BriefCASE: EV Software Challenges – Lessons from Volvo and Volkswagen

Over-the-air (OTA) software updates can improve an electric
vehicle's (EV) features and functionalities, but buggy software
rollout can have unintended consequences, including malfunction in
critical vehicle systems; sometimes it could be life-threatening.
The negative sentiment surrounding software issues can also dampen
consumer enthusiasm for new electric vehicles' reliability and
safety. This is why software development and management are
occupying centre stage in automakers' plans.

Multiple original equipment manufacturers have delayed launch of
new EVs due to issues related to software development. Volvo is one
of the latest to announce such issues. In June, the automaker recalled the EX30 electric small
sport utility vehicles (SUVs) owing to a software issue. The
software update led to a multitude of problems, including
blacked-out infotainment screens and emergency braking system
randomly activating.

Subsequently in June 2024, Volvo informed customers that the
EX90, currently facing delays, may be delivered
without up to 10 key features. This includes four safety and
advanced driver-assistance systems (ADAS) features. Volvo said
these features will be added later via an update.

Getting its software right will be critical for Volvo to
maintain the demand for its EVs. In January-July 2024, Volvo Cars reported a 62% year-on-year
increase in sales of fully electric vehicles to 104,890 units.

The software challenges largely originated from the adoption of
a central computing system that Volvo lacked prior experience in
developing. This system, heavily reliant on Nvidia processors, was
intended to transform the vehicle into a high-tech computer on
wheels, comparable to Tesla's offerings. However, the decision to
use a central computing system led to significant debugging
challenges, particularly as Volvo's engineering team was not
initially equipped with the necessary expertise.

E/E backbone to run the software: Volvo's balancing
act

Volvo initially aimed to deploy a zone architecture in 2022, but
this was postponed to 2025. By 2025, Volvo planned to introduce the
GPA EV platform, where vehicle interface units (VIUs) would be
transformed into zone controllers (ZCUs), thereby eliminating
multiple ECUs. The company also intended to integrate the functions
of the body/vehicle control unit (VCU) and the autonomy domain
controller into a centralized computer.

However, Volvo is facing challenges with the implementation of
this central computer, particularly concerning security issues when
integrating ADAS and VCU into a single central computer. As a
result, even if the company rolls out a central computer
architecture, it might consider reverting to a domain controller
plus zone architecture in future offerings.

Volvo's challenges reflect industry-wide software
struggles

Volvo is not the only automaker grappling with software-related
challenges. Volkswagen faced similar issues with the launch of its
ID.3 model in 2022, where initial production vehicles were delayed
owing to software glitches. Volkswagen's software subsidiary,
Cariad, struggled to resolve these issues, resulting in persistent
problems with slow and unreliable software for early customers. The
ambitious E3 2.0 software platform, which was to unify the digital
architecture across VW Group brands by 2026, is now being
completely reworked.

This situation highlights the complex and costly nature of
integrating cutting-edge software into modern vehicles, an issue
that parallels Volvo's own challenges with its EX90 model. Both
cases illustrate the critical need for robust software development
capabilities as traditional automakers navigate the digital
transformation.

In addition to software challenges, traditional OEMs face
significant performance disparities between their entry-level and
premium vehicle segments. Future computational capabilities and
memory bandwidth in vehicles are projected to vary greatly,
necessitating the development of adaptable and scalable E/E
architectures to efficiently manage these variations. Flexibility
and scalability in E/E architecture will be crucial for maintaining
competitiveness across different market segments.

Authored by: Hrishikesh S, Research Analyst, Supply
Chain & Technology, S&P Global Mobility

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