Tesla Joins the AR Fray as the Automotive Industry Leads a Push Toward the Digitization Horizon

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1Q 2019 | IN-5350

AR offers automotive manufacturers the ability to reduce costs, expedite design and prototyping processes, strengthen brand proposition, and increase customer engagement. Manufacturers will need to consider which type of device best meets their needs and integrates with their existing systems.

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Automotive Manufacturers Embrace AR


More and more automotive manufacturers are using Augmented Reality (AR) technologies and have implemented them in various parts of their project lifecycle. Design, manufacturing, marketing, and sales have all seen some AR investment and piloting. In accordance with ABI Research’s latest database, it is estimated that the AR revenue in the automotive industry will reach almost US$5 billion by 2023, while smart glasses shipments will climb to 1.5 million for the market.

Tesla filed a new patent for AR application that leverages Google Glass (Explorer Edition) aiming to reduce extra costs and extensive time in car manufacturing that occurs from manual calibration and inspection. The application is called Augmented Reality for Manufacturing. Using the AR glasses and machine vision achieves employee safety and task efficiency. The latest initiative from Tesla confirms that AR is a promising tool for addressing challenges in vehicle manufacturing, boosting task and employee efficiency. Apart from Tesla leveraging AR tech in the manufacturing stage, Volvo has already adopted an AR solution by using Microsoft HoloLens AR glasses, enabling production workers to digitally have access to hands-free assembly instructions in real time, while completing their tasks. Other global car manufactures, such as Hyundai, Jaguar Land Rover, and Audi, have already implemented AR applications, mainly as a part of their marketing strategies.

AR Applications in the Automotive Vertical


AR tools for strengthening brand proposition and increasing customer engagement are among the most promising and novel applications that businesses include in their marketing strategies. ARKit and ARCore development played a catalytic role in the massive deployment of AR mobile applications for marketing purposes. Automotive manufacturers can also leverage AR apps to better educate existing and potential customers regarding technical information and other car characteristics. Hyundai developed an AR app for Australian car dealerships, enabling sales employees to demonstrate car characteristics to customers in the showroom, instead of just using traditional videos and pictures. In addition, Jaguar Land Rover launched a mobile AR app that enables customers to explore and better understand key features of the car.

Product visualization though AR apps is a unique and engaging way to interact with products. Manufacturers enhance customer experience and transform sales from being product-centric to customer-centric, giving consumers the chance to customize and design their own virtual car models. These novel initiatives are aligned with digital transformation strategies that businesses adopt. AR applications that foster marketing and increase customer engagement are often cost-efficient solutions, especially when applied in mobile devices with some guaranteed Return on Investment (ROI) and measurable Key Performance Indicators (KPIs).

Car manufacturing is characterized by complex, time consuming, and high-cost processes; consequently, automotive companies continuously experiment with various solutions in order to increase their efficiency and reduce costs. AR solutions have been embraced and have seen success when implemented during the manufacturing stage, with data visualization and access to real-time information and instructions increasing employee efficiency, speed, and accuracy. AR tools allow employees to detect details and other related information that can contribute to diagnosing and solving issues faster, while significantly reducing errors. For example, AR glasses or mobile devices leveraging machine vision can capture the view of one or more automotive parts and analyze the parts for faults, overlay structural data regarding mechanical joints or interfaces with other parts, and leverage location and other sensor data to identify the precise location and orientation for installing parts.

Finally, AR tools can benefit professionals during the design and prototyping phase by enabling them both to share content in real time with colleagues/supported teams, regardless of their location, while allowing the assessment or modification of parts before actual fabrication or launch. By adopting AR during the design stage, businesses can save valuable time and costly resources, as they can implement immediate changes in the model, with real-time evaluation informing decision making. For instance, Ford has introduced Microsoft HoloLens in the design stage for real-time, spatially accurate, and collaborative digital design.

Future Expectations


The automotive industry is one of many enterprise verticals that can benefit from AR technologies in various project stages, spanning the initial phases of designing and prototyping to the go-to-market strategies and consumer engagement. However, the challenges that limit massive adoption of AR tools in the automotive industry during all project stages are observed in other verticals as well. High Capital Expenditure (CAPEX) and Operational Expenditure (OPEX) for AR smart glasses are two of the main barriers that affect even the most lucrative industries; large-scale organizations require thousands of devices that automatically boost the cost of investment. In order to address this issue, businesses either remain in trial phases and/or leverage mobile devices as a less expensive solution instead of headsets. ROI tends to be a less crucial consideration, as the number of successfully implemented use cases is continuously increasing and the KPIs are easier to define and measure.

The device type that car manufacturers will mainly select depends on the use case for which they plan to implement AR solutions. For instance, for marketing purposes, mobile AR is the most preferred, as it is cost efficient and user friendly, while during the manufacturing stage, Head-Mounted Displays (HMDs) are more suitable in terms of flexibility and user workflow. Generally, it is expected that mobile AR solutions will dominate in the majority of enterprise verticals in the near term, with the number of smart glasses increasing, ultimately taking the majority share in the future. Another factor to consider is that the automotive manufacturing stage relies on robotics and automated processes; consequently, the device decision depends on which type of device can integrate better with existing systems. While HMDs and mobile devices are targeted for human use, machine vision and AR integration with machines offers a bridge between automation and the human workforce. In addition, weight, display quality and graphics, and connectivity issues affect hardware decision making as well.

As the technology rapidly evolves and car manufacturers align with technological advancements for optimizing their processes, diversifying their products, improving efficiency, and meeting customer expectations, AR will play a catalytic role for achieving their strategic goals. Expected technological advancements in hardware, software, and content will enable more and more car manufacturers to adopt AR solutions, while businesses that have already experimented with the technology will be more comfortable scaling up quickly.


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