Driving the Future

Our latest episode of Driving the future was recorded live at CES 2024 as a part of our collaboration with the Tech & Trends podcast. 
Capgemini’s automotive experts, Alexandre Audoin and Daniel Garschagen, speak with Daniel Newman from the Futurum Group and Christopher Bellaci of Holoride (an Audi spinoff company), about the future of in-car experiences with the onset of EVs and autonomous driving. How can tech and regulations together drive towards making this change affordable and sustainable?

What is Driving the Future?

Driving the Future is a podcast about where the automotive industry is going, and how not only to keep up with the rapidly changing business, but to shape it.

Fueled by such factors as the climate crisis and the digital revolution, the automotive industry is changing. Whether we’re talking about autonomous cars and electric vehicles or the new customer experiences that digital technologies enable, whether it’s transforming from being an auto manufacturer into an organization that provides mobility services, the map of the industry is being re-drawn. Are you going to follow the path that others lay out, or grab the wheel and shape the future of mobility yourself? The promise of technology is big, but how do you get there?

Driving the Future is a podcast by Capgemini.

Daniel Newman: Hello everyone. Welcome to the Tech and Trends podcast, brought to you in partnership by The Futurum Group and Capgemini. I’m Daniel Newman, CEO of The Futurum Group, and I’m excited to be here for the first installment of this multipart series where we’re here live at CES and we’re talking about automotive trends in the space. I’m going to be joined today by a series of guests and a continuous co-host. Alexandre, thanks for joining me.

Alexandre Audoin: All right, thank you.

Daniel Newman: And we’ll be bringing guests on later in the show, but this episode is all about not just what we saw here, but about the continuous innovation that’s going on in the automotive space. And that’s everything from the driving experience to safety, to integration with our smart cities and the grid, and of course how we experience entertainment, music and we’ll talk about autonomy. So getting started, let’s do a quick introduction. Alexandre, really appreciate you taking the time to join me here. Tell me a little bit about the work you do at Capgemini.

Alexandre Audoin: Yeah, actually I’m leading the automotive industry at Capgemini, and also for IT landscape and for engineering. So basically, I’m here to evaluate the trends, and to make sure that Capgemini is going to have the right answer and solution to support our customer in this journey.

Daniel Newman: I’ve been following the work of Capgemini for many years, and you’re an innovator. Oftentimes as an analyst, I look at the work you do to enable companies to innovate. I’ve been to multiple times to the IA show across the street to your Capgemini lab. I’ve spent time with your OEM partners, and it’s been really a fascinating opportunity for me to see the way an innovation partner can work with an OEM to enable them. Whether it’s software-defined vehicles, whether it’s been autonomy, whether it’s infotainment systems, whether it’s understanding silicon development to create vehicles that can be updated in real time and changed, and by the way, shortening those innovation cycles.

So excited to be here with you to talk about these trends, and listen, there’s been no bigger trend every year here at CES than autonomy. But Alexandre, I’d love for you to start off and just talk about what are the big things that you’re meeting with OEMs, partners, distributors, software companies, what are the things in focus for you here at the CES event in 2024?

Alexandre Audoin: Actually, the trends we are seeing are always about autonomous driving, about in-car experience with accelerator like gen AI. It’s all about that, and definitively at Capgemini what is interesting and important finally to address this market on our side that we are working for all industries, not only automotive. So we can bring also expertise coming from telecom, media, coming from semicon industry to finally support our market and our customer in automotive.

Daniel Newman: And it’s a big opportunity. I’ve met with many people here during CES, and whether it’s the content opportunity, meaning the number of chips that are going to go into vehicles, we’re seeing that grow by orders of magnitude, whether it’s what people are expecting, we have generations to generations. You and me, we’ve had the chance in the green room to talk a little bit, we’re car fanatics, and so we still have an affection for the combustion engine and roar of the cars maybe on an F1 track, maybe on the Autobahn. But we are also seeing probably one of the most transformative periods in history. We’re seeing an entirely new global infrastructure being put into place with electrification.

We are seeing new sensor technology enabling safer cars. People love to say, “When I was a kid, my parents just laid me on the backseat.” Well, that was dumb, and now we have LiDAR and we are seeing this great. But what are your overviews of the trend? I mean, the pandemic made such a big difference in automotive. We saw the pricing market, and we saw supply chain issues. So you guys are addressing so many things for automotive. What’s your overview, not just so much on the technology but on the automotive industry?

Alexandre Audoin: Yeah, let me answer you through the USP from the customer. So people are expecting to have experience in a car, that’s clear. To have sustainable solution to drive, and it’s a must to have safety in the drive, and also to get the car to get the mobility solution at a good price affordability. So that’s globally the USP of the clients. And in front of that, you have the interior of the ecosystem through an in-car experience with infotainment system, with the famous L-shape screen we see in a car now. Sustainability, it’s all about the EV. I have to admit that even if I love the V8, V12 and so on, I have to admit that.

Daniel Newman: I got you.

Alexandre Audoin: Yeah, I know that you like it too. So I have to admit that to drive an EV is another experience. You can enjoy the time you spend in the car with your family, with your children, with your friends. So it’s totally different. It’s cool too. So the answer to sustainability, it’s EV, the answer to the affordability will be it’s a bit difficult because here, we are talking about autonomous driving. You were talking about LiDAR. LiDAR is very expensive finally. But I’m convinced that, and thanks to events like CES, I’m convinced that the tech will bring, the more tech we’ll put in a car, the lower the price will be for the car. And in term of affordability, it will make the safety affordable for everybody tomorrow.

Daniel Newman: In a few moments, we’re going to bring on our guests to talk a little bit about in-car experiences and the innovation there, but I did want to take a minute based on your expertise and the work you do, Alexandre, to talk about autonomous driving first. You mentioned it, of course I did mention LiDAR. We have some companies that have done it with entirely with vision. Other companies are using a combination of vision, radar, and different sensor technologies.

And we have Chinese manufacturers entering very aggressively into software-defined vehicles. We have US manufacturers and European manufacturers trying to overhaul what I would call a lot of historical legacy technology and pair it with these new software. But ultimately it’s to bring autonomy, it’s to bring whether it’s L2 plus all the way to L4 and then eventually to L5. Talk about where we’re at with the autonomous driving. I mean it’s everywhere here. You got cars that fly, you got cars that float, you got cars that drive, trucks that drive. But when I’m driving down the street, maybe outside of a few trips to Silicon Valley and others, I still see people behind the wheel.

Alexandre Audoin: Yeah. So first, I do believe that it’s really good move autonomous driving. Also for the safety, I was talking about the safety. In US, you have unfortunately 40,000 people died roughly in the year every year, so it’s too much. So safety is a must, and autonomous driving will put solution like what you said, put solution will be very permanent in the detection of unexpected event. So it will take time because you can imagine that to go across all use cases when you drive your car on an highway or on a city, it’s just unbelievable.

So the technology will help. LiDAR scanning 20 million of points per second, it will bring finally something you cannot get with your eyes. It’s impossible. So it will bring safety, and it fit very well with the EV, with the electrical vehicle. Why? Because you are in the car. You have silence in the car. You can enjoy the silence by having good discussion, watching, I don’t know, TV.

Daniel Newman: Playing games.

Alexandre Audoin: Yeah, in gaming. So your in-car experience is very different. So it fits well and I do believe that yeah, it’s more than important for future and for our children to have this safety.

Daniel Newman: In a world of smartphones and iPads and mobile PCs, I, probably like you, I’ve seen everything being done behind the wheel without autonomous vehicles. So I think there’s a pretty big case to be made, whether it’s makeup, people shaving, pretty much seeing people write letters in longhand, but in all serious, lots of phone. It really does worry me and I do think it is quite necessary. They say that driving while using your mobile device is very similar to driving while under the influence. And everywhere you look when you’re driving down the road, you see people driving while using their devices so it is quite scary, but it also is very exciting.

I’ve actually been in some autonomous demos. I’ve done some of the demos here at CES. I did a LiDAR one once where it did the little kid running out from behind the car in the road, and I saw a LiDAR versus just a traditional vision-based system and how it was able to stop and the vision-based system ran the little sign which looked like a little kid running out into the road every time. But it’s actually very encouraging. I think driving at some point might become more of a novelty, the kind of driving we talk about. And eventually it’s going to be really about mobility, which is something I know Capgemini has talked a lot about.

I’m going to pivot here because I want to move to CX, and so I’d like to take a moment here and bring on our guests, Daniel and Chris. Just like we did with you, Alexandre, let’s go ahead and give the guests an opportunity to just quickly introduce themselves. Chris, starting with you.

Christopher Bellaci: Hi, my name is Christopher Bellaci. I’m the General Manager North America at Holoride, which is a spinoff of Audi, and we are doing in-vehicle immersive entertainment.

Daniel Newman: Very cool. I look forward to hearing more about it. Audi’s got some different innovative things going. I rented a few Silvercars in my day.

Christopher Bellaci: Sure. I mean certainly we were born there, but in order for us to make sense business-wise, economically, we want to play with all the car manufacturers. So the decision was made to spin us out right after CES 2019. So we’ve been an independent company since March of 2019.

Daniel Newman: Excellent. Daniel, welcome to the show. Give us a quick overview.

Daniel Garschagen: Thanks, Daniel. So I’m based out of Germany, Munich. Obviously growing up there car enthusiast as well, and with Capgemini. And on that note, I do lead an innovation lab that we have in Munich where we are focusing on everything around the automotive industry, of course with a particular interest in customer experience.

Daniel Newman: Right across the street from the-

Daniel Garschagen: Exactly.

Daniel Newman: I’ve been there. I’ve been to the innovation center and appreciated the opportunity to be shown around. So Daniel, let’s just start with you. We were pivoting here to the CX part of the conversation, and if we do get to autonomy and we do get these software-defined vehicles, what are the experiences that I think some of us are getting little bits of them. We’ve had maybe been able to plug our phone in and have a next generation, some touch screens, and it seems to change, but there has to be more. How do you see this evolving?

Daniel Garschagen: Well, on the one hand side, there has to be more. On the other hand side, once we come to autonomous driving, there needs to be way more, and other things with regards to customer experience because the feeling of what’s going to happen when you’re in the car will be so different. We already experienced it when we are driving an electric vehicle, right? I mean, before combustion engine, you go in there, turn your key, start, go. Now you need to have so many different experiences with regards to how do I start my car, what do I do against range anxiety? So get information, where is my next charging point? It’s already starting. There are so many different things happening in this area that’s coming from the product, the vehicle as such.

On the other hand side, we must take into consideration that the demand for mobility is changing for the generations to come. I’m not saying that they will not buy vehicles anymore, definitely not. So personal mobility will be there, but it’s going to be different, and manufacturers need to address that with new experiences that they will provide starting in marketing and sales all the way through the usage phase while driving, while owning the car, while being part of a community with your car. So there’s really a lot that’s going to happen.

Daniel Newman: Chris, I’m hearing from Daniel that the evolution is really in its infancy, and would love to get your take both personally and as a voice of Holoride, what do you see as the evolution and CX and what are you working on?

Christopher Bellaci: Well, you’ve talked about autonomous before, and ironically enough, the genesis of Holoride was, it’s 2015 at Audi’s Innovation Lab and future think is what they do. And one of the major thought experiments was L5 vehicles are coming, what’s that going to look like? How are we going to design for the passenger experience when the focus isn’t necessarily the driver anymore? And in a lot of respects, they felt like the passenger experience had been at least given short shrift. And in fact, the haul ride technology was originally designed on the autonomous driving stack from Audi. So they understood that it was coming. What is that going to look like? What is it going to look be when we move from the driver focused economy to the passenger focused economy?

The idea was, well, what did Audi have to offer as to be part of the value chain beyond the initial sale of the vehicle? And it’s like, well, the cars, they generate extraordinary amounts of data and metadata through their whole sensor array of microchips and external sensors now. And they’re like, “Well, that’s great. What do we do with that?” Well, it turns out if you can synchronize that data, motion data to a immersive device, in this case a virtual reality headset on ultimately all mobile devices, it turns out you’d have essentially a theme park ride in your car. So we’re designing for the next generation of experiences, but we also can’t wait for level five autonomous vehicles to show up. So we’re starting at now.

Daniel Newman: I’ll double down on that though. I think there’s been a bit of a war waged on AR and VR. For a while, I think it got conflated with metaverse and then it got really unpopular when Web3 and crypto, and somehow all these things got conflated and it was really interesting. But having said that, I mean, I know Apple doesn’t really do CES, but they did happen to drop some pretty important news right ahead of it that certainly caught your radar.

Christopher Bellaci: Of course.

Daniel Newman: In case anybody out there isn’t paying attention, they announced basically the availability and allowing people to start to buy their new Vision Pro. And I’ve always said Apple actually gets too much credit for being an innovator, but they get not enough credit for making markets. And what they effectively do is when they bring a product to market, that’s when a product becomes a market. We know how hard Meta’s been trying for a long time and others, Samsung and now Apple’s going to sell. And so my point though is you’ve hit this inflection, ’24 seems like a year where AR/VR is back, but there’s a lot of complexity. It’s expensive, at least theirs is really expensive.

There’s a lot of motion issues, a good percentage of users. So now you add actually people experiencing something in their headset, and then you actually have them in motion while they’re experiencing it. But at the same time, what are you seeing? Are people showing a propensity to adopt things like an AR/VR experience while riding in the car? I mean.

Christopher Bellaci: Listen, it’s certainly, people, there’s trepidation about it. It’s one of those things where if you haven’t done it, it can be difficult to understand. We can talk about motion synchronized, immersive experiences till we’re blue in the face, but it’s one of those things where you really need to do it, but that ends up being transformative. The overwhelming responses that we get are, “Wow, I’m surprised.” Me when I first did it, I had been in VR for several years at that point, and when someone told me, “Hey, come check out this Holoride company, they do VR in your car.” I was like, “That sounds nauseating.” And it’s “No, it really works.” And it really did.

I had one experience with a big metaverse guy who was like, “Look, I get sick in 10 minutes in my living room in AltspaceVR, in static VR.” And then of course I gave him the demo and it gets really quiet and that’s when you know things are going well. Takes the headset off and says, “That’s the first time I’ve ever been comfortable in virtual reality.” So it’s going to be a measure of educating the public obviously. And Apple, it’s like a turboboost for us for them to say, “Hey, this spatial computing is a use case.”

Daniel Newman: They’ve defined and committed and now there’s no turning back. There’s at least several million people that will buy anything, probably 10 million, I always laugh that’ll buy anything. Apple could put used shoes in a box and there’d be 10 million people in line to buy a used shoe from Apple so it’s amazing what they’re capable of.

Daniel, I just want to take it back to you for a final part of the CX segment, and that’s about the buying journey. So as part of automotive, the buying journey’s changed. We’ve seen a couple of things. We’ve seen the manufacturer direct relationship to vendors, it’s companies like Tesla and other of these born on software-defined vehicle companies. But you’ve also seen now whether it’s AR/VR experiences that people might be able to do at home to get a feel of what it might be like to drive in their new car or going to a dealership and getting, what’s a buying experience going to potentially evolve to look like in the next generation of vehicle era?

Daniel Garschagen: Well, what we see with, well, next generation vehicle era, but also next generation peoples.

Daniel Newman: Humans.

Daniel Garschagen: People era, right?

Daniel Newman: Human machines.

Daniel Garschagen: Well, I mean we’ll see that. Look at 25, 30 years old young men and women on the street, I mean on their mobile phones, and you can buy almost everything online. And we are talking about online car sales for, I don’t know, 20 years now, 15 years? And when you tell me it’s buying a car online is just like buying a book online, that’s just not true because, well, first of all, it’s way more expensive and then it’s more complex.

I know Tesla vehicles might not be that complex, or others might not be as complex, but in that case, again, we need to create those experiences to make online sales as convenient as possible, to make it as convenient as possible to combine the online world with the offline world. And we do see that with, let’s say, those city stores, right? I mean, we are in the US obviously, and I’m from Germany, but when I get a picture in my head from car sales in the US, it’s always these huge retail stores with these flags and everything around.

Daniel Newman: It’s a real thing.

Daniel Garschagen: You just go there and buy your car, right?

Daniel Newman: It takes like a whole day, but it’s a real thing.

Daniel Garschagen: And then you have a car, it’s amazing. But now we see evermore that there are city stores where you don’t have those space for all the different vehicles that you might have that you can sell. But then again, technology comes into place. So you can have one vehicle there, augment with technology to see maybe also different variants in an immersive world. So this is really bringing the online world and the offline world together. And this will also then bring younger generations into the buying process and future buying processes.

Daniel Newman: It’s become a bit more of a thing with, like you said, a few of these companies that have put their stores inside of luxury shopping areas where it’s the same size as a Louis Vuitton store, and it’s just one or two cars. And now you can play with the models and potentially change some of the options. And I could see things like augmented reality, we talk about those transparent screens. The cars could be created with transparent glass where you could pick a color, and you could literally light the car up or seating configurations on the inside. And I think that’ll be really fascinating for people to build it quickly.

And obviously flooring, supply inventory because in the future I also believe customization, the old style was, especially in the US, was dealerships with a lot full of cars and they would try to sell you one that was in the lot, but that wasn’t the exact car you wanted and certain companies that have been able to deliver the exact car you wanted.

So we’re going to wrap this CX segment up, and I want to thank both you, Daniel, and Chris for joining. But Alexandre, just any final remarks as pertains to CX? What do you think? Anything that you’d like to add to what these brilliant gentlemen brought to the conversation?

Alexandre Audoin: Yeah, on CX. Yeah, one thing. And I’m sure you.

Daniel Newman: They’re still brilliant though, right?

Alexandre Audoin: Yeah. I do believe that you will agree. So I was thinking that with this AR/VR lenses, we may have a good experience having the noise of V8 or V12 and maybe we can leave the driver’s seat to go to the passenger seat and just listen.

Daniel Newman: They pump audio into some of the cars now. I’ve driven a few where they’re actually, they’re a V6, but they make them sound like they’re one of those big engines, so that you can tell your kid in the back running around the neighborhood. Well Daniel, Chris, thanks so much for joining us. So Alexandre, I want to tie this up a little bit with you.

Alexandre Audoin: Yeah, sure.

Daniel Newman: And bring this all together. So cars are, I mentioned the software defined vehicle. I’ve talked a little bit about silicon content, all things that Capgemini works with partners on. I maybe even alluded to the rolling data centers on wheel, you got storage, network compute, you’re talking to cloud to, you have C to G, C to V, C to V to C to G. I mean there is so much going on, but this tech, what do you see the economies of scale? Does it become affordable? What are the other considerations that these OEMs and consumers need to be thinking about?

Alexandre Audoin: Yeah, let me talk a little bit about regulation. I’m going to say something maybe which will be a bit strange, but let me start with that. At a certain level, regulation make technology affordable. Why? Because if you consider that if regulation push the EV at the end, so all the car manufacturer will produce finally. EV, the battery manufacturer will produce battery in mass volume and it will reduce the price. So somehow, the regulation bring technology affordable. So for that, you need, but just to a certain level. We remember with diesel, it raised to a price for diesel which was not reasonable at all. So that’s the first answer.

Second one is, of course, it seems to be very complex. A new car with, as you said, the edge computing cloud software. But guess what? The software driven transformation, what’s the interest from the car manufacturer perspective, it’s to bring more services easily, and you remove number of control units. I remember when I was working at the OEM making calibration entry, there are many, many, many control unit at that time. And now the purpose is to reduce the number of computing unit in the car, to reduce the harness in the car, also to simplify it so it will reduce the cost somehow. It will take time because we need to push those technology in all the lineup of the OEM step-by-step to finally get the volume to reduce the price.

Daniel Newman: Yeah, I think regulation, I made a reference to the seatbelt early on, and there’s certain technologies that people still omit and OEMs still omit from vehicles that could make them safer. I’ve mentioned a few examples, but we know, and it’s sometimes price, someone will choose to not put all the safety features on a vehicle. At some point, there was no seatbelt. And my point is by regulating that, there will be volume created, there will be efficiencies created because when it becomes a requirement, it’s amazing how crafty enterprises can be to figure out how to get that and then how to get consumers to, of course, pay for it.

We also touched on, and maybe just one other thing besides regulation that I’d like to talk about is sustainability. And this would maybe be a really good way to wrap up as we head to, and depending on when you’re listening to this, it’s right around Davos season, which I’ll be heading to next week. And this is always a big focus, but as we head from CES to Davos, sustainability, electrification is a magnificent moment for creating more sustainability. Of course, we have new challenges, you’ve got nickel and mining and replacement, and you’ve got new sustainability challenges. But I know this is a very important trend line for Capgemini as well. Talk a little bit about the industry, about sustainability, how this evolves, and how you’re working with OEMs to continue to solve this problem.

Alexandre Audoin: So sustainability in automotive for Capgemini group is one of the most important topics for us in automotive industry in particular. So we address the market, supporting our customer in their operation, what we call the green IT, but not only, also to support them in their development of electrical vehicle, and also to reconsider sustainability beyond the fact that you sell EV and you have several other solution like hydrogen, we can discuss that also, fuel cell, hydrogen.

So I mean sustainability, we need to have a holistic view of sustainability, not just thinking about battery, electrical vehicle, as you said. So it bring a lot of problem about mining and so on. But I’m sure, I’m an optimist, I’m an optimist. So I do think that the engineer and people, the sciences will find solution to improve the battery, and to find new technology in the battery to make finally this EV more sustainable than it is today. That’s true that 70% of the emission of CO2 is due to the usage of a car, but it remained 30%. So we would like to solve those 30% for our children, for the citizenship, and technology will help us for that I’m sure.

Daniel Newman: Well, Alexandre, as we wrap up, my conclusions from the conversation are that, one, we will see aggressive continued innovation in this space. It will be driven by software, silicon, and a desire to create safer, more autonomous, more connected vehicles. We will, of course, in the process create new experiences. We will make people feel more engaged in their vehicle, whether that’s through augmented reality and virtual reality, whether that’s through next generation infotainment, watching movies or having the opportunity to get work done by being consistently connected to our devices, our PCs, our mobile smartphones. And of course, we’re going to try to do this all while paying attention to being in lockstep as much as possible with regulators and while paying attention to issues related to sustainability.

What a great conversation. What a great way to start off this podcast series, Alexandre. And I just want to thank you so much for joining me here and being my co-host in this first episode of Tech and Trends.

Alexandre Audoin: My pleasure.

Daniel Newman: And I want to of course thank our guests who joined the show, and I hope you had a lot of fun joining us for this first ever installment of Tech and Trends that we did live at CES 2024. We talked all about the automotive space. Tune in for all of our episodes. Check out the show notes to the link where you will see future episodes. We hope you’ll become part of our community, but for now, we got to say goodbye. We’ll see you all later.