that's coming, and it's gonna be here sooner rather than later. The answer is pretty much the same as for most industries. Artificial intelligence is really pushing us forward to really see what's coming. 12:37 We're already seeing this in many industries that we've been talking about. 12:42 So again, at CES, Cox Automotive's Chief Product Officer, Marian Johnson, shared a bold vision for the future of work in automotive, one powered by agentic systems, data-driven decision-making, and responsive AI. 12:59 So her message, if you think about it, was very clear. The time to act is now, and I think we're seeing a lot of companies feel exactly the same way. It's bold, it's aggressive, and it's forward-thinking. 13:10 So the transformation isn't just about us, it's about giving dealerships access to AI capabilities that weren't possible even 18 months ago. 13:21 When we were talking about the connected car and we were giving out awards to car companies, we were just talking about having some social things in the car, some connected car. 13:31 Now we're talking about fully autonomous cars, level five, the dream. This will ultimately lead to quality, speed, and innovation. 13:41 Now we're seeing the rise of technology in cars, which will lead to smarter, more intelligent vehicles. One will hope there'll be s- safer roads. 13:50 We certainly are headed in this direction on the road to autonomous vehicles. That's what everybody wants. So this next curve will be a big one as we see the shift to, I guess I would say, higher levels of automation. 14:05 That's what's coming, and the pace of innovation, I think, will only continue to speed up. All right. Now, we've dug pretty deep into the world of autonomous cars. 14:19 Now, I wanna turn our attention maybe to electric vehicles. Is that next? Is it gonna be fully electric vehicles? That's really an interesting question. Electric vehicles are an interesting intersection these days. 14:34 We, we had this big push for them. Now they are slowing down. Geopolitical, regulatory, financial constraints can cause electric vehicles to either speed up or slow down. That's gonna be interesting. 14:49 There's been some talk in the days following CES that electric vehicles don't take as much of the spotlight as years in the past. Now, it's very interesting. 15:00 The fact is adoption in North America is slowing compared to regions like China and Europe. There's no question. 15:07 But China is seeing more mass production, and Europe is seeing steady, I'd say, growth due to regulatory support. That is happening. 15:18 Still, the number of electric vehicles is in fact rising if we take a closer look at all the numbers. 15:25 Now, this is one I wanted to share with you because it's interesting if we look what's happening here to the rest of the world. 15:31 At the end of last year, Gartner predicted electric vehicles, and I'm looking at the numbers, in use could grow roughly 30%, that's what it's saying right here, in 2026, while plug-in hybrid electric vehicles in use could increase 32%. 15:50 Now, battery electric vehicles are forecast to account for well over half of the EV installed base. Now still, there is an increasing portion of customers choosing plug-in hybrid vehicles overall. 16:06 Now, let's review a few of the big announcements from the show. The Chinese company Dream unveiled its first electric vehicle. 16:14 Kosmera Dabula is a hybrid performance sports model reminiscent, reminiscent of the French Bugatti. Now, this new vehicle relies on four integrated electric motors producing up to 1,399 kilowatts. 16:31 It also has the ability to accelerate from zero to a hundred in just 1.8 seconds. Pretty impressive. So to be clear, this car is still in the concept phase rather than commercial production, but interesting. 16:48 It does represent the company's ambition to compete in that high-end EV market. The Hyundai IONIQ 5 was also the talk of the show. 16:58 Although this isn't necessarily a brand-new announcement, this vehicle is a fast-charging electric SUV. 17:06 What is new is the Hyundai IONIQ 5 Robotaxi, which back to the autonomous driving conversation because that was really the big news. The same was true for the Ohai. 17:20 This vehicle is electric, but the big topic of conversation was the self-driving capabilities. The van here is built by the Chinese company, and it features 13 cameras, six radar sensors, and four LIDAR sensors. 17:37 It's-- There were certainly some concept vehicles and new cars in production to really talk about. The theme was electric vehicles integrated with AI and autonomous capabilities. 17:49 When we talk about EVs, autonomous, where's the market headed? We're looking at what's happening, uh, in China and Europe versus what's happening in the U.S., and we're seeing some talk about how all this is gonna merge. 18:03 So just some final thoughts here on electric vehicles. Long-term electrification in vehicles seems inevitable, doesn't it? 18:11 You might be saying no, but if you look at what's happening in China and Europe, there's a push there. If you look what's happening here, it might be slowing down. 18:20 There still are some short-term hurdles like regional policy shifts and other economicKind of hurdles like tariffs that could slow momentum, but of course, there's also challenges surrounding infrastructure. 18:35 We don't have the infrastructure. 18:37 And if you've been following me here, you've gotta have the infrastructure in EVs that if it doesn't happen, nothing's gonna happen, and that is something we've got a lot more that we need to touch on. 18:48 And I've been long saying, "If we don't have the right electric vehicles, it won't take off." But we need to build the infrastructure or EVs are gonna stay where they are, stuck. There's no road, nowhere to go. 19:00 So we're beginning to see more charging stations, though, that are rolling out both in public and private entities. 19:07 Now, that's giving a little momentum to all of this, but it's not happening fast enough to really drive things forward. So there is progress being made. 19:17 That's the exciting part, but there's still a lot of hurdles to overcome. But let's shift a little bit more to some other conversation: hybrid. 19:27 There's a lot more people that are saying they wanna talk about hybrids, so we're seeing some interest, some momentum, but that's a much bigger conversation for an entirely different day. 19:38 So let's get to my overall opinion for today for the automotive space. Today, based on what we saw at CES earlier this month, this is what I think. 19:47 Here at The Peggy Smedley Show and at Connected World, we have been covering telematics in the enterprise space for rou- roughly almost three decades. 19:56 In the last 10, almost 15 years, we have seen the rise of connected cars aimed at consumers. There's no question about that. 20:04 And now we are at the precipice, which is so exciting, where much of this is set to change the industry. 20:12 All of this car connectivity combined with the autonomous driving is spurring, it's so exciting, innovation along in automotive, and it's truly really coming together. 20:25 Surrounding all of these changes will be a global business changes that we need to follow, and there's gotta be some other creative things that will start merging, outside objectives with other companies. 20:39 For instance, what does all this mean maybe, let's say, for the insurance industry? It's an outside part of all of this, right? 20:46 Will the traditional model for car insurance need to be adjusted to hold manufacturers and software developers liable for collisions caused by autonomous vehicles? Who will ultimately be responsible for all this? 21:01 There are many questions that still need to be answered, asked, and discussed, right? 21:07 But with all of these new innovation, there are also so many big opportunities to take a step forward into the autonomous world, and it's really exciting that we need to be having engaging and strategic conversations. 21:21 So here's my tip for today. As we continue to move forward, we must keep our eye on the biggest trends, such as AI. New technology is racing down the road very fast. 21:33 Now we are all challenged with keeping pace with what comes next. Ask yourself some big questions. L- let's think about this. I think this is really important. 21:42 How will artificial intelligence shape this new world of mobility? That's maybe what we need to be thinking about. What role will your company play? Are you thinking about that? 21:53 Because maybe there's some op- opportunities you hadn't thought about before, but you can think about now. How can we make it secure and accurate? Safety also has to come. We want everything we do to be secure and safe. 22:08 There's much work that still needs to be done, always, when we think about our vehicles and what we're looking at, but where are we headed, and are we headed in the right direction? That's always a good one. 22:19 So if we think about this, where are we going? 22:22 But that's what I want all of you to think about, because we all wanna be headed in the right direction as we head down some of these bumpy roads that could be very smooth in the future. 22:32 All right, listeners, I'm out of time for this first segment. Share your thoughts with me on X at ConnectedWorld, or follow me on LinkedIn and continue the conversation there. 22:40 Please check out our website at connectedworld.com, our show website at thepeggysmedleyshow.com. Please share and subscribe to all of these episodes each week. I love new followers, new listeners. Follow me on YouTube. 22:51 I would love that. Don't go away. We've got always more to come, and every week, and we want you to continue in all of these conversations. This is The Peggy Smedley Show, your voice for our connected world. 23:01 And remember, with great technology comes great responsibility. [upbeat music]
