On May 12, 2020, Plug and Play hosted a roundtable event featuring John Absmeier, Chief Technology Officer of Lear Corporation, Hakan Yilmaz, Vice President and Chief Technology Officer of BorgWarner Inc., and  Saeed Amidi, CEO and Founder of Plug and Play, to discuss the many great opportunities Detroit presents for technology innovation in the mobility space.  

In January of this year, Plug and Play announced a new mobility program located in Detroit, in partnership with Fiat Chrysler (FCA) and Michigan Minority Supplier Development Council (MMSDC). Detroit is well known for the automotive industry and we’re excited to unlock the technology potential of the corporations and startups in this area.

New Challenges in the Automotive Industry 

Saeed Amidi opens by observing that the automotive industry has been facing incredible challenges recently — from massive innovations in electrification and automation from new entrants and competitors — and supply and demand-side disruption under COVID-19.  

What happens now with the new normal in automotive?

John explains that we’ll see various changes:

1. The industry will see more consolidation because it’s such a capital-intensive business. Especially with liquidity being a challenge when you’re not generating revenue. 
2. Some commitments in autonomy are being pulled back. For example, technology challenges that are difficult to solve in regards to sensors, computing, and regulatory issues.
3. The industry has been moving towards connectivity in the past decade. But connectivity offers new opportunities for OEMs. Digital transformation and improving the user experience is going full force. 
4. Electrification has now crossed the tipping point, with a number of major trends that are driving the transformation. Even now, consumers globally are pushing for green energy. 
5. Consumers may potentially move away from shared mobility due to COVID-19. They are going to want to own vehicles for personal space and sanitary reasons. However, shared mobility is still safer than public transportation. 

How will automotive manufacturers survive the pandemic?

Hakan from BorgWarner notes that in a crisis, you must follow certain steps. First, determine if you can survive the crisis. You must prepare for the worst. Do you have enough liquidity to survive? 

Second, you should also prepare operations for the best-case scenario. Think about the operational power needed to restart manufacturing, a supply base, and customers. 

Third, think about your strategic moves. Find opportunities and fill in the gaps. 

The data proves that companies have to keep investing in new mobility solutions, regardless of the current situation. In China and Europe, we aren’t seeing any setbacks from electrification because of the pandemic. 

How are leading automotive firms upskilling their capabilities and workforces to facilitate the transition to new technologies?

You must have a strategy for your innovation journey, says John from Lear. You can look at two angles for innovation:

1. Product innovation

Product innovation is essential. In the mobility industry, many products are struggling to create a cohesive user experience due to too many competing technologies. New advancements in connectivity and touchless contactless transactions should aim to make the user experience in the car “delightful”.

1. Business model innovation 

It’s important to be looking at different ways to monetize technology, software services, recurring revenue streams, or low capital intensity type opportunities. There are different ways to look at the industry from a business model perspective. For example, in Industry 4.0, a lot of automation in plants become touchless - that becomes even more relevant with less human physical interaction; it will be a welcome change in the pandemic.

What is the new focus in the automotive innovation agenda?

Hakan from BorgWarner notes that product-driven companies must keep product leadership at the forefront. Even though they don’t make money directly from digitalization, machine learning, and artificial intelligence, these are tools that can be used to perfect product offerings. Using cutting edge technology in conventional products gives you an advantage against competitors. 

Even if you’re not in digital space, you need to be aware and apply new technologies to make your products better. 

What’s unique about the startup mobility ecosystem?

“The magnitude of it,” says John from Lear. It’s been an accelerating cadence of exciting ideas and entrepreneurship. “I’ve worked my whole career on the trends that are finally becoming a reality because smart people around the world are working hard to make this a reality. I don’t see any change in magnitude or speed due to the COVID-19 pandemic.”

We have launched a global COVID-19 accelerator dedicated to scaling the world’s most promising startups who can help address the coronavirus pandemic. Join the platform today.