Automotive Tech: Freedom machine to luxury experience

- [Narrator] This is an audio course. Thank you for listening. (upbeat music) - [Georgie] Cars are no longer feats of engineering design. Now, they're one of the most sophisticated and expensive mass market software products. Around 90% of all new capabilities in automobiles are software defined. The industry, as a result, has been forced to change. But is it moving fast enough? (upbeat music) I'm Georgie Frost, and this is "The So What from BCG." - [Alex] If I compare the vehicle from 50 years ago, it was literally like a freedom machine. This was the thing you get into to get away. When we look at the car of the future, it has thousands of sensors, cameras, body temperature. You have vibrations, everything that is being measured, so it's literally the opposite. - [Georgie] Today I'm talking to Alex Koster, BCG's lead for automotive tech. - [Alex] We are just at the very start of a major transformation of what has been a very consistent product for the past hundred years, and has looked and felt more or less the same way. Yes, it went a bit faster, yes, it went a bit more clean over time, but I think now we will see that it will change fundamentally. The reason why that is is mainly because we are seeing the shift from mechanical to software, and what that will do is it will bring innovation at an exponential speed. Because basically when you buy the product, it's not a fixed product anymore, but it can change forever in the future. It will constantly download updates, get new functionality, new capabilities. And there are, in particular, two main areas which I would like to highlight. One being the AI driver. So essentially, you replace the human driver by a machine operation. That is one big change that is only possible through software and the latest computing. And the other one that is happening is the digital cabin. The whole interior experience, which was very much focused around you driving the vehicle and pushing buttons, well, that's now going to be an immersion space, like an experience environment, which, of course, if you're driven around, you can now fully explore. So those two are the main ones that will feel and look in a very different way than what they do today.