The transportation and mobility (T&M) sector is evolving rapidly, driven by rising vehicle complexity, technological advancements, and shifting consumer demands. Important trends—such as electrification, the growing role of software in vehicle design and functionality, and changing business models—present startups and SMBs in the T&M industry with both exciting opportunities and significant challenges.
This article explores those opportunities and challenges and highlights the technological capabilities that smaller original equipment manufacturers (OEMs) and suppliers need to navigate the changing T&M industry landscape.
Electric Vehicles and Alternative Fuels
The most significant trend in the T&M industry is the shift from traditional internal combustion engine (ICE) vehicles to battery electric vehicles (BEVs), which run entirely on rechargeable batteries, and hybrid electric vehicles (HEVs), which run on a combination of battery power and traditional fuels. Consumer demand for more sustainable vehicles and government and industry policy targets are driving OEMs to develop new batteries that charge more rapidly and extend these vehicles’ ranges. Such improvements are essential for furthering their widespread adoption, but the complex chemistry and design requirements of EV batteries make it difficult to optimize their designs for efficiency while keeping costs down. In addition, most EVs today rely on lithium-ion batteries, which require the mining of rare elements and raise their own environmental concerns.
Hydrogen-powered vehicles, particularly fuel-cell electric vehicles (FCEVs), represent another alternative to ICE vehicles and conventional HEVs. These vehicles emit only water vapor and can be refueled more quickly than BEVs charge. Despite these advantages, the costs and safety challenges of producing, storing, and distributing hydrogen fuel have thus far limited the market for hydrogen-powered vehicles.
Software-defined Vehicles and Increased Connectivity
The growth of software-defined vehicles (SDVs) represents another important transition for T&M companies. Unlike traditional vehicles defined by mechanical and electrical hardware, SDVs are built around a central software architecture that controls nearly all vehicle functions. This enables the smart, connected functionality and personalized driving experiences customers increasingly expect. SDVs allow for over-the-air (OTA) updates that can improve functionality and facilitate the addition of new features throughout the vehicle’s lifestyle. Advanced software is also crucial to the ongoing development of autonomous navigation systems. However, integrating high-performance computing platforms, advanced sensors, and increasingly sophisticated software systems into vehicles requires an overhaul of the vehicle design process. Companies must therefore rapidly build software development expertise and ensure their new vehicle architectures and capabilities comply with safety and cybersecurity standards.
Assisted and Autonomous Driving
The rise in software-defined functionality in today’s vehicles has coincided with the development of assisted and autonomous driving systems. Advanced driver-assistance systems (ADAS) provide numerous safety enhancement features, such as adaptive cruise control and lane-centering. These features, many of which now come standard on numerous makes and models, automatically adjust a vehicle’s speed or lane position to maintain a safe distance from others on the road. Today’s vehicles are also often equipped with enhanced warning systems that alert drivers to potential frontal collisions and blind spot threats. Some systems even offer traffic sign recognition to keep drivers informed of speed limits and navigation changes.
Autonomous driving systems, which enable vehicles to operate without human intervention, are also becoming more advanced. These systems require a significant amount of computational power, and their technical complexity makes it difficult to implement the high levels of automation required to satisfy regulators’ safety concerns. As a result, autonomous driving remains largely experimental.
New Business Models
The T&M industry is also facing disruption from alternative business models that redefine the relationship between vehicles and consumers. Subscription-based models allow customers to access a fleet of vehicles—with maintenance and insurance included—for a recurring fee. This enables them to switch between models and brands without committing to a lease or purchase agreement. Similarly, mobility-as-a-service (MaaS) models integrate multiple modes of transport, such as ride sharing, car sharing, and public transportation, into a single on-demand service available through a digital platform. This model may be particularly attractive to urban customers who value convenience and flexibility more than car ownership.
Advanced Digital Tools Provide Critical Capabilities
The increased complexity of vehicle systems and their growing reliance on software requires startups and SMBs to adopt design and development solutions that enable them to share information and collaborate across engineering domains and functional departments more efficiently. These companies must also be able to streamline the integration of numerous vehicle systems and verify and validate the behaviors and performance without relying extensively on costly, time-consuming physical prototyping and testing. In addition, cloud-based technologies can provide smaller companies the scalability, flexibility, and powerful computing resources they need to manage large amounts of data and integrate new services, all without significant hardware investments. By embracing modern digital tools and the capabilities they provide, T&M startups and SMBs can navigate the challenges of the industry’s landscape, reduce time-to-market, and more readily pursue opportunities to innovate and capture market share.
To learn more about how startups and SMBs can manage the challenges of design and manufacturing in the T&M industry, check out Lifecycle Insights’ Transportation & Mobility Industry Trend Report: A Guide for SMBs and Startups.
Disclaimer: This post was written by Lifecycle Insights and may not reflect the official position of Dassault Systèmes.
Pierre is a Marketing Director at Dassault Systèmes. He has been working in the high-tech industry over the past 20 years. His experience spans development, consulting, product management, and marketing roles in small to very large companies. Pierre also holds a BCompSc and a MBA.