Every year cars drive around three trillion miles on the roads of the USA. The country has more than 250 million vehicles. But for years there has been more computing power in the average mobile phone than in the average car. That is set to change, rapidly.

By 2014, automobiles will be in the top three fastest growing areas for connected devices and internet content, according to Gartner forecasts. Intel Capital has recently announced a $100 million “Connected Car” fund for research into automotive technology. From electric vehicles and infotainment systems to radar capabilities, wireless connectivity and even self-driving technology, the car of the future is on the road – bringing with it a wealth of opportunities for innovation and development.

The subject was the topic of the British American Business Council’s half day conference in Santa Clara on Wednesday June 13, 2012 –
Technology on the Move: The Car as the Ultimate Mobile Device.

More than 80 people attended the event, which was kindly sponsored by Silicon Valley Bank and UK Trade & Investment.

Held at Silicon Valley Bank’s Kellogg Auditorium, the afternoon began with a joint keynote speech from Simon Segars, EVP and General Manager of the Physical IP Division at ARM Technologies and Taner Ozcelik, Automotive General Manager at NVIDIA.

Two panel discussions followed – the first, moderated by Richard Waters,West Coast Editor of the Financial Times, looked at the current challenges faced by innovators in developing the car of the future, particularly in terms of electrification. The second, moderated by Andy Tsao, Managing Director with Silicon Valley Bank’s Global Private Equity Services, discussed the future opportunities opening up in this field. The final talk was a ‘fireside chat’ between Mark Plashton, of BMW i-Ventures Venture Capital Group, and Gerald Brady, Managing Director of Silicon Valley Bank’s Venture Capital Group.

Three key themes were highlighted throughout the day’s discussions: computing power, electrification, and connectivity.

Screens, Speed and CPUs

Keynote speaker Simon Segars began by describing the progression of technology in the cars he has owned – from his very first car, a Ford Escort to his current ARM powered Lexus. He pointed out that our expectations of technology have expanded massively over the past few years, in all areas of life.

“One of the challenges the industry has is that consumers today are used to a very different level of technology experience than in the past, and cars don’t live up to that,” he said. “It’s both a challenge and an opportunity for the industry. The next generation of consumers will have a very different level of expectation from the technology in their cars.”

Simon believes it’s time the car began to catch up. “User interfaces have rapidly progressed from being very clunky to very slick. There are screens everywhere. Computing has gone from something you do – you sit at a machine and do computing – to something that just is, all around us. And it’s that experience that needs to come into the car. All of those benefits we’ve had from the explosion of mobile devices, driven by fundamental processor technology, screen displays, innovative user interfaces and huge economies of scale – if we can bring that into the car it’s going to make the car much more interesting.”

Taner Ozcelik, Automotive General Manager at NVIDIA agreed that the different average design life-cycles of the automotive industry – 15 years for a car, compared with 2 years, for a mobile phone – poses a fundamental challenge for manufacturers trying to bring the latest technology into their vehicles.

“We should be looking at this holistically,” he explained. “Some parts of the system change rapidly. Others don’t. Why not decouple them? If there is a modular computer system, you could replace the computer regularly, bringing technology to the car more quickly. For example last year Audi announced they were including our 2011 Tegra infotainment system in their new cars. Just a year later, an upgrade was released. That would have been unheard of previously.”

Electrification

The first panel of the event focused on the challenges currently facing the electric vehicle industry in its quest for mass market adoption.

One of the most frequently cited objections to electric vehicles is their limited range: around 80 – 120 miles before they need to be plugged in and recharged. However, with 80% of all US car journeys covering less than 40 miles, for Rich Meyer, of PWC’s PRTM Management Consulting, a complete reset of how we prioritize our vehicles is needed.

“The EV is perfect to use as a commuter vehicle, to drive to work,” he said. “It’s not designed for a family vacation. But at the moment a lot of families have two vehicles – one for driving to work, and one for more long range trips. Electric vehicles need to have better market penetration.”

The CEO of Mission Motors (a San Francisco supplier of advanced powertrain technology), Jit Bhattacharya, says the technology has come a long way since the previous attempt to encourage widespread EV adoption in the 1990s.

“The Nissan Leaf Battery pack would have been twice as heavy and four times as expensive ten years ago,” he explains. “And the arguments for electric vehicles picked up as soon as the price of gas went above four dollars a gallon in 2008. Every time the price of gas gets ten cents higher – EVs become more attractive. It makes the payback premium so much better…As with many renewable energy sources, the upfront cost is high – but the cost per mile is far lower. Currently the payback time is around seven to ten years. It’s shorter once maintenance is taken into account….But that payback is continually getting more competitive.”

Maryline Daviaud Lewett, Business Development Manager for EV Business at Schneider Electric, agreed the situation is now very different.

“10-15 years ago we did not have a standard technology for vehicle charging – it depended on the car….

“Back then automotive makers did not make the full investment in electric vehicle technologies…today there are 15 models arriving on the market this year alone.”

Now, nearly all the big car brands are getting involved in the electric vehicle market; with such a sudden explosion of research and investment, its hoped economies of scale will help bring the costs down more rapidly.

Jason Wolf, from Better Place, an American-Israeli company working to produce a market-based transportation infrastructure that supports electric vehicles has no doubt that the car of the future will be electric. “Already it is better and cheaper to drive a mile on electricity than on any other fuel,” he said. “In the same way that CD was inevitable once it was first introduced, because it was so much better- it’s just a question of time.”

Connecting the Car