There is a new chapter being written in our automotive history. Coding the Car 2.0 reveals the transformation taking place in the industry
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00:00In China, the consumer perception about mobility is changing.
00:05There's nothing more exciting than to watch history being created,
00:10to witness the pace at which change is possible.
00:14The revolution of AI is not going back.
00:16Never going back.
00:17Yeah.
00:18This will be the new chapter of what we are writing in our history.
00:21What can we do that's fundamentally different with those technologies?
00:25I mean, that's the multi-billion dollar question, right?
00:28It helps everybody to transform.
00:30Because if you do not do that, you are going to be in trouble very quickly.
00:34And the exciting thing about a car is that it's not a phone on wheels, it's a robot.
00:39The next chapter of automotive history will be written in China.
00:58The time I joined Bosch, which was 2010, at that moment,
01:21everybody still believed internal combustion engine will last forever.
01:25But things changed so rapidly.
01:28It's very different from five years ago, these customers.
01:31At that time, there's early adopters.
01:33But now, so many mainstream people already get onto your showroom and saying,
01:39okay, shall I buy your car?
01:41In 2020, Chinese brands held 36% share of the market.
01:46In the first four months of this year, they have 61% of the market.
01:51A 25 percentage point swing in just over three years.
01:56How did that happen?
01:57They're focusing on the technology, and they're able to focus on the technology
02:01and say that's an area that we can and should differentiate.
02:05I think the whole revolution was triggered by Tesla.
02:09But the Chinese automakers reacted very quickly.
02:12So they started to develop the EVs and also PHEVs.
02:17Chinese government also played an important role.
02:21The government has a very long-term target for five years, 10 years, 15 years down the road.
02:27And also, at the same time, they give the subsidies to promote the technology
02:32they believe that's for future.
02:33The public sector having a role to play in bootstrapping the reimagination of an industry
02:42or the redefinition of a paradigm of how transportation should be consumed,
02:47the government does have a role in that.
02:49They just put in motion a set of targets and appropriated investments
02:54toward creating the incubator within which a birth can occur.
02:58What is different in China is that the intelligent connected vehicle
03:03is the fully-fledged manifestation of what a car as a smart device really is.
03:13We want to create this more of a smart home experience inside the car.
03:18You know, it's your personal doorman, and also it's your personal driver,
03:22and it's your personal butler.
03:24And all these things are all integrated together as one for the Robocar.
03:28We see a lot of high-tech company join the race.
03:32We started introducing the connectivity to the vehicles
03:35and then people looking at high-performance chips trying to make the vehicle smarter, more intelligent.
03:41I think they have some unique partnerships that they're standing up with Baidu and Xiaomi
03:46and those types of, you know, kind of pure tech players.
03:49Xiaomi Huawei, their company, because they come from the cell phone industry,
03:54they have a huge ecosystem to utilize.
03:57Intelligent doorbell, intelligent television, yes, refrigerator,
04:02intelligent cell phone pad, everything.
04:04They can connect everything to the car.
04:06The online video, social, you know, internet, and the music, entertainment, navigation,
04:17already dominated by few players.
04:21And everyone doing the in-car infotainment.
04:24The online video, social, you know, internet, and the music, entertainment, navigation,
04:29already dominated by few players.
04:33And everyone doing the in-car infotainment.
04:36So for the Chinese OEM they can easily partner with one of them
04:40to develop good enough product at a very fast pace.
04:44Internet companies step in and say, I'm going to invest.
04:47And they did, in big way.
04:48Xpeng is a big investment of the Alibaba ecosystem.
04:52NIO is a big investment of the Tencent ecosystem.
04:54I want interoperability between platforms.
04:57That's internet way of thinking.
04:59This is what became the gravitational pull
05:02from the internet economy to get into the mobility industry.
05:05Mobile phone success definitely boosted
05:08the automotive segment as well, for sure,
05:11because mobile phone was the first device
05:14that has that kind of growth for almost a decade.
05:18The compute and the complexity of the chips,
05:21it was basically improving dramatically almost every year.
05:28You know, if you look at the technology revolution,
05:30actually every time there's a revolution,
05:33what happened underneath it
05:35is you have a new chipset coming up.
05:37So almost all the new chipsets,
05:39the first release is in China.
05:41Like you put a server into the car.
05:44It will become the strongest computer in your home.
05:48In 2021, two chipsets are there.
05:52One is, you know, 80295 Qualcomm,
05:57and we also have Olynx from NVIDIA
06:00because this high performance chipset
06:04can empower those AI capability.
06:06Because previously we cannot do it.
06:08The cockpit GPU or CPU is catching up with smartphone.
06:12The first time, first time ever.
06:14All the cars look pretty much the same
06:16as they have throughout history.
06:19On the inside, it's a totally different user experience.
06:27The interior of the cabin matters so much to them, right?
06:32Whereas traditionally we've been in the US
06:35have been much more acceleration, horsepower,
06:38look and feel, and the interior mattered,
06:41but it was more of a convenience.
06:43If I can get my music to play, like I was kind of happy.
06:46That's not the case of where the Chinese consumer is at.
06:50And it's funny today, engines and transmissions
06:54are almost the commodity.
06:56You know, are they quiet?
06:57Do they give good gas mileage?
06:59Do they respond to the throttle?
07:00Yes.
07:01And once you get there,
07:04the new buyers are much more interested
07:06in the rest of the vehicle.
07:07We wanted to create a car
07:08that delivers the best user experience.
07:11And then we pinpoint some of the keys or experience
07:14that's gonna make customers feel like, wow.
07:17Especially the Chinese customers
07:19spend a lot of time in the car,
07:21just waiting there and they want to be entertained.
07:25Now, karaoke is a very popular hobby for Asian market.
07:29Everybody liked to getting one cold sharing space
07:32and be able to sing karaoke.
07:34We integrated the industry's very first
07:37panoramic driving video game experience.
07:41So the Relax Mo is a fully immersive space
07:46that has multiple environments.
07:48You can see either at a forest or at a beach
07:51or at a bonfire.
07:53The more you drive this car,
07:54the more you can never go back to a traditional car.
07:58This display is not a window into the car.
08:01It's not a replacement for knobs and switches.
08:04It is a window into a whole new world
08:07and a whole new set of opportunities
08:08and a window into the company
08:09that you wouldn't otherwise have.
08:11When I talk to my friends,
08:13if you want to buy a car,
08:15which feature will you pay the most attention to?
08:19They love the intelligence.
08:22The intelligence will be the most important feature
08:26that they will consider.
08:31AI will certainly play a big role
08:34in the automotive industry.
08:36Even from the development stage,
08:38analysis of the data
08:40automatically generate the software code
08:42and also to train the autonomous driving models.
08:46So we have this whole technology called Omniverse.
08:49You can pretty much have a digital twin
08:52of your whole factory.
08:54Basically, you can design vehicle
08:56and manufacturing a vehicle in a much more smarter way.
08:59The ability to test, certify,
09:03build with quality, manufacturing processes,
09:05I think all of that's going to be touched by AI.
09:08So ultimately, you get a higher quality vehicle
09:10that lasts longer,
09:12that you can upgrade easier.
09:13Even in the car,
09:14we'll see the AI can be a good interaction
09:17between driver and vehicle and environment
09:20to provide a convenience
09:22from the infotainment standpoint.
09:24Yes, even when we're driving,
09:27for example, I'm in Shanghai,
09:28and I'm driving my own car,
09:30I can ask this car
09:32after all the years I've been in Shanghai,
09:34where is this place?
09:34Is there a place worth visiting?
09:37The AI of the car,
09:38through its entire environmental perception ability,
09:40such as the camera of the car,
09:42can accurately capture
09:44some of the iconic buildings on the road
09:46and give me the answer I need.
09:48Just say,
09:49hey, do you want to have a look at the restaurant?
09:52There are some free seats
09:53and they get a good rating for their burger.
09:55Do you want to join?
09:56Should I do a reservation?
09:58Starting from like a niche function,
09:59like something for fun,
10:01it becomes more and more like a tool that people rely on.
10:07The last 100 years,
10:08we were focusing on making cars more safe,
10:12more efficient,
10:13having better design,
10:14ensuring the quality.
10:16Now with the software-defined vehicles,
10:19and especially with the AI,
10:20we have the unique chance
10:21to bring some soul to the car.
10:24The most direct feeling
10:26customers can get from the AI
10:28can start with the voice control area.
10:30You can more like this kind of natural response
10:33and dialogue with the system.
10:34How do you deal with the AI?
10:36How do you do the human interface design there, right?
10:40When you're in a vehicle,
10:40what do you need to see?
10:41Where do you need to see it?
10:43What's the interaction model
10:44versus this sort of interaction model, right?
10:46I actually think this is the number one issue
10:50in the industry,
10:51user interaction.
10:53And that's what Apple was really great at.
10:55They used this phrase,
10:55which is it just works.
10:57And recognized how deep the work has to go,
11:02how much refinement there is,
11:03how much iteration,
11:04how much slaving over it,
11:06so that at the end,
11:07it's kind of inevitable.
11:08And the customer says,
11:09well, of course it works this way.
11:10Why would it work any different?
11:12So CMO is the AI
11:13that pretty much do all the interaction
11:16with the user.
11:18I don't even feel like Siri
11:19can give you that kind of conversation at all.
11:21Siri is more of,
11:22I give a command
11:23and then just give me
11:24a very, very specific designed response.
11:27Where CMO can constantly give you
11:29very, very dynamic response,
11:31like a human conversation.
11:33The car has to have life.
11:34It has to have a name.
11:37And even it has to have an avatar or a face.
11:39Nomi is the avatar of the car
11:42that is representing the soul
11:44and the relationship between the car
11:45and the user.
11:47Many people who work in automobile industry
11:50start with the functions,
11:51start with the features and performances.
11:54But actually we started with the relationship.
11:56The first question we ask is,
11:58what will be the long-term relationship
12:00between human being
12:01or between a user and an automobile?
12:04Is it a car?
12:06Is it a transportation?
12:08Is it a horse?
12:09Actually, we've all felt
12:10it's more like the horse direction.
12:13Because we feel that
12:14the relationship between human beings
12:17and the horses
12:19is actually quite fundamental.
12:21It's not just purely functional.
12:22They have connection.
12:24They have this emotion.
12:25That's actually where the Western OEMs
12:27are already really strong, right?
12:29Like when you look at,
12:30you know, a company like a Ford.
12:32Bronco is a very emotional vehicle
12:34that they can build off of.
12:35Explorer is an emotional vehicle.
12:37Mustang is an emotional vehicle.
12:39F-150 is its own brand in and of itself.
12:42We want to make passion products.
12:44People still are emotionally connected
12:47to their vehicles,
12:47even in the digital age.
12:49You can simply ask Simo to say,
12:51hey Simo, write me a 300 word essay
12:55talking about how to be a car designer.
12:58And the Chachapiti like,
13:00which we use is the Ernie Bot,
13:02powered by Baidu,
13:04can suddenly give you all the answers
13:06through our Simo AI.
13:08At the same time,
13:09you can generate visual images
13:10like the mid-journey.
13:12Say, hey, draw me a spaceship.
13:14Draw me the future concept car
13:17or draw me a alien.
13:18Real time, it gives you all these
13:21pretty much requests that you need.
13:23It can all be done through the Robocar.
13:25When you're approaching the car,
13:27you no longer need
13:28the traditional plastic door handles.
13:30You can just simply say, open the door.
13:31And autonomous car always see it
13:33as the first version of mass-produced robots.
13:38Everything moving will be autonomous.
13:40The beginning of really the physical AI.
13:46We can see it, right?
13:48The biggest wave of innovation
13:50is really about making the car drive itself.
13:53Because we believe that's gonna give you
13:55more free time, more free space.
13:57And everybody loves freedom, right?
14:00You don't need to focus on the traffic.
14:02You just can relax and experience
14:04the entertainment in the car.
14:05We know the different person
14:08have the different need.
14:10So how to make the autonomous driving function
14:15can adapt to different needs?
14:18Maybe it's mom drive with the baby.
14:21So she want this car will be driving safely.
14:26The whole AI system is like,
14:28it's like egg and chicken thing, right?
14:30If you don't launch a large number of cars
14:34and start getting data back
14:35and start to train the algorithm,
14:38you won't be able to improve your AI algorithm.
14:40So it's like an egg and chicken thing, right?
14:42It's a smart EV which keeps evolving.
14:45With software updates,
14:47we can custom to your needs, to your habits.
14:50You cannot believe how this cloud edge
14:52computing resource in China
14:54have like, you know, millisecond levels delays.
14:58You are able to also leverage
15:01the literally infinite computing resource on the cloud.
15:06In five years, we're going to be at that cusp
15:08of turning the driving function over to the machine
15:12within five years here.
15:14But when that happens,
15:15shift our society in such a fundamental way,
15:17a car will just become a moving office
15:20and a moving living room.
15:22The question is, does the Chinese tech idea
15:24translate to the non-Chinese markets?
15:29That's a steeper hill.
15:30That's a steeper hill.
15:35All OEM has to plan the adaption of their technologies
15:39into different regions
15:40because the end user are looking for different things
15:44in different countries.
15:45It's so astonishing where we see in the Nordic countries,
15:49actually, Nomi should speak a little bit more harsh
15:52because the language itself
15:53is actually quite straightforward.
15:54But in other countries, for example, like in Germany,
15:57they brought actually the way Nomi speak in China,
16:00where people feel it's a little bit too young.
16:03So those kinds of feelings are actually very subtle
16:06and we need to deep dive into those countries
16:07and understand the user better
16:09and use software to customize to those differences.
16:12So when I think about software, again,
16:14it makes it even more challenging
16:16to build a common set of interfaces in a platform
16:20that lets you do features,
16:22but also customizations as needed in local markets
16:25in such a way that you don't end up
16:26with 50 different vertical stacks,
16:28which is impossible to maintain.
16:29Automotive is a global industry, right?
16:32For any established brand, they should be global.
16:35And for most of the reason,
16:37they will partner with local partner.
16:40Different region have different regulations, right?
16:43Different ecosystem partners.
16:45I think Chinese OEM still try to leverage
16:49some of the asset and know-how from China
16:51and provide a tailor-made regional solutions.
16:55Creating something that's outside the norm
16:59generally comes from a tangential direction, right?
17:03A startup, a Tesla, a BYD, a NIO.
17:08They come at the problem with a different mindset
17:11and you need that inspiration in order to reimagine.
17:15But when they do that,
17:16they don't necessarily win in the end.
17:18We have too many manufacturers.
17:21You know, the consolidation of industry is well expected.
17:24Eight years ago, there was more than 100 banks.
17:27Now the survivors are only 30.
17:3030 survivors.
17:32Many OEMs already went bankrupt in the past eight years.
17:36Their business go up, then go down, crash.
17:40Yes, a fierce competition market.
17:43In China, automotive industry is the number one
17:47In China, automotive industry,
17:49we're in the middle of a price war, right?
17:53Because we see the NEB already account for 50% of market share.
17:58Leading player, Tesla, BYD,
18:01try to lower down the price to conquer the world.
18:05Which is good to customers to a certain extent,
18:08but to be honest, not so good for the industry.
18:11It's not sustainable, so this is short-term.
18:1315 of the top 20 electric vehicles sold in the world
18:17are made by a company that was making a gasoline-powered car
18:21before they started making an EV.
18:23The only startups on the list are Tesla and Li Auto.
18:26That says legacy matters.
18:29A blank page is a gift,
18:31and we don't get to start there,
18:33and the other established OEMs don't.
18:35And we have to figure out how to take 120 years of history
18:39and make that a strength and not a liability.
18:42You are still having to manage the legacy side of things
18:46while also trying to figure out
18:48what our next-generation architecture is
18:50and doing that purpose-built solution.
18:53The challenge is still,
18:55they almost have two separate teams
18:58to some degree working on it, right?
18:59Of where do I want to go in the future,
19:02which is their next-gen architectures,
19:04and how am I plugging the holes
19:07in what I've had traditionally to stay competitive?
19:13The SDV actually changed the supply chain totally.
19:18Before, we had a pretty vertical supply chain.
19:23Now we have all the suppliers more play like partners.
19:27Made the relationship more healthy
19:29and more lifetime-scalable.
19:32So they can actually use our platform
19:33to develop the applications
19:35and integrate what they used to integrate themselves
19:39and now onto our platform.
19:41So we also need to make this system
19:44to adapt to the different OEMs' demands.
19:47So its request is need to be modular design,
19:51very flexible,
19:52so that, you know, the different OEMs
19:54can tailor the system as they wish.
19:56Actually, as far as I know,
19:58many traditional hardware-based TOYs
20:01may be subject to the development of new energy vehicles throughout China.
20:04It has become more open.
20:06As far as I know,
20:08many foreign manufacturers,
20:10such as air suspension,
20:12used to be in a state of black box delivery.
20:15Manufacturers couldn't make any definitions or modifications to their capabilities.
20:19But the Chinese market has a very strong demand for this.
20:23So it's beyond the current development of China's supply chain.
20:26It has to make some similar changes
20:29to enhance its overall competitiveness.
20:31I think it's also a little bit of that, like, build versus buy.
20:34You have to say, like,
20:35is that something that I can do better in-house by owning it?
20:38I think as well with partnerships, though,
20:40you also get a technology multiplier.
20:42Let's think of an example, cloud.
20:44Like, I don't think it's in GM's interest
20:46to go off and build a giant global cloud service, right?
20:49Why would you do that?
20:50Instead, you partner and you can leverage that sort of thing.
20:53You're really looking at how do I bring that in
20:56so that I'm not having to reinvent the wheel?
20:59How do I make those individual components
21:01as robust, as powerful, as streamlined, as efficient
21:05from a power standpoint as possible?
21:07Share those components across, you know,
21:09multiple OEMs, multiple suppliers.
21:11And then it's about how do you bring those pieces together
21:14and build them into the software architecture that works for you.
21:18A lot of suppliers say,
21:19well, I'm going to offer a system solution.
21:21That is a very difficult problem to solve.
21:24There hasn't been an industry standard
21:26that's really evolved on the full system.
21:29And it is very, very hard to design one
21:33that is going to work for the industry.
21:34The bottom is the hardware, the chip.
21:36Then goes to the top is the solution in the cloud side.
21:40So you cannot truly do everything by yourself.
21:42You cannot, because the investment and the return
21:45will be a disaster if you try to do it this way, right?
21:48You should let the chip company do the chip.
21:50And you can customize with them.
21:52You can do the low-layer software together with them.
21:54But you should not do a chip by yourself.
21:56And it's more like an orchestra.
21:59You may have the OEM as the conductor over there,
22:01but all the players follow the conductor
22:04to generate beautiful music.
22:06The big innovation is still coming.
22:09The better and the stronger AI keep coming.
22:12To keep the technology competitive,
22:15you have to also look ahead
22:17and make sure you don't miss the big train
22:19in terms of being able to get to the next generation of technology
22:24whenever it's ready.
22:25Two years from now, right,
22:26everybody will use an AI phone.
22:28And once that happens, that phone, your phone
22:30can impact what you use, your behavior in the car.
22:34And that's going to happen,
22:35going to be really fast two years from now.
22:38We should be inspired by it, not rejecting it.
22:41We should say, yes, there's proof here
22:43that consumers will accept a vehicle with those features,
22:46provided it's a reasonable price point.
22:52If you understand that the future product spec
22:55is an electric, must be electric,
22:58there's no debating this,
23:00and connected, device-oriented platform,
23:04then you better build up the talent pool
23:06to be able to build that kind of car.
23:08If you want to change the world,
23:09this is a way to actually change the world
23:12in terms of reducing accidents
23:14or in terms of just fundamentally changing,
23:16you know, how we are transported,
23:18particularly in cities.
23:19That is an industry-changing dynamic.
23:22It's a society-changing dynamic.
23:25This industry never, you know,
23:28tired of innovation.
23:29This is a never boring industry, right?
23:32You know, automotive industry,
23:34by far the biggest GDP booster in China, right?
23:38The car industry, in the past 30 or 40 years,
23:41actually the way people making cars
23:43are relatively stable.
23:45And now what we are doing is
23:47we are solving the new problems
23:49nobody was facing before.
23:51So it's something you can do in the internet companies,
23:54you can also do here,
23:55maybe in a more direct and more successful way.
23:57But people have an awareness now
23:59that this inflection point is happening, right?
24:01And even if they don't,
24:03I think it only takes maybe a minute or so
24:05to explain why it's interesting
24:06when they're like,
24:07oh yeah, I didn't realize that was that level of complexity.
24:09But as an engineer,
24:10when you think about it,
24:11you're like, of course it is.
24:12Yeah, why didn't I think about that?
24:13We are building a global team.
24:15We have offices in Silicon Valley,
24:18Cambridge, UK, Munich, Germany.
24:21It's just trying to hire
24:23the best people in the world.
24:25We're in Israel,
24:26we're in China,
24:27we're overseas.
24:29There's a principle of talent
24:31over almost everything else
24:33that really changes the dynamic
24:35of the culture.
24:37In such a culture,
24:38you must let people be different.
24:40So I have a pair of pink bunny slippers
24:42in my office.
24:43I don't care if you wear pink bunny slippers
24:44to world headquarters.
24:45If you're the best in the world at what you do,
24:47you've got a place on my team.
24:49Embracing that
24:50and being a place for the misfits
24:52is essential to
24:54going really fast
24:55and doing really great work
24:56both on the creative side
24:57and the technology side.
24:59It needs expertise
25:01from everywhere essentially.
25:02You need talents
25:03from very different domains.
25:05So if you as a person
25:07you love the reality
25:09more than the virtual
25:11and if you as a person
25:13want to create a space
25:15for others,
25:16you want the world
25:18to be more fantastic
25:20in the future.
25:21I think join this industry.
25:23You have to keep learning
25:25to embrace
25:27the new era of
25:29software-defined vehicle.
25:30To embrace the new era
25:32of AI-defined vehicle.
25:33I know it's probably easier said
25:35than done.
25:36It's very difficult.
25:37But I do believe
25:38that in the next
25:40five to ten years
25:41this will definitely happen
25:42in the Western world as well.
25:48Microsoft Mechanics
25:50www.microsoft.com
25:52www.microsoft.com
25:54www.microsoft.com
25:56www.microsoft.com
25:58www.microsoft.com
26:00www.microsoft.com
26:02www.microsoft.com
26:04www.microsoft.com
26:06www.microsoft.com
26:08www.microsoft.com