How ‘resource bulge’ is driving chip shortages – Techdoxx

Deepak Gupta January 9, 2022
Updated 2022/01/09 at 3:36 PM

And if the Wasn’t the auto industry’s best solution to the chip shortage simply to make more chips? Suppose we instead have control over what might be called “resource bulge”—the trend, fueled by sales competition, to cover new cars with as much technology as possible?

Research shows that consumers want – and expect – their next car to be loaded with state-of-the-art features, demand that is a factor in the current bloat. CES 2022, which ended this week, provides a glimpse of what the future car might hold. Bosch said it expects double-digit annual growth in automotive software through 2030; Panasonic showcased a head-up augmented reality display with eye tracking, in addition to the 1,000-watt ELS Studio 3D audio system with 25 speakers. BMW has unveiled future technology that will allow owners to change the exterior color of their cars and display digital art inside them, not to mention a 31-inch rear movie screen with built-in Amazon Fire TV.

And that’s just a small taste of the car’s technology showcased at CES 2022.

But if this technology is unreliable – as some have proven – then it’s not a win for consumers. Meanwhile, market reality has resulted in a collision course for buyers in the field: higher prices and uneven availability of some of the features they say they want most.

“We have no shortage of chips; we have bloated software,” said Mike Juran, CEO and co-founder of Altia, which provides graphical user interface design and tools for many automakers. “There is a lot of unnecessary software out there.”

Get the Chevrolet Volt. The plug-in hybrid had over 10 million lines of code when it was released for model year 2011; today’s mid-to-high-end vehicles have something like 100 million lines, said Michael Hill, Altia’s vice president of engineering.

“It’s at the level you might have seen on a jet fighter 10 or 15 years ago,” Hill told Ploonge. “And there is no bug-free software.”

The bad news for consumers: Resource bloat is inevitable and getting worse.

“Today’s cars are being overwhelmed with features that consumers aren’t necessarily asking for or demanding,” Jake Fisher, senior director of automotive testing at Consumer Reports, told Ploonge.

According to Fisher, CR 2021 Automatic Reliability Report found that state-of-the-art electric SUVs are among the least reliable vehicles.

“And it’s not because their powertrains are problematic,” Fisher said. “Instead, automakers saw an opening with early adopters of EVs to package cars with all the technology they could create. They are trying to differentiate the product – and justify the high cost. And that results in cars that are not very reliable.”

Bad software caused by ​​inefficiency and coding issues is being driven by a shift – or more accurately, an acceleration – in the vehicle’s development cycle, according to Jason Williamson, vice president of marketing at Altia.

“People are used to seeing new phones every year, and automakers are trying to keep up with consumer electronics,” Williamson said. “They are striving to develop completely new cars in two years or less. And that means using building blocks that might be intended for laptops and not necessarily customized for automotive applications.”

It’s not just expensive electric cars that are wooing consumers with technology; it’s happening in many mid-range and high-end product lines.

“It’s more a plethora of features than a plethora of software,” said Sam Abuelsamid, principal electronic mobility research analyst at Guidehouse Insights. “The software is just there to make all the features work, and do we really need 30-way electric adjustable seats with five massage pattern options? Or sequential taillights, multi-zone automatic climate control and audio systems with concert hall and studio settings? The insatiable desire to outperform the competition is what’s driving this.”

The crux for automakers

Automakers that adopt the option that all technology is good technology avoid the more complicated but smarter approach.

“The hardest part is figuring out what the feature set should be and sticking to it,” said Mike Bell, senior vice president of digital for Lucid Group. “It might be easier to say, ‘We’re not sure what we’re doing, so let’s throw out the entire kitchen sink.’ The smart approach is to decide what customers really want to do and then figure out how to give them the best experience. There shouldn’t be seven ways to do something.”

Bell spent nearly 17 years at Apple and recruited part of his Lucid technology team from there. He said one source of trouble is that, contrary to technology company regulations, automakers contract out much of their software to vendors. “You can’t grow it and expect to have a good experience,” he said. “At Lucid, instead of buying anything at the level, we make our own software and our own integration.”

Automakers are beginning to recognize the new domain of technology.

“Launching a car now is not just about the hardware, it’s also about the software,” according to Polestar CEO Thomas Ingenlath. He added in an interview that the ability to make over-the-air updates to this software “makes a big difference in customer satisfaction. We can respond quickly to problems that arise.”

Great expectations

An important factor here is consumer expectations. It’s true that car buyers don’t need certain features, but they seem to want them. one november CoPilot study, a data-driven car-buying app suggests that automakers are simply responding to public demand. It found that 65.7% of current renters expect better feature functionality in their next car or truck, and just over 56% think they will pay the same or less than what they pay for the current vehicle.

Likewise, a month of September CarMax Search of more than 1,000 car owners found that nearly 50% “said they would like their current car to have more tech features.”

Buyers in their 20s and 30s, a highly desirable demographic for automakers, were most likely to say that technology features were “extremely important” to them as a purchasing consideration. Overall, 15.9% considered the technology package extremely important; 36.7% considered it very important; and 31.8% were in the “somewhat important” field. Only 3.9% said “nothing” important.

Given the shortage of chips, technological expectations are unlikely to be met.

Pat Ryan, CEO and founder of CoPilot, said in an interview that consumers are likely on a collision course in three areas. “First, it can take three to six months just to get a car, and people aren’t used to it,” Ryan said. “The second issue is that buyers may find that their new car has fewer features than what they’re delivering.

Premium sound, wireless charging and even heated seats may not be available due to lack of chips. And people used to paying maybe 95% of the tag price can be hit with stickerplus.”

But the desire for high-tech cars is unlikely to go away. Jessica Caldwell, executive director of Insights at Edmunds, told Ploonge that automakers are touting their cars and trucks as multifunctional offices and living spaces on wheels, and buyers are appreciative.

“Consumers are taking advantage of the growing number of features and amenities and, most importantly, are willing to pay for these highly satisfied vehicles,” she said. “The shortage of chips has made it challenging to produce models with more options and features, but consumer interest still exists. And as long as there is consumer appetite, automakers will find a way to feed it for their own profits and market share.”

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