Software-defined vehicle experiences and services is a developing, but potentially competitive, market.
What is Ultifi, and How Does it Relate to GM's Partnership with Google?
General Motors (GM) has recently unveiled Ultifi, a Linux-based end-to-end software platform meant to usher software-defined vehicle experiences and services. Ultifi will help enable frequent and seamless delivery of updates, features, apps, performance enhancement, and services to customers for over-the-air (OTA), cloud-based services (e.g., personalization via facial recognition, vehicle-to-everything (V2X)), and integration with third-party content. It is an in-house developed platform and its open-source capability unlocks opportunities for third-party developers to speed up the scale of the app offerings.
Built on GM's Vehicle Intelligence Platform (VIP), which provides the required bandwidth, cybersecurity, and processing power, Ultifi work as a centralized layer with key software acting as a hub for vehicle systems. Due to hardware abstraction, the deployment of software and applications is accelerated. Ultifi will increasingly integrate multiple domains, including infotainment, Advanced Driver-Assistant Systems (ADAS), telematics, climate and control, and propulsion. The hardware capable of supporting it will be available in select next-generation products starting in 2023. The platform will be used in all GM brands, both internal combustion and electric vehicles. GM believes that Ultifi will provide it with a strategic advantage in deploying software-defined vehicles and redefining vehicle ownership.
The announcement of the Linux-based platform was met with surprise, considering that in 2019 GM announced the integration of Android Automotive OS (AAOS) and Google Automotive Services (GAS) into its vehicles starting in 2021. According to GM, Ultifi will run alongside AAOS, and the Ultifi promo videos clearly show Google services on the vehicle dashboard. However, the company made it clear that not all its vehicles will get AAOS, conflicting with the initial information that GAS would be available in all its vehicle brands outside China. Even though the contract between GM and Google is not exclusive, the overlaps between Ultifi and GAS (e.g., app store) give the impression that GM may use GAS only temporarily until Ultifi and its app ecosystem are enhanced.
 Android Automotive OS (AAOS) is a full-stack turnkey automotive infotainment platform that runs directly in the in-vehicle infotainment hardware. It is not a fork or parallel development of Android. It uses the same codebase as AOSP, extending it to support automotive-specific technologies, requirements, and features. AAOS can be used without GAS.
 Google Automotive Services (GAS) is the collection of applications and services, including Google Maps, Assistant, and Play Store, that car Original Equipment Manufacturers (OEMs) can license and integrate into their infotainment systems. GAS requires a license, and AAOS complient to the Android Compatibility Definition Document (CDD).
How Does GAS Affect the Adoption of a Software-Defined Strategy?
Carmakers have been cautiously implementing GAS into production vehicles, starting with selected high-end or low volume models (e.g., GMC Hummer EV, Renault Mégane E-Tech Electric) as a Proof of Concept while other options are tested. For them, GAS is a double-edged sword. While it provides an extensive app ecosystem and popular apps are likely to increase customer adoption of embedded systems at low software development costs, it compromises differentiation and the ownership of the available applications in the car and their monetization strategy.
Most importantly, GAS can have a high impact on the adoption of a software-defined vehicle strategy. This strategy consists of implementing centralized hardware architecture with powerful computing and software abstraction that allows for software updates OTA and features from several domains to be activated on-demand via a cloud-based platform during the vehicle's lifetime. Although it encompasses all vehicle domains, enabling vehicle functionalities (e.g., heating and AC) is done via the infotainment system. Consequently, the whole strategy can be compromised if the carmaker does not own its vehicle store because it uses GAS/ Play Store.
First, Google can make it hard for carmakers to offer their own services and applications, such as EV battery management, fleet management, parking spot locator, and in-vehicle payments, if they conflict with Google services. Second, Google may impose conditions such as revenue sharing for implementing the delivery of features on demand. Lastly, considering that a software-defined architecture requires a paradigm change and significant upfront investments, carmakers can struggle to justify a Return on Investment (ROI) to their stakeholders if they do not fully control their infotainment systems' monetization.
New Vehicle Architectures and OTA-Based Business Models Effect on Adoption of GAS
The ultimate goal of carmakers is to provide differentiation while maintaining ownership of the user experience and deploying a flexible business model. So far, they have been struggling to achieve that.
GAS undoubtedly offers benefits aligned with the carmaker's current needs. It provides a superior user experience than embedded systems available today and the differentiation has the potential to drive sales, at least while its market penetration is still low. Regarding ownership, with GAS, Original Equipment Manufacturers (OEMs) will move from a situation in which they have no control over the mirroring experience (e.g., Android Auto, CarPlay) preferred by many vehicle owners to one with partial ownership. However, there are concerns about the lack of differentiation in the long term, the ownership of the vehicle experience, app store, and user data, how GAS could impact future OTA revenues, and whether Google will ultimately commit to GAS in the long-term.
This is a critical moment for carmakers because the way they shape their relationship with Google now can have a decisive impact on the further generation of digital revenue streams enabled by the software-defined platforms. Nevertheless, due to their traditional transactional mindset, OEMs may roll out GAS aggressively if the first vehicles featuring it start to outsell competitor models, disregarding long-term revenues.