In an industry as fluid and prone to change as automotive, the odds of accurately predicting the future are certainly stacked against you. However, as a leading cybersecurity provider in this space, we at Trustonic follow the latest trends across the automotive industry closely and with great interest.
On that note, our top predictions for the rest of 2024 and beyond are below. As with industry predictions we’ve made in the past, we’re not afraid to take risks by making statements that later turns out be inaccurate if it means those we get right are more impactful. Because we stand side by side with our Original Equipment Manufacturer [OEM] partners, it’s our hope that this new set of predictions will help them to prepare for what may happen throughout 2024 and beyond.
1. The industry starts to explore gaming as the potential next big digital service
For many years now, the video games industry has been a multi-billion-dollar business, having generated an estimated 347 billion dollars in revenue in 2022. Of this number, approximately 248 billion dollars came from the mobile games market, amplifying the huge appetite there is for ‘gaming on the go’ among players. With so much of our lives spent travelling – often long distances – games can serve as a welcome distraction from the journey, and an enjoyable way to while away the hours.
Yes, radios and built-in DVD players have long served this function in vehicles, but there’s arguably no substitute for the level of immersion gaming can offer, and this is something that automakers are increasingly recognising.
Portable systems like the Nintendo Switch, PlayStation Portable [PSP] and Game Boy have all served gamers on the go for years, but automakers are now exploring new ways how cars can become games consoles themselves. BMW, for example, announced a partnership in 2022 with AirConsole to provide ‘casual gaming’ in new vehicles from 2023.
Using their smartphones as controllers, this enables passengers to play a varied selection of titles together via the BMW’s Curved Display. This means people no longer have to bring their handheld systems with them on long journeys because all their gaming needs have effectively been built into the vehicle’s design.
Automakers have only scratched the surface of what’s possible when it comes to in-vehicle gaming so far, but we expect to see many more exploring how they can move into this space. While gaming won’t explode onto the market this year, or even next, it’s likely to start appearing more prominently in requests for quotation [RfQs] for vehicles launching in three to four years’ time from now.
Over the next 12 months, we expect that OEMs will consider their viable options for incorporating gaming into vehicle design in the years ahead. Importantly, this will include what the real use cases are that will entice vehicle users to pay for such services.
This could see many deciding to embed an existing console – such as the PlayStation 5 or Xbox Series X – into a car, much like they would with a high-quality audio system. As a result, passengers will have a huge range of games at their fingertips; a benefit for automakers, considering no developer is likely to make a game specifically for one manufacturer’s vehicles. However, this approach would constitute a massive increase in power consumption.
This is why some OEMs might decide that focusing on integration of a specific game engine to existing IVI platforms or cloud gaming are more logical options for them to take. In the case of cloud-based gaming, hosting games via remote servers and streams reduces the level of power required to play. It would also allow manufacturers to link up with popular cloud gaming services like Amazon Luna with their cross-platform support capabilities. Additionally, by baking in cloud gaming, automakers would be able to incorporate 5G networks into their vehicles, helping to further encourage data sharing among consumers.
This could support OEMs’ efforts to collect customer data for use in improving key areas of their services. Whichever way OEMs choose to implement gaming, it’s inevitable that the number of potential cybersecurity vulnerabilities present in vehicles will grow as a result. As such, it is vital that automakers have robust security measures in place to ensure that they provide the most seamless and secure gaming experiences for players.
2. Automotive begins thinking about the role of ‘offensive’ AI tech, and how security responds to the emerging threat
Until recently, AI was merely the stuff of science fiction to many people. It represented a nebulous vision of some far-off future where flying cars soared through the skies and people used teleportation machines to go about their daily business. Now, what once seemed like fiction has become a fact of everyday life. In 2023, we use AI as smart assistants in our homes, as the providers of answers to complex questions, and even in our cars.
Although the use of AI isn’t necessarily a new phenomenon in vehicles, its prominence has certainly grown exponentially in recent years. AI-enabled personal digital assistance has become a vital part of user experience [UX], with automakers harnessing the technology to allow drivers to more seamlessly carry out a number of functions.
Everything from making calls, adjusting the temperature, and changing radio stations has become easier than ever, with users simply needing to instruct their on-board AI to perform these tasks for them. This has made for a much more convenient driving experience, and given automakers access to vital consumer data. However, the unfortunate reality is that it has also brought new vulnerabilities to vehicles, which attackers have wasted no time in exploiting.
According to a report published in 2021, remote attacks against vehicles have consistently outnumbered physical attacks since 2010, accounting for 79% of all attacks between that point and 2020. As the integration of AI has accelerated in recent years, the number of remote attacks has grown further, with 77.8% of all attacks in 2020 alone having been carried out in this way.
What’s more, AI doesn’t only present a vulnerability to vehicle security, but also serves as a potential weapon in an attacker’s arsenal. This is because the technology can be used to scope out vulnerable applications, devices, and networks with considerable ease, and even identify opportunities to access sensitive data on a vehicle-by-vehicle basis.
It’s clear that, while the rise of AI brings a raft of benefits to user experiences, it isn’t without its significant setbacks as well. Not only does AI create new vulnerabilities, but it can also be used as a way of attacking vehicles. However, automakers do not have to merely accept that they are at the mercy of attackers as they continue to roll out AI across their cars. In fact, the technology can simultaneously function as a means of taking the fight back to cybercriminals, and this is an area of research that we are likely to see develop soon.
OEMs will begin to think more about how AI can itself form a vital part of a vehicle’s security infrastructure, marking a move from ingress detection to ‘behaviour detection’. In this way, AI can help security become more predictive and preventative than reactive, identifying potential threats as soon as possible and taking swift action to eliminate them.
3. As the focus remains on Chinese OEMs expanding globally, the nation’s tier one and silicon vendors seek to gain a foothold in the West
Historically speaking, China probably isn’t one of the first countries that springs to people’s minds when they think about vehicle production. Looking back to the mid-1980s, China was only making a few thousand cars per year. Since then, the Chinese automotive industry has practically exploded, boosted by important partnerships with major foreign manufacturers like Volkswagen, GM, and Honda.
Now, the country is set to become the world’s second largest exporter of passenger vehicles, surpassing even the likes of South Korea and the United States. In fact, forecasters are expecting Chinese OEMs to capture as much as 33% of global new vehicle sales by 2030, exemplifying just how far the nation’s car market has come over the last 40 years.
Despite Chinese automotive having expanded overseas, this expansion has been primarily focused on developing markets, with the developed West proving a tougher nut to crack. According to a survey by market research firm Jato Dynamics, this has largely been due to a negative perception of Chinese vehicles among Western consumers, with 62% of participants favouring cars produced in the West.
While this perception of inferiority may persist among a large percentage of consumers, the reality is that many Chinese vehicles are actually of a higher quality than their Western counterparts. China’s manufacturers have worked hard to improve their products’ safety and quality, to the point where many of the country’s OEMs now regularly achieve five-star Euro NCAP ratings, placing them alongside Europe’s finest automakers.
In fact, some of the big-name Europeans OEMs have been handed zero-star scores for safety in recent years, having removed vital safety equipment from their vehicles in an effort to cut costs. As China continues to focus on improving quality instead of cutting corners, we expect that this will be the year that Western markets finally wake up to the fit and finish quality of Chinese vehicles. This will help manufacturers from China to establish a stronger foothold in Western markets, and open up more plants across Europe and North America.
In turn, this will encourage the nation’s tier one and silicon vendors to expand their operations across the West, emboldened by the newfound perception of Chinese quality around the world. With vendors investing increasingly in electrification tech as this segment of the market continues to grow substantially, breaking through to the West will be key to China’s prosperity in the electric vehicle [EV] revolution ahead.
4. Western consumers views towards Chinese OEMs brands starts to change
The fact that China features so prominently in our predictions for 2024 illustrates just how dominant the country has become in the industry over recent years. As already referred to, many Chinese vehicles are now considered to be among the best that the world has to offer in terms of quality and safety. But this high standard of safety is not merely limited to physical safety in the event of a crash; it also extends to vehicle cybersecurity.
To many people, this may come as a surprise. After all, China is often depicted as a ‘surveillance state’ among many Western countries, and an ever-present threat to personal privacies. With so much of our technology coming from China, many people are made to live in constant fear that their home appliances are subtly spying on their every move, often with the Chinese government’s backing.
The reality, however, is that many major tech companies and governments around the world are collecting large amounts of consumer data. For people in the West, however, China makes for a convenient bogeyman; an embodiment of the clandestine practices carried out by manufacturers around the world.
The conversation around surveillance is much more nuanced than that though, and the Chinese state is progressively increasing its investment in cybersecurity. This is largely in an effort to change negative perceptions among Western markets, but also to consolidate China’s position as a leading provider of ‘gold standard’ security solutions.
Government investment has enabled OEMs like Nio to flourish overseas, despite the manufacturer effectively positioning itself as a startup. Because Western governments aren’t allowed to invest in OEMs in this way, it could be argued that the fight for cybersecurity supremacy isn’t a fair one for European and North American manufacturers.
Regardless, one thing’s for certain: Chinese vehicle cybersecurity will continue to improve, and we believe that, over the next 12 months, China’s OEMs will begin to be seen more positively by Western consumers. Indeed, many of the nation’s manufacturers appear to be taking cybersecurity more seriously than Western tech vendors, and this is something that customers increasingly appear to be discovering for themselves.
If Chinese OEMs can translate this into positive marketing messages this will help companies like Nio to grow their market share considerably, especially as cybersecurity becomes an ever more important consideration for consumers. No longer will vehicles be seen as a threat to motorists’ privacy simply because they were produced in China.
After all, any car that passes Type Approval in a Western market should be considered trustworthy, given the level of documentation and evidence that’s needed. But if Western OEMs don’t want to be left in the dust, they need to be making cybersecurity a key priority now to avoid losing consumers en masse to their Chinese competitors.
5. One of the world’s top five OEMs will start a new company to innovate faster
In recent years, relatively new market entrants like Tesla and Nio have taken the automotive industry by storm, particularly in future-thinking areas like electric and autonomous vehicles. With EV sales in the US having recently hit a record high – as customers move away from petrol and diesel cars ahead of the 2035 ban – Tesla still accounts for 55% of the market.
Although this share is falling quarter on quarter as new startups continue to enter the space in their droves, it’s unmistakable that the industry’s more traditional players are lagging behind in electrification. In fact, analysis conducted in 2022 by campaign group InfluenceMap found that just two of the world’s largest carmakers are on the trajectory needed to hit the international target of limiting global heating to 1.5ºc. This is because, despite the growing shift towards EVs, plenty of OEMs are still focusing on selling petrol and diesel vehicles, which tend to be more lucrative than their electric counterparts.
When it comes to autonomous vehicles, meanwhile, established manufacturers have been quicker off the mark, but still trail behind new entities like Waymo – also known as the Google Self-Driving Car Project. In fact, according to a report by investment bank UBS, Waymo is on track to capture 60% of the driverless market by 2030.
It’s clear, therefore, that despite industry stalwarts’ efforts to innovate at pace, growing competitiveness in areas like electrification and autonomous vehicles are making it tougher to cut through the noise, and reaffirm their dominance. This is why we’re predicting that at least one of the world’s top five OEMs will start an entirely new company this year focused on EVs or autonomous vehicles. With new entrants to the market maintaining such a solid lead in these areas, the industry’s old heads will need to take a bold and well-publicised move to shake the market up. This will surely give those who would seek to take them on pause for thought.
Electrification and autonomous vehicles are unquestionably the new frontiers upon which the automotive industry will do battle. As such, the faster that manufacturers can innovate in these areas now, the more prosperous they will be in the long run. Setting up a new company would allow the big OEMs to achieve this objective, and prevent themselves from being consigned to the scrapheap of history.
6. The focus of ransomware attacks expands to vehicles
Ransomware attacks have long plagued the automotive industry.
Indeed, in a 2021 survey of 35 industries, automotive ranked eighth for reported ransomware attacks, and as the highest targeted manufacturing sub-sector, accounting for roughly a third of total attacks in all manufacturing disciplines. Typically carried out by criminal organisations, this type of malware-based attack involves the encryption of important files and data.
Perpetrators then demand ransom from their victims – i.e., OEMs, suppliers, third parties, etc. – in exchange for the decryption key. Besides the obvious financial impact that such attacks can have on OEMs, they can also inflict severe reputational damage as well. After all, if customers can’t trust that manufacturers can keep their sensitive data safe from criminals, they’re likely to switch their allegiances to a competitor who they believe will do a better job.
The risk of ransomware attacks has been compounded by the fact that many OEMs still treat cybersecurity as a mere afterthought, rather than an intrinsic part of their operations. While many manufacturers have moved to digitalising their facilities, not nearly enough attention is paid to ensuring that systems are kept secure. This is why it’s estimated that about half of the top 100 OEMs continue to be heavily impacted by ransomware attacks.
And to worsen the situation for those companies not taking their cybersecurity responsibilities seriously, new vulnerabilities are presenting themselves all the time. As the technology that cybercriminals use grows more sophisticated, new ways of committing attacks are constantly becoming open to them, and this is something that we are beginning to see play out.
For example, many fleet management companies have fallen victim to ransomware attacks over the course of 2023, with criminals specifically targeting fleets themselves. This has been different from the traditional approaches to committing attacks, which have typically focused on targeting organisation’s core systems rather than their fleets. But with each vehicle now posing a potentially catastrophic vulnerability to an entire fleet due to the technology present within, carrying out an attack in this way is becoming an increasingly viable option for hackers.
As such, it’s highly probable that, this year, we will start to see ransomware attackers expanding their focus from OEMs, suppliers and third parties to consumers and their vehicles. For example, due to the embedded connectivity of modern cars, it’s entirely possible that criminals will begin hacking on-board systems, rendering vehicles undrivable for their owners.
Extortionists could then demand a ransom from motorists in exchange for the restored use of their car. But with the vehicle’s systems clearly compromised, victims would have little recourse in preventing subsequent attacks from taking place against them. This would add further reputational damage to OEMs who’ve already been targeted by ransomware attackers and should be working hard to build trust with consumers as a result.
To prevent this from happening, manufacturers need to give the cyber security of their vehicles the highest level of priority. This is not only as a means of protecting their own systems, but also to keep customers out on the road safe from the scourge of cybercriminals as well.
7. The insurance industry’s rebellion against EVs gathers pace
In September 2023, John Lewis Financial Services stopped providing car insurance to new and existing customers who own electric cars. This, its underwriter Covéa explained, was due to the analysed expenses associated with repairing EVs, especially damaged batteries, which can cost upwards of £10,000 to replace. While the John Lewis announcement received much media attention at the time, it wasn’t the first insurer to have made such a move.
Earlier in the year, Aviva U-turned on its decision to provide insurance for the Tesla Model Y, declaring that it was ‘no longer able to offer a policy at renewal’. While most major insurers continue to provide cover for the Model Y and many other electric cars besides, it’s clear that John Lewis and Aviva’s decision forms part of a wider, worrying trend.
Namely, this trend focuses on moving away from insuring EVs and towards other, more lucrative markets. As insurance costs and premiums for EVs continue to remain much higher than those of their fossil-fuel based counterparts, it’s highly likely that we’ll see more insurers moving away from providing EV products in 2024. This will this come as huge blow to existing electric car owners, many of whom may be forced to bear the cost of repairs themselves.
Furthermore, it will create a barrier to consumers keen to move towards greener options in the run up to the 2035 ban on new diesel and petrol cars. News that insurers are removing coverage for EVs will likely cause many of these customers to think twice before making the switch to electric. This risks the ban being pushed back even further than it already has been, creating further uncertainties around OEMs’ future supply chain and manufacturing investments.
As a result, the need for OEMs to implement more robust cybersecurity measures into their EVs becomes clearer. This is especially important given that cyberattacks and hacker-based thefts form a substantial part of the risk assessment surrounding the insurance of electric cars.
As cyberattacks and thefts committed against EVs grow more prevalent and sophisticated, OEMs must give insurers the confidence they need to provide coverage. Insurers need to be safe in the knowledge that the manufacturer has taken every precaution to minimise the risk.
Doing so wouldn’t only be in the best interests of OEMs and insurers alike, but would also be far cheaper than having to second guess when and how the phaseout of ICE engines will happen. It would also reassure motorists, who would gain ready access to the products they need to justify purchasing an electric vehicle.
Conclusion
Given the point that we’re at now, it looks increasingly likely that 2024 will be another momentous year for the automotive industry. China is set to solidify its dominance in the industry ever further over the next 12 months and beyond. Meanwhile, OEMs will continue to explore emerging areas like electrification, automation, and in-vehicle gaming, offering exciting new experiences to drivers and passengers alike.
Amid the innovations that the industry is making, however, cybersecurity concerns will inevitably persist. Ransomware and other forms of attacks will become increasingly commonplace as the tools available to cybercriminals grow more sophisticated and dangerous in nature.
OEMs must work hard to protect both themselves and their consumers if they are to fully embrace the opportunities presented by new segments of the market, and truly secure the industry’s sustainable, autonomous future.
