Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)2024 State of Automotive Software Development ReportWhat Are the Top Concerns Impacting Automotive Software Development?Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)2|2024 State of Automotive Software Development Report IntroductionWelcome to the 2024 State of Automotive Software Development Report!This year,nearly 600 automotive development professionals around the world provided responses to questions regarding current practices and emerging trends within the automotive software industry.The survey was expanded geographically in 2024 to include more respondents from the Asia-Pacific region,which provides a more accurate and representative view of the current state of automotive software development worldwide.Partly due to this geographical expansion,our findings this year show that quality is now the leading key area of concern,rising above both safety and security to take the top spot.In second place,continuing the trend from last year,security has now for the first time become more important than safety as a leading challenge for automotive software professionals likely because safety standards are now well established in the industry.Indeed,with the continued growth of electric vehicles and connected vehicles becoming more established across the automotive industry,embedded security is on the rise as a prominent trend for embedded software in 2024.More connectivity in embedded systems leads to increased complexity and risk of software vulnerabilities,so security and meeting regulations requiring cybersecurity approval will be an important focus.The current state of the global economy had the greatest market impact on automotive software professionals,which means that maintaining industry competitiveness and maximizing existing resources continue to be of great importance to automotive developers in 2024.Our findings also show that there was an increasing move toward a remote/hybrid workforce,so these strategies will be important for accelerating development and increasing productivity across distributed teams in software and hardware worldwide.Improving efficiency and saving time during development was top of mind for many automotive developers in 2024.Respondents are addressing this by adopting various development methods and shifting testing to the left of the linear software development lifecycle.To save time,many more automotive professionals are using coding standards such as MISRA,and development tools such as those used for Static Analysis.Artificial intelligence and machine learning are also still being used.We hope this information will help your development team innovate faster and improve quality while maintaining compliance for safety and security.Thank you to everyone who participated in the survey!Jill Britton Director of Compliance Perforce SoftwareJill Britton,Director of ComplianceJill Britton Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)3|2024 State of Automotive Software Development Report Table of ContentsWhat Are the Top Concerns Impacting Automotive Software Development?.4The Leading Concerns in Automotive Software and Technology Development .8Areas of Automotive Software Development .21Adoption&Implementation of Shift-Left.22Recalls&Vulnerabilities.25Automotive Software Security.27How Much Are Developers Truly Affected by Electric,Autonomous,Semi-Autonomous,and Connected Vehicles?.28Why Standards-Compliant Software Remains Vital for Automotive Software .35Leading Challenges in Proving Compliance .44Key Coding Standards for Automotive Software Development .46How Development Teams Manage Their Work .48How Artificial Intelligence and Machine Learning Have Impacted Automotive Design .56Which Software Tools Development Teams Are Using.60Why Static Analysis Remains Essential for Automotive Software Development .62About the Survey Appendix .63 Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)4|2024 State of Automotive Software Development Report What Are the Top Concerns Impacting Automotive Software Development?The Leading Market Challenges of 2024 in Automotive Software Development 2024 Market Conditions Of all the market conditions that have most impacted automotive organizations,the global economy continued to be a leading concern among respondents(35%).Supply chain challenges were also a factor,impacting 26%of respondents.There was also a 6%increase in a shift to a remote/hybrid workforce and/or outsourcing/opening remote locations globally.Finally,ongoing conflict throughout the world is further impacting the automotive software market,increasing by 6%since last year.WHAT MARKET CONDITIONS HAVE MOST IMPACTED SOFTWARE DEVELOPMENT FOR YOUR ORGANIZATION?14 23-85 23-43! 23-15& 23-30%4%OngoingconflictworldwideGlobaleconomyShift to remote/hybridworkforce and/oroutsourcing/openingremote locations globallySupply chainchallengesOther2023-N/A Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)5|2024 State of Automotive Software Development Report REGION While the global economy was the most pressing market concern for a majority of respondents across all regions,breaking the responses down by region shows us an interesting divide.North America,Europe and the UK,and the Middle East were most impacted by the growing shift to remote/hybrid work.Asia,Africa,Oceania,and Latin America,however,had more supply chain challenges.133(%9)% %8B%4%4%96%1 %North AmericaEurope/UKAfrica198$%Middle EastAsiaOceania1233%Latin AmericaOngoing conflict WorldwideGlobal economy Shift to remote/hybrid workforce and/or outsourcing/opening remote locations globallySupply chain challengesOtherORGANIZATION TYPE The global economy was a top market concern for all organization types.OEMs,Tier 1,and Tier 3 suppliers were most impacted by supply chain challenges,while Tier 2 suppliers,most of whom were in North American and Europe/UK,were most impacted by the shift to a remote/hybrid workforce and/or outsourcing/opening remote locations globally.99 0 2 $0%(%3%2%4%OEMTier 1Tier 3137#$%Tier 2Ongoing conflict WorldwideGlobal economy Shift to remote/hybrid workforce and/or outsourcing/opening remote locations globallySupply chain challengesOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)6|2024 State of Automotive Software Development Report Hybrid Working Is the New Norm Becoming more widespread during COVID-19,connecting via video conferencing and working asynchronously have presented more options for workers and companies in flexible scheduling,cost savings,and widening the global talent pool.As we continue to navigate workplace flexibility,hybrid working seems to be the work model of choice for organizations and employees in 2024,and the automotive industry is no exception 54%of respondents said that their development team practices hybrid working,36%work in an office,and 10%work exclusively from home/remote.DOES YOUR DEVELOPMENT TEAM MAINLY:36T%Work inan officeHybridworkingWork exclusivelyfrom home/remoteA mix of going into a physical workplace and working remotely from another location,the hybrid work model strikes a balance that increases opportunities for collaboration and team building,while still providing the benefits of a flexible work schedule and increased productivity.Hybrid work is on track to be the new norm.A recent survey conducted by The Conference Board found that 27%of U.S.CEOs,30%of Europe CEOs,and 13%of Latin America CEOs cited“maintaining hybrid work”as a human capital priority.Technology continues to change the landscape of the workforce in the digital age.According to the World Economic Forum,the number of digital jobs that is,“jobs and workforces distributed across borders in different geographies,empowered by digital tools to perform their tasks,connect,and communicate globally”is expected to rise globally to 92 million by 2030.Considering the current 54%majority of respondents who practice hybrid working and the 6%increase since last year from our survey respondents in“shifting to a remote/hybrid workforce and/or outsourcing/opening remote locations globally,”it will be interesting to see how this shapes the way automotive software development organizations work in the coming years.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)7|2024 State of Automotive Software Development Report 2024 Leading Challenges Automotive organizations are facing many competing challenges in 2024.In fact,24%of automotive professionals said that they were concerned with“all of the above,”a new answer option that was added to the survey in 2024.Similarly to last year,respondents were most concerned with the individual challenges of“maintaining industry competitiveness”(30%)and“maximizing existing resources(18%).Fourteen percent also expressed that“educating existing talent”is a challenge they are focusing on in 2024,followed by“mitigating software recalls”(6%)and“making compliance easier”(6%).“Other”leading challenges answers included“social contributions,”“working to track new directions in the auto industry,”and“keeping on track with e-mobility market trends.”18 23-26%Maximizing existing resources14 23-17ucating existing talent30 23-38%Maintaining industry competitiveness6 23-10%Mitigating software recalls6 23-6%Making compliance easier24 23-N/AAll of the above2 23-3%OtherORGANIZATION TYPE When looking at the individual leading challenges by organization type,Tier 1(36%)and Tier 2(25%)suppliers were most concerned about“maintaining industry competitiveness.”Tier 3(24%)suppliers were most concerned with“maximizing existing resources.”Respondents at OEMs were split equally at 25%for maintaining competitiveness and 25%maximizing resources.However,27%of OEMs and 27%of Tier 3 suppliers said that“all of the above”challenges were leading concerns.12%7%66$%5%4$%8%8%6%5%1%1%OEMTier 1Tier 316%8%Tier 2Maximizing existing resourcesEducating existing talentMaintaining industry competitivenessMitigating software recallsMaking compliance easierAll of the above Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)8|2024 State of Automotive Software Development Report The Leading Concerns in Automotive Software and Technology Development We identified five key areas of concern in automotive software development:1.Quality 2.Security3.Safety 4.Team Productivity 5.Testing Based on the results,quality takes the lead as the top concern at 29%.This is an upset from last year:in 2023,safety was the leading concern,followed by security,then quality.This new emphasis on quality could be due to the expansion of our survey geographically to reach more countries in the Asia-Pacific region.Countries in this region may be concentrating on keeping quality high because they either dont have to address other standards yet,or they already have standards coverage.While security was the leading concern for respondents in other regions(28%),quality was the leading concern for respondents in the Asia-Pacific(37%).Security(25%)has also now outranked safety(21%)as the more immediate concern for developers,while safety decreased by 9%over last year.This shift is likely because safety standards are now well established in the automotive industry,so the focus is moving toward security as embedded automotive systems become increasingly connected.In addition,team productivity has now outpaced testing,increasing by 4%compared to last years report.Given the upward trend in automotive software professionals working from distributed locations across the globe,productivity concerns could be higher this year because teams are not working together as often in the same place and at the same time.QualitySecuritySafetyTeam ProductivityTestingOther29 23-26% 23-27! 23-30 23-6%9 23-11%6 23-N/AWHAT IS YOUR BIGGEST CONCERN IN AUTOMOTIVE SOFTWARE AND TECHNOLOGY DEVELOPMENT TODAY?Quality and security now outpace safety as a top concern in automotive software development.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)9|2024 State of Automotive Software Development Report Quality GENERAL 29%of those surveyed cited quality as their top concern in automotive software development.When those 29%were asked about their leading quality concerns,there were a few shifts compared to last years report.16%of respondents did not have specific quality concerns.For those who did,“our testing efforts are not exhaustive and we do not have time to test more”moved to the top concern this year at 24%,over“our codebase is too complex”at 23%.Following closely behind was“it is difficult to enforce coding best practices”at 21%.Most survey respondents were not as concerned with peer code reviews being inconsistent(7%).Overall,there was a decrease year over year in specific quality concerns,a continuation of a downward trend from 2023.These results indicate that internal code review processes are becoming more streamlined but having time to test fully is still a challenge.Peer code reviews are inconsistent.Our codebase is too complex.It is difficult to enforce coding best practices.I do not have quality concerns.Other23 23-32! 23-32$ 23-25%7 23-10 23-N/AWHICH BEST DESCRIBES YOUR QUALITY CONCERNS?Our testing efforts are not exhaustive and we do not have time to test more.9 23N/ARESPONDENT EXPERIENCE LEVEL Respondents with less than 1 year of experience were the most concerned with the codebase being too complex(43%),while those with more than 10 years of experience were most concerned about their testing efforts not being exhaustive,and not having time to test more(24%).A notable change from last year is that those with 3-5 years of experience are now much more concerned with the codebase being too complex(30%)and 5-10 years of experience more concerned about testing efforts not being exhaustive(44%),over enforcing coding best practices.This may indicate that respondents of any experience level have a greater understanding of the requirements to produce quality code.1-3 yearsLess than 1 year3-5 yearsMore than 10 years5-10 years30#6%4%8!$%6C%9%9%5%6D%3%Our codebase is too complex.It is difficult to enforce coding best practices.Peer code reviews are inconsistent.Our testing efforts are not exhaustive and we do not have time to test more.I do not have quality concerns.Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)10|2024 State of Automotive Software Development Report REGION Respondents from Asia and the Middle East said that“testing efforts are not exhaustive and we do not have time to test more”was their highest quality concern,and most of these work for Tier 1 suppliers,which could indicate that they are more concerned about delivery schedules than other regions.Whereas in North America,respondents were more concerned with the complexity of their codebase.19%8$G%4)C%58%8(%4%P%North AmericaEurope/UKAfrica40 %Middle EastAsiaOceania50P%Latin AmericaOur codebase is too complex.It is difficult to enforce coding best practices.Peer code reviews are inconsistent.Our testing efforts are not exhaustive and we do not have time to test more.I do not have quality concerns.OtherORGANIZATION TYPE Quality challenges differed,depending on the type of automotive organization.Top concerns for OEMs were their“codebase being too complex,”while suppliers were more concerned about“difficulty enforcing coding best practices”and“testing efforts not being exhaustive.”20%60)%7%7343%3%OEMTier 1Tier 3278%8%8%Tier 2Our codebase is too complex.It is difficult to enforce coding best practices.Peer code reviews are inconsistent.Our testing efforts are not exhaustive and we do not have time to test more.I do not have quality concerns.Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)11|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)When breaking down the responses by automotive development focus,the leading quality concern for many areas was“testing efforts not being exhaustive and they do not have time to test more,”while other areas were more concerned with“difficulty enforcing coding best practices.”239%5%51$%4%9!(%4%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive15!)%Powertrain(non-EV)24%74%7%3cess Control and Comfort SystemsInfotainment Systems280%9%9%7AS/Driver Assistance143$#%LIDARInstrument Clusters/HVAC/Lighting204 %4%5%Connected Car and V2X22D%6%6%4aler ManagementManufacturing35%5 %Supply Chain172%N/A30&%4%4&%DiagnosticOur codebase is too complex.It is difficult to enforce coding best practices.Peer code reviews are inconsistent.Our testing efforts are not exhaustive and we do not have time to test more.I do not have quality concerns.OtherAUTOMOTIVE DEVELOPMENT FOCUS(EV)For electric vehicle components,testing efforts and enforcing coding practices were of greater concern for Hybrid Electric Control Systems,while the codebase complexity was the greater concern for Powertrain.EV charging did not have as many specific quality concerns overall.27$%5%4%3%PowertrainHybrid Electric Control Systems(HEV/EV)17!$%EV ChargingOur codebase is too complex.It is difficult to enforce coding best practices.Peer code reviews are inconsistent.Our testing efforts are not exhaustive and we do not have time to test more.I do not have quality concerns.Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)12|2024 State of Automotive Software Development Report Security GENERAL 25%of those surveyed cited security as their top concern in automotive software development.Comparing the results to last years report,the top security concern remained“unauthorized access to on-board/off-board systems”at 35%.This figure could be higher than the other security concerns because“unauthorized access to on-board/off-board systems”is an end result of not implementing the other security practices.However,compared to last year,those chiefly concerned with unauthorized access decreased by 18%.This year,we replaced“security testing takes too much timeit slows down development”with a new response option that 28%of respondents said was their top concern,“It is difficult(and time-consuming)to fulfill security requirements”so it could be that respondents who previously cited“unauthorized access”as their top concern moved their response to“fulfilling security requirements.”Concerns over“enforcing secure coding practices”is the third leading security challenge at 14%,while teams“lacking the skills needed to combat security threats”moved down to the fourth leading concern compared to it being the third last year.In 2023,automotive professionals focused on training and education as a priority,so many respondents may now have achieved adequate security training to combat security threats.WHICH BEST DESCRIBES YOUR SECURITY CONCERNS?28 23-35 23-53 23-20 23-24 23N/AIt is difficult(and time-consuming)to fulfill security requirements(i.e.IEC 62443,ISO 27001)We are concerned with unauthorized access to on-board/off-board systems.It is difficult to enforce secure coding practices.OtherOur development team lacks the skills needed to combat security threats.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)13|2024 State of Automotive Software Development Report REGION When looking at the collected responses by region,respondents in Asia were most concerned with“fulfilling security requirements”at 37%.Those in North America,Europe/UK,the Middle East,and Africa were more concerned with“unauthorized access to on-board/off-board systems.”RESPONDENT EXPERIENCE LEVEL Regardless of experience level,most automotive software professionals were most concerned about both the difficulty in“fulfilling security requirements”and“unauthorized access to on-board/off-board systems.”Those with 1-3 years of experience were more concerned about the difficulty in“enforcing secure coding practices”over“fulfilling security requirements,”however.This is probably because fulfilling security requirements such as ISO 27001,which was given as an example in the answer,is typically an issue for senior team members and managers over those with less experience.1-3 yearsLess than 1 year3-5 yearsMore than 10 years5-10 years322%8U 0% 11 %6%2&E%It is difficult(and time-consuming)to fulfill security requirements(i.e.IEC 62443,ISO 27001)We are concerned with unauthorized access to on-board/off-board systems.It is difficult to enforce secure coding practices.OtherOur development team lacks the skills needed to combat security threats.Regions across the globe have distinct security concerns,and each one can be effectively addressed through the implementation of a secure software development lifecycle.241G%67c7#%N/ANorth AmericaEurope/UKAfrica18%9U%Middle EastAsiaOceania3334%Latin AmericaIt is difficult(and time-consuming)to fulfill security requirements(i.e.IEC 62443,ISO 27001)We are concerned with unauthorized access to on-board/off-board systems.It is difficult to enforce secure coding practices.OtherOur development team lacks the skills needed to combat security threats.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)14|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)When looking at the collected responses by automotive development focus,concerns about“unauthorized access to on-board/off-board systems”was the highest for Access Control and Comfort Systems,Infotainment Systems,and Connected Car and V2X.The difficulties“fulfilling security requirements”was a top concern among respondents in Powertrain,ECU/ECM,AD/Autonomous Drive,and Dealer Management.36&%9(20%8%6%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive37#%9%Powertrain(non-EV)22A%737cess Control and Comfort SystemsInfotainment Systems30(%9AS/Driver Assistance12%0&%9%LIDARInstrument Clusters/HVAC/Lighting305%9%Connected Car and V2X323%83aler ManagementManufacturing32%5%Supply Chain273%N/A31%83%DiagnosticIt is difficult(and time-consuming)to fulfill security requirements(i.e.IEC 62443,ISO 27001)We are concerned with unauthorized access to on-board/off-board systems.It is difficult to enforce secure coding practices.OtherOur development team lacks the skills needed to combat security threats.AUTOMOTIVE DEVELOPMENT FOCUS(EV)For respondents focusing on electric vehicle components,those working on Powertrain found it most difficult to“fulfill security requirements,”while EV Charging and Hybrid Electric Control Systems(HEV/EV)listed their biggest challenge as“unauthorized access to on-board/off-board systems.”36&%8)9%PowertrainHybrid Electric Control Systems(HEV/EV)258%EV ChargingIt is difficult(and time-consuming)to fulfill security requirements(i.e.IEC 62443,ISO 27001)We are concerned with unauthorized access to on-board/off-board systems.It is difficult to enforce secure coding practices.OtherOur development team lacks the skills needed to combat security threats.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)15|2024 State of Automotive Software Development Report Safety GENERAL 21%of those surveyed cited safety as their top concern in automotive software development.This year saw an increase in difficulty“fulfilling every ISO 26262 requirement,”from 47%in 2023 to 50%in 2024.As we will show later in this report,most respondents are required to comply with ISO 26262.North America,Europe/UK,and Asia had the highest number of respondents required to comply with ISO 26262.“Other”responses included that in some cases,“safety concepts are not often clearly defined,”and“advanced development is not as affected by ISO 26262,but we are aware of them.”This last response is especially concerning,because safety is extremely important for advanced automotive systems!WHICH BEST DESCRIBES YOUR SAFETY CONCERNS?Our customers expect us to comply with a safe coding standard.We are struggling to ensure safety across the supply chain.It is difficult(and time-consuming)to fulfill every ISO 26262 requirement.Other50 23-47 23-34 23-19 23N/A Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)16|2024 State of Automotive Software Development Report ORGANIZATION SIZE Organizations of all sizes are struggling to“fulfill every ISO 26262 requirement,”especially for Large(56%)and Enterprise(57%)organizations.Small-sized organizations noted“struggling to ensure safety across the supply chain”as their top concern at 40%.57%Enterprise(10,000 employees)56$ %Large(1000 employees)47(%9%Medium(101-999 employees)35%Small(100 employees)It is difficult(and time-consuming)to fulfill every ISO 26262 requirement.Our customers expect us to comply with a safe coding standard.We are struggling to ensure safety across the supply chain.OtherREGION When examining the collected responses by region,the majority of regions found it most difficult to“fulfill every ISO 26262 requirement.”Those respondents in the Middle East and Africa said they were more concerned about“customers expecting them to comply with a safe coding standard.”49D1%9%P%X#%7%N/ANorth AmericaEurope/UKAfrica25u%Middle EastAsiaOceania100%Latin AmericaIt is difficult(and time-consuming)to fulfill every ISO 26262 requirement.Our customers expect us to comply with a safe coding standard.We are struggling to ensure safety across the supply chain.Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)17|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)The top concern in most areas of automotive development focus was fulfilling ISO 26262 requirements,with a few notable exceptions:Manufacturing,Supply Chain,Access Control and Comfort Systems,where customer expectations to comply with safe coding standards was the greater concern.53%9WD0%6%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive35%0%Powertrain(non-EV)283Pcess Control and Comfort SystemsInfotainment Systems60AS/Driver Assistance3332 (%LIDARInstrument Clusters/HVAC/Lighting421%Connected Car and V2X381#%8%3aler ManagementManufacturing33%93%Supply Chain20 %N/A38!(%DiagnosticIt is difficult(and time-consuming)to fulfill every ISO 26262 requirement.Our customers expect us to comply with a safe coding standard.We are struggling to ensure safety across the supply chain.OtherAUTOMOTIVE DEVELOPMENT FOCUS(EV)In areas of electric vehicle development focus,respondents in all areas said that“fulfilling every ISO 26262 requirement”was their overall concern,similarly to non-EV components.Notably different than the rest,however,the Powertrain area response noted that“struggling to ensure safety across the supply chain”was of greater concern than expectations from customers to“comply with a safe coding standard.”This is likely because according to our survey responses,more suppliers are working on Powertrain components than OEMs.49&%9D&!%9%PowertrainHybrid Electric Control Systems(HEV/EV)47&%EV ChargingIt is difficult(and time-consuming)to fulfill every ISO 26262 requirement.Our customers expect us to comply with a safe coding standard.We are struggling to ensure safety across the supply chain.Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)18|2024 State of Automotive Software Development Report Team Productivity GENERAL 10%of those surveyed cited team productivity as their top concern in automotive software development.When compared to last years report,the team productivity concerns have changed significantly.“Managing design and IP assets across hardware and software teams”is now the top concern at 42%,an increase of 8%over last year.Whereas“managing the lack of integration or alignment between disparate teams in parallel development”moved down to the second top concern at 27%,a decrease of 17%compared to last years report.In addition,the need to“extend release cycles due to merge conflicts and broken builds”increased from 0%to 8%since last year,while the concern about“QA cycles being long”decreased from 22%to 8%.This shift in leading team productivity challenges speaks to the increasing complexity of managing and coordinating projects across embedded development teams.Automotive software development professionals who are having difficulties managing design and IP assets could benefit from Perforce IPLM solutions that help plan,manage,reuse,and track IP and design data.WHICH BEST DESCRIBES YOUR TEAM PRODUCTIVITY CONCERNS?27 23-44B 23-34%8 23-22%8 23-0 23N/AWe need to manage the lack of integration or alignment between disparate teams in parallel development.We need to manage design and IP assets across hardware and software teams and facilitate reuse.QA cycles are long,so we are often waiting for testing to be complete.OtherWe need to extend release cycles due to merge conflicts and broken builds.Key areas of concern in regard to team productivity:Managing design and IP assets across hardware and software teams,and team integration and alignment between disparate teams.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)19|2024 State of Automotive Software Development Report TEAM SIZE While“managing design and IP assets across hardware and software teams”led overall,when breaking down the top concerns by team size,smaller teams with 1-5 people were most concerned with the length of QA cycles,as they likely have fewer resources to accelerate testing processes.Larger teams were most concerned with needing to“manage the lack of integration or alignment between disparate teams in a parallel environment.”6-201-521-10025 100-25033307%45U%5%8%3%5 %We need to manage design and IP assets across hardware and software teams and facilitate reuse.We need to extend release cycles due to merge conflicts and broken builds.We need to manage the lack of integration or alignment between disparate teams in parallel development.OtherQA cycles are long,so we are often waiting for testing to be complete.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)20|2024 State of Automotive Software Development Report TestingGENERAL 9%of those surveyed cited testing as their top concern in automotive software development,an 18crease compared to last year.Struggling to test efficiently remained the top testing concern at 26%,but decreased by 18%since last year.Difficulty“documenting automated and manual testing efforts for compliance”also decreased from 23%to 20%year over year.Meanwhile,more respondents struggled with“not testing early enough in development”than in 2023,with an increase of 5%over last year,and“coordinating testing efforts is difficult across global teams”also increased from 14%to 16%.WHICH BEST DESCRIBES YOUR TESTING CONCERNS?It is difficult to document our automated and manual testing efforts for compliance.We are not testing early enough in development,so we find bugs too late.We are struggling to test efficiently testing and software validation are time-consuming.Coordinating testing efforts is difficult across global teams.Other26 23-44 23-23$ 23-19 23-14 23N/AORGANIZATION SIZE Large and Enterprise organizations had difficulty testing efficiently as their top testing concern.Small organizations struggled to coordinate testing efforts across global teams,and Medium organizations said that not testing early enough in development was their top testing concern.32%6$ %Enterprise(10,000 employees)322%8%Large(1000 employees)258%6%Medium(101-999 employees)22&%Small(100 employees)We are struggling to test efficientlytesting and software validation are time-consuming.It is difficult to document our automated and manual testing efforts for compliance.We are not testing early enough in development,so we find bugs too late.Coordinating testing efforts is difficult across global teams.Other Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)21|2024 State of Automotive Software Development Report Areas of Automotive Software Development The automotive software industry continues to evolve and adapt to growing market demands.As we can see from the respondents to this survey,todays vehicles are made up of many different software components and development focuses.There were respondents from most of these areas,allowing us to establish some noteworthy trends that emerged in our survey results.Automotive Development Focus (Non-Electric Vehicle Components)Automotive software development covers many areas of design and development,from chassis and safety(electric power steering,brakes,airbags)software to ADAS/driver assistance,and software for the supply chain.The automotive software industry covers all aspects of what makes a vehicle today,from electric components to instruments,and software for the supply chain.32U/ECM22%Powertrain(non-EV)26/Autonomous Drive15cess Control and Comfort Systems30AS/Driver Assistance23%Infotainment Systems11%LIDAR22%Connected Car and V2X15%Instrument Clusters/HVAC/Lighting10aler Management20%Diagnostic15%Manufacturing10%Supply Chain5%N/A10%Other25%Chassis and Safety(Electric PowerSteering EPS,Brakes,and Airbags)WHAT DOES YOUR DEVELOPMENT TEAM DESIGN(NON-EV)?SELECT ALL THAT APPLY.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)22|2024 State of Automotive Software Development Report Adoption&Implementation of Shift-Left Shift-left strategy refers to processes and tooling to automate testing and security scanning earlier ideally,as soon as the code is written within the software development lifecycle(SDLC).Although there is still progress to be made in the automotive software industry,33%of respondents have already implemented a shift-left strategy,are currently in the process of implementing it(26%),or at least know that it is important(26%).However,a small percentage of respondents(16%)have no plan of implementing a shift-left process,which is an increase of 6%over last year.The majority of the automotive software industry has adopted or is actively implementing shift-left practices.SHIFT-LEFT TESTING MOVES TESTING EARLIER IN THE SOFTWARE DEVELOPMENT LIFECYCLE.DOES YOUR ORGANIZATION HAVE A SHIFT-LEFT STRATEGY IN PLACE?No,we do not but know that it is important.Yes,we are in the process of implementing it.No,we do not have a plan to implement it.33 23-34& 23-39& 23-17 23-10%Yes,we have implemented it.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)23|2024 State of Automotive Software Development Report REGION When looking at those who are shifting testing to the left by region,a majority of respondents in North America and Europe/UK have implemented a shift-left strategy or are in the process of implementing one.While 31%of respondents in Asia have already implemented it,30%do not currently have a strategy in place but know that it is important.Most of the other regions respondents do not currently have a shift-left strategy in place,but they do know that it is important.331#A141 0 %North AmericaEurope/UKAfrica23A%Middle EastAsiaOceania333%Latin AmericaYes,we have implemented it.Yes,we are in the process of implementing it.No,we do not but know that it is important.No,we do not have a plan to implement it.ORGANIZATION SIZE Enterprise,Large,and Medium organizations tend to have already shifted left.Small organizations recognized the importance of shifting testing to the left but have not yet made it a part of their process.There continues to be an overall trend from 2023 to 2024 toward shifting left;however,smaller companies may be less likely to do so than larger organizations,because shifting left requires more resources and planning.42&%Enterprise(10,000 employees)34$(%Large(1000 employees)280%Medium(101-999 employees)21#)%Small(100 employees)Yes,we have implemented it.Yes,we are in the process of implementing it.No,we do not but know that it is important.No,we do not have a plan to implement it.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)24|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)Most areas of non-EV automotive development have already(or are in the process of)adopting a shift-left strategy,with Instrument Clusters/HVAC/Lighting having a higher percentage of adoption at 48%.38#C%!9%$%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive34!1%Powertrain(non-EV)390!A1cess Control and Comfort SystemsInfotainment Systems37&#AS/Driver Assistance42#%8H%9$%LIDARInstrument Clusters/HVAC/Lighting393%Connected Car and V2X40!)4)aler ManagementManufacturing20(%Supply Chain41(%DiagnosticYes,we have implemented it.Yes,we are in the process of implementing it.No,we do not but know that it is important.No,we do not have a plan to implement it.AUTOMOTIVE DEVELOPMENT FOCUS(EV)Similarly,those working in electric vehicle areas have either already shifted left or are in the process of shifting left.As electric vehicle development projects are more recent due to newer technologies,more respondents may have implemented shift-left testing from the start compared to non-EV component projects.Overall,these results are similar to the non-EV components,as EVs have become more mainstream.40%$A&!%PowertrainHybrid Electric Control Systems(HEV/EV)40$%8(%EV ChargingYes,we have implemented it.Yes,we are in the process of implementing it.No,we do not but know that it is important.No,we do not have a plan to implement it.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)25|2024 State of Automotive Software Development Report Recalls&Vulnerabilities In the last two decades,the number of automotive recalls has nearly doubled in North America,according to the National Highway Traffic Safety Administration(NHTSA).In Europe,according to data compiled by the Car Recalls website,in 2020 there were 353 car recalls total,which affected 248 models and 38 manufacturers.And in North America,according to the NHTSA,in 2023 there were more than 320 automotive recalls for nearly 35 million vehicles.While this is a dramatic decrease since 2019(964 automotive recalls for 53.1 million vehicles),a recall can still be incredibly expensive for manufacturers.Aside from the financial impact,a recall can affect a companys reputation and impact market performance.In general,each recall affects thousands of vehicles.Whats more,the impact of a vehicle recall is significant with the cost averaging about$500 per vehicle,according to Mike Hield,a director in the automotive and industrial practice at AlixPartners.When it comes to automotive software,in particular,an in-depth analysis of NHTSA recall data shows that the involvement of automotive software in all recalls has risen from 5%in 1966 to 15%of all recall incidents in 2023.Wards Auto also reports that over-the-air(OTA)software updates are on the rise for recalls.So,instead of having to recall every vehicle to a physical location,software patches can be applied OTA for an automotive software recall.This may lead to significant changes in the development process.Recall Fewer respondents were impacted by a recall than last year,overall.This could be explained by the reduction in vehicle recalls overall in 2023,and because it is more likely today that any vulnerability is repaired quickly by an OTA update.HAS YOUR ORGANIZATION BEEN IMPACTED BY A RECALL?Yes,we have been impacted once.Yes,we have been impacted several times.Yes,we have been impacted many times.I dont know.20 23-24%9 23-14%7 23-18F 23-32 23-12%No,we have not been impacted.The average cost of a software-related automotive recall is about$500 per vehicle.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)26|2024 State of Automotive Software Development Report Code VulnerabilityIt is important to note that recalls may or may not be due to a code vulnerability.A recall can be caused by a software or hardware problem,whereas a code vulnerability will always be a security issue in software.This year,there were fewer respondents impacted by a code vulnerability compared to 2023.But organizations developing automotive software should still be on their guard:according to the Hacker News,just last year,multiple bugs were found in millions of vehicles from 16 different car manufacturers.HAS YOUR ORGANIZATION BEEN IMPACTED BY A CODE VULNERABILITY?19 23-23%9 23-12 23-17B 23-36 23-12%Yes,we have been impacted once.Yes,we have been impacted several times.Yes,we have been impacted many times.I dont know.No,we have not been impacted.7A# 6%3%OEMTier 1Tier 331%4B%7%Tier 2Yes,we have been impacted many times.Yes,we have been impacted several times.Yes,we have been impacted once.No,we have not been impacted.I dont know.ORGANIZATION TYPEPREVENTING VULNERABILITIES WITH SECURE CODING STANDARDSSecure coding standards help developers detect vulnerabilities in their code.Many respondents use CERT,CWE,and OWASP to identify bugs and assess risks during automotive software development.CERT had the highest percentage(63%)of use among respondents.This is probably due to CERT being an easy-to-use coding standard,which helps with the general prevention of vulnerabilities.CWE and OWASP help detect known vulnerabilities.WHAT STANDARD DO YOU USE TO DETECT SOFT-WARE VULNERABILITIES?SELECT ALL THAT APPLY.CERTCWEOtherOWASP634)%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)27|2024 State of Automotive Software Development Report Automotive Software Security As more software is added to vehicles,enforcing software security is more important than ever before.THE LEADING AUTOMOTIVE SOFTWARE SECURITY CHALLENGES 41%of those surveyed cited that“meeting regulations requiring cybersecurity approval”was their leading software security challenge,with“enforcing secure coding practices”(28%)being the second most cited challenge.This is not surprising,as security for automotive software is a new requirement(previously,safety was the main concern).Static analysis tools are essential for meeting todays security requirements.A CULTURE OF SOFTWARE SECURITY IS GROWINGTo meet software security requirements and enforce secure coding practices,the majority of those we surveyed stated that they are provided with tools and/or are given software security training an 11crease from last year for a total of 64%.Of those surveyed,24%do not provide tools and/or software security training(an increase from 15%in 2023),and 12%were unsure.As security training was a focus for respondents last year,these results could indicate that teams are feeling more confident about the level of security training theyve already achieved and the training tools/programs they have in place.DOES YOUR ORGANIZATION OFFER SECURITY TRAINING FOR DEVELOPERS?64 23-75$ 23-15 23-10%Yes,we provide tools and/or training.No,we do not.I dont know.Meeting software security requirements and enforcing secure coding practices are the leading challenges for automotive software security.WHAT IS YOUR BIGGEST AUTOMOTIVE SOFTWARE SECURITY CHALLENGE?Enforcing securecoding practices.Meeting regulationsrequiring cybersecurityapproval.Investingin aDevSecOpsculture.Delivering software security updates.28 23-37A 23-44 23-15 23-N/AOther-4 23-4%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)28|2024 State of Automotive Software Development Report How Much Are Developers Truly Affected by Electric,Autonomous,Semi-Autonomous,&Connected Vehicles?In recent years,the automotive industry has been expanding and evolving to include electric,autonomous,semi-autonomous,and connected vehicles.In fact,it is estimated that by 2030,96%of all new cars will have connectivity built in,and,according to a BBC report,by 2040 virtually every new car sold globally will be electric.Electric Vehicle Development Continues to Ramp Up According to a recent McKinsey report:Last year,our survey indicated that electric vehicles were becoming the norm,with 45%stating that they are working on some electric vehicle components and 45%stating that they are working extensively on electric vehicles.This year,51%of respondents indicated that they are working extensively on electric vehicles,an increase of 6%.The response for electric vehicles somewhat impacting design and development efforts decreased from 45%to 33%,and the response for“not at all”went up from 10%to 16%.Somewhat We are workingon some electriccomponents.Extensively We are activelyworking onelectric vehicles.TO WHAT DEGREE HAVE ELECTRIC VEHICLES IMPACTED YOUR PRODUCT DESIGN?Not at all We are notworkingon electricvehicles today.51 23-453 23-45 23-10%“Governments and cities have introduced regulations and incentives to accelerate the shift to sustainable mobility,with regulators worldwide defining more stringent emissions targets.The European Union presented its Fit for 55 program,which seeks to align climate,energy,land use,transport,and taxation policies to reduce net greenhouse gas emissions by at least 55%by 2030,and the Biden administration introduced a 50 percent electric vehicle target for 2023.Larger impact of electric vehicles in product development and design.51%of respondents are extensively working on electric vehicles.Beyond such mandates,most governments are also offering EV subsidies.”Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)29|2024 State of Automotive Software Development Report REGION A majority of the responses by region indicated that they are extensively impacted by electric vehicle and EV components design.521b0%800%55!D %North AmericaEurope/UKAfrica596%Middle EastAsiaOceania56%Latin AmericaExtensively We are actively working on electric vehicles.Somewhat We are working on some electric components.Not at all We are not working on electric vehicles today.ORGANIZATION SIZE The majority of responses in Small,Medium,and Large companies said that they are now actively working on electric vehicles,as opposed to last year when the majority were only working on some electric components.574%9%Enterprise(10,000 employees)456%Large(1000 employees)55)%Medium(101-999 employees)432%Small(100 employees)Extensively We are actively working on electric vehicles.Somewhat We are working on some electric components.Not at all We are not working on electric vehicles today.ORGANIZATION TYPERespondents from all types of organizations are now extensively working on electric vehicles.44%R6%OEMTier 1Tier 3545%Tier 2Extensively We are actively working on electric vehicles.Somewhat We are working on some electric components.Not at all We are not working on electric vehicles today.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)30|2024 State of Automotive Software Development Report Automotive Development Focus(Electric Vehicle Components)Automotive software development of electric vehicle components includes Powertrain,EV Charging,and Hybrid Electric Control Systems(HEV/EV).Most respondents who are actively working on electric vehicles are working on all these areas of automotive development focus.WHAT DOES YOUR DEVELOPMENT TEAM DESIGN(ELECTRIC VEHICLE COMPONENTS)?SELECT ALL THAT APPLY.15DAA%PowertrainEV ChargingOtherHybrid Electric ControlSystems(HEV/EV)Leading Concerns About Electric Vehicle DevelopmentFor electric vehicles,where many hardware components have been replaced by software electronic devices,it is essential that the software is compliant with key functional safety and security standards.That may be why complying with regulations to ensure safety remained the top concern(40%),a decrease over last year of 11%.Security and avoiding cyberattacks were the second leading concerns for 26%of respondents,a 6%increase over last year.These results correlate with the trend that embedded security is fast becoming a greater concern than safety,as many developers now understand safety requirements in the automotive software space.Time-to-market and meeting deadlines remained consistent as the leading concern for 16%of respondents.Meanwhile,keeping development costs under control increased from 13%to 19%as the leading concern for respondents.14velopment Costs Keeping Them Under Control16#5&%Time-to-Market Delivering Innovative Software on Time260 $%Security Avoiding Cyberattacks403%9%Safety Complying with RegulationsVery ConcerningConcerningSomewhat ConcerningNot Concerning The leading concern of electric vehicle development is ensuring safety and security.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)31|2024 State of Automotive Software Development Report Autonomous Vehicles Are(Still)Coming The automotive industry has continued to make steady progress on the development of fully autonomous vehicles,but they are still not quite ready.Similar to last years results,42%of those surveyed are working on some autonomous components,and 33%are extensively focused on designing a fully autonomous vehicle.With 5wer people working on any sort of autonomous vehicle,it is unknown whether developing semi-autonomous and fully autonomous vehicles will continue to be a work in progress,or if the focus will shift elsewhere.TO WHAT DEGREE HAVE AUTONOMOUS VEHICLES IMPACTED YOUR PRODUCT DESIGN?33 23-35B 23-45% 23-20%Extensively We are focused on designing a fully autonomous vehicle.Somewhat We are working on some autonomous components.Not at all We are not working on autonomous vehicles today.REGION When looking at the collected responses by region,the majority of the regions remained consistent compared to last year,with most regions working on some autonomous components.(While it appears that Oceania is extensively focused on designing a fully autonomous vehicle,only 1%of total survey respondents were from this region.)33616GR)2C% %North AmericaEurope/UKAfrica48C%9%Middle EastAsiaOceania22V%Latin AmericaExtensively We are focused on designing a fully autonomous vehicle.Somewhat We are working on some autonomous components.Not at all We are not working on autonomous vehicles today.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)32|2024 State of Automotive Software Development Report Connected Vehicles Have Become the Norm By 2030,nearly every vehicle will feature built-in connectivity.This year,many of our respondents are working on connected vehicles,but as most connected vehicles are now on the market,there is less of a development need for them,which could be why there was a decrease year over year in connected vehicles impacting product design.Most survey respondents are somewhat working on connected vehicles at 40%.The percentage of respondents actively working on connected vehicles decreased from 43%to 39%,while those not actively working on connected vehicles increased from 14%to 21%.TO WHAT DEGREE HAVE CONNECTED VEHICLES IMPACTED YOUR PRODUCT DESIGN?39 23-40C 23-40! 23-15%Extensively We are actively working on connected vehicles.Somewhat We are working on some connectivity components.Not at all We are not working on connected vehicles today.REGION When looking at the collected responses by region,a majority of respondents indicated that they are working on at least some connectivity components,with some regions working extensively on connected vehicles.359&GD%9$H(%59$7 %North AmericaEurope/UKAfrica52C%Middle EastAsiaOceania3433%Latin AmericaExtensively Connected vehicles are driving our design.Somewhat We are working on some connectivity components.Not at all We are not working on connected vehicles today.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)33|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)Breaking down the responses by automotive development focus,you can see a clear extensive development based on connected vehicles,in many areas over half of the respondents.45CG7T6%5%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive40F%Powertrain(non-EV)477R8cess Control and Comfort SystemsInfotainment Systems48AS/Driver Assistance538%9I6%LIDARInstrument Clusters/HVAC/Lighting66)%Connected Car and V2X494R2aler ManagementManufacturing58#%Supply Chain494%DiagnosticExtensively Connected vehicles are driving our design.Somewhat We are working on some connectivity components.Not at all We are not working on connected vehicles today.AUTOMOTIVE DEVELOPMENT FOCUS(EV)Breaking down the responses by automotive development focus for electric vehicles,there is extensive development occurring for EV Charging and Hybrid Electric Control Systems(HEV/EV),while some development is occurring for the Powertrain area.41F%PowertrainHybrid Electric Control Systems(HEV/EV)48C%9%EV ChargingExtensively Connected vehicles are driving our design.Somewhat We are working on some connectivity components.Not at all We are not working on connected vehicles today.48C%9%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)34|2024 State of Automotive Software Development Report Leading Autonomous,Semi-Autonomous,and Connected Vehicles Concerns With autonomous,semi-autonomous,and connected vehicles,there are both safety and security concerns especially with so many hardware components having been replaced by software.For these types of vehicles,49%of those we surveyed stated that complying with regulations to ensure safety was their leading concern,which is a slight decrease of 5%from last year,and keeping development costs under control decreased by 3%.Security concerns,meanwhile,increased by 5%,and time-to-market increased by 3%.This shows that while safety is still a leading concern for connected and autonomous vehicles,embedded security concerns are rising.One way to ensure both safety and security best practices are met is by using tools such as static code analyzers that identify vulnerabilities and compliance issues as developers code,so issues can be fixed earlier in the process.Concerns over security:avoiding cyberattacks rose by 5%over last year.49)%8%Safety Complying withRegulations286%Very ConcerningConcerningSomewhat ConcerningNot ConcerningSecurity AvoidingCyberattacks14 &%Time-to-Market Delivering InnovativeSoftware on Time9Ivelopment Costs Keeping ThemUnder Control Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)35|2024 State of Automotive Software Development Report Why Standards-Compliant Software Remains Vital for Automotive SoftwareTHE AUTOMOTIVE INDUSTRY REMAINS HIGHLY REGULATEDAll vehicle components regardless of whether they are for autonomous,semi-autonomous,electric,connected,or traditional vehicles have some safety and security requirements,but the level of coverage varies depending on the functionality of the component.Therefore,ensuring that software is compliant with key industry coding standards and guidelines is an essential part of the automotive software development process for all types of vehicles.ISO 26262 Is Still Key ISO 26262 is a key functional safety standard for the automotive industry.A majority of those we surveyed are required to comply with ISO 26262(77%).77%Yes23%NoWHY DEVELOPERS NEED TO COMPLY WITH ISO 26262For those who need to comply with ISO 26262:48%need to comply due to a customer requirement,an increase of 5%over last year.35%need to comply due to a market requirement,a decrease of 5%over last year.17%have an internal requirement,an increase of 1%over last year.WHY DO YOU NEED TO COMPLY WITH ISO 26262?48 23-43%0 23-15 23-40 23-16%Customer RequirementMarket RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)36|2024 State of Automotive Software Development Report ORGANIZATION TYPEThe type of organization matters for ISO 26262 compliance.Suppliers(Tiers 1-3)had a higher customer requirement to ensure components compliance with ISO 26262 because OEMs are their customers,while OEMs had a higher market requirement to comply with the standard.29B(2R%1%2%OEMTier 1Tier 334P%Tier 2Market RequirementCustomer RequirementInternal RequirementOtherREGION ISO 26262 compliance is a nearly universal expectation,yet the reasoning for its compliance differs.For example,most regions respondents cited that ISO 26262 is a customer requirement,whereas a majority of respondents in Latin America(50%)indicated that ISO 26262 is an internal requirement.In North America,51%of respondents said that it was a market requirement.37EQ2)d%7%1%3X$%P%North AmericaEurope/UKAfrica25c%6%6%Middle EastAsiaOceania173P%Latin AmericaMarket RequirementCustomer RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)37|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)When looking at the collected responses by automotive development focus,the leading reason for ISO 26262 compliance was that it was a customer requirement for most non-EV components,with the market requirement reason following closely behind.For the Supply Chain,the market requirement was greater at 42%.31P3I2I%2%2%1%3%2%1%4%1%1%2%1%1%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive33G%Powertrain(non-EV)378!0Pcess Control and Comfort SystemsInfotainment Systems36GAS/Driver Assistance30FR%LIDARInstrument Clusters/HVAC/Lighting36B %Connected Car and V2X31P6&8aler ManagementManufacturing429%Supply Chain40E%DiagnosticMarket RequirementCustomer RequirementInternal RequirementOtherAUTOMOTIVE DEVELOPMENT FOCUS(EV)For EV components,the leading reason for ISO 26262 compliance was that it was a customer requirement.38D%3%4%3%PowertrainHybrid Electric Control Systems(HEV/EV)33G%EV Charging32F%Market RequirementCustomer RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)38|2024 State of Automotive Software Development Report ASIL LevelsAutomotive Safety Integrity Level(ASIL)is a key component of ISO 26262.ASIL A is the minimum level of risk and ASIL D is the maximum level of risk.Going from A to D,the compliance requirements get stricter.As 40%of survey respondents said that they are required to achieve ASIL D,most respondents are working on higher-risk automotive systems/components.ASIL DASIL CASIL AASIL BWHICH ISO 26262 ASIL LEVEL DO YOU NEED TO ACHIEVE?4#3%REGIONRespondents in most regions need to achieve ASIL D.In Africa and Latin America,a majority of respondents needed to achieve ASIL C.40)75#)P%7%3%4%52Cu%North AmericaEurope/UKAfrica377 %6%Middle EastAsiaOceania17g%Latin AmericaASIL DASIL CASIL BASIL A Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)39|2024 State of Automotive Software Development Report ISO/SAE 21434 Highlights the Growing Need for Software Security ISO/SAE 21434 is a relatively new automotive standard that focuses on cybersecurity risk in road vehicle electronic systems.Despite its recentness,a majority of those surveyed will be required to comply with ISO/SAE 21434(65%).65%Yes35%NoWHY DEVELOPERS NEED TO COMPLY WITH ISO/SAE 21434For those who need to comply with ISO/SAE 21434:46%need to comply due to a customer requirement,an increase of 4%over last year.38%need to comply due to a market requirement,an increase of 8%over last year.15%have an internal requirement,a decrease of 13%over last year.46 23-428 23-30 23-28%CustomerRequirementMarketRequirementInternalRequirementWHY DO YOU NEED TO COMPLY WITH ISO/SAE 21434?Other-1 23-N/AREGION For most regions,compliance with ISO/SAE 21434 was more of a customer requirement rather than a market or internal requirement.However,recent international requirements for regulatory cybersecurity compliance for vehicles,such as UNECE WP.29 R155,will see an increase in market requirements.32F 046g%2B)0%North AmericaEurope/UKAfrica17g%Middle EastAsiaOceania40 %Latin AmericaMarket RequirementCustomer RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)40|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)When looking at the collected responses by automotive development focus,compliance with ISO/SAE 21434 is primarily a customer requirement.This makes sense as it is not yet an industry requirement but will become mandatory in the future.In addition,customers have to conform with regulatory guidance regarding security.37PDBBB%2%2%2%1%3%1%2%1%1%1%1%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive35H%Powertrain(non-EV)4758Ccess Control and Comfort SystemsInfotainment Systems41CAS/Driver Assistance27I$(H%LIDARInstrument Clusters/HVAC/Lighting396#%Connected Car and V2X42B9%9Paler ManagementManufacturing399%Supply Chain38!%DiagnosticMarket RequirementCustomer RequirementInternal RequirementOtherAUTOMOTIVE DEVELOPMENT FOCUS(EV)When looking at the automotive development focus for electric vehicles,compliance with ISO/SAE 21434 is also primarily a customer requirement.37I%2%1%PowertrainHybrid Electric Control Systems(HEV/EV)33F%EV Charging37E%Market RequirementCustomer RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)41|2024 State of Automotive Software Development Report SOTIF(ISO/PAS 21448)Continues to Be Important SOTIF(ISO/PAS 21448)was developed to address the additional safety challenges for autonomous and semi-autonomous vehicles.A majority of those we surveyed stated that SOTIF(ISO/PAS 21448)was not part of their software development process marking a notable change from previous years,increasing from 36%to 51%.Respondents who do have SOTIF as part of their process decreased from 64%to 49%year over year.49%Yes51%NoREGIONIn Europe/UK,Asia,and Latin America,respondents did not cite SOTIF as part of their software development process.Respondents in all other regions said that SOTIF is a part of their process.40g3WCYA %North AmericaEurope/UKAfrica75%Middle EastAsiaOceania44V%Latin AmericaYesNo Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)42|2024 State of Automotive Software Development Report WHY DEVELOPERS NEED TO COMPLY WITH SOTIF(ISO/PAS 21448)For those who need to comply with SOTIF(ISO/PAS 21448):44%need to comply due to a customer requirement,consistent with last year.38%need to comply due to a market requirement,an increase of 5%over last year.17%have an internal requirement,a decrease of 5%over last year.WHY DO YOU NEED TO COMPLY WITH SOTIF(ISO/PAS 21448)?44 23-44%1 23-18 23-33 23-22%Customer RequirementMarket RequirementInternal RequirementOtherREGION Customer requirements for compliance with SOTIF(ISO/PAS 21448)were the leading reason among most regions,however,respondents from North America and Latin America said that market requirements were their leading reason for compliance.38HI4%g%8D#3PP%North AmericaEurope/UKAfrica33S%7%7%Middle EastAsiaOceania75%Latin AmericaMarket RequirementCustomer RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)43|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)Some areas of automotive software development have a higher customer demand for SOTIF(ISO/PAS 21448)than others.For example,Instrument Clusters/HVAC/Lighting(54%)and LiDAR(51%).458F7C7 %2%1%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive34P%Powertrain(non-EV)4594Pcess Control and Comfort SystemsInfotainment Systems466AS/Driver Assistance37Q0T%LIDARInstrument Clusters/HVAC/Lighting428%Connected Car and V2X33G F9aler ManagementManufacturing39F%Supply Chain37E%DiagnosticMarket RequirementCustomer RequirementInternal RequirementOtherAUTOMOTIVE DEVELOPMENT FOCUS(EV)EV areas of automotive development focus had a greater percentage of respondents with customer requirements.37B!%PowertrainHybrid Electric Control Systems(HEV/EV)35E %EV Charging35F%Market RequirementCustomer RequirementInternal RequirementOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)44|2024 State of Automotive Software Development Report Leading Challenges in Proving Compliance Proving compliance with key automotive functional safety and security standards can be a challenging and time-consuming process,but we continue to see increased demand from customers for meeting these standards.Most of those that we surveyed struggled to fulfill safety requirements and prove that those requirements have been filled(44%).16%of respondents struggled with“enforcing coding standards,”an increase of 4%over last year,while there was a decrease of 10%in those who had difficulties documenting versions of files and assets.Others experienced difficulties with qualifying tools(12%)which this year replaced“showing design history”and analyzing risks(14%).WHAT IS YOUR BIGGEST CHALLENGE IN PROVING COMPLIANCE?44 23-45 23-12%4 23-1 23-N/A10 23-20 23-11%Enforcing Coding StandardsFulfilling Safety Requirements(and Proving It)Qualifying ToolsDocumenting Versions of Files and AssetsAnalyzing RiskOther Fulfilling safety requirements and providing documentation proving that the criteria have been met remains the leading challenge with automotive software compliance.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)45|2024 State of Automotive Software Development Report ORGANIZATION SIZE When looking at the collected responses by organization size,Small organizations struggled with“qualifying tools”(17%)more than other organizations,which had an average of 11%.Small organizations struggled the least with“fulfilling safety requirements(and proving it)”(38%)compared to other organizations,which had an average of 46%.Enterprise organizations were the least concerned with enforcing coding standards(11%)compared to other organizations,which had an average of 18%,and struggled with“fulfilling safety requirements”(49%)more than other organizations,which had an average of 42%.11I%8%Enterprise(10,000 employees)16C%Large(1000 employees)19F%Medium(101-999 employees)188%3%3%1%5%Small(100 employees)Enforcing Coding StandardsFulfilling Safety Requirements(and Proving It)Qualifying ToolsDocumenting Versions of Files and AssetsAnalyzing RiskOtherRESPONDENT EXPERIENCE LEVELIndustry professionals with 5-10 years of experience were less concerned than most other experience levels about“documenting versions of files and assets”(8%),with the average for the other groups being 11%.However,they were the most concerned about“fulfilling safety requirements(and proving it)”(50%),with the average for the other groups being 40%.1-3 yearsLess than 1 year3-5 yearsMore than 10 years5-10 years25%9 B%7%8G%60%6&%2%2%3%2%8P%Enforcing Coding StandardsFulfilling Safety Requirements(and Proving It)Qualifying ToolsDocumenting Versions of Files and AssetsAnalyzing RiskOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)46|2024 State of Automotive Software Development Report Key Coding Standards for Automotive Software Development82%of those surveyed are using at least one coding standard.The use of a coding standard is important for code quality,which helps to ensure that it is safe,secure,and compliant.82%Yes18%No Coding standards are used by 82%of organizations in the automotive software development industry.MISRACERTC CoreGuidelinesAUTOSARC 14High IntegrityC Google C Style GuideEmbedded C(Barr Group)36 23-392 23-36! 23-31 23-26% 23-21 23-15%WHICH CODING STANDARDS DO YOU CURRENTLY USE?SELECT ALL THAT APPLY.3 23-4%Other62 23-42%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)47|2024 State of Automotive Software Development Report WHICH CODING STANDARADS DEVELOPERS USE MOST FOR AUTOMOTIVE SOFTWAREMany of those that we surveyed are using multiple coding standards.62%are using MISRA,an increase of 20%over last year.Since last years report,new MISRA guidelines have been published,which likely accounts for the sharp increase:MISRA C:2023,which updates MISRA C:2012 and is a rollup of all the previous amendments and technical corrigenda.MISRA C :2023,which is the new standard for use with modern C for C 17 and incorporates AUTOSAR guidelines.It is important to use a static analysis tool that enforces all the new MISRA guidelines.The second most-used coding standard is C Core Guidelines,which saw a decrease of 3%over last year for a total of 36%.Some of those surveyed use the following standards:32%use AUTOSAR C 14,a decrease of 4%.21%use Embedded C(Barr Group),a decrease of 10%.16%use High Integrity C ,a decrease of 10%.25%use CERT,an increase of 4%.14%use Google C Style Guide,a decrease of 1%.MISRA is used across all automotive software development areas globally.Perforce Static Analysis provides 100%rule enforcement coverage for the new MISRA guidelines,including MISRA C :2023.ARE YOU REQUIRED TO TRACK CODE QUALITY METRICS?Of those surveyed,the majority of respondents are required to track code quality metrics.77%Yes23%NoWHICH CODE QUALITY METRICS ARE YOU REQUIRED TO TRACK?SELECT ALL THAT APPLYMost respondents who need to track code quality metrics are required to track HIS(66%)and McCabe(41%).McCabeHISOther66A%8%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)48|2024 State of Automotive Software Development Report How Development Teams Manage Their Work C and C Are Still the Most Commonly Used Programming Languages Based on our survey results,C is still the leading programming language for automotive software development(51%);however,C is quickly catching up,increasing from 34%to 50%year over year.When compared to last years report,the use of Java decreased by 18%to 28%,while the use of Python,which is the preferred language for Artificial Intelligence(AI)and Machine Learning(ML)applications,increased by 15%.This years report also shows the 2023 addition of JavaScript,Kotlin,Go/GoLang,and Rust.CC Python51PG%JavaScriptJavaC#28%Go/GoLangRustKotlin12%8%7%WHICH PROGRAMMING LANGUAGE(S)DOES YOUR TEAM CURRENTLY USE?SELECT ALL THAT APPLY.COUNTRY(ASIA)This years survey has expanded to be more representative of automotive software professionals working in the Asia-Pacific region.In this region,C(37%)was the top programming language over C (23%),which could explain the dramatic increase in the overall use of C in 2024.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)49|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)When looking at the collected responses by automotive development focus,we found the following,with the most-used automotive components for each programming language highlighted in blue.C C C#JavaJava ScriptKotlinGo/GoLangRustPythonChassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)20 %7%8%4%4%5U/ECM25 %7%6%3%3%5%Powertrain(non-EV)19%8%8%5%5%5/Autonomous Drive18#%6%8%4%4%6 cess Control and Comfort Systems16%9%4%5%7AS/Driver Assistance20$%5%7%3%3%6 %Infotainment Systems17 %5%9%5%5%6%LIDAR15 %6%7%3%8%Connected Car and V2X16!%6%9%4%5%7%Instrument Clusters/HVAC/Lighting19%6%9%6%4%7aler Management9%5%6%4%7%Diagnostic18%7%5%4%6%Manufacturing13 %8%9%5%4%7%Supply Chain13%8%5%7%6%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)50|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(EV)When looking at the collected responses by electric development focus,we found the following,with the most-used automotive components for each programming language highlighted in blue.C C C#JavaJava ScriptKotlinGo/GoLangRustPythonPowertrain24 %8%7%3%4%4%EV Charging18 %9%9%3%4%6%Hybrid Electric Control Systems(HEV/EV)20!%6%7%4%4%4 %Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)51|2024 State of Automotive Software Development Report Teams Are Leveraging Faster Methods and Processes Many automotive development teams have adopted methods and processes that help them to quickly adapt and develop quality software faster.In comparison to last years results,we can conclude that respondents are increasing the number of methods they are using,including model-driven development with an increase of 10%for a total of 47%.However,it appears that test-driven development saw a decrease of 6%,automatic code generation saw a decrease of 2%,and waterfall development saw a decrease of 4%compared to last year.The dip in these methodologies could be explained by the geographic expansion of our survey.For example,out of all the regions,the Asia-Pacific region had the lowest test-driven development(12%).Model-DrivenDevelopmentParallelDevelopmentTest-DrivenDevelopmentAutomatic CodeGenerationWaterfallDevelopmentAgileDevelopment33 23-397 23-39Q 23-42 23-31 23-18%Other-3 23-3%WHICH DEVELOPMENT METHODS AND PROCESSES ARE YOU USING TODAY?SELECT ALL THAT APPLY.47 23-37%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)52|2024 State of Automotive Software Development Report Leading Challenges for Teams Short on Time Teams adopting faster methods and processes are still running into activities that take too much time.The most time-consuming activity by far was“verifying and validating software,”with 47%of respondents citing this activity as a pain point.“Documenting work and reviewing documentation”(41%)and“reviewing code for errors/coding rule violations”(34%)were also particularly time-consuming for respondents.Combining faster methods with tools such as static code analyzers that help automate these top time-consuming activities can go a long way in helping teams accelerate automotive software development.HOW HARDWARE AND SOFTWARE TEAMS WORK TOGETHERWith the growing prevalence of electric,autonomous,semi-autonomous,and connected vehicles,the automotive industry continues to shift from hardware-driven machines to software-driven electronics.For that reason,it is essential that development teams can effectively manage both hardware and software,as well as code assets.WHICH OF THE ACTIVITIES BELOW DO YOU FIND PARTICULARLY TIME-CONSUMING FOR YOUR TEAM TODAY?SELECT ALL THAT APPLY.Documenting work and reviewing documentation.Verifying and validating software.Reviewing code for errors/coding rule violations.47A4%Managing multiple variant configurations.Supporting parallel development and integrating work.Establishing risk control measures.24$ %Organizing and prioritizing work.Communicating with other team members.Analyzing data.20%Managing continuous integration/build pipeline.Other17%3%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)53|2024 State of Automotive Software Development Report Leading Challenges in Managing Hardware,Software,and Code Assets Challenges in managing hardware,software,and code assets can become exacerbated as more hardware components are replaced with software.The most significant challenge this year was still cross-team(hardware/software)collaboration(29%),an increase of 5%over last year.However,“teams working from distributed locations”decreased from 25%to 21%and was much less concerning for respondents year over year compared to the other challenges.It appears that teams have mostly figured out working together across the globe,and the focus is now on hardware/software and tool integration.WHAT IS YOUR SINGLE BIGGEST CHALLENGE IN MANAGING HARDWARE AND SOFTWARE DESIGN AND CODE ASSETS?24 23-30) 23-24%4 23-2 23-19! 23-25%Cross-Team(Hardware/Software)CollaborationIntegration with EngineeringTools(Design/Test)Management of MultipleVariants/Releases ofTechnology ComponentsTeams Working FromDistributed LocationsOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)54|2024 State of Automotive Software Development Report ORGANIZATION SIZE Small organizations were least concerned with“teams working from distributed locations,”while Enterprise organizations noted this as their second highest concern,likely given their size and number of offices and teams distributed globally.Small organizations were also more concerned than other organization sizes about“managing multiple variants/releases of technology components”(27%),while Medium-sized(26%)and Large-sized(27%)organizations were more concerned than others about“integration with engineering tools(design/test).”28$#%Enterprise(10,000 employees)31!%Large(1000 employees)28#&!%Medium(101-999 employees)31%4%2%4%3%Small(100 employees)Cross-Team(Hardware/Software)CollaborationTeams Working From Distributed LocationsIntegration with Engineering Tools(Design/Test)Management of Multiple Variants/Releases of Technology ComponentsOtherORGANIZATION ROLE When looking at the collected responses by organization role,many respondents cited“cross-team(hardware/software)collaboration”as their leading challenge,with a few notable exceptions.Compliance Officers,Executives,Analysts,and Students cited“integration with engineering tools(design/test)”as their top challenge.Consultants and Administrators,meanwhile,responded that“teams working from distributed locations”was their leading concern.32!$%5%4%2%5%5%Director/ManagerEngineer/Developer248$%Compliance Officer33!$ 0!%Functional Safety/Security OfficerAnalyst14$8$%Executive229%2%ConsultantStudent257%71ministrator20 %Cross-Team(Hardware/Software)CollaborationTeams Working From Distributed LocationsIntegration with Engineering Tools(Design/Test)Management of Multiple Variants/Releases of Technology ComponentsOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)55|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)For the leading challenges in managing hardware,software,and code assets,here is a breakdown based on automotive development focus.382&0% %6%5%4%4%4%5%5%3%4%2%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive29#%Powertrain(non-EV)29 #$&1cess Control and Comfort SystemsInfotainment Systems27$AS/Driver Assistance194#%7(!&%LIDARInstrument Clusters/HVAC/Lighting26)%Connected Car and V2X200(%6%6!aler ManagementManufacturing44%Supply Chain29!0%DiagnosticCross-Team(Hardware/Software)CollaborationTeams Working From Distributed LocationsIntegration with Engineering Tools(Design/Test)Management of Multiple Variants/Releases of Technology ComponentsOtherAUTOMOTIVE DEVELOPMENT FOCUS(EV)For the leading challenges in managing hardware,software,and code assets,here is a breakdown based on automotive development focus for EV components.39!%3%3%3%PowertrainHybrid Electric Control Systems(HEV/EV)30!& %EV Charging30 #$%Cross-Team(Hardware/Software)CollaborationTeams Working From Distributed LocationsIntegration with Engineering Tools(Design/Test)Management of Multiple Variants/Releases of Technology ComponentsOther Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)56|2024 State of Automotive Software Development Report How Artificial Intelligence and Machine Learning Have Impacted Automotive Design The use of new technologies has also had an impact on the automotive development space,with artificial intelligence and machine learning continuing to be used in their automotive software development.There was an overall decrease in using AI and ML for product design and development.Most of those we surveyed stated that they were still using AI/ML somewhat for development(43%),and 32%stated that they were extensively using AI/ML extensively to drive innovation.Those who are not using AI/ML at all in automotive development increased from 18%to 25%year over year.TO WHAT DEGREE HAVE AI AND/OR MACHINE LEARNING IMPACTED YOUR PRODUCT DESIGN?43 23-462 23-36% 23-18%Extensively We are using AI and/or machine learning to drive innovation.Somewhat We are using AI and/or machine learning for some development.Not at all We are not using AI and/or machine learning today.REGION The Oceania and Latin America regions displayed extensive use of AI/ML(though these regions represented only 3%of total respondents).One possible explanation is the nature of the organizations and type of development in these regions include more startups looking at new technologies to bring into the automotive space.25E0AE38)B0( %North AmericaEurope/UKAfrica48H%4%Middle EastAsiaOceania444%Latin AmericaExtensively We are using AI and/or machine learning to drive innovation.Somewhat We are using AI and/or machine learning for some development.Not at all We are not using AI and/or machine learning today.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)57|2024 State of Automotive Software Development Report AUTOMOTIVE DEVELOPMENT FOCUS(NON-EV)When looking at the collected responses by automotive development focus,we see at least some development-based AI/ML.32C%CIA%Chassis and Safety(Electric Power Steering EPS,Brakes,and Airbags)ECU/ECMAD/Autonomous Drive33E%Powertrain(non-EV)38H7Gcess Control and Comfort SystemsInfotainment Systems42DAS/Driver Assistance44B3P%LIDARInstrument Clusters/HVAC/Lighting45C%Connected Car and V2X42C6&8aler ManagementManufacturing39A %Supply Chain34D%DiagnosticExtensively We are using AI and/or machine learning to drive innovation.Somewhat We are using AI and/or machine learning for some development.Not at all We are not using AI and/or machine learning today.AUTOMOTIVE DEVELOPMENT FOCUS(EV)When looking at the collected responses by EV automotive development focus,we see at least some development-based AI/ML.35B#%PowertrainHybrid Electric Control Systems(HEV/EV)33F!%EV Charging36C!%Extensively We are using AI and/or machine learning to drive innovation.Somewhat We are using AI and/or machine learning for some development.Not at all We are not using AI and/or machine learning today.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)58|2024 State of Automotive Software Development Report A CLOSER LOOK AT AI/ML USE IN AUTOMOTIVE SOFTWARE DEVELOPMENT Respondents who are using AI/ML in automotive software development were asked specifically between certain areas of automotive development focus.Most of those surveyed were focusing on AI/ML in ADAS(68%),followed by In-Vehicle Infotainment(IVI)Systems(40%)and LiDAR(33%).Additionally,the“Other”responses give an interesting overview of the specific functional areas where AI/ML are used,rather than just the components(e.g.,image recognition and tracking reports).They are also used for data management in the cloud and resource optimization within the components.Notable“Other”responses included:Cloud data.Predictive maintenance.Image recognition.Intrusion detection.Telematics and GPS tracking reports.Analysis of unstructured data related to automotive cybersecurity.Remaining useful life and diagnosis accuracy.Crash deformation assessment.Resource optimization and data management.ADASIn-VehicleInfotainment(IVI)SystemsLIDAROther403%HOW ARE YOU USING AI/ML IN AUTOMOTIVE SOFT-WARE DEVELOPMENT?SELECT ALL THAT APPLY.68%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)59|2024 State of Automotive Software Development Report THE AUTOMOTIVE OS THAT DEVELOPMENT TEAMS ARE USING As more software is added to vehicles,it is important to look at the operating system(OS)that development teams are using in the embedded software.According to our results,the leading operating system was AUTOSAR OS(34%),followed by Automotive Grade Linux(13%),QNX(9%),Android Automotive OS(8%),VxWorks(7%),and OSEK/VDX(5%).Automotive Grade LinuxAUTOSAR OSQNX34%9%VxWorksAndroid Automotive OSOSEK/VDX8%7%5%OtherN/A18%6%WHAT IS THE BASE AUTOMOTIVE OS THAT YOUR DEVELOPMENT TEAM IS BUILDING FROM?IF YOU ARE NOT USING A BASE AUTOMOTIVE OS NOW,WHICH ONE WOULD YOU MOST LIKELY USE IN THE FUTURE?21%of respondents said that they have no intention of using a base Automotive OS.Of those respondents who are not currently using a base automotive OS but would consider it in the future,most said they would consider using AUTOSAR OS(36%)above other operating systems,followed by Automotive Grade Linux(14%).Dont intend to use abase Automotive OSAUTOSAR OSAutomotive Grade Linux36!%QNXAndroid Automotive OSOther10%9%4%OSEK/VDXVxWorks3%3%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)60|2024 State of Automotive Software Development Report Which Software Tools Development Teams Are Using Using the right software development tools is essential for ensuring that your software is safe,secure,and reliable.Some of the top tools for those we surveyed included:Dynamic Code AnalysisStatic Code AnalysisStatic ApplicationSecurity Testing(SAST)67F&%Software Composition AnalysisDynamic ApplicationSecurity Testing(DAST)Application Lifecycle Management(Requirement/Test/Issue Management)20$7%Project ManagementVersion ControlAutomated/Continuous Testing56TA%Open-Source Security TestingOther15%1%I do not currently use any development tools.5%The use of Static Analysis tools saw the most significant increase of 25%year over year,which is in part due to the expansion of the survey to more countries in the Asia-Pacific region,as the average percentage of respondents from automotive professionals in the Asia-Pacific using Static Analysis was 20%higher than other regions.Version control saw an increase of 18%,Project Management increased by 10%,and Automated/Continuous Testing increased by 5%.Leading Benefit of Development Tools A majority(31%)of those we surveyed said that using software development tools has helped accelerate their time-to-market.Some remarked the biggest benefit was simplifying their compliance process(15%).Improved software quality(21%),eliminated risk(safety and/or security)(15%),and reduced costs in development(9%)were also listed as the leading benefit.21 %ImprovedSoftware Quality9%99%Reduced Costsin Development15 %Eliminated Risk(Safety/Security)15%Simplified theCompliance Process31celeratedTime-to-MarketMost BeneficialSomewhat BeneficialBeneficialSomewhat Less BeneficialLess BeneficialN/A Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)61|2024 State of Automotive Software Development Report Open-Source Automotive SoftwareA majority of those we surveyed said they were using open-source tools for automotive development.Some respondents using these tools were also contributing to open-source projects(35%),while others were using the tools but not actively contributing to open-source projects(35%).This could indicate that while many developers use open-source tools,they do not have the time or resources to contribute to open-source projects.WHAT BEST DESCRIBES YOUR ENGAGEMENT WITH OPEN-SOURCE AUTOMOTIVE SOFTWARE?1655%We use open-source tools and contribute to open-source projects.We use open-source tools but do not contribute to open-source projects.We do not use or contribute to open-source projects but are interested.We do not use or contribute to open-source projects and are not currently interested.For those who are not adopting open-source software or contributing to open-source projects,the most common barriers were time and development resources(42%)and safety/security concerns(37%).These results speak to the advantages and disadvantages of open-source software.Anyone can contribute,so there is more diversity of thought and more resources for the softwares use.However,open-source code is typically not checked as rigorously as in-house code,so there may be more security vulnerabilities.Safety/security concerns.Time and development resources.IP concerns.4270%Unclear value proposition.Organizational support/buy-in.Vendor lock-in.28#%OtherLacking collaboration frameworks to work across the industry.15%3%WHAT ARE THE BARRIERS TO YOUR TEAM ADOPTING AND/OR CONTRIBUTING TO OPEN-SOURCE SOFTWARE?SELECT ALL THAT APPLY.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)62|2024 State of Automotive Software Development Report Why Static Analysis Remains Essential for Automotive Software Development Based on survey responses,the leading concerns across multiple areas of automotive development are quality and security.One of the most effective methods to mitigate potential functional code quality and security issues is to use a static analysis tool.An industry standardized static analysis tool such as Perforces Helix QAC and Klocwork enables teams to effectively identify software security vulnerabilities and weaknesses as well as enforce recommended coding standards and guidelines.Both Perforce static analysis tools verify compliance with the coding standards and guidelines,as well as provide evidence of that compliance.This will provide overall consistency,correctness,and completeness with respect to functional safety and cybersecurity requirements.By using a static analysis tool,you can accelerate compliance by:Enforcing coding standards and detecting rule violations.Detecting compliance issues earlier in development.Accelerating code reviews and manual testing efforts.Reporting on compliance over time and across product versions.In addition,Perforce static analysis tools provide full compliance to both MISRA and CERT guidelines.They are also certified for use for safety-critical systems by TV-SD,including ISO 26262 up to ASIL level D.See for yourself how Perforce static analysis tools can help ensure the functional safety and security of your automotive software.Request your free trial Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)63|2024 State of Automotive Software Development Report Experience Those that participated in the survey presented a range of professional experience from less than a year to more than 10.We received a balanced sample of respondents in this category.1-3 yearsLess than 1 year3-5 yearsMore than 10 years5-10 years36#%Region Those that participated in the survey are from seven geographical regions,with Europe/UK,North America,and Asia representing the majority of the responses,with other responses from the Middle East,Africa,Latin America,and Oceania.Europe/UKNorth AmericaMiddle EastAsiaAfrica39%4%4)!%Latin AmericaOceania2%1out the Survey Appendix The 2024 State of Automotive Software Development Report is based on an anonymous survey conducted between January 8 and March 1,2024.It targeted automotive professionals from across the globe and received 575 responses.To help segment and analyze the survey results,we asked respondents basic demographic questions.Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)64|2024 State of Automotive Software Development Report Country(Europe/UK)Among those respondents who are from the Europe/UK region,the majority of respondents are from Germany(42%)and the United Kingdom(12%).United KingdomGermanyFranceNorwaySweden1%7%7B%OtherItaly27%4%Country(Asia-Pacific)Among those respondents who are from the Asia region,the majority of respondents are from China(46%),Japan(27%),and India(22%).JapanChinaIndiaVietnamSouth Korea1%0F%Other4%Company Size Those that participated in the survey work for companies of all sizes,with a good distribution between enterprise,large,medium,and small organizations being represented in the survey.Enterprise(10,000 employees)Large(1000 employees)Medium(101-999 employees)201%Small(100 employees)Organization TypeThose that participated in the survey work primarily for OEM and Tier 1 suppliers,but there were also respondents from Tier 2 and Tier 3 suppliers.Tier 1 SupplierOEMTier 1 SupplierOtherTier 1 Supplier13%68&%Perforce Software,Inc.All trademarks and registered trademarks are the property of their respective owners.(0420TP24)65|2024 State of Automotive Software Development Report ABOUT PERFORCEPerforce powers innovation at unrivaled scale.Perforce DevOps solutions future-proof competitive advantage by driving quality,security,compliance,collaboration,and speed across the technology lifecycle.We bring deep domain and vertical expertise to every customer,so nothing stands in the way of success.Our global footprint spans more than 80 countries and includes over 75%of the Fortune 100.Perforce is trusted by the worlds leading brands to deliver solutions to even the toughest challenges.Accelerate technology delivery,with no shortcuts.Get the Power of Perforce.Role and Area in the OrganizationTo help readers of this report better understand who participated in the survey,we asked the respondents about their area of automotive development,as well as their current roles.It was not surprising to see that“software development”was the top selection,but there are a large variety of areas and roles,including testing and research and development under the“other”category.EngineeringSoftware DevelopmentStrategyArchitectureProject Management8%8%98%Regulatory/Compliance/SecurityQuality Assurance5%6%OtherDevOps7%5%Director/ManagerEngineer/DeveloperFunctional Safety/Security OfficerCompliance OfficerConsultant4%7%8%9%AnalystExecutive3%4%StudentAdministrator2%3%Other5%Have comments or suggestions for next years report?Share them with us by emailing with the subject line“Automotive Software Development 2024”.
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WHITE PAPERAutomotive digital transformation in uncertain timesABCDEF4030201002Automotive digital transformation in uncertain timesWhite PaperTable of contentsAutomotive digital transformation in uncertain timesWhite PaperExecutive summary 3The world is changinguncertainty is here to stay 4Strategies for uncertain times Process-related strategies 8Five categories of uncertainty impacting the automotive industry Technology-related strategies 11People-related strategies 16A call to action 18Conclusion 193Automotive digital transformation in uncertain timesWhite PaperThe automotive industry is experiencing a profound CASE(Connected,Autonomous,Shared,and Electrified)driven transformation,leading to changes in virtually every aspect of the business.In addition to this CASE-related disruption,several macro factors add to the overall uncertainty,requiring a rethinking of traditional strategies to survive and thrive during this transition.Developing an agile,resilient organization with a focus on people,processes,and technology is key to addressing uncertainty and mitigating risk.From a people perspective,as the industry becomes more technology-centric,the demandand competitionfor digital talent will only intensify.OEMs and suppliers must become employers of choice,competing with Silicon Valley for the cream of the hi-tech talent pool.From a process perspective,winning companies must develop the ability to anticipate and respond to an increasingly complex and disrupted normal and,more so than ever,place the customer experience at the center of their strategies,look beyond their four walls for operational excellence,and respond to opportunities with laser-like precision and speed.Finally,organizations must implement an information technology architecture centered on a data-driven,cloud-based digital operating platform capable of providing scalability,agility,resilience,and actionable insights to achieve competitive advantage.It may be clich to say that the auto industry stands at a historic crossroadsbut this reality also brings an unparalleled opportunity for exponential growth while building a foundation for the next 100 years.Executive summaryDeveloping an agile,resilient organization with a focus on people,processes,and technology is key to addressing uncertainty and mitigating risk.4Automotive digital transformation in uncertain timesWhite PaperGiven the dramatic changes within the automotive industry and the broader world,making predictions is an inherently perilous endeavor.Consider this,for example:did any of us,in our wildest scenario planning simulations,even consider the possibility that a global pandemic like COVID-19 would impact the world economy so profoundly?While we are all now painfully familiar with the fallout from this event,most notably the impact on supply chains,the broader effects of this watershed event will continue for decades to come.The world continues to be awash with change.Consider just a few examples as of this writing:the Middle East conflict,the ongoing Russia-Ukraine war,diplomatic and trade tensions with China,the real possibility of further monetary tightening by the US Federal Reserve along with talk of a possible recession,and ongoing concerns regarding the explosive growth and impacts of Artificial Intelligence(AI).Stir in a healthy dose of CASE-driven industry transformation,escalating demand for battery minerals,EV adoption challenges,political turbulence,and changing consumer expectations,and it becomes clear that todays automotive industry is facing unprecedented change and uncertainty.Five categories of uncertainty impacting the automotive industry With so many factors impacting the automotive industry in so many areas,it becomes helpful to characterize the drivers of uncertainty more clearly.These can be grouped into five broad categories,as depicted in Figure 1.The world is changinguncertainty is here to stayUncertainty3.Product and service1.Macro-economic2.Supply and demand5.Customer and market4.Operations and technologyFigure 1:Sources of Uncertainty5Automotive digital transformation in uncertain timesWhite PaperOne of the most prolific types of uncertainty involves macroeconomic uncertainty.Broadly defined,this type of uncertainty involves fiscal,natural,or geopolitical events that broadly affect a regional or national economy.Recent examples of macro factor uncertainty include the following:Post-pandemic economic uncertainty:Countries worldwide are trying to reestablish pre-pandemic economic equilibrium,with mixed results.Inflation,economic growth,and consumer spending differ widely across countries and regions,posing challenges to automakers production and investment decisions.Geopolitical tensions and trade uncertainty:Despite the march to an ever-more-global world economy,several threats loom on the horizon,adding a new layer of uncertainty.Both ongoing and potentially impending wars threaten to disrupt fragile supply chains,while trade tensions across countries are reaching a fever pitch,with increasing calls for tariffs and other protectionist actions.Regulatory and legislative uncertainty:Country and region-specific legislative initiatives create new uncertainties with ever-changing regulatory requirements.Recent examples in the United States include the CHIPS and Science and Inflation Reduction Acts,aimed at promoting domestic manufacturing of semiconductors,battery electric vehicles,and supply chain re-shoring incentives.In the European Union,proposed regulationswill ban new non-CO2 neutral ICE vehicle sales from 2035 in all member states.Finally,new United Nations Economic Commission for Europe(UNECE)regulations R155 and R156,governing cybersecurity and software,respectively,will hold OEMs responsible for all vehicle software,regardless of source,from July 2024 onwards.The following sections examine each of these sources of uncertainty in greater detail:While balancing supply and demand uncertainty has long represented a challenge within the global automotive industry,this has recently reached new heights.Consider the following:Forecasting BEV versus ICE demand:While the industry continues to invest in electrification,the actual rate of EV adoption is a point of considerable ongoing debate.BEV optimists are predicting mass adoption within a few years,and BEV pessimists vehemently disagree.While the EV market share has grown from a relatively small base,global market dynamics indicate slowing EV sales and continuing demand for internal combustion engine(ICE)vehicles.For legacy ICE automakers,in particular,this uncertainty requires highly consequential and risky investment decisions on precisely where to focus future production and product development resources.Globally constrained supply chains:The electric vehicle revolution similarly stresses global supply chains like never before,creating supply-related uncertainty not seen in decades.Automakers must develop new supply networks,often encompassing new technologies with globally constrained battery mineral supplies and long lead times for new mine development.At the same time,perhaps as a painful lesson learned during the COVID-19 pandemic,automakers are reexamining and de-risking supply chains(e.g.,microchip supply)for resilience in the face of uncertainty.2.Supply and demand uncertainty1.Macro-economic uncertainty6Automotive digital transformation in uncertain timesWhite PaperThe very nature of the automobile,and automotive transportation in general,is transforming today at a greater rate than ever before,arguably more so than the shift from the horse and buggy to the horseless carriage itself.The sheer scope of this change is dizzying,resulting in newly emerging product and service offerings difficult to imagine only a few years earlier.Automakers must weigh these potential offerings carefully and place high-stakes bets on products and services that,in many cases,have never existed before;these bets will determine their pathway to sustainable future growth and profitability.Given the pace and scope of change,success is not guaranteed.To understand the stakes at hand,consider the significant automotive transformations underway:From ICE to NEV:Few would disagree that the automotive industry is undergoing a major disruption,transitioning from exclusively internal combustion engine(ICE)powertrains to a mix of ICE as well as new energy vehicles(NEVs),including battery electric vehicles(BEVs),hybrid vehicles,hydrogen-powered vehicles,and even synthetic fuel-powered vehicles.However,while there is broad consensus that this is occurring,the projected rate of NEV penetration into the marketplace is anything but predictable.A debate is occurring concerning the recent growth in the BEV segmentwill they achieve mass adoption,and if so,when?This resulting demand uncertainty is particularly relevant to traditional OEMs,who have responded mainly by hedging their bets by flexibly altering the ICE and BEV production mix wherever possible.From hardware-to software-defined vehicles:A software-defined vehicle(SDV)is a vehicle in which new features or capabilities can be added or removed based on software capabilities rather than altering physical hardware,giving automakers great flexibility in personalizing vehicles based on individual customer requirements.This provides a more personalized customer experience and huge new opportunities for automakers to monetize new subscription revenues over the entire customer journey.Importantly,these software-derived revenue opportunities will likely provide higher profit margins than those from the physical vehicle sale,making the efficient identification and development of these offerings a highly strategic endeavor.Moving toward autonomy:Much like the shift toward alternative powertrains,there is general agreement that vehicle technology will transition from Advanced Driver Assistance Systems(ADAS)towards increasing levels of autonomy.Once again,the real debate in this area is timing,with autonomous vehicle optimists predicting the technology is imminent and pessimists disagreeing.For automakers and suppliers,this provides a high degree of uncertainty in planning product and service offerings,not to mention significant legal and regulatory considerations.From vehicle ownership to transportation as a service:If and when autonomous vehicles reach fruition,they may usher in the next logical question for the industry:if cars can drive themselves and do so continuously,then why not leverage a fleet of vehicles that can be optimally utilized?The answer to this question almost inevitably leads to fleet-based,transportation-as-a-service(TaaS)providers(i.e.,Cruise,Waymo)using robotaxis.Once again,introducing and mass adopting such services are still being determined,posing further forecasting and product planning challenges to automakers.3.Product and service uncertainty7Automotive digital transformation in uncertain timesWhite PaperAutomakers face dual challenges from external technological changes and internal digitalization,a global trend sweeping across industries.Ignoring this transformation isnt an option,as competitors embracing these technologies gain substantial competitive advantages.Consider the impact of just a few of these developments:Artificial Intelligence and Machine Learning(AI/ML):This critical capability opens endless possibilities for business process improvements,from advanced robots and collaborative robots to robotic process automation,automated quality inspections,and advanced simulations with digital twins of physical assets.Industry 4.0/smart manufacturing:The adoption of Internet of Things(IoT)sensor-based technologies in manufacturing enhances efficiency,quality,and flexibility.Amidst challenges like rising costs and increasing vehicle complexity,gains in manufacturing efficiencies are crucial.Industry 4.0 also offers opportunities in asset optimization,condition-based maintenance,and Overall Equipment Effectiveness(OEE).Ultimately,the changes previously outlined would only be meaningful if driven by demand.However,the challenge of providing these new offerings also coincides with an increasingly disrupted market environment.Consider the following:Increasingly complex consumers:Amidst global competition and a plethora of consumer preferences,beliefs,and values,modern consumers dynamic choices pose challenges for automakers.The demand for a seamless,personalized end-to-end purchase and ownership experience intensifies the struggle for customer loyalty.Evolving distribution models:How vehicles are sold and delivered to customers is also in question.While direct-to-consumer sales models are being introduced by newer OEMs such as Tesla and Rivian,some new entrants are also experimenting with“hybrid”models(e.g.,VinFast),incorporating both direct-to-consumer channels as well as to-be-constructed brick-and-mortar stores.Ultimately,a mix of models may prevail,adding to distribution model uncertainty.Movement toward build-to-order:Current trends favor potential movement toward more of a build-to-order(BTO)model.As new vehicle demand outstrips supply,consumers have been increasingly willing to wait for a vehicle to be built and delivered according to their specifications.As legacy automakers build more flexibility into their manufacturing lines to facilitate mixed ICE/BEV production,they will likely be better able to fulfill various consumer orders more efficiently.These factors individually and collectively affect automotive companies,resulting in volatility,uncertainty,complexity,and ambiguity(VUCA).This complexity makes it challenging to formulate effective strategies for capital allocation,capacity optimization,balancing volume and profitability,attracting and retaining top talent,and navigating the accelerating pace of the ongoing historic industry transition.5.Customer and Market Uncertainty4.Operational and technology uncertainty8Automotive digital transformation in uncertain timesWhite PaperStrategies for uncertain times Given the wide-ranging automotive industry uncertainties described in the previous section,what business strategies should OEMs and suppliers pursue to thrive in these challenging times?While the answer to these questions can be far-reaching,the following recommendations are broadly relevant and should be considered within a comprehensive strategy for change.These recommendations can be grouped under the pillars of process,technology,and people.Since change is unavoidable,those who thrive will both anticipate it and respond quickly to it.Winners will embrace the fact that uncertainty is a given and develop agile organizations and processes responsive to market dynamics.Several process strategies can be employed,as outlined in Figure 2.Process-related strategies Accept endemic uncertainty and develop enhanced sense-and-respond capabilities to stay ahead of unprecedented change and disruption Proactively anticipate key trends and developments to further mitigate risk and gain competitive advantage Place customer-centricity and operational excellence at the center of the organizations strategy Think beyond organizational boundariesand embrace an operating paradigm that includes the entire automotive ecosystem Develop a holistic understanding of customer needs,motivations,and expectations across the entire value chainKey takeaways:Uncertainty3.Respond quickly,execute flawlessly1.Sense and anticipate change2.Prepare for an uncertain future5.Understand your complex consumers4.Beyond your four wallsFigure 2:Process strategies for thriving in an uncertain world9Automotive digital transformation in uncertain timesWhite PaperWhile sensing change is important,it is of limited value if it is not accompanied by action;effective organizations act proactively.While the abovementioned ability to better sense the current business environment is foundational for addressing uncertainty,the ability to anticipate the future provides even greater benefits.Leading organizations have already begun implementing these capabilities to hedge commodity prices,minimize supply chain risk(by strategically diversifying suppliers and supplier locations),and optimize operations.The challenge of overcoming enterprise inertia should be considered,especially for large organizations.Companies can outpace their competition by embracing the following key principles:The need for speed:New technologies and business models threaten to disrupt long-established industry norms.Consequently,companies must not only constantly expect change but execute that change quickly and effectively as well.As illustrated by the recent mega-trend toward electrification,leaders ability to define a new market and rapidly scale operations is essential to success.Interestingly,this need for speed may upend an organizations traditional cultural norms,prioritizing speed over stability.2.Prepare for an uncertain future3.Respond quickly and execute flawlesslyIt is easier to respond effectively to change if it is recognized in the first place.An effective change strategy must exhibit the following key characteristics:Accept uncertainty:Although many aspects of the automotive industry are returning to pre-pandemic normalcy,too much has changed for former assumptions and norms to be taken for granted.Shifting global competition and geopolitical factors,financial riptides,consumer expectations,and rapid new technology disruptions remain,creating a complex,multi-variable environment that defiantly resists all attempts to precisely define and control it.To thrive,industry-leading organizations must accept uncertainty as the new normal and realign their corporate DNAs to derive competitive advantage in uncertain times.Sense your environment:Given the constant disruption in the industry,automotive companies must develop a new“sixth sense”to rapidly detect changes and identify trends.These include shifts in global or regional macro factors(economic,political,environmental),technology advancements,consumer preferences,or changes within the value chain(supply and distribution networks).Companies that actively sense and respond to these developments most effectively will outmaneuver their less proactive competitors.1.Sense and anticipate changeEach of these strategies is explored in greater detail below:10Automotive digital transformation in uncertain timesWhite PaperHistorically,automotive manufacturing has been defined by a linear model involving two primary stakeholder groups:the OEMs and the tier suppliers.However,CASE has expanded the frontiers of the industry to include a wide variety of additional,non-traditional participants and services,such as navigation,telecom providers,retail,restaurants,municipalities,financial and concierge services,and digital content providers,to name a few.The new paradigm is the networked enterprise,with several characteristics emerging:Evolving business models:Automakers are reimagining their strategies to keep up with industry developments,both to adopt critical new technologies(e.g.,electrification,software-defined capabilities,smart manufacturing)and new customer experiences(e.g.,EV charging,hyper-personalization,virtual assistants,in-vehicle services).This is a trend that will continue as the industry evolves.Increased inter-and intra-organizational communication:As a result of these new relationships,organizations must also evolve.There is an increased need for inter-and intra-organizational communication and connectivity between OEMs,suppliers,distribution channels,and other ecosystem participants.This ubiquitous connectivity and system-to-system information-sharing within and across an organizations boundaries is a modern digital business network hallmark.Think holistically:OEMs and suppliers must strive to learn more about their customers lifestyles and values,the way they use their vehicles,and how they spend their time on the road to defend existing revenue and anticipate new value streams in,for example,infotainment,software upgrades,and new features.Look across the value chain:To fully understand customers,we recommend taking an end-to-end view of the automotive value chain to identify all opportunities to improve the customer experience.Some of these may take some time to be obvious.For example,consider that quality problemsextremely detrimental to customer satisfactioncan arise from machine calibration errors on the shop floor.Likewise,supply chain inefficiencies can adversely impact customer satisfaction by limiting the availability of specific vehicle options or causing delays to promised vehicle delivery dates.Looking through a customer-focused lens can unearth many such areas for competitive advantage.4.Beyond your four walls5.Understand complex consumersAcross all operations:To achieve the agility required for todays rate of change,organizations must transform into a series of fast and agile operations impacting all business functions within the enterprise.From constantly understanding customer needs to quickly developing and efficiently manufacturing products through hyper-responsive customer experience operations(marketing,sales,and aftermarket service),no aspect of the value chain can escape the need for speed.11Automotive digital transformation in uncertain timesWhite PaperA foundational enabler for addressing uncertainty and developing these capabilities is the cloud.As the industry finds its way through the disruption,agility,scalability,and resilience will be critical to weather unexpected challenges,quickly pivot toward new opportunities,and turn capacity on or off as needed to meet business demands.Cloud-based systems are uniquely architected to address these needs.Figure 3(right)presents a recommended technology strategy.Technology-related strategiesKey takeaways:Develop a data-centric worldview and implement an ecosystem-spanning data strategy Leverage data analytics and AI/ML for actionable insights,risk mitigation,and improved customer experience Prioritize agility,scalability,and collaboration within and across organizational boundaries Establish a future-ready digital operating core and guard against cyber threats by moving to a cloud-centric IT strategyEach of these strategies is explored in greater detail below:The world is awash with data.Vast new streams of IoT data are available from connected vehicles and smart factories,and a staggering variety of structured and unstructured consumer data can be collected from web clickstreams,social media,and other channels.Add in traditional data from enterprise systems(ERP,CRM,PLM,Supply Chain,WMS,and the like.),and it quickly becomes clear that automakers can now access a wealth of information never before available.In this data-rich ecosystem,competitors best able to utilize data for analytics and modernizing business processes will obtain a first-mover advantage in exploiting new opportunities and reducing risks.The following points are crucial to becoming a more data-centric organization:Establish a data strategy:Becoming a truly data-centric organization requires a deliberate strategy to maximize the value of data assets.In its most minimal form,a data strategy may outline narrowly targeted objectives.However,such strategies must be broader and tightly aligned to longer-term corporate objectives and performance metrics for a truly data-centric enterprise.1.Become a data-centric organizationUncertainty3.Extend the enterprise1.Become a data-centric organization2.Leverage data-driven insights&automation5.Establish a digital operating core4.Defend the castleFigure 3:Technology strategy for thriving in an uncertain world12Automotive digital transformation in uncertain timesWhite PaperAs with any other strategic resource,investments in data-centricity should be made using a portfolio approach,prioritizing the highest potential ROI opportunities.In addition,the strategy should also provide a necessary framework to constantly monitor the actual ROI and business value of data assets.Use all data:As many organizations have learned,collecting,storing,and integrating the huge volumes of disparate data generated today can be a daunting endeavor.However,while the challenges are great,the rewards are considerable,providing modern data-hungry advanced analytics and AI/ML applications with the fuel necessary for next-generation business insights and process automation.Two approaches aid in furthering this data collection and integration goal:First,enterprise data lakes provide the ability to land data of varying formats,such as structured data(from enterprise transaction systems),semi-structured data(such as IoT-related data from connected vehicles and manufacturing sensors),and unstructured data(i.e.,images,video,audio)into a single location,for consumption by various applications.Second,migrating siloed legacy transaction systems to more modern and integrated enterprise platforms wherever possible provides near real-time access to data required for effective cross-functional collaboration and extraction of actionable insights.Both of these should be provisioned in the cloud,which is ideally suited to securely handling massive data volumes and enabling easier connectivity and access.Focus on data stewardship:Since comprehensive,high-quality data is the coin of the realm,data stewards must fully define data requirements and rigorously scrutinize the originating source systems for data quality at the grassroots level.In addition,as a direct consequence of increasing governmental regulations,automakers should not take this task lightly.For example,the exponential growth in connected vehicle data is drawing the attention of lawmakers seeking to strengthen privacy and liability regulations.For automakers,who have historically sought to leverage connected vehicle data for competitive advantage,these new regulations come with new obligations and potential legal risks.Consider the fact that the aforementioned UNECE regulations R155 and R156 make it compulsory for all OEMs selling vehicles within the EU to assume full ownership of vehicle data exchanged with external sources,in addition to assuming full liability for all on-board software(regardless of who developed that software).Automakers cannot manage this responsibility casually,underscoring the need for proactive data stewardship and compliance.Advanced technologies are reshaping the automotive value chain in many ways,arming automakers with opportunities for new revenue streams,cost reductions,and risk mitigation.However,enterprises must adopt a comprehensive technology strategy to achieve such results.13Automotive digital transformation in uncertain timesWhite PaperData fluency and mastery will separate industry leaders from laggards in todays profoundly uncertain and competitive business environment.The reason for this is cleara data-driven approach is essential for all the process improvements suggested in the previous section.Data is also the foundation for AI/ML,driving next-level advancements to actionable insights and automation.The following sections outline a few examples.Sensing the environment:In the pursuit of more clearly sensing change within an uncertain business environment,modern technologies provide critical new capabilities,including social media monitoring,web clickstream and web crawling analytics,Internet of Things(IoT)product usage insights,and ML-based pattern recognition.Companies leveraging such capabilities can“hear”news first,better sense their business environments,and act quickly to gain the upper hand.Minimizing risk:Several technologies can assist organizations in evaluating the business risk associated with uncertainty.Chief among them are the tremendous recent advances in computing power,enabling powerful scenario modeling capabilities for decision-making.By leveraging high-performance computing in the cloud,one can evaluate thousands of scenarios,considering economic indicators,geographic trends,consumer behavior,demand and labor rate changes,etc.Leading organizations are already implementing these capabilities to reduce revenue variance in their product portfolios,anticipate and prepare for various outcomes,de-risk supply chains by strategically diversifying suppliers and supplier locations,and hedge commodity prices,among other strategies.From reporting to insights:Historically,IT departments have focused on a reporting paradigm,delivering backward-looking reports to business users on a predetermined schedule.In contrast,modern data-driven organizations focus on delivering actionable insights based on current data and developing trends.Robotic Process Automation(RPA)can automate many operational decisions.At the same time,AI/ML-enabled tools can provide capabilities one step beyond,learning from historical data,outcomes,and trends to make prescriptive,next-best-action recommendations.For example,the quality inspection process can be automated by using camera image data to train ML algorithms to distinguish“good”versus“bad”quality outcomes.Similarly,ML customer service recommendations can be automated based on learning from previous actions to successfully address similar situations.2.Leverage data-driven insights and automationHistorically,IT departments have focused on a reporting paradigm,delivering backward-looking reports to business users on a predetermined schedule.In contrast,modern data-driven organizations focus on delivering actionable insights based on current data and developing trends.14Automotive digital transformation in uncertain timesWhite PaperImproving the customer experience:Once again,technology plays a critical role in all touchpoints along the customer journey.For example,automakers can leverage digital twin design simulations to bring innovative products to market more quickly,improve manufacturing quality by leveraging Industry 4.0 smart manufacturing technologies,and take the pulse of current customers via cross-channel sentiment analytics and connected vehicle product usage insights.Across the product lifecycle and the customer journey,advanced data analytics and AI/ML hold the keys to enthusiastic and loyal customers.Research into todays extended enterprises indicates that up to 80%of the data needed for key business decisions resides outside an organizations four walls.Despite this,an important lesson learned during the COVID-19 pandemic was that effective collaboration and communication are possible,even with people and resources spread across the globe.Several technologies can help in removing cross-value chain data silos and barriers to communication.These technologies will be most effective if deployed in the cloud,which can provide the ideal foundation for secure communication and collaboration.Examples include:Real-time collaboration tools:Such as shared workspaces,video conferencing,and augmented reality workspaces.Collaborative enterprise systems:Modern enterprise operating systems with vendor portals for transactional collaboration and reporting.An unfortunate byproduct of ubiquitous connectivity is the constant threat of cyberattacks,encompassing both individuals and organizations.This threat will continue to grow over time in direct proportion to the exponential growth in connected devices and systems.This represents a potentially existential risk,with several highly publicized examples of extremely damaging data breaches occurring in the not-so-distant past.For example,in separate incidents across two continents,ransomware attacks recently brought the operations at two tier-1 suppliers to a complete standstill,to the extent that even their backup systems were compromised.This caused massive financial damage not only to the suppliers but to their customers as well,whose production was also affected.As a result of such breaches,and to“defend the castle”in these perilous times,organizations are renewing efforts to develop robust cybersecurity strategies.Two points should be considered:Ensure tight cybersecurity and privacy controls:This is critical,as a single incident can compromise the integrity of operational data sets and expose the organization to potentially devastating liability-related costs and risks.Further,in the face of such occurrences,it is not unusual for companies to overreact and introduce onerous new barriers to communication and collaboration.To guard against such situations,organizations should 3.Extend the enterprise4.Defend the castle15Automotive digital transformation in uncertain timesWhite Paperimplement processes and protocols such as role-based security and multi-factor authentication in an expedited manner.Focus on technical infrastructure:In the data breaches described above,both companies ran their enterprise applications on on-premises systems(i.e.,in their data centers).Had these systems been running on a highly secure cloud platform,such as Amazon Web Services or Microsoft Azure,the likelihood of these destructive breaches would have been far lower.A comprehensive digital operating core is essential to achieve transformation at scalebut what exactly is a digital operating core?Simply put,it consists of two critical capabilities.First,it must provide an operating core capable of supporting the global automotive enterprise.Second,it must provide a digital backbone that can serve the data required by various applications.Each of these is further explained below:The digital operating core:This contains the transactional applications(ERP,CRM,SCM,etc.)and associated analytics required to run the core operations of an automaker.Importantly,the legacy operating cores currently in use are straining against the needs of todays automotive companies.As many of these systems have been developed and modified over decades,they often lack more modern applications flexibility,functionality,and security.Common application shortcomings include difficulty adapting to changing business processes and organizational structures,data quality and accessibility,inability to securely collaborate with external partners,and high cost of ownership due to extensive customization and constant maintenance and upgrades.As new cloud-based operating cores have emerged,application capabilities have improved markedly.The digital backbone:As previously established,digital-native applications such as advanced analytics and AI/ML require large datasets from multiple sources to perform their functions.Consequently,a digital backbone should facilitate access to the various data types described earlier.This should result from a tight integration between the digital operating core and an enterprise data lake that can store and serve large amounts of varying data types.For more information,reference the data-centricity section of this whitepaper.5.Establish a digital operating core16Automotive digital transformation in uncertain timesWhite PaperAs the automotive industry digitally transforms,it is evolving from an old-school manufacturing paradigm into a modern,technology-intensive one.Despite this fact,however,it has an image problem,as many potential employees still consider it a less dynamic sector of the economy.In a practical sense,this has hindered the industrys ability to be seen as an employer of choice and access the best of the talent pool,for which automotive companies now must compete with digital native organizations like Apple and Google.In poll after poll,industry executives say that finding and retaining top talent is a key strategic priority.In the words of one automakers CEO,its a“global talent war.”Automakers must develop a talent strategy closely aligned with business objectives and employee expectations to better compete.Additionally,culture change is a key requirement for the workplace of the future and should go hand-in-glove with an active change management program.Figure 3 depicts key elements of a people strategy for the modern automotive industry.The modern digital workforce,primarily Millennials and older Gen Z,is motivated by more than just financial incentives.Accordingly,companies need a whole person strategy,which provides employees with meaningful and impactful work,growth opportunities,a collaborative,flexible work environment,alignment with their values,and opportunities for self-actualization through participation in personally consequential causes.1.Talent acquisition and retentionPeople-related strategiesKey takeaways:As the auto industry becomes more technology-driven,finding and retaining top digital talent is mission-critical Companies must adopt a whole person talent development strategy,which accounts for a generational shift in employee expectations Decision rights should be pushed down to facilitate employee empowerment,organizational agility,and responsiveness Senior management must drive and manage culture change to eliminate outdated stereotypes of the industry and become employers of choiceEach of these strategies is explored in greater detail below:Figure 4:People strategy for automotive transformationUncertainty1.Talent acquisition and retention2.Skills development5.Change management4.Culture of change3.Empowered organization17Automotive digital transformation in uncertain timesWhite PaperIt can fairly be said that every automotive company today is a technology companyor needs to become one to survive and thrive.As the line between software companies and automakers blurs,maintaining and growing an employees technical capabilities in all areas of the value chain,but especially in product development,engineering,validation,manufacturing,and customer experience,is no longer optional.No matter their role,every employee,regardless of level,now needs a significantly higher degree of technical expertise than what was necessary less than a decade ago.The pace of this change will only continue to accelerate,underscoring the need for role-specific training delivered just in time,utilizing various learning methods.Even the best-trained and most motivated workforce will be constrained without an agile and empowering organizational structure.Open communication,democratization of decision rights,and a merit-based reward system are essential for organizational responsiveness and individual accountability.The importance of change management is widely recognized,and yet,in many cases it remains an afterthought.To successfully embrace change,employees need to understand how it will personally benefit them.To maximize the benefits of a transformation,it is crucial to include a change management strategy and change execution plan as integral parts of the transformation program.Importantly,these should align with key program milestones and metrics and should be actively sponsored by executive management.Culture is the glue that creates a cohesive organization.It is important to recognize that in todays rapidly transforming industry,cultural attributes that were appropriate in the past may no longer be sufficient.In particular,three cultural attributes are essential for the digital enterprise:Culture of innovation:An innovation-driven culture with a bias for action,complemented by an environment encouraging experimentation,knowledge sharing,stewardship,and trust.Culture of openness:As organizational boundaries morph to ever-more-extended enterprises encompassing a diverse mix of ecosystem partners,a culture of openness,trust,and sharing is essential for success.Culture of data-centricity:A culture of data-centricity begins with executive sponsorship at the top of the organization.This will help break through organizational silos and drive cross-functional collaboration on data-related initiatives.The companies that have been most successful in digital transformation have essentially rewritten their corporate DNA to metamorphose into data-driven organizations.Such organizations prioritize experimentation and agility over routine and structure.2.Skills development3.Empowered organization5.Change management4.Culture of change18Automotive digital transformation in uncertain timesWhite PaperA call to actionListen to the environment:Organizations need to always have their proverbial antennae up to read how the winds are blowing within the global automotive industry as well as in adjacent industries and the economy as a whole.A variety of internal and external inputs should be considered when evaluating these developments and trends.Prioritize speed over stability:In the digital era,success will belong to those who can best senseand ideally anticipatechallenges and opportunities and respond fastest to them.The traditional approach of seeking certainty before acting is inherently risky in a business environment as dynamic and fluid as today.Leverage technology:While technology for its own sake should not be an end,it is foundational for mitigating risk and achieving competitive advantage.When properly aligned with business objectives,technology can be the secret weapon in a companys arsenal to combat uncertainty and emerge stronger from the transition.In the preceding paragraphs,we have made the case that the automotive industry must adapt to a new reality of endemic uncertainty resulting from global macro factors and the ongoing CASE revolution.We have also discussed process,technology,and people strategies for addressing these changes.There are five specific recommendations to realize the benefits of these strategies:19Automotive digital transformation in uncertain timesWhite PaperAlign the organization and the culture:Change does not come easily in an industry often challenged by excessive bureaucracy,silos,and a lack of open communication and trust.These issues can be addressed by redesigning the organization for greater agility and transparency and fostering a culture of trust and collaboration.Of course,changing this scope and scale is not easy,bringing us to the fifth recommendation.Actively manage the change:This is a dimension which,if overlooked or treated halfheartedly,can seriously undermine,or even negate,the benefits achieved by the other actions.A key requirement for a successful change program is executive sponsorship,which is then cascaded down through the various levels of the organization.Human nature often resists change,finding it threatening or,at the very least,uncomfortable.Nevertheless,change is inevitable,and nowhere is it more apparent than todays automotive industry.Todays vehicles are a far cry from those of even five years agoand five years hence,they may make todays vehicles look antediluvian in comparison.The new normal is anything but normal,and it is here to stay,for better or worse.Companies that run toward this new normal and reinvent themselves to capitalize on the opportunities that lie behind the veil of uncertainty are the ones that will still be successful decades from now.ConclusionInfor is a global leader in business cloud software products for companies in industry specific markets.Infor builds complete industry suites in the cloud and efficiently deploys technology that puts the user experience first,leverages data science,and integrates easily into existing systems.Over 67,000 organizations worldwide rely on Infor to help overcome market disruptions and achieve business-wide digital The Center for Automotive Research is an independent non-profit that produces industry-driven research and fosters dialogue on critical issues facing the automotive industry and its impact on the U.S.economy and society.CAR researchers closely track current and future global automotive industry and technology trends and assess their impacts.CAR researchers also study international collaborations and stay abreast of changes in international trade and regulatory environments,the development of technology standards,and the deployment of new vehicle technologies.MICHAEL GER DIGITAL TRANSFORMATION CONSULTANTAbout InforAbout the authorsCopyright 2023 Infor.All rights reserved.The word and design marks set forth herein are trademarks and/or registered trademarks of Infor and/or related affiliates and subsidiaries.All other trademarks listed herein are the property of their respective owners.INFDTP2967176-en-US-1123-1LEARN MORENavigate the automotive industrys digital transformationABCDEFGPETER MAITHELGLOBAL AUTOMOTIVE INDUSTRY STRATEGY LEADERDR.HENNING DRANSFELD DIRECTOR,INDUSTRY STRATEGY&SOLUTIONSFor citations and references to this publication,please use the following:Dransfeld,H.,Ger.M.,Maithel,P.,Automotive digital transformation in uncertain times,The Center for Automotive Research,2024.
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Economic Contribution of the U.S.Automotive Industry.An Economic Contribution Analysis of Automobile and Light Duty Motor Vehicle and Motor Vehicle Parts Manufacturing in the United States Authors:Tyler Harp Industry Analyst,Center for Automotive Research K.Venkatesh Prasad,Ph.D.SVP of Research&Chief Innovation Officer Center for Automotive Research July 2024 CENTER FOR AUTOMOTIVE RESEARCH 2 About the Authors The Center for Automotive Research(CAR)is an independent,non-profit organization conducting industry-driven research and analysis.Focusing on critical areas like Energy&Sustainability,Technology,and Labor,Economics,and Policy,CAR has been a trusted resource for the automotive industry for over twenty years.www.cargroup.org Acknowledgments For citations and references to this publication,please use the following:Harp,T.&Prasad,K.(2024).Economic Contribution of the U.S.Automotive Industry.Center for Automotive Research,Ann Arbor,MI.880 Technology Drive,Suite C|Ann Arbor,MI 48108|www.cargroup.org CARs mission is to inform and advise through independent research,education,and dialogue,enabling a more viable and sustainable automotive ecosystem.CENTER FOR AUTOMOTIVE RESEARCH 3 Table of Contents About the Authors.2 Acknowledgments.2 Table of Tables.3 Table of Figures.3 Introduction.4 Methodology.4 Multi-Industry Contribution Analysis.5 Book of Deals:2023 Announced Investment.10 Conclusion.11 Appendix.12 Table of Tables Table 1.Economic contribution,supported tax revenue.6 Table 2.Economic contribution,supported employment,labor income,value added,and output.8 Table 3.Economic contribution,top 10 industries by supported indirect output.9 Table 4.Automaker and tracked supplier announced investment in the US,2023.11 Table 5.Census Regions and Divisions of the United States.12 Table of Figures Figure 1.Automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing direct employment by state.7 Figure 2.Inter-division connectedness:indirect output from inter-division trade and commuting flows.10 CENTER FOR AUTOMOTIVE RESEARCH 4 Introduction Automotive manufacturing is a critical industry in the United States.This research note examines the economic contribution of automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing quantifying and providing insight into the combined industries role in supporting employment,economic output,and tax revenues.Furthermore,both automakers and suppliers have announced historical investments in across the United States.These investment announcements are tracked in the CAR Book of Deals,which captures public automaker and supplier announced capital investment projects across North America.This research note provides analysis of this proprietary CAR data source,highlighting the automotive industrys importance to communities across the nation.Methodology To assess the economic contribution of light vehicle manufacturing across the United States,CAR conducted a multi-industry contribution analysis of automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing1 utilizing IMPLAN,an economic input output modeling application.This analysis employs a multi-region input-output(MRIO)to model direct,indirect,and induced employment,labor income,value added,output,and local,state,and federal tax revenue contribution.The MRIO methodology limits aggregation bias2 and allows for examination of the interconnectedness of multiple regions.The model regions are based on the census regions and divisions of the United States3,with the MRIO implemented at the US division level.Please see the Appendix for table mapping states to divisions and regions.The automotive manufacturing industry contribution findings were determined using a multi-industry MRIO contribution analysis of the economic impact of automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing modeled using IMPLAN economic analysis data software,2022 data year.The CAR Book of Deals,which tracks publicly announced capital investment projects announced by automakers and tracked suppliers across North America,allows one to look backwards to look forwards analyzing capital investment announcements to forecast future impacts of the automotive 1 NAICS 33611 and 3363 2 Aggregation bias occurs when combining multiple geographies or industries and results in a loss of detail.3 https:/www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf CENTER FOR AUTOMOTIVE RESEARCH 5 industry.In this research note,CAR has reviewed capital investments announced in 2023 captured by the Book of Deals and summarized the findings by US division and region.Book of Deals data can be used to as inputs into IMPLAN to inform economic impact analyses at such geographies as metropolitan statistical area,congressional district,state,or other custom regions.Multi-Industry Contribution Analysis Automotive manufacturing is a critical industry in the United States.Encompassing automobile and light duty motor vehicle manufacturing,as well as motor vehicle parts manufacturing including motor vehicle electrical and electronic equipment,gasoline engine and engine parts,metal stamping,seating and interior trim,steering,suspension components,brake systems,transmission and power train parts,and other motor vehicle parts manufacturing.CAR analyzed the economic contribution of the automotive manufacturing industry,examining the direct,indirect,and induced effects of the industry on US employment,labor income,value added,output,and tax revenue.Automotive manufacturing in the US supports nearly$100 billion in local,state,and federal tax revenue.Across the nation,this industry contributes most greatly to the Midwest,followed by the South,in collected tax revenue.CENTER FOR AUTOMOTIVE RESEARCH 6 Table 1 shows the total local,state,and federal tax revenue supported by automotive manufacturing within each division and region.CENTER FOR AUTOMOTIVE RESEARCH 7 Table 1.Economic contribution,supported tax revenue4 US Region US Division Local Tax Revenue State Tax Revenue Federal Tax Revenue Midwest East North Central$5,862,000,000$9,640,000,000$28,191,000,000 West North Central$687,000,000$1,126,000,000$3,238,000,000 Midwest Total$6,550,000,000$10,766,000,000$31,429,000,000 Northeast Middle Atlantic$1,094,000,000$1,141,000,000$3,234,000,000 New England$179,000,000$275,000,000$829,000,000 Northeast Total$1,273,000,000$1,416,000,000$4,063,000,000 South East South Central$1,560,000,000$3,527,000,000$9,127,000,000 South Atlantic$1,893,000,000$2,330,000,000$7,409,000,000 West South Central$905,000,000$1,164,000,000$4,252,000,000 South Total$4,357,000,000$7,021,000,000$20,788,000,000 West Mountain$291,000,000$456,000,000$1,349,000,000 Pacific$1,506,000,000$2,721,000,000$5,911,000,000 West Total$1,797,000,000$3,176,000,000$7,260,000,000 US Total$13,977,000,000$22,380,000,000$63,541,000,000 The automotive manufacturing industry directly supports nearly 775,000 jobs across the US.Automobile and light duty motor vehicle manufacturing direct employment is estimated at just over 240,000 while motor vehicle parts manufacturing contributes roughly another 535,000 direct jobs.Figure 1 shows the direct employment by state in the modeled by IMPLAN,2022 data model.This direct contribution supports a total employment of 3,369,000 across the US,factoring in both indirect and induced employment effects.Among the four US regions noted above,the Midwest region has the highest employment levels supported by automotive manufacturing,with roughly 1.5 million jobs supported by the industry within the East North Central division,inclusive of Indiana,Illinois,Michigan,Ohio,and Wisconsin.The second largest division in terms of automotive manufacturing supported employment is the East South Central region,consisting of Alabama,Kentucky,Mississippi,and Tennessee.4 Direct,indirect,and induced effects CENTER FOR AUTOMOTIVE RESEARCH 8 Figure 1.Automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing direct employment by state The 3,369,000 direct,indirect,and induced jobs supported by the US automotive manufacturing industry in turn support nearly$260 billion in labor income.Labor income consists of all forms of employee compensation,including wages,salaries,and benefits,and proprietor income.This contributes to value added,which includes labor income in addition to other property income and taxes on production and imports.The total value added supported by automotive manufacturing in the US,which can be interpreted as the industrys contribution to gross domestic product,is over$450 billion.The total output supported by automotive manufacturing in the US,which includes the total value added plus the value of intermediate goods and services,measures over$1.275 trillion.Total employment,labor income,value added,and output supported by automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing by US division is shown in CENTER FOR AUTOMOTIVE RESEARCH 9 Table 2.CENTER FOR AUTOMOTIVE RESEARCH 10 Table 2.Economic contribution,supported employment,labor income,value added,and output5 US Region US Division Employment Labor Income Value Added Output Midwest East North Central 1,491,000$116,087,000,000$203,066,000,000$573,750,000,000 West North Central 187,000$13,598,000,000$23,275,000,000$66,958,000,000 Midwest Total 1,677,000$129,685,000,000$226,341,000,000$640,708,000,000 Northeast Middle Atlantic 152,000$12,820,000,000$21,120,000,000$42,441,000,000 New England 38,000$3,217,000,000$5,144,000,000$11,155,000,000 Northeast Total 190,000$16,037,000,000$26,263,000,000$53,596,000,000 South East South Central 534,000$38,892,000,000$65,138,000,000$228,053,000,000 South Atlantic 408,000$28,654,000,000$49,987,000,000$134,069,000,000 West South Central 233,000$16,815,000,000$35,721,000,000$89,044,000,000 South Total 1,175,000$84,361,000,000$150,846,000,000$451,166,000,000 West Mountain 77,000$5,382,000,000$9,248,000,000$24,602,000,000 Pacific 250,000$23,326,000,000$39,551,000,000$105,814,000,000 West Total 327,000$28,709,000,000$48,799,000,000$130,416,000,000 US Total 3,369,000$258,792,000,000$452,249,000,000$1,275,886,000,000 By considering indirect output,a measure of all output generated due to direct business to business spending,one can see the other industries most supported by automotive manufacturing output in the US.Unsurprisingly,the industry supported the most by automotive manufacturing economic contributions is the manufacturing industry.However,manufacturing only accounts for roughly 27.5%of the indirect output.Nearly three quarters of the total indirect output supported by automotive manufacturing takes place outside of manufacturing,led by wholesale trade,transportation and warehousing,and professional,scientific,and technical services.Indirect output supported by the US automotive manufacturing industry can be seen in 5 Direct,indirect,and induced effects CENTER FOR AUTOMOTIVE RESEARCH 11 Table 3.CENTER FOR AUTOMOTIVE RESEARCH 12 Table 3.Economic contribution,top 10 industries by supported indirect output Top 10 Industries Supported by Indirect Jobs Indirect Output%of Total Indirect Output Manufacturing$109,356,000,000 27.5%Wholesale Trade$106,581,100,000 26.8%Transportation and Warehousing$31,821,300,000 8.0%Professional,Scientific,and Technical Services$24,484,700,000 6.2%Finance and Insurance$20,669,800,000 5.2%Management of Companies and Enterprises$19,261,100,000 4.9ministrative and Support and Waste Management and Remediation Services$18,613,400,000 4.7%Real Estate and Rental and Leasing$15,740,300,000 4.0%Information$15,493,900,000 3.9%Utilities$10,970,300,000 2.8%Other Industries$24,141,800,000 6.1%One primary benefit of running a MRIO analysis is that it allows the inter-region effects of trade and commuting to be examined.Figure 2 shows the interconnectedness of the US divisions,depicting the inter-division flow of indirect jobs supported by the direct business to business transactions of the automotive manufacturing industry.This flow diagram shows how intertwined the automotive manufacturing industry is automotive manufacturing activity in each individual US division supports indirect employment,output,value added,and tax revenue,in each of the other divisions across the nation.The East North Central division benefits from the highest number of indirect jobs supported by direct automotive manufacturing output in other US divisions.The automotive manufacturing industry in the East South Central division supports the most indirect jobs across other US divisions.CENTER FOR AUTOMOTIVE RESEARCH 13 Figure 2.Inter-division connectedness:indirect output from inter-division trade and commuting flows Book of Deals:2023 Announced Investment The prior multi-industry contribution analysis helps to define and examine the current economic contributions of automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing in the US.By examining data captured in the Book of Deals,it is possible to analyze recently announced capital investment projects to better understand where the industry is heading in the future(as automotive investments typically amortize over the course of multiple years).In 2023,automakers and tracked suppliers announced over$84 billion in capital investment projects across the US.Table 4 shows 2023 capital investment announcement totals across US divisions.Additionally,the number of expected jobs to be newly created as a result of the announced projects are shown.Furthermore,these data are categorized by overarching vehicle technology type electrification(e.g.,electric vehicles,or EVs)versus other(non-EV).In 2023,automakers and tracked Indirect jobs supported in other divisions Indirect jobs supported by other divisions CENTER FOR AUTOMOTIVE RESEARCH 14 suppliers announced at least$72.5 billion towards electrification projects,or investments tied to EVs and EV batteries,and over 40,000 new jobs expected to be created in the future as these projects come to fruition.Table 4.Automaker and tracked supplier announced investment in the US,2023 Region Division Electrification:Investment Announced Other(Non-EV):Investment Announced Electrification:Expected New Jobs Other(Non-EV):Expected New Jobs Midwest East North Central$28,634,100,000$8,286,690,000 16,330 987 West North Central$1,000,000,000$100,000,000 200 Midwest Total$29,634,100,000$8,386,690,000 16,330 1,187 Northeast Middle Atlantic$266,000,000$42,000,000 700 550 New England$60,000,000 200 Northeast Total$326,000,000$42,000,000 900 550 South East South Central$4,280,100,000$1,022,000,000 3,776 1,006 South Atlantic$25,126,600,000$763,000,000 17,742 3,638 West South Central$1,270,700,000$585,000,000 1,550 50 South Total$30,677,400,000$2,370,000,000 23,068 4,694 West Mountain$10,370,000,000$129,000,000 3,420 Pacific$1,500,000,000$1,000,000,000 West Total$11,870,000,000$1,129,000,000 3,420 Grand Total$72,507,500,000$11,927,690,000 43,718 6,431 Conclusion Automotive manufacturing economic contribution supports over 3.3 million jobs across the US through direct,indirect,and induced employment and supports over$450 billion in gross domestic product.Direct automobile and light duty motor vehicle manufacturing and motor vehicle parts manufacturing employment in each individual US division supports further economic output not only within the same division but,through the interconnectedness of trade and commuting flows,supports further indirect and induced output,jobs,and tax revenue in each and every other US division.This economic contribution will continue to grow as the over$84 billion announced automaker and supplier capital investment is realized in the coming years,along with the expected creation of over 50,000 new jobs.CENTER FOR AUTOMOTIVE RESEARCH 15 Appendix Table 5.Census Regions and Divisions of the United States Region Division State Region Division State Midwest East North Central Indiana Northeast New England Connecticut Illinois Maine Michigan Massachusetts Ohio New Hampshire Wisconsin Rhode Island West North Central Iowa Vermont Nebraska Middle Atlantic New Jersey Kansas New York North Dakota Pennsylvania Minnesota South South Atlantic Delaware South Dakota Division of Columbia Missouri Florida West Mountain Arizona Georgia Colorado Maryland Idaho North Carolina New Mexico South Carolina Montana Virginia Utah West Virginia Nevada East South Central Alabama Wyoming Kentucky Pacific Alaska Mississippi California Tennessee Hawaii West South Central Arkansas Oregon Louisiana Washington Oklahoma Texas Note:States were combined at the division level for the muti-industry contribution analysis MRIO.
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Skyways to the Future:Operational Concepts for Advanced Air Mobility in IndiaI N S I G H T R E P O R TN O V E M B E R 2 0 2 4In collaboration with the Ministry of Civil Aviation of IndiaImages:Getty ImagesDisclaimer This document is published by the World Economic Forum as a contribution to a project,insight area or interaction.The findings,interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum,nor the entirety of its Members,Partners or other stakeholders.2024 World Economic Forum.All rights reserved.No part of this publication may be reproduced or transmitted in any form or by any means,including photocopying and recording,or by any information storage and retrieval system.ContentsForeword 3Foreword 4Executive summary 5Introduction 61 Designing the vertiport environment 112 Developing an integrated airspace 163 Evaluating economic considerations 234 Cultivating community acceptance and integration 285 Implementing an AAM programme 30Conclusion 37Contributors 38Endnotes 40Skyways to the Future:Operational Concepts for Advanced Air Mobility in India2ForewordVumlunmang Vualnam Secretary,Ministry of Civil Aviation of IndiaSkyways to the Future:Operational Concepts for Advanced Air Mobility in IndiaNovember 2024The advent of air travel has revolutionized transport,mobilizing millions globally.Today,as technology advances,aviation remains a crucial driver of economic and social connectivity.As the third-largest domestic aerial market globally,India stands at the threshold of a new revolution.With schemes and frameworks aimed at extending aviation to the last mile,advanced air mobility(AAM)presents a unique opportunity to address challenges due to urban sprawl as India experiences rapid economic progress.Furthermore,regional mobility will enhance access to jobs and finance,ensuring no one is left behind in the broader transport network.The value chain of AAM offers India the chance to take a leading position in manufacturing,operations,supply chains and training expertise.Given Indias culturally diverse geography,the seamless integration of AAM into the Indian market will help develop a model for aspiring nations.This concept of operations(CONOPS)report is a key milestone in our journey towards realizing the full potential of AAM in India.It represents the culmination of extensive multistakeholder dialogue among industry leaders,government,regulators and experts from various domains that have set the stage for AAM.To harness this sectors opportunities,we have built a strong community of purpose to address key elements from an end-user perspective.Since our inaugural session at the Paris Air Show in 2023,1 attended by key decision-makers from India and around the world,we have worked diligently to realize our vision.Further,Indias safety regulator,the Directorate General of Civil Aviation(DGCA),has issued comprehensive advisory circulars on commissioning vertiports and ensuring AAM aircrafts airworthiness.In September 2024,India participated in the International Civil Aviation Organizations(ICAO)Advanced Air Mobility Symposium in Montreal,where an India-led initiative was showcased.2 The broader objective of the symposium was to raise awareness about the extensive benefits of AAM.Our goal is to curate and develop a safe,sustainable,inclusive and economically viable AAM ecosystem while improving quality of life for all citizens.The CONOPS presented in this report serves as a foundational guide for achieving this vision,providing clear guidance on airspace management,regulatory frameworks,operational standards and community engagement.This report also marks the beginning of a sunrise industry.As we move forward,continuous innovation,collaboration and adaptability will ensure the successful rollout of AAM in India.We are committed to working closely with all stakeholders to realize the vision of making AAM accessible,inclusive,safe and impactful.We are immensely proud of the work that has gone into this effort and believe that it will serve as a foundation for the future of advanced and short-haul air mobility for all(ASHA).Together,we will shape the future of aerial mobility for generations to come.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India3ForewordSebastian Buckup Head of Network and Partnerships;Member of the Executive Committee,World Economic ForumPurushottam Kaushik Head,Centre for Fourth Industrial Revolution,World Economic ForumIndia exemplifies the power of multilateralism in transforming lives and uplifting over a billion people.With its rich cultural diversity and rapidly growing economy,India has made remarkable strides in recent years.As it passed the G20 leadership baton to Brazil,the G20 New Delhi Leaders Declaration highlighted how a dynamic and resurgent India is committed to bridging the gender divide through increased female enrolment in STEM(science,technology,engineering and mathematics)fields,accelerating low-emission technologies,and ensuring that the cities of tomorrow are both resilient and sustainable.Indias aviation sector stands as a testament to the countrys forward-thinking leadership and commitment to inclusive growth.The Regional Connectivity Scheme,Ude Desh Ka Aam Nagrik(UDAN),has democratized air travel,making it affordable,safe and accessible to millions.Advanced air mobility(AAM)is the next chapter in this story,introducing new aerial vehicles and technologies that will expand last-mile connectivity across India.This visionary approach positions AAM as a pioneer for the future of air mobility,bringing swift,efficient transport to the broader population.This report embodies the spirit of multilateralism and inclusivity,demonstrating how a collaborative,multistakeholder approach can create a roadmap for a dynamic,emerging sector.Developed in collaboration with the leadership of Indias Ministry of Civil Aviation and the Directorate General of Civil Aviation(DGCA),it maps out the essential elements of an AAM ecosystem.Notably,this documents list of authors includes four accomplished women leaders,each an expert in her field,reflecting a commitment to diversity and gender inclusion.As Prime Minister Narendra Modi emphasized at the Asia Pacific Ministerial Conference on Civil Aviation,held in partnership with the International Civil Aviation Organization,air taxis are soon to become a reality in India.This report serves as a foundational guide to the architecture of a comprehensive AAM ecosystem,bridging policy,technology and practice.Moving forward,it is crucial to transform this academic foundation into tangible,on-ground action through coordinated pilot programmes.This document offers a detailed framework for Indias journey in AAM,which is set to redefine urban and regional transport and inspire a new era of sustainable mobility.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India4Executive summaryAdvanced and short-haul air mobility for all(ASHA)is set to transform urban and regional transport.Currently,India ranks third globally in domestic passenger traffic.This concept of operations(CONOPS)report outlines key elements of the advanced air mobility(AAM)ecosystem critical to the sectors success in India.The report aims to inform local decision-makers who may lack subject matter expertise and familiarity with aviation terminology.It serves as a blueprint for the phased adoption and integration of AAM across the country,targeting critical areas such as airspace management,infrastructure development,regulatory frameworks and community engagement.The report focuses on the economic impact that should be considered when planning and designing these vehicles for various use cases.AAM provides innovative solutions to alleviate urban congestion,improve access to remote regions and identify new economic opportunities.Through AAM,India can witness a new economic opportunity by relieving urban transport distress and access to markets for regional India.This will improve access to jobs,healthcare and economic clusters and contribute to Indias broader development goals.The report outlines Indias AAM roadmap,focusing on the need for integrated vertiport networks,a robust regulatory ecosystem and advanced technologies to ensure safe,sustainable and scalable air mobility solutions.Key strategic actions include:Establishing urban and rural vertiports,with a priority on safety,accessibility and transport needs Integrating AAM into Indias multimodal transport system,ensuring seamless interaction with existing infrastructure like airports and helipads,as well as with road and rail infrastructure Addressing key challenges such as noise mitigation,energy demands and community acceptance Developing a replicable framework that supports Indias formally issued vertiport requirements3 ensuring public safety while supporting the growth of this emerging sectorUltimately,AAM is not just a transport solution but a powerful tool for social inclusion and economic growth.As India accelerates towards becoming a global leader in AAM,this CONOPS report provides the roadmap to ensure its safe,inclusive and equitable adoption.To validate this report,it is imperative that a sandbox exercise follows to validate the concepts presented here.This report serves as a primer for Indias AAM sector,touching upon crucial ecosystem elements to unlock the sectors potential.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India5IntroductionIndias top 10 cities must have a well-established network of vertiports that are well-integrated with airports and helipads and the broader road network.There should be a replicable model where dedicated maintenance,repair and overhaul facilities are in proximity to vertiports.Advanced air mobility(AAM)aircraft must be cost-efficient in comparison to radio and app-based premium cab services.AAM can contribute to decongesting arterial roads in Indias cities,especially around buildings,clusters and fulfilment centres for logistics.Locations such as mall roofs,terraces and hospitals are especially suitable for integrated vertiports,and India needs a supportive advanced regulatory framework that supports AAM.This concept of operations(CONOPS)report outlines the potential for AAM to revolutionize Indias transport landscape.It explores the technology,infrastructure needs,economic considerations and social implications of integrating AAM into the national mobility ecosystem.The primary objective is to provide a comprehensive framework for a phased implementation strategy,ensuring safe,efficient and inclusive AAM adoption across India.The CONOPS also attempts to equalize access to this technology by ensuring that rural populations also stand to benefit from implementation.Overview of AAMThe word“aircraft”is typically associated with high-speed aeroplanes that transport people and cargo across cities and continents via airports.In simple terms,it is a machine that can derive support in the atmosphere through reactions in the air other than those on the Earths surface.4 Configurations include:Aeroplanes(fixed-wing):Typical planes,such as commercial jets,seen in the sky every day.They have wings that dont move(fixed)and fly forward to create lift.Helicopters(rotary-wing):Aircraft with spinning blades(rotors)on top.The rotating blades lift the helicopter straight up,allowing it to hover,take off and land vertically.Multirotors:Drones with multiple spinning rotors(usually four or more).The rotors lift the drone into the air,allowing it to hover and move in any direction.Airships/hot air balloons(lighter-than-air aircraft):Airships and hot air balloons float because they are filled with lighter-than-air gases like helium.Airships can be steered,while hot air balloons drift with the wind.As technology advances,however,the world is witnessing new forms of aerial vehicles that can access hard-to-reach areas that traditional aeroplanes cannot more sustainably.These vehicles range from small drones delivering sensors or medical supplies to remote areas to future air taxis designed to carry passengers for the last mile.Electric vertical take-off and landing(eVTOL)and short take-off and landing(STOL)aircraft are fixed-wing aircraft that can take off and land on runways much shorter than those needed by conventional aircraft.They offer on-demand passenger and cargo transport within urban and regional areas.Through such vehicles,AAM holds the potential to decongest roads,improve accessibility and create new economic opportunities.The modernization of Indias multimodal transport system will be driven by advanced air mobility.India is at the threshold of a transformative shift in mobility,and AAM represents a pivotal step toward unlocking the potential of our skies.With the development of this concept of operations,we are laying the foundation for a future where air transport is not just faster and more efficient,but also accessible,sustainable and inclusive for all Indians.This collaboration with the World Economic Forum underscores our commitment to embracing innovation while ensuring safe and secure integration into our national airspace.The Hon.Kinjarapu Ram Mohan Naidu,Minister of Civil Aviation,Ministry of Civil Aviation of IndiaSkyways to the Future:Operational Concepts for Advanced Air Mobility in India6The India AAM stackFIGURE 1Form factor(VTOL,STOL)Propulsion systemsBattery technologyAvionics,automationVertiportsAir traffic management(ATM)Communication networkMaintenance,repair and overhaulRegulatory frameworkSustainable developmentEnhanced mobilityResearch and development(R&D),manufacturing and Supply chain considerationsAAM India stackEcosystem integration(level 3)Workforce,training and certificationVehicle technology layer(level 2)Infrastructure layer(level 1)Foundational layer(level 0)Safety and securityUrban planningRegional integrationMultimodal transportPublic acceptanceEnabling ecosystem required to fulfil the product and operational requirementEnd user and operational requirements being translated into product requirementEnd user requirement being translated into operational requirementsSource:World Economic Forum;Deloitte.Definitions and principlesAAM encompasses a diverse range of technologies,including eVTOL aircraft,electric drones and other urban air mobility(UAM)vehicles.The core components of AAM include:Electric propulsion:Reducing noise and emissions compared to traditional aviation Vertical take-off and landing(VTOL)and STOL:Enabling operations from dedicated infrastructure(vertiports)or modified infrastructure Piloted,remotely piloted,autonomous or semi-autonomous operations:Increasing efficiency and safety in the future On-demand services:Offering a flexible and personalized transport optionAdditionally,AAM significantly intersects with the United Nations Sustainable Development Goals(UN SDGs),given its coverage across sectors urban planning,agriculture,supply chain and logistics,emergency services,public health and safety.The SDGs cover various social,economic and environmental global challenges to achieve an equitable future.More recently,the Asia and Pacific Ministerial Declaration on Civil Aviation(Delhi)highlighted the importance of“identifying opportunities for innovation and the adoption and integration of new technologies,such as AAM,to keep pace with global advancement in information technology and artificial intelligence”.5AAM:Whats in it for India?In many ways,transport systems are the veins of the Indian economy.Indias transport system is central to Indias economy.As Indias metropolitan cities stand at the forefront of the nations economic growth,its citizens transport and mobility needs must be met effectively and efficiently.Cities with a higher travel demand indicate an upward trend in economic activity.Furthermore,several major cities are now subject to traffic congestion during rush hour.The late arrival of a commuter to their workplace is not only a loss for the commuter but also a productivity loss for the organization.In 2023,a survey in Bengaluru,India,revealed that 57%of private vehicle owners and 55%of public transport users regularly arrived late to the office.The study also estimated that approximately 700,000 productive hours were lost due to lateness in 2018,leading to a financial cost of INR 11.7 billion(Indian rupees).6 Additionally,AAM can increase accessibility in rural and hard-to-reach areas.The role of advanced and short-haul air mobility for all(ASHA)stands to expand significantly in these contexts.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India7Potential benefits of AAM for IndiaTABLE 1Time efficiency and speedAAM offers faster point-to-point travel,avoiding ground-level congestion and taking more direct routes,significantly reducing travel times.Traffic alleviationAAM can help reduce congestion on roads and highways by moving people and goods through the air,easing ground-level traffic.Environmental sustainabilityElectric AAM vehicles produce fewer emissions,contributing to reduced air pollution and greenhouse gas emissions.This aligns with sustainability goals.Flexible and adaptable transportAAM is versatile and can be adapted for various purposes,including passenger transport,cargo delivery and emergency services.Enhanced safety standardsAAM vehicles often feature advanced safety systems,redundancy and autonomous capabilities,reducing the risk of accidents.Urban planning optimizationAAM can influence urban planning by reducing the need for extensive ground-level infrastructure,allowing cities to optimize land use.Economic growth and job creationThe AAM industry can create new jobs and stimulate economic growth through vehicle manufacturing,infrastructure development and related services.Noise reductionAAM vehicles are designed to be quieter,reducing noise pollution,in turn encouraging community acceptance in urban and suburban areas.Connectivity in remote areasAAM can improve connectivity to remote and underserved regions,providing a lifeline for communities that were previously isolated.Disaster response and humanitarian aidAAM can facilitate rapid disaster response by delivering medical supplies,humanitarian aid,and conducting search and rescue operations.Technological innovationThe development of AAM technologies drives innovation in electric propulsion,autonomous systems,ATM and more.Customized and personalized transportAAM offers tailored transport options,providing personalized services to passengers and cargo owners.Integration with existing transport modesAAM can seamlessly integrate with existing transport modes,providing multi-modal options for travelers and shippers.Global connectivityAAM has the potential to connect cities and regions globally,reducing travel times and creating global economic ties.Infrastructure cost savingsAAM reduces the need for costly ground-level infrastructure expansion,saving on infrastructure investments while improving transport options.Regional connectivityAAM has the potential to significantly enhance regional connectivity,making it easier for people and goods to move between various regions.This increased connectivity can have a range of economic,social and logistical benefits.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India8In India,state-and city-level logistics plans should factor AAM into the multimodal transport system.A strong infrastructure strategy accounts for the use and repurposing of existing infrastructure,while planning the development of new vertiports will support the advancement of the AAM agenda.Lessons from the helicopter marketIn the financial year(FY)2022-23,the total number of helicopter hours in India was about 58,000,compared to 2.7 million in the US.7 This indicates an open avenue for AAM to expand and operate to address key infrastructure,regulations,economic viability and supply chain bottlenecks.Why is the AAM market expected to succeed when the helicopter market in India has not met its anticipated usage levels since its introduction?Several factors contribute to the imminent expansion of AAM:Costs:With fewer points of failure,AAM aircraft can incur significantly lower operational costs than helicopters.In particular,eVTOLs may be more energy-efficient,relatively quieter and require less maintenance than helicopters.Electric propulsion systems also introduce a sustainability element to the sector.Infrastructure:Unlike helicopters,land acquisition may not be a significant challenge for AAM.These aircraft can use existing infrastructure,such as the rooftops of malls,buildings,hospitals and existing helipads,instead of dedicated helipads.Regulatory:Regulations supporting AAM are evolving in a well-informed and evidence-based manner.The sector is highly technical,involving airspace management and overall aircraft operations.Therefore,regulatory inputs will also come from software experts in the industry.Helicopters,on the other hand,faced substantial regulatory hurdles.Demand:Indias requirements align closely with AAMs capabilities.For example,primary healthcare accessibility,urban decongestion,and efficient transport of people and high-value cargo are critical needs.AAM solutions,such as air taxis for urban areas,air ambulances for medical transport and connections to rural regions,address these requirements effectively.The city of So Paulo represents a compelling example for comparison.Brazil has a helicopter fleet of over 2,000,with So Paulo alone accounting for 411 aircraft and 260 helipads out of the countrys total of 427.A helicopter lands in So Paulo every 45 seconds,indicating the potential of UAM.So Paulo is a decisive case of how a financial hub,rapidly urbanizing and home to 12 million people,uses magnified airspace for urban mobility.With greater adoption,the city has seen a democratization of this mode of transport akin to radio and web-based services around the world.A typical take-off/landing fee stands at$40.8Despite its vastness,India has a fleet of 300 helicopters,with 250 registered and operational civil helicopters and over 1,000 helipads.Even during the COVID-19 pandemic,when medical evacuations were at an all-time high,the helicopter sector did not see much upturn.On the other hand,the pandemic caused a significant rise in drone-based medical deliveries across India post-2020.9 The decline in helicopter adoption was due to several factors,including financial viability,integration with air traffic control(ATC),understanding helicopter flight rules beyond visual flight rules(VFR),challenges with last-mile connectivity and infrastructure,and the need for dynamic pricing models.Electric aircraft,eVTOLs and STOLs are well-suited and present an excellent case for India to mainstream the technology.Despite the odds and market factors against helicopters,the response to the Ude Desh ka Aam Naagrik(UDAN)scheme proposed by the Government of India has been overwhelming.The concept of AAM in the transport sector bridges the economic gaps in large cities.It overcomes many negative factors such as infrastructure,emissions,maintenance costs,potential to automate and ease of use.AAM aircraft can use existing infrastructure,such as the rooftops of malls,buildings,hospitals and existing helipads,instead of dedicated helipads.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India9Elements of the AAM ecosystem in IndiaFIGURE 2Skyways to the Future:Operational Concepts for Advanced Air Mobility in India10Designing the vertiport environment1Safety,access and necessity are key factors in selecting vertiport locations to address Indias diverse needs.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India11The vertiport environmentVertiports are the key physical infrastructure required for AAM.They enable taking off,landing,charging and a good flow of passengers and goods within the terminal and beyond(multimodality options with the broader transport system).The vertiport environment involves several key factors,including space availability,meeting safe landing requirements,setting up charging infrastructure and ensuring a smooth passenger experience.Figure 3 provides a flowchart with the key decision steps for setting up a vertiport.While multiple aspects are at play,determining the vertiport location has three overarching objectives:ensuring safety,contributing to access and equity,and addressing a transport need.Safety:Against the backdrop of Indias rapidly expanding urban landscape and complex geopolitical environment,safety and security must be non-negotiable in the development and deployment of AAM aircraft.To build public trust,vertiports must be in areas that are safe for take-off and landing activity.Vertiports must also be designed to fit harmoniously within neighbourhoods,ensuring minimal noise pollution.This can be achieved through risk mitigation strategies,conducting thorough safety assessments and audits,and making well-informed decisions about the vertiports location.Proximity to emergency response services and hospitals is also key to ensuring that timely action can be taken in the event of any untoward incident.Access and equity:The potential of AAM as an opportunity to be a mass-market transport in India is immense,given the size and density of Indias population.For the country to reap the overall benefits of the technology,the system must be designed to make the sector accessible to more than just those with higher disposable incomes and a greater willingness to pay for the service.Rural and underserved areas must directly connect to urban clusters in tiers 1,2 and 3 cities.This requires a deeper integration of AAM into intermodal transport,serving as connectors to and from major hubs like train stations and bus stops.Necessity:Positioning a vertiport must be a strategic decision.It must cover the outcomes that the specific area is looking to achieve.These could include decongestion of an urban corridor,connecting an underserved area to an economic cluster or delivering medical supplies and high-value cargo to a remote area.Economic viability can be ensured if these decisions are made based on demand.Decision criteria for setting up a vertiportFIGURE 3Identify potential locationsEvaluate proximity to urban areasAssess accessibility to transport networksCheck zoning and land use compliance Site selectionDesign runways and landing padsPlan passenger and maintenance facilitiesIntegrate advanced navigation systemsIncorporate electric charging infrastructureDesign and infrastructure planningConduct environmental impact assessmentPerform cost-benefit analysisIdentify funding sourceStakeholder consultationFeasibility studyReview local,national and international regulationsObtain necessary permits and approvalsDevelop safety protocolsRegulatory complianceSelect contractors and suppliersBegin construction of facilitiesInstall navigation and communication systemsSet up charging and maintenance infrastructureConduct safety tests and drillsValidate navigation and communication systemsPerform environmental monitoringTesting and validationHire and train staffEstablish operational proceduresCoordinate with ATC Operational planningSoft launch for initial operationsCollect feedback and make adjustmentsFull-scale launchOngoing monitoring and maintenanceLaunch and monitorConstruction and development To build public trust,vertiports must be in areas that are safe for take-off and landing activity.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India12Scorecard for decision-making on vertiports in IndiaTaking a structured and quantitative approach is important while planning to set up a vertiport in India.Indias Aerodrome Advisory Circular sets the necessary preconditions to set up a vertiport while providing guidelines for designing,operating and authorizing.10 As India is characterized by highly complex transport patterns,high population density in urban areas,vast rural areas and established transport infrastructure,a scorecard may help determine key candidate cities or towns in urban and rural India.Priorities for urban IndiaSafety is crucial in areas that have a high population density.Vertiports must be located in areas that allow aircraft to easily navigate high-rise buildings and designated landing funnels around airports.This positioning greatly impacts public safety,ensuring that no uninvolved parties are affected by AAM operations.Locations prone to congestion,such as business districts and intermodal hubs like intercity stations,could be prioritized for vertiport placement,aligning with demand.However,noise mitigation must be seriously considered in areas near residential locations.Space utilization is paramount in an urban setting.Vertiport planning with local decision-makers and municipalities must incorporate this to ensure swift passenger turnover.Priorities for rural IndiaIn rural India,areas requiring essential transport access should be prioritized.For example,it is important to link remote areas to urban centres in nearby towns,use air ambulances to connect community health centres to district hospitals and create corridors to transport agricultural goods from farms to markets.While some areas of rural India are sparsely populated,vertiport positioning must be determined based on the terrain,ease of accessibility and travel expense through traditional means of transport.Vertiports in rural India should be able to handle diverse operations,ranging from heavy-lift cargo delivery to passenger transport.Rural areas may benefit from additional regulatory support in developing a skilled workforce,infrastructure and efficient operations.These economies can be revitalized as they gain access to broader markets,creating more job opportunities.Additionally,tourism can be boosted through AAM connectivity.Ensuring that all Indian vertiports are sustainableFIGURE 42.Energy-efficient infrastructureUse energy-efficient lighting,heating,ventilation and air-conditioning(HVAC)systems and other electrical appliances to reduce overall energy consumption.5.Green landscapingDesign green spaces with native and drought-re-sistant plants to reduce the need for irrigation and enhance biodiversity.8.Noise mitigationDesign the vertiport with noise-reducing materials and layout to minimize noise pollution in surrounding areas.3.Green building materialsUse sustainable and recycled building materials in the construction of the vertiport facilities.6.Waste managementEstablish comprehensive recycling and composting programmes to manage waste efficiently and reduce landfill use.9.Sustainable transport linksEnsure good connectivity with public transport systems and encourage the use of bicycles and electric shuttles for last-mile connections.1.Renewable energyInstall solar panels,wind turbines or other renewable energy sources to power the vertiport.4.Water conservation systemsImplement rainwater harvesting,greywater recycling and low-flow fixtures to minimize water use.7.Electric vehicle(EV)charging stationsProvide EV charging stations for ground transport vehicles to encourage the use of electric cars and reduce emissions.Vertiports in rural India should be able to handle diverse operations,ranging from heavy-lift cargo delivery to passenger transport.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India13Scorecard for vertiportsIn alignment with the previously mentioned priorities,the following scorecard may be considered a guide while planning a vertiport.Vertiport feasibility scorecard using key criteria for urban and rural areasTABLE 2CriteriaDescriptionWeight(urban)Weight(rural)Score(1-5)Weighted score(urban)Weighted score(rural)1.Location necessityAssess the need for new vertiports in the area0.150.20Consider traffic congestion and demand for intra-city/intercity travel in urban areas;connectivity in rural areas0.150.202.Safety considerationsEvaluate the safety of the proposed vertiport location0.200.15Assess factors like airspace management,proximity to emergency services and public safety risks0.200.153.Environmental and social impactConsider potential noise pollution,public acceptance and environmental impact0.150.104.Urban planning integrationAssess the integration of the vertiport with existing urban planning and infrastructure0.100.055.Population densityEvaluate the population density and its potential to drive demand for AAM services0.100.156.Travel patternsAnalyse existing travel patterns and the potential for AAM to enhance connectivity and reduce travel time0.100.157.Existing transport infrastructureAssess the ability of current transport infrastructure to support AAM integration0.100.108.Economic potentialEvaluate potential economic benefits,including job creation,tourism and business opportunities0.100.159.Topology and design feasibilityAssess the suitability of the areas topology for vertiport construction,considering design options like rooftops or ground-based facilities0.050.0510.InteroperabilityEnsure the vertiport can accommodate various AAM vehicles,promoting standardized infrastructure0.050.0511.Readiness indexAssess the locations readiness for AAM integration based on land availability,regulatory frameworks,public acceptance,connectivity and workforce availability0.100.10a)Land availabilityAvailability of suitable land for vertiport construction0.100.10b)Regulatory frameworksPresence of regulations supporting AAM operations0.100.10c)Public acceptancePublic acceptance based on surveys and community engagement0.100.10d)ConnectivityConnectivity to existing transport networks0.100.10e)Skilled workforceAvailability of a skilled workforce for vertiport operations0.100.10Skyways to the Future:Operational Concepts for Advanced Air Mobility in India14How to use the scorecard1.Assign scores:For each criterion,rate the proposed vertiport location on a scale of one to five.2.Calculate weighted scores:Multiply the score by the corresponding weight for urban or rural settings.3.Sum weighted scores:Add the weighted scores across all criteria to get a total score for both urban and rural contexts.4.Comparison:Use the total weighted score to compare different locations,prioritizing those with the highest scores for vertiport development.4-V vertiport topology:four topological configurationsBOX 1Depending on volume needs,a 4-V(verge,vantage,vista and vertex)configuration system should be considered for vertiport topologies.These configurations are designed to accommodate different capacity requirements,available space,maintenance levels and operational needs.They are adaptable and can be expanded based on local decision criteria,ensuring flexibility in urban and rural settings.VergeThe verge configuration is suited for small-scale operations and is ideal for urban or regional nodes with space constraints.It can be used for rooftop vertiports or emergency landing sites.Verge configurations can also support drone operations for medical or emergency supply deliveries.This setup is optimal for tertiary nodes in an aerial or multimodal transport network.Application:Urban or regional locations,emergency services,small-scale operations Function:STOL and VTOL operations with basic passenger amenities and limited maintenanceVantageThe vantage configuration is designed for medium-scale operations,offering enhanced facilities and the ability to handle more flights per hour.It is well-suited for regional hubs,particularly at transport interchanges such as bus or railway stations,where multimodal transfers are common.Vantage configurations provide expanded maintenance and passenger amenities,making them ideal for heavier cargo and medical transport.Application:Regional nodes,multimodal transport hubs Function:Supports higher flight frequency and offers expanded fuelling,maintenance and passenger servicesVistaThe vista configuration is the largest and most capable,designed for high-volume,large-scale commercial operations.It is ideal for integration with airports or as standalone hubs on major transit routes.Vista vertiports can accommodate a high number of flights per hour and offer advanced amenities,making them suited for air taxi services,heavy cargo transport and large-scale commercial operations.These hubs also allow for extensive aircraft servicing and maintenance.Application:Airport hubs,busy urban or regional corridors Function:Capable of handling high-volume traffic with advanced passenger and aircraft maintenance servicesVertexFurther,a minimalist configuration may be considered for locations where electrification is not feasible or required.It is primarily suited for low-demand areas,emergency landings or temporary operations.This can serve as a basic landing and take-off site,offering minimal infrastructure and services,making it ideal for remote or rural locations where power and facilities are limited.Application:Remote or rural areas,emergency landing sites,temporary setups Function:Supports basic VTOL operations without the need for charging or electrical infrastructure suitable for drones,non-electric aircraft or emergency use cases,with minimal passenger and maintenance services.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India15Developing an integrated airspace2Integrating AAM through the use of dynamic corridors can facilitate seamless coexistence with traditional aircraft and airspace operations.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India16Understanding the low-level airspace economy Low-level airspace refers to the part of the sky closer to the ground,typically where helicopters and drones operate.It is carefully managed to ensure safe sharing between various types of aircraft.UAM and the use of drones in low-level airspace enable a whole new class of operations and have the potential to power a new economy of low-level airspace.The rapid progress in this technology will enable a new class of vehicles and operations in low-level airspace,contributing to the productivity and efficiency of economic activity within cities and regions.The low-level airspace economy has the potential to transform life in both communities and cities,with its operational possibilities offering exciting opportunities for growth and innovation.Starting with the use of small drones,UAM will then be integrated into low-level airspace.The airspace will accommodate new vehicles and operations in a step-by-step fashion in parallel with the acceleration of technological capability.While crewed aviation flights currently outnumber small drone flights,uncrewed operations in low-level airspace will eventually dwarf crewed operations at any level of airspace.While the timing of this shift is hard to predict,it represents a fundamental change in how low-level airspace is managed and used.In this sense,this airspace is undergoing a profound transformation.Effective management of this modernization will enable the integration of these new operations to economically benefit communities.Therefore,efficient airspace design and management should be crucial pillars in supporting safe,reliable and efficient UAM operations in Indias cities.Federal Aviation Administrations airspace guidance for unmanned aircraft system(UAS)operatorsFIGURE 5Upper limit underfinedClass EClass AClass EFL 60018,000 MSLClass BClass CClass D14,500 MSL12,000 AGL700 AGL400 AGLAir traffic authorization requiredAGL Above ground levelFL Flight levelMSL Mean sea levelAirspace guidance for small UAS operatorsAir traffic authorization requiredAir traffic authorization requiredClass ESurface areaClass GClass E surface extensionAir traffic authorization requiredSource:Federal Aviation Administration.(2018).Airspace Guidance for Small UAS Operators.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India17Airspace design and modernizationA new framework for airspace design and management must be developed to accommodate the dynamic nature of new operations and vehicles.It is envisaged that UAM will not require a new class of airspace,but operations will happen in existing airspace classes.These changes in airspace represent a marked departure from traditional airspace management operations and the crewed aviation ecosystem.Not only does the organization of airspace need to be more dynamic,but changes based on demand,density and other factors will now need to be factored in.11 In traditional aviation,the airspace system is designed by a competent authority and managed by air navigation service providers near airports for crewed operations.In the context of UAM,the airspace(e.g.class G)may be managed by private entities,e.g.providers of service to UAM.The ATC is made aware of the operations if there is a safety and/or operational risk with crewed aviation(e.g.movement from class G to class B).To ensure cooperative traffic management,situational awareness of operations in different classes of airspace should be digitally transferred and made available to ATC and private entities managing UAM airspace.This will help to avoid possible disruptions in this new world of aviation.This new paradigm in airspace management means that new systems,processes and tools must be developed to enable operations in urban environments.Some initial work on standards and CONOPS from other countries e.g.the Federal Aviation Administration(FAA)in the US12 envision the role of public or private entities to support the traffic management services within UAM environments.This significantly differs from the current airspace management model,which places ATC in the centre.The new CONOPS encourages industry and public sector entities to actively participate in flight safety and decision-making for air traffic management(ATM).This new management system is envisioned to be mainly digital and increasingly automated.This is partly due to the nature of the low-altitude economy it is simply not possible for trained ATC to manage the volume of flights projected.Since various UAM operations and small drones share the airspace,a network of providers is anticipated.This network will allow the exchange of flight information and other data,giving operators a real-time view of airspace to ensure proper separation and maintain safety.The role of ATC and ATC systems will change.The eventual goal of the modernization programme is airspace integration so that all types of operations are enabled.Roll-outA phased roll-out plan with increasing levels of autonomy will enable a smooth transition from current helicopter operations to a highly networked,dense AAM with high levels of automation to cater to such high volumes.Aircraft should have detect-and-avoid(DAA)or sense-and-avoid(SAA)capabilities that will help the pilot assess traffic.High-level rollout flowFIGURE 6AAM aircraft with DAAUltra-low volume trials with SORA based one-time approval UATMS*integrationLimited high-volume trials with automated approval for specific geo-fences strategic deconflictionLow-volume trials with SORA based block approval UATMS integrationHigh-volume trials with automated approval UATMS strategic and tactical deconfliction*Unified ATM systems123456Ultra-low volume trials(with direct ATC coordination)Not only does the organization of airspace need to be more dynamic,but changes based on demand,density and other factors will now need to be factored in.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India18Data ecosystem for integrated AAM/UAM with existing ATMs for seamless airspace managementFIGURE 7AAM/UAM data management ecosystemSurveillance protocolsOperator/ATC(current)Drone dataOperator/ATC(AAM)Advanced/augmented ATM systemurban air traffic management systemUAM data aggregationUAM aircraftsGeneral/business aviationExisting air trafficmanagement systemsNationalized unmanned traffic management serverAATMS/UATMSDefence/law enforcementRegulatorsSource:The ePlane Company.Airspace allocation for AAM in IndiaAAM will operate in the existing airspace classes,meaning it must coexist with traditional aviation without compromising safety.To ensure smooth integration,some key principles need to be considered.For incumbent air traffic to remain unaffected by AAM,existing frameworks and protocols,such as instrument flight rules(IFR)and VFR,which govern existing air traffic,must be adhered to.Furthermore,AAM systems must establish a pathway to autonomy to avoid overburdening ATCs.However,this will require a phased approach.To achieve this,automated flight management and collision avoidance systems must be at the forefront of AAM.Airspaces in India are diverse,with unique characteristics based on ownership,geopolitics and terrain.Flexibility is,therefore,key from an AAM standpoint.Operational procedures for AAM should ensure adaptability in different scenarios,be it high air traffic density,varied weather conditions or other aspects.Apart from humanitarian and healthcare operations,airspace access must be equitable.A digital public infrastructure(DPI)framework ensures that all operators can access the most efficient airspace corridors and routes according to the nature and requirements of the operation.A sandbox test focused exclusively on AAM traffic can help develop a pilot project that ensures AAM operations do not conflict with traditional aircraft.This approach can inform the creation of guidelines to prevent air traffic issues and support safe integration into existing airspace.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India19Factors for identifying UAM corridors:managementFIGURE 8Proximity to airports:Consider nearby airport locations and their operational configurationsExisting airspace interaction:Ensure smooth integration with existing airspace,especially near airports(class B)Population and demand:Analyse population density and demand in the regionRoute design:Design routes with multiple altitude levels for safe vertical separationEfficient routing:Establish the shortest and most efficient routes with appropriate elevationsVertiport integration:Position vertiports to connect seamlessly with other transport servicesNo-fly and emergency zones:Identify and publish no-fly zones,emergency zones and altitude restrictionsImportant considerations for airspace managementVFR and IFRVFR and IFR are two sets of regulations governing how aircraft are operated.VFR allows pilots to fly using visual cues from the ground and sky,requiring clear weather conditions and visibility.It is commonly used for short flights when the weather is clear to ensure the safety of operations.On the other hand,IFR is used when visual references are inadequate for safe flying,such as in poor weather or at night.Under IFR,pilots rely on instruments to navigate and communicate with ATC to obtain guidance on the safety of flight paths and expected obstacles,following specific procedures to ensure safety in low-visibility conditions.With AAM and this new aviation paradigm,new flight rules may be developed in different jurisdictions,and the Indian ecosystem must pay attention to these,especially in cases with a high level of autonomy.VFR corridorsA VFR corridor is a designated airspace area where pilots flying under VFR can pass through controlled areas without needing ATC clearance.These corridors allow smaller planes to fly at lower altitudes without interfering with commercial jets.Pilots in VFR corridors must rely on their own navigation and visual observation to avoid obstacles and other aircraft in order to pass through controlled airspace safely.These corridors are general flight paths across the different classes of airspace without a specifically defined course.They are commonly used to plan flights that enter,exit and pass through complex airspace to avoid class B airspace.Dynamically delegated corridors Dynamically delegated corridors(DDCs)are airspace routes that are temporarily created or adjusted in real-time to accommodate specific traffic flows,usually in response to changing air traffic demands or environmental conditions.These corridors are similar to VFR corridors but are Skyways to the Future:Operational Concepts for Advanced Air Mobility in India20dynamically changed over short intervals based on weather,UAM density,air traffic,etc.The flexibility of DDCs helps improve efficiency and adaptability in modern ATM.Rules and procedures are also defined for coordinating traffic flows within these corridors.Authorization may be required to fly within these corridors,and the integration of unmanned aircraft system(UAS)traffic management is crucial to manage and synchronize uncrewed and crewed aircraft movements effectively.1 Performance related operations Technology will be a major enabler in handling and managing traffic and providing scene awareness in a dense traffic and congested operating environment.UAM operators with the most advanced technologies will be able to fly the most efficient routes in certain situations.These routes depend on technologies like precise navigation,DAA systems,noise reduction and vehicle-to-vehicle communication.Some DDCs may only be open to aircraft equipped with a specified level of navigation precision,providing more direct routing options to these aircraft.Some DDCs are designed to accept aircraft that can provide precise arrival times.This accommodates a high volume of flights through these designated corridors,significantly enhancing operational efficiency.2 Digital flight rules To accommodate safer protocols in digital flights,a different set of weather minimums for certified equipment would be required than current definitions of visual meteorological conditions used by pilots.VFR corridors enable VFR traffic to fly within controlled airspace(typically classes B,C and D)without requiring communications with ATC,thus providing partial autonomy during flight.Automation capabilities and communication and navigation systems will be crucial in successfully implementing piloted,remotely piloted and autonomous flights for AAM.The air traffic controller treats DDCs just as it treats VFR corridors.The air traffic controller does not provide traffic or separation service within these corridors.An automated traffic management service,which can be used for coordination,may also define DDCs within the boundaries of class E airspace.3 Support services Information regarding traffic location,DDC status,meteorological information,obstruction locations,traffic coordination and landing site information will need to be provided and fed into the onboard systems.The services provided will be similar to and possibly share elements with the unmanned traffic management(UTM)system.A tactical and strategic deconfliction service is essential since AAM is expected to expand air mobility into a vast,interconnected,dynamic system.Strategic deconfliction refers to the planning phase,where potential conflicts between aircraft are avoided before flights even begin.This is achieved by assigning specific flight paths,altitudes and timing well in advance,often during the flight planning stage.The goal is to ensure that the overall airspace use is optimized and that aircraft will not come into conflict as they follow their routes.This proactive approach aims to minimize risks and avoid congestion over a longer period.Tactical deconfliction occurs in real time during flight operations.It requires air traffic controllers and pilots to make on-the-spot decisions to avoid immediate conflicts,such as when two aircraft come too close to one another.Controllers may give instructions on changing altitude,speed or direction to resolve these situations as they arise.Tactical deconfliction is a reactive process used when unforeseen events or changes in traffic require immediate intervention to maintain safe separation between aircraft.A tactical and strategic deconfliction service is essential since AAM is expected to expand air mobility into a vast,interconnected,dynamic system.21Skyways to the Future:Operational Concepts for Advanced Air Mobility in IndiaDPI for aviation operationsBOX 2The transition to digital aviation presents an opportunity to reimagine the safety and risk framework in aviation operations.Indias aviation system is fundamentally built for the safety and security of passengers and others sharing the airspace.As airspace gets busier,digitalization and automation play a very important part in operations management,oversight and information-sharing mechanisms.Many suggest that digitalization is necessary for managing air traffic,as human controllers may struggle to keep up with the increasing information and workload.The airspace management system must be able to coordinate both the highly automated vehicles and crewed flight operations within it.Digital aviation,therefore,will facilitate the integration of crewed aviation with uncrewed aviation.In this context,some parts of the traffic management system can be built as DPI to reap the benefits of incorporating these technologies into airspace management without compromising safety.These public infrastructure elements of airspace management are vital in monitoring and verifying traffic management systems.This is especially true in repetitive,routine transactions where private monetization is not desirable or does not make sense.Airspace management operations will always be in the public interest to some extent.DPI is normally built from open source software,and communities in the open source network(e.g.OpenUTM and XTMAlliance)have built open,standards-compatible traffic management systems.These can be used in India to build the public interest component of airspace services.Using verified open tools and technology will help cut costs,increase redundancy and boost reliability in the UAM and lower-airspace context.Building DPI for UAM is especially crucial because it has been observed that traffic management services are important enablers of safety and trust in flight operations.To fulfil the promise of UAM,the airspace must be open and democratized to ensure maximum participation,access and equity without compromising safety.In the low-airspace economy,many operations involving small drones will pose lower risks and operate under different business models to crewed aviation.In this mixed operational environment,airspace safety must be maintained almost as a public utility that private parties share.Building upon existing open source tools safely with verification mechanisms in India will ensure that the infrastructure serves all participants in the airspace.The benefits of using and deploying open,verified and standards-compliant systems are numerous for airspace:They provide data sovereignty and customization options that can be tailored to the Indian context.They come with a community that can be harnessed and a flexible support and licensing model that can be customized for India.They enable other government or private participants to join the airspace and participate in a standards-compliant fashion.In the long term,they provide maximum flexibility and security in the context of the national airspace,which represents critical national infrastructure.In the context of AAM,it is important to acknowledge a few crucial areas to ensure the effective and correct implementation of DPI:Domain expertise:Implementing open-source-based public infrastructure requires extensive knowledge of both aviation and software systems,including AAM/UTM concepts,standards and regulations.Technical complexity:Integration with existing aviation infrastructure can be challenging,involving potential compatibility issues and the need for seamless data flow between different ecosystem components.Expert support:Deployment,configuration and ongoing maintenance often necessitate specialized assistance,especially for organizations with limited IT capabilities.Resource demands:Customizing or developing additional modules requires careful planning,budgeting for skilled developers and allocating time for testing and integration.Continuous adaptation:The rapidly evolving nature of AAM and related technologies demands ongoing learning,system updates and alignment with the latest standards and best practices.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India22Evaluating economic considerations3AAM provides the advantage of lower operational costs as fossil fuel rates continue to rise.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India23In 2022,the global market size of AAM was estimated to be$8.93 billion.It was expected to reach$45.12 billion by 2030 at a compound annual growth rate of 22.45%.13 India is making rapid strides in its goal to streamline and future-proof its transport sector.The next generation of transport in India is poised to become increasingly safe,secure,efficient and potentially autonomous.In ground mobility,Indias purchasing trends around advanced driver-assistance systems(ADAS),which include partial vehicle automation,demonstrate a growing interest in advanced vehicle technologies.The India ADAS market is experiencing robust growth and is projected to reach$7.99 billion by FY 2031 from$1.52 billion in FY 2023.14India is seen as a key market with the potential to shape the future of global transport and infrastructure.In the AAM sector,given the population,geography and challenges in surface transport and aspirations,India is best placed to create an ecosystem that is supportive of and adaptive to diverse geopolitical environments.Taking lessons from conventional aviation in India,it is pertinent to establish and develop the entire value chain(including production,operations,support and services)to reap optimum benefits from this new ecosystem.The sector will gain much-needed momentum with incentive schemes focused on design,performance and employment,positioning India as a key player in AAM.Figure 9 highlights the potential areas of job creation and gross domestic product(GDP)growth:Potential areas of job creation and GDP growth by AAM industryFIGURE 9Four AAM CapEx1 and OpEx2 supply chainsExamplecomponentsDirect industry job and GDP impactsAir transportOther transitTaxi and limo servicesSupport activities for transportTravel servicesAir transportOther transitSupport activities for transportArchitectural,engineering and related servicesAir transportOther transitB2B4 electronic marketsTaxi and limo servicesSupport activities for transportTravel servicesAmbulatory servicesManufacturingProfessional,scientific and technical servicesEngineering constructionTruck transportTelecommunicationsEnergy production and transmissionReal estate servicesComputer systems design and related servicesFinancial investment services,funds and other financial vehiclesInduced job andGDP impactsMiscellaneous spending of direct and indirect employee wagesLogisticsHospitalityTourismEtc.etc.AAMindustryGroundinfrastructureUATMAAM eVTOLoperatorsAAM eVTOLmanufacturingVertiportsBattery charging stationsSecurity shelterAmenitiesATC towersANSPs3Beacon and radar surveillanceCounter-UASDASGPSWeatherHelicopter operatorsMedical servicesAirport shuttleRegional transportCargo deliveryTourismHeli skiingVehicle manufacturersBattery technologyHydrogen powerNotes:1.Capital expenditure;2.Operating expenditure;3.Air navigation service providers;4.Business-to-business.Source:Canadian Advanced Air Mobility Consortium(CAAM).(2020).Economic Impacts of Advanced Air Mobility.https:/www.pnwer.org/uploads/2/3/2/9/23295822/economic_impact_assesment_-_caam_-_v1.0.pdf.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India24Components of the total cost of operations for AAMThe cost of operating AAM in India will be impacted by:a.Upfront capital cost of setting up the vertiports,accompanying infrastructures and the product cost itselfb.Costs of operating the vertiports,maintenance,repair and overhauls c.Utilities and labour costs(e.g.fleet operators,pilots,etc.)The capital costs associated with establishing AAM as a transport model in India will be significantly influenced by real estate and construction expenses,which will vary depending on the chosen city and prevailing market rates.However,substantial uncertainty remains regarding the components of product costs,necessitating a more thorough investigation.AAM product costs will be heavily impacted by research and development(R&D)efforts,particularly in designing components that must meet stringent safety regulations while maintaining lighter and more compact structures.This will likely extend design cycles,require more expensive materials and demand stricter testing protocols.Additionally,manufacturing will necessitate specialized infrastructure,and end-of-line testing will require advanced systems to ensure safety compliance.These factors will drive up the overall product cost,underscoring the need for further in-depth analysis.Furthermore,approximately 40%of the total product cost will be attributed to the battery and its components.The product cost will also be influenced by battery lifespan and replacement cycles,with potential for repurposing batteries for other applications through recycling after their AAM life cycle ends.While battery prices are declining,the laws and costs surrounding lithium battery recycling in India are still under evaluation.Volume-weighted average lithium-ion battery pack and cell price split,2013-2023FIGURE 10Cell20132014201520162017201820192020202120222023780535Real 2023$/kWh1Pack2456924702224483001483452519425818177211152591831285516011941150115351611283313910732Note:1.Cost(in dollars)per kilowatt-hour adjusted for inflation to 2023 values.Source:BloombergNEF.(2023).Lithium-Ion Battery Pack Prices Hit Record Low of$139/kWh.https:/ to the Future:Operational Concepts for Advanced Air Mobility in India25Rising utilities costs,labour costs and other operational expenses,including the network consumption cost,will influence operational costs associated with AAM operation in India.Compared to other modes of transport,AAM provides the advantage of lower operational costs,as the fossil fuel rates will continue to rise.The labour costs,however,will add to the operational costs compared to the conventional mode of transport in India.The current shortage of commercial pilots,combined with high demand,is expected to drive salaries even higher.Currently,the average year-over-year increase in salaries of commercial pilots is around 8%,while the median salary ranges between$12,000-28,000(INR 1-2.4 million)annually in India.Technical ramifications:Dealing with diverse market segments will impact the nature of service and form factor,among other things.Urban corridors may need agile,smaller and swifter fleets,while regional fleets may require robust vehicles capable of handling longer commutes and heavier loads.This fleet diversification will require investment in research,manufacturing and operational infrastructure.Energy and charging infrastructure:Urban eVTOL services will demand high-speed charging facilities to support frequent flights.These hubs should be located near business districts or other key urban areas.It may be important to consider a“bus-stop”approach,where all vertiports or pads do not necessarily have to be electrified.For regional AAM flights,longer-range and lower-frequency flights might demand different battery solutions,such as larger capacity but slower charging systems.Additionally,alternative energy sources(e.g.solar power)could be necessary to support eVTOL operations in areas lacking grid infrastructure.Operational costs:Operating in urban and rural areas will lead to variant cost structures.Urban areas with higher demand can better support premium pricing and dynamic models,but regional corridors will initially require subsidies to offset operational costs.These subsidies will ensure that rural services are economically viable while maintaining affordable consumer prices.ATM and safety:ATM systems in urban areas will be more sophisticated,given the presence of high-traffic airports,densely populated areas and helicopter and other aviation activity.Congestion and safety management will need higher levels of scrutiny and,therefore,staffing.Relational communication and navigation are crucial for regional transit,especially in areas with less-developed infrastructure than urban areas.These ATM systems will need to be interoperable and agile to suit the unique needs of each environment.Maintenance and support networks:Maintenance facilities and technical support will need to be built to ensure the reliability of AAM services.If these are strategically housed in regional hubs,operational costs for services,spare parts,repair technicians and backup power systems may be optimized.According to aerospace analysts,the price per kilowatt-hour(kWh)for batteries is two to three times the current cost of automotive batteries.15 The higher quality of batteries used in aerospace allows these batteries to have a significant application in their second life across a variety of applications.Some are mentioned below:Applications1.Renewable energy systems2.Energy storage for data centres and telecommunications towers3.Electric vehicle(EV)charging infrastructure4.Grid services(frequency regulation,peak shaving)5.Backup power for critical infrastructureUsing second-life batteries for non-aviation applications will reduce hazardous waste,conserve resources and reduce energy storage costs.These factors for product and infrastructure costs will determine the business case justification for the economic considerations for eVTOLs.A report by the Institute for Social and Economic Change(ISEC)estimated that traffic congestion in Bangalore,India,caused around INR 11.7 billion in lost productivity in 2018,with approximately 700,000 hours wasted due to traffic jams.16AAM is expected to reduce traffic congestion on Indian roads and provide significant benefits,such as saving lives through air ambulances.This makes a strong case for its use and highlights its potential return on investment(ROI)in contributing to the nations growth and GDP.Pricing As the sector takes shape,original equipment manufacturers(OEMs)and service providers are expected to begin developing pricing strategies to cater to their target markets.While doing so,it is important to keep in mind the buyer persona to cater to a pan-Indian audience.Early indications are that consumers may be willing to pay up to twice as much for a new mode of transport compared to what they currently spend on their existing Using second-life batteries for non-aviation applications will reduce hazardous waste,conserve resources and reduce energy storage costs.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India26options.Currently,the commuter is willing to pay a significant premium for the time saved by air travel compared to traditional ground transport.If potential eVTOL users are willing to pay INR 1,500 for a 20-kilometre trip and INR 2,000-3,000 for longer distances,such as 30-kilometre airport trips,other factors will influence the ideal pricing.It is important to understand where the value of this technology lies both in urban and rural settings in India,as well as the different mechanisms that can be used to price AAM services.Urban market willingness to pay:Early adopters are perceived as significantly more willing to pay due to time savings,so a value-based pricing strategy may work for this segment.This tier includes personalized or VIP services,including private or semi-private flights with on-demand scheduling.Regional market willingness to pay:The purpose of introducing ASHA in regional India is to ensure that rural citizens have greater access to economic clusters,jobs and primary services such as healthcare.To ensure cost-consciousness,services can be subsidized through government schemes,such as the UDAN scheme,to incentivize fares and make them accessible to rural customers.This tier could focus on scheduled,shared air taxi services.Dynamic pricing strategies:Most suburbs in urban India have catchments that house mid-income groups who use public transport extensively.In urban areas,dynamic pricing models,similar to ride-hailing apps,could be applied with the additional location reference point.Peak times and popular routes could influence higher prices,while off-peak travel and less-frequented route prices could be lowered to ensure wider coverage of citizens from all income groups.Subscription(flexi-pass)models:A membership model could be an effective pricing strategy for urban users,particularly those travelling to business districts or neighbourhoods.This could include subsidized rides for a fixed monthly or yearly fee,targeting regular users travelling daily.Partnership with local authorities:Pricing strategies can be built around partnerships with local governments and businesses in rural areas.For instance,reduced fares can be offered for essential services,such as medical transport and agricultural logistics.Bulk pricing for businesses that require mass cargo transit between rural and urban areas could also be considered.Subsidized models through public schemes:The pricing strategy should include value gap funding to support rural connectivity,similar to the current UDAN scheme for air travel.This allows the service to penetrate deeper into rural areas,supplementing existing transport with reduced fares or government-subsidized services.These subsidies can encourage the adoption of ASHA vehicles while ensuring profitability for operators.Government-backed initiatives(such as UDAN)that currently focus on affordable regional air travel could be expanded to support AAM deployment in regional India as well as suburban and arterial corridors in urban India.This would promote greater connectivity and stimulate economic activities,particularly in sectors like tourism and agriculture,where improved mobility can open new markets.In this context,AAM could serve as a catalyst for rural revitalization,bringing its benefits to underserved and geographically isolated regions.27Skyways to the Future:Operational Concepts for Advanced Air Mobility in IndiaCultivating community acceptance and integration4To encourage acceptance of AAM integration,challenges related to noise,safety,accessibility and environmental impact must be addressed.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India28Community acceptance is critical for successfully implementing any new public service and is crucial for AAM implementation.Introducing new transport and connectivity solutions requires trust from both the service providers and the public,as well as active collaboration.Community buy-in also helps overcome the initial hurdles of technology adoption,and the feedback loop helps refine the service faster,thereby reducing the time to achieve ROI.Community acceptance and integration of AAM will require addressing some key challenges:Noise and environmental concerns:Noise pollution is a major issue for communities near potential vertiport locations,especially with the high frequency of take-offs and landings.Noise can be minimized using quieter propulsion technologies,such as reducing rotor speeds and setting noise emission limits for AAM vehicles during the product certification phase.Additional measures might include curfews,upper limits on noise levels and surcharges for breaching permitted noise levels.Furthermore,establishing flight paths that avoid residential areas will help reduce the overall noise impact on communities,contributing to a more harmonious integration of AAM into urban environments.Safety assurance:A robust safety and regulatory framework is essential to building public trust.The Directorate General of Civil Aviation(DGCA)should lead comprehensive safety regulations with clear oversight and enforcement mechanisms.These regulations will ensure high safety standards and reduce the risk of incidents.Integrating advanced ATM systems for real-time monitoring is crucial to maintaining safe and seamless AAM operations.Public awareness:Effective public outreach is key to addressing concerns and building trust in AAM.Engaging local ambassadors can play a pivotal role in promoting the benefits of AAM by connecting with communities and enabling early adopters to lead by example,helping to ease initial apprehensions.Involving AAM in urban planning from the early stages and including local communities in decision-making encourages collaboration and ensures access to AAM services across all socioeconomic groups.Additionally,incorporating subsidy programmes into fare structures can further promote inclusivity.Equity considerations:Bridging the digital divide is essential to ensure equitable access to AAM services,which may heavily rely on digital platforms.To achieve this,public access points for booking AAM services should be established,along with user-friendly interfaces with multilingual support to cater to diverse populations.Adoption can be encouraged through schemes similar to the UDAN initiative,with fare caps to make services affordable and accessible to all.Additionally,infrastructure should be designed to streamline processes like check-in and check-out,ensuring that short flights,such as 15-minute journeys,have minimal wait times and avoiding inefficient procedures like longer check-ins.Accessibility in remote areas:AAM has the potential to significantly enhance connectivity in remote regions where traditional transport infrastructure is limited.Ensuring rural inclusivity is crucial for broader acceptance,as it guarantees that all communities benefit from this technology,reducing initial apprehension and accelerating adoption.To achieve this,it is important to explore the feasibility of developing vertiports in strategic locations that connect remote areas,allowing AAM to bridge gaps in access to essential services like medical care.Integrating AAM into existing transport networks will also streamline long-distance travel between rural and urban areas.Infrastructure should be designed to streamline processes like check-in and check-out,ensuring that short flights have minimal wait times.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India29Implementing an AAM programme5A three-phased approach,emphasizing initial planning and devising regulatory frameworks,developing infrastructure and pilot programmes,and sandbox environments.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India30The following phases can guide local authorities(municipalities,collectorates)through the key steps of implementing an AAM programme:1.The three-phased approach to implementing an AAM programme ensures market analysis through primary research and cost-benefit analysis.It also determines programme locations and ecosystem building by identifying regulatory frameworks and partnerships.2.The second phase involves developing infrastructure(repurposing old and developing new vertiports),with simulated and actual pilot programmes to test and iteratively improve the design and operations.3.The third phase ensures the infrastructure is ready,considering and applying learnings from previous phases.The regulatory requirements are clearly defined and met to ensure compliance with safety protocols.Pilot programmes,data analysis and insights pave the way for a commercial launch with subsequent scaling over the next few years.Guided three-phased approach for implementing an AAM programme in a districtFIGURE 11Phase 3Phase 2Phase 1Initial planning and research,regulatory framework development and partnershipsInfrastructure development,pilot programmes and regulatory continuationContinued infrastructure development,pilot programmes and regulatory finalizationEnsuring infrastructural readiness and completeness of all components of the AAM infrastructureInfrastructural readinessCompliance with established regulatory requirements,standard operating procedures Validation of safety protocols and operational proceduresRegulatory requirementsCompletion of pilot programmesAnalysis of data collected to derive insights for launch strategiesFinal pilot programmesMulti-channel promotion for awareness and adoptionFull-scale commercial deployment via multiple routesCommercial scalingPrimary researchCost benefit analysisDetermination of locations,routes,customer segments(urban and rural)Current market analysisIdentification and mobilization of regulatory frameworkDetailed timeline for implementationRegulatory requirementsLocal and international stakeholdersTechnology and infrastructure providersLogistics partnersIdentifying partnershipsEstablishing supply chain for AAMPilot training programmesEcosystem buildingIdentification of existing infrastructure to be repurposed for AAMDevelopment on new vertiports,landing zones at strategic locationsInfrastructure developmentPilot programmes using simulators and actual flightsGathering and evaluation of user experience data(performance,safety,acceptance)Pilot programmesIntegration of AAM infrastructure with existing transport systems for enhanced connectivityCharging and maintenance facilities to support operationsTesting of AAM in different regions and conditions to ensure the robustness and reliability of technologyDesign and operational iterations to optimize AAMSkyways to the Future:Operational Concepts for Advanced Air Mobility in India31Key stakeholders for AAM implementationSuccessful AAM integration requires collaboration between various stakeholders:Government agencies:DGCA,Ministry of Civil Aviation,urban development authorities State developmental authorities and planning agencies Municipalities and collectorates:responsible for local planning and infrastructure development AAM operators:airlines,drone service providers,vertiport operators Urban planning authorities:integrate AAM into urban planning initiatives Community groups:residents associations and local non-governmental organizations Research institutions:provide expertise in technology,safety and economic analysisSetting up a sandbox environmentImportance of a sandbox environmentA sandbox environment is crucial in developing,testing and implementing AAM in India.It provides a controlled setting where new technologies,operational procedures and regulatory frameworks can be explored without the risks associated with full-scale deployment.Sandboxes allow for the evaluation of UAM vehicles and infrastructure and integration with existing ATM and UTM systems.Potential benefits and lessons from a sandbox approachTABLE 3Key benefits of a sandbox approachLessons from sandbox testing Risk mitigation:Allows for controlled testing of AAM systems,reducing the potential for operational and safety risks(ground and air)in a real-world environment Validation of technology and procedures:Facilitates the validation of emerging technologies,communication protocols and safety procedures under realistic but safe conditions Regulatory insights:Provides valuable feedback to regulatory bodies like the DGCA and the Airports Authority of India(AAI)on the operational and safety standards required for AAM Stakeholder collaboration:Promotes coordinated efforts among government agencies,technology providers and industry stakeholders to address operational challenges and refine solutions Community engagement and acceptance:Offers an opportunity to engage with the public and gather feedback,thus encouraging greater community acceptance of AAM initiativesTesting within a sandbox environment could yield critical lessons that inform the broader implementation of AAM:Operational safety protocols:Develop and refine emergency procedures,such as sterile heights and safety lanes,based on real-world scenarios encountered during testing Traffic management and airspace integration:Learn to seamlessly integrate UAM vehicles into existing ATC structures,including coordination with military and civil aviation authorities Technology readiness levels:Evaluate the readiness of UAM and other CNS(communication,navigation and surveillance)systems,including low-altitude radars and sensors,under operational conditions Performance metrics:Measure the capabilities and limitations of UAM platforms,informing decisions about operational corridors,airspeed,altitude restrictions and communication requirementsSkyways to the Future:Operational Concepts for Advanced Air Mobility in India32A sandbox environment can be established to test AAM technologies and operational procedures in a controlled setting.This could involve:Using designated airspace for AAM pilot programmes Setting up a limited network of vertiports for initial operations Partnering with research institutions and AAM operators for testing and data collection Gathering evidence and making a commercial decisionData collected during the sandbox phase will inform commercial decisions regarding AAM implementation.Key metrics to consider include:Public acceptance and user satisfaction Operational efficiency and safety record Economic viability and cost-recovery potential Training and skill developmentAAM integration will require a skilled workforce for various roles,including:AAM vehicle pilots and air traffic controllers Vertiport operations Maintenance personnel Regulatory and safety specialists Urban planners specializing in AAM integrationTraining and skill developmentTraining and skill development are crucial in ensuring that the ecosystem is ready for implementation of the AAM programme.The following steps highlight the basic enablers for a safe and seamless AAM implementation.1 Multi-agency coordination Effective management of emergencies in AAM requires coordinated training programmes for aircrew,ground crew and emergency responders.Developing comprehensive,multi-agency training programmes that include technical training for operators and sensitization programmes for city and emergency response personnel is critical to improving multi-agency coordination,which is required for AAM to function seamlessly.Establishing training sessions for firefighting teams,emphasizing the use of appropriate equipment for specific scenarios,such as electrical fires,much like how the New York City Fire Department trains for high-rise building fires2 Integrated response teams Rapid and effective emergency response requires well-coordinated teams and clear protocols.Creation of integrated response teams that include personnel from various agencies,equipped with standardized response protocols tailored to AAM emergencies.Example:In Singapore,integrated response teams composed of police,fire and medical personnel are trained to handle unmanned aerial vehicle(UAV)incidents,which can serve as a model for AAM.3 Emergency protocols Specific protocols should be developed for low-and ultra-low-level flight incidents.Establish and regularly update emergency protocols that address the unique challenges of AAM,including potential mid-air collisions and emergency landings.Example:The UKs Civil Aviation Authority has developed UAV-specific emergency protocols that can be adapted to AAM operations.The pathway to automation All AAM equipment must be airworthy.Standardization ensures greater consumer confidence.India must undertake a comprehensive standardization process for all elements of the AAM ecosystem,starting with hardware.Developing a clear communication procedure in its certification process to align with European Union Aviation Safety Agency(EASA)/FAA standards will help optimize testing and reduce time to market.The growing number of flights in AAM systems is increasing their complexity and operational demands.As AAM systems evolve,this requires changes in airspace procedures,the development of new regulations and collaborative practices.As operations increase,the pilots role will evolve from being on the aircraft to being remote,with command transitioning from onboard to remote operations.The pilots role will also evolve as vehicles progress from lower to higher levels of automation,from human-in-the-loop(HITL)to human-on-the-loop(HOTL)to human-over-the-loop(HOVTL).As operations increase,the pilots role will evolve from being on the aircraft to being remote,with command transitioning from onboard to remote operations.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India33AAM roadmap for evolutionFIGURE 12Piloted intracity/intercity operations Supervisory pilot on board Remotely piloted flights Increased operations Autonomous flights 12345Remotely operated fleets 76Piloted flightsTo scale this over 15 years,NASAs UAM maturity levels(UMLs)framework17 could be adopted.The UMLs could then be modified based on the envisaged growth seen in India,with a greater focus on scaling operations and the ecosystem surrounding the aircraft.Envisaged UAM maturity levels for AAMFIGURE 13UMLs based on the envisaged growth of UAM in India in the next 15 years Initial stage5 yearsIntermediate stage5-10 yearsMature stage10-15 yearsExisting helipads,dedicated UAM routes for self managed operationsComplete automated and autonomous solutions,air and ground connectivityType certification sandbox trials pre-operational setupLow density and complexity commercial operationsLimited UAM network serving exclusive urban areasAdvanced,automated airspace managementFleet of 100 autonomous aircrafts,1,000 flights dailyMedium density,complexity operations,daily shuttle servicesDedicated vertiports,daily operations with ground connectivityAd-hoc landing sites,integrated vertiports for enhanced connectivity1,000 operational aircrafts,more than 100,000 flights daily,improved and efficient connectivitySource:Deloitte insightsSkyways to the Future:Operational Concepts for Advanced Air Mobility in India34Australias AAM roadmap and the associated waves and enablersFIGURE 14Likely entry into serviceUse caseWave 1Wave 2Wave 3Key enablersPrivateAerial workPublic servicesDefenceFreightTourism and charterExperientialTrainingUrban passenger transportRegional transportIncreasing scale,complexity and viability of AAM operationInfrastructure,social licence,economicTechnology maturity,regulatory,economicTechnology maturity,regulatory,workforceTechnology readiness,industry capability,regulatoryRegulatory,infrastructureRegulatory,finance capitalRegulatory,finance capital,infrastructureRegulatory,finance capital,infrastructureSocial licence,airspace integration,infrastructureTechnology maturity,infrastructure Global examples United StatesIn the US,more than 12 companies are actively engaged in developing AAM technology and manufacturing.FAA is currently drafting policies and certification guidelines for AAM to facilitate its safe and efficient integration into the national airspace.Commercialization of AAM in the US is expected to be achieved by the end of 2024.EuropeOver 10 companies are involved in AAM technology and manufacturing,with the Netherlands emerging as the fastest-growing market in the region.The EASA is preparing to adopt final regulations for AAM operations.Similar to the US,Europe is also expected to see the commercialization of AAM by the end of 2024.JapanMore than five companies are actively pursuing opportunities in the AAM sector.The country is working on a comprehensive roadmap for UAM adoption,which will finalize the operating environment and regulatory framework,aiming for a commercial launch by 2025.Japans roadmap for eVTOL incorporation outlines flight areas,operational methods and vertiport use,offering a template that could serve as a model for Indias roadmap over the next 15 years.South KoreaEarlier this year,South Korea commissioned an association for AAM,partnering with 67 organizations.The purpose is to deliver an entity that can develop universally acceptable standards for AAM vehicles.The entity aims to cross-pollinate key emerging areas such as AI,mobile communication and data with a focus on reliability and sustainability.18 Recently,the Incheon region issued a CONOPS for AAM.AustraliaIn Australia,roadmaps have been developed for AAM based on concepts of use that are expected to work.These concepts of use are built on a framework consisting of a series of overlapping waves.Different regions and use cases will adopt these concepts at varying rates,influenced by key enablers outlined in Figure 14.Additionally,the progress of these waves depends on AAM demonstrations during major events,such as the Olympics.Source:Australian Association for Uncrewed Systems(AAUS).(2024).AAUS Release Vision Roadmap for AAM.https:/www.aaus.org.au/news-item/15577/aaus-release-vision-roadmap-for-aam.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India35 ItalyItalys roadmap describes three AAM maturity levels(AMLs):AML 1 will see demonstrations in controlled environments,AML 2 will use controlled airspace for preliminary commercial use tests,and AML 3(which Italy aims to reach by 2030)will see low-density,medium-complexity operations and large-scale commercial services in subsequent years.Italys AAM roadmapFIGURE 15Intermediate testing demonstration for AAMoperations during large visibility events(e.g.Milano Cortina Winter Olympics,Jubilee)in specific cities(e.g.Rome,Milan,Venice)2026AML 2Tests or preliminary commercial use in temporary corridors through controlled airspaceLarge scale commercial services2030AML 3Low-density,medium complexity operations within dedicated corridorsTodayStart2023AML 1Demonstrations in controlledenvironments(e.g.dedicated test bed Grottaglie airport,DoraLab in Turin,aircraft carrier)and early operational experimentationSource:Italian Civil Aviation Authority(ENAC).(2021).Roadmap AAM(2021-2030).https:/www.enac.gov.it/sites/default/files/allegati/2021-Set/02_AAM Italian Ecosystem Project overview and Roadmap_web.pdf.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India36ConclusionThe AAM ecosystem presents a wide range of transformative benefits for the future of transport,contributing to more efficient,sustainable and adaptable solutions.One of its most significant advantages is the potential for time efficiency and speed,offering faster point-to-point travel by avoiding ground-level congestion and taking direct routes.This can alleviate traffic on roads,improving the flow of goods and people while reducing strain on existing infrastructure.AAM vehicles produce fewer emissions than traditional aircraft,reducing air pollution and greenhouse gas emissions.This supports global efforts to minimize the aviation sectors environmental impact,significantly contributing to carbon emissions.AAM can reduce emissions through electric propulsion systems and quieter vehicles,addressing concerns around noise pollution and enhancing community acceptance.Moreover,AAM offers flexibility and adaptability for passenger transport,cargo delivery and emergency services.The versatility of AAM vehicles,combined with advanced safety systems and autonomous capabilities,enhances safety standards and reduces the risk of accidents.This flexibility extends to areas where the applications are most suited,such as disaster response,rapid delivery of medical supplies,air ambulances and humanitarian aid while supporting search and rescue operations.AAM will bolster Indias existing disaster management resources,thereby providing relief to those in critical need.AAM also reduces the need for extensive ground-level infrastructure.By optimizing land use,cities can develop more efficiently without the costs associated with expanding traditional transport infrastructure.Additionally,AAM improves connectivity in remote and underserved areas where surface infrastructure development is either costly or impractical.This increased connectivity stimulates regional economic growth,social inclusion and logistical efficiency.The AAM industry is also expected to stimulate economic growth and job creation through vehicle manufacturing,infrastructure development and new service creation.Technological advancements in electric propulsion,autonomous systems and ATM will drive innovation across related sectors.AAM can integrate seamlessly with existing transport modes to provide multimodal options for passengers and cargo.It can reduce travel times between regions,cultivating stronger global economic ties.On a regional level,AAM can significantly enhance connectivity,offering economic,social and logistical benefits that contribute to broader development goals.AAM can provide solutions to densely populated and rapidly urbanizing areas in India,such as Mumbai,Bengaluru,Kolkata and Delhi,where traffic congestion is causing severe economic losses.Bengaluru alone lost almost INR 200 billion in 2023 due to congestion,hampering productivity and worsening pollution.While traditional infrastructure development can only partially address these issues,AAM could capitalize on airspace for medium-and short-distance travel.AAM holds the potential to revolutionize transport,providing a diverse range of benefits that extend beyond individual convenience,including environmental sustainability,economic development and societal well-being.It reimagines the movement of people and goods,offering solutions for urban congestion,regional connectivity and global transport efficiency.As countries like India face growing urbanization,AAM presents a viable,forward-thinking alternative for immediate and long-term needs.Skyways to the Future:Operational Concepts for Advanced Air Mobility in India37ContributorsAcknowledgementsWe want to extend our deepest gratitude to Indias Ministry of Civil Aviation and the Directorate General of Civil Aviation(DGCA)Drone Directorate for their invaluable support,guidance and collaboration throughout the development of this report on advanced air mobility.The ministrys strategic vision for Indias aviation future and the DGCAs expertise in regulatory standards and airspace management have been instrumental in shaping this report.AVIATE India community experts and contributorsFarooq AhmedLead,Medical Engineering Apollo HospitalsAsangba Chuba AoJoint Secretary,Ministry of Civil Aviation,Government of IndiaUjjwal BakshiIndustry Affairs,India Nepal Bhutan,International Air Transport Association(IATA)Jan BeranResearch and Development Architect and UAM Platforms,HoneywellAchyut ChandraLead,Strategy and Open Innovation,Government and Public Sector,HCL TechnologiesKantilal DandePrincipal Secretary,Transport Roads and Buildings,Government of Andhra Pradesh Gopi GudimetlaDirector,Engineering,HoneywellS.GuruvayurappanTechnical Head,Quality Council of IndiaPierre MauryAutonomous Systems Specialist,World Economic ForumShankhesh MehtaDirector,Ministry of Civil Aviation,Government of IndiaKapil MittalGlobal Head,Digital Airspace,EricssonNilesh ModiChief of Staff,Chairmans Office,Reliance IndustriesSuresh MunuswamyDean,Indian Institute of Health and Medical ResearchDan NewmanChief Technology Officer,Honeywell Advanced Air MobilityWorld Economic ForumMaria AlonsoLead,Autonomous SystemsVignesh SanthanamIndia Lead,Aerospace and DronesDeloitteKumar DeepakAssociate DirectorSuyash TyagiAssistant Manager,InnovationSudeepta VeerapaneniPartner Lead authorsHrishikesh BallalManaging Director,Openskies Aerial TechnologySatyanarayanan ChakravarthyProfessor of Aerospace Engineering,Indian Institute of Technology MadrasVijay ChandrachudStrategic Advisor,Hunch MobilityDivya ManchandaChief,Airworthiness,The ePlane CompanyKanika TekriwalChief Executive Officer,JetSetGoShrikant ThakkarVice-President,Asteria AerospaceSkyways to the Future:Operational Concepts for Advanced Air Mobility in India38Clem Newton-BrownChief Executive Officer,SkyportzDaniella PartemHead,Centre for the Fourth Industrial Revolution IsraelDhaval PatelDirector,Gujarat State Aviation Infrastructure Company Vishnu RamakrishnanFounders Office,The ePlane CompanyAdarsh SidarthFormer Group Captain,Indian Air Force (1995-2020)Arvind SinghManager Marketing and Tourism,Gujarat State Aviation Infrastructure Company Jonathan SumnerChief Security Officer,JetSetGoProductionLaurence DenmarkCreative Director,Studio MikoXander HarperDesigner,Studio MikoWill LileyEditor,Studio Miko39Skyways to the Future:Operational Concepts for Advanced Air Mobility in IndiaEndnotes1.World Economic Forum.(2023).AVIATE India Advanced Air Mobility Announcement at the Paris Air Show.https:/initiatives.weforum.org/aviate-india/aviate-india01.2.International Civil Aviation Organization(ICAO).(2024).ICAO Symposium delegates urge international community to act on fostering the deployment of advanced air mobility.https:/www.icao.int/Newsroom/Pages/ICAO-Symposium-delegates-urge-international-community-to-act-on-fostering-the-deployment-of-advanced-air-mobility.aspx.3.Directorate General of Civil Aviation(DGCA).(2024).Aerodrome Advisory Circular on Vertiport.Subject:Guidance Material for Design,Operation and Authorization of Vertiports.https:/www.dgca.gov.in/digigov-portal/?dynamicPage=dynamicPdf/lLjdZ7INp65fPYM0CaBIgg=&maincircularsRulesAerodromes/7/3321/viewDynamicRuleContLvl2.4.International Civil Aviation Organization(ICAO).(2024).Annex 6 Operation of Aircraft,Part II International General Aviation.https:/www.icao.int/SAM/Documents/2008/RPEO03/Anexo 6 ParteII Just Cambios.pdf.5.International Civil Aviation Organization(ICAO).(2024).Asia and Pacific Ministerial Declaration on Civil Aviation(Delhi).https:/www.icao.int/APAC/Meetings/2024 APACMC/Asia Pacific Ministerial Declaration on Civil Aviation (Delhi Declaration).pdf.6.Vijayalakshmi,S.and R.Krishna.(2023).Estimation of Productivity Loss Due to Traffic Congestion:Evidence from Bengaluru City.Institute for Social and Economic Change.https:/www.isec.ac.in/wp-content/uploads/2023/09/WP-554-Vijayalakshmi-and-Krishna-Raj-Final.pdf.7.PricewaterhouseCoopers(PwC).(2024).Transforming last mile connectivity in India through aviation.https:/www.pwc.in/assets/pdfs/transforming-last-mile-connectivity-in-india-through-aviation.pdf.8.BISAviation.(n.d.).The Capital of So Paulo Has the Largest Fleet of Helicopters in the World.https:/.br/the-capital-of-sao-paulo-has-the-largest-fleet-of-helicopters-in-the-world/.9.World Economic Forum.(2022).Medicine from the Sky,India:How Drones Can Make Primary Healthcare Accessible to All.https:/www3.weforum.org/docs/WEF_Medicine_from_the_Sky_India.pdf.10.Directorate General of Civil Aviation(DGCA).(2024).Aerodrome Advisory Circular on Vertiport.Subject:Guidance Material for Design,Operation and Authorization of Vertiports.https:/www.dgca.gov.in/digigov-portal/?dynamicPage=dynamicPdf/lLjdZ7INp65fPYM0CaBIgg=&maincircularsRulesAerodromes/7/3321/viewDynamicRuleContLvl2.11.NASA.(2020).Urban Air Mobility(UAM)Vision Concept of Operations(ConOps)UAM Maturity Level(UML)4.https:/ntrs.nasa.gov/api/citations/20210010443/downloads/UAM Vision ConOps Overview Presentation 18DEC2020.pdf.12.Federal Aviation Administration.(2023).Concept of Operations:Urban Air Mobility(UAM).https:/www.faa.gov/air-taxis/uam_blueprint.13.Precedence Research.(2022).Advanced Aerial Mobility Market Size,Share,and Trends 2014,to 2034.https:/ and Data.(2023).India Advanced Driving Assistance System(ADAS)Market Assessment,By Stage Type Level 1,Level 2,Level 3,Level 4,Level 5,By System Type Passive,Active,By Sensor Type LiDAR Sensor,Ultrasonic Sensor,Radar Sensor,Camera Sensor,Others,By Vehicle Type Internal Combustion Engine(ICE)Vehicle,Electric/Hybrid Vehicle,By Region,Opportunities,and Forecast,FY2017-FY2031F.https:/ Marquand,Y.(2023).Finding the Breakeven on Batt
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Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change Insights report December 2024 Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 2 Table of contents The 2024 Automotive and Transportation Manufacturers Benchmark 3 Keystone companies in the 2024 Automotive and Transportation Manufacturers Benchmark.5 Summary of results.8 Five key findings.13 Key finding 1:Transition of the automotive sector is stalling as companies fail to scale their electrification commitments globally.13 Key finding 2:Automotive manufacturers are not financially committed to a low-carbon future.15 Key finding 3:Automotive companies must urgently strengthen oversight of battery suppliers to achieve complete decarbonisation.16 Key finding 4:Without an increased focus on reskilling,the automotive sector remains unprepared for a low-carbon future and risks leaving at least 1.3 million workers behind.17 Key finding 5:More ambition needed from transportation manufacturers to address the decarbonisation challenges ahead.18 Technical summary.20 Targets.20 Emissions performance.22 Investments.24 Climate governance and oversight.26 Transition planning and scenario analysis.26 Supplier and client engagement.30 Trade associations and policy engagement.32 Low-carbon business activities.34 Appendix:Companies in the 2024 Automotive and Transportation Manufacturers Benchmark.38 About the World Benchmarking Alliance.40 Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 3 The 2024 Automotive and Transportation Manufacturers Benchmark The transformation required to decarbonise the transport of people and goods starts with the technological choices for powering vehicles,vessels,planes and trains.By 2030,sales of electric vehicles need to outstrip conventional ones(IEA 2024),hydrogen vessels must be made market-ready and the first hybrid-electric regional aircraft need to take off.Disruption is needed,certainly in a sector accounting for 21%of global energy emissions and employing millions of workers.How are keystone manufacturers preparing for such a challenge?The Automotive Benchmark was the first benchmark released by WBA in 2019,as part of its Climate and Energy Benchmark series.Since its inception,the benchmark has evaluated 30 key automotive manufacturers,providing ongoing insights into their performance.This 2024 benchmark iteration builds on assessments using an updated version of the Accelerate Climate Transition(ACT)Automotive methodology1.This methodology has been updated mainly to include more ambitious and up-to-date climate scenarios and related emissions reduction pathways(1.5C aligned),to better cover the upstream emissions of automotive manufacturers(associated with purchased materials),and to reflect some scoring set-up improvements of brought to more recent ACT assessment methodologies.These deep changes make ACT score comparisons more challenging for assessed automotive manufacturers.The benchmark has been renamed the Automotive and Transportation Manufacturers Benchmark in order to highlight the expansion of the assessed scope of activities see Keystone companies in the 2024 Automotive and Transportation Manufacturers Benchmark section.In this benchmark iteration,WBA also assesses keystone manufacturers for other transportation modes besides automobiles,including aircraft,ships,trains,and trucks and buses.The expansion of the benchmark scope addresses the growing need to account for the rising share of emissions and activities associated with both passenger and freight transportation.Air travel is returning to pre-Covid levels,leading to a corresponding increase in emissions.Additionally,70%of global freight is transported by ships,while road freight has surged by 40%since 2010.All companies included in this benchmark are assessed both against the low-carbon transition to meet the Paris Agreement and the social challenges for a just transition see Summary of results section.In 2022,the transport of people and goods across cities,regions and continents released 8 gigatonnes(Gt)of carbon dioxide(CO2),accounting for 21%of global energy-related emissions(IEA 2023).The technological choices powering vehicles,vessels,planes and trains are central to the sectors decarbonisation.In the remaining years up to 2030,transportation manufacturers must align their technology offering with that required to achieve a 25%reduction in CO2 transport emissions from 2023 levels.Automotive manufacturers need to scale up proven battery systems,while other manufacturers need to pursue diverse technological solutions,including new fuels,substantial efficiency gains and breakthrough innovations.1 ACT Automotive v2.0 released in June 2024,see Automotive and Transportation Manufacturers Benchmark FAQ Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 4 The automotive industry is on the verge of undergoing a major transition as internal combustion engine(ICE)vehicles are replaced by electric vehicles(EVs),leading to impacts from the factory floor to global trade.In early 2024,China surpassed Tesla in EV exports,reshaping market competition(Sustainalytics 2024).Protectionist trade tariffs risk driving up prices and slowing production(IFW 2024).EV production requires new technologies and skills,creating opportunities for upskilling but also risking job losses where skills are non-transferable.To meet the 1.5C target,automotive manufacturers must commit adequate investments and scale up EV production globally in order to displace ICE vehicles from their production lines no later than 2035,while ensuring adequate workforce reskilling and upskilling to minimise social disruption.Achieving full transport system decarbonisation,however,requires all transportation manufacturers to actively prepare for the challenging technological advancements needed to make their products low-carbon.Manufacturers must actively invest to ensure that 45%of heavy trucks sold by 2030 are battery-electric,while advancing hydrogen fuel cell(HFC)research for powering long-haul transport(ICCT 2022).Shipbuilders need to adopt ammonia or hydrogen power by 2030 so that low-carbon fuels meet the 13%target for international shipping(IEA 2023).Plane manufacturers need to engage with industries and governments on scaling up the capacity of sustainable aviation fuels2(SAFs),and with clients on innovative ways to tackle rising demand.This report presents the five key findings from the 2024 Automotive and Transportation Manufacturers Benchmark see Five key findings section and a Technical summary of the ACT assessment findings covering key elements of companies low-carbon transition plans.The findings are designed to provide investors,civil society and policymakers as well as the companies themselves with the insights needed to take responsible and effective action.WBAs mission is to build a movement to measure and incentivise business impact towards a sustainable future that works for everyone.Working with over 420 organisations in our Alliance,we envision a society that values the success of business by what it contributes to the world.To achieve this,we need all actors in the ecosystem to drive the needed transformations.If you have any feedback on our findings,please reach out to Vicky Sins,Decarbonisation and Energy Transformation Lead at WBA:info.climateworldbenchmarkingalliance.org 2 Aviation fuel produced from sustainable feedstocks(cooking oil,energy crops or municipal waste)rather than fossil sources like crude oil.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 5 Keystone companies in the 2024 Automotive and Transportation Manufacturers Benchmark The 2024 Automotive and Transportation Manufacturers Benchmark evaluates 44 companies,including 30 major global automotive manufacturers and 14 influential transportation manufacturers producing aircraft(three companies),ships(four companies),trains(three companies),and trucks and buses(four companies).These companies are a dominant force within the respective industries,with a combined revenue of USD 3.2 trillion in 2023 and directly employing 5.5 million workers.The selected companies are directly responsible for a significant share of global production in their respective industries.Automotive manufacturers included in the benchmark accounted for 80%of global vehicle sales in 2023,manufacturing approximately 81 million vehicles.3 The truck manufacturers included in the benchmark made up nearly 54%of global truck production in 2023,while the plane manufacturers(due to the particular global duopoly characterising this industry)contributed to almost the entirety of global production of commercial aircraft in the same year.The automotive manufacturers assessed in this benchmark are representative of the overall regional patterns of car production in 2023.Production in China,the European Union and the United States in 2023 was 34%,16%and 10%of global output,respectively(ACEA 2024).A comparable geographical aggregation of the manufacturers included in the benchmark-see Figure 1 shows shares of 30%,22%and 12%,respectively,of the total share of vehicle production assessed.4 FIGURE 1:2023 SHARES OF AUTOMOTIVE GLOBAL PRODUCTION 3 For more details on how this was calculated,refer to our FAQ document:2024 Automotive and Transportation Manufacturers Benchmark:Technical FAQs 4 Country-level distribution between global estimates and in-sample estimates differ due to the fact that in-sample estimates are based on company reports,meaning that they represent the number of vehicles produced by companies headquartered in each country instead of vehicles produced in the country.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 6 In terms of delivering solutions,the evaluated manufacturers play an important role in the electrification of the global vehicle fleet.In 2023,electric vehicles(EVs)5 accounted for 14%of the total sales of light-duty vehicles(LDVs)by the benchmarked companies,up from 12%in 2022 and 7%in 2021.Global production of EVs exceeded 11 million units in 2023,rising from approximately 9 million in 2022 and 5.5 million in 2021.Reflecting broader trends in LDV production and in line with dedicated literature(EV Outlook 2024)China dominated EV production in our sample,producing over half of the EVs globally,followed by the United States with around 2.5 million units-see Figure 2.FIGURE 2:2023 EV PRODUCTION BY COUNTRY FOR THE ASSESSED AUTOMOTIVE MANUFACTURERS As a reflection of their dominant position,the emissions associated with the use of products from the automotive and transportation manufacturers included in this benchmark have a substantial impact on the planet.In 2023,this accounted for 52%of the global transport sector emissions,which totalled 8.2 Gt CO,and 11%of global energy-related emissions,which amounted to 37.7 Gt CO in the same year.Product emissions from the benchmarked automotive manufacturers in 2023 totalled 2.65 Gt CO2,representing approximately 7%of global energy-related emissions and 79%of the global emissions from the use of cars.That is a bit more than the CO2 emissions from the European Union,or Africa and South America together,in the same year,considering fossil-fuel combustion and industries(Our World in Data,2024).Emissions from the other transportation manufacturers included 5 In this report,EVs are defined according to the ACT Automotive methodology as battery-electric vehicles(BEVs)or fuel cell electric vehicles(FCEVs);hybrid vehicles using combustion engines are excluded.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 7 in this benchmark iteration also represent a significant share of global emissions in their respective industries-see Figure 3.6 FIGURE 3:PRODUCT-USE FROM THE ASSESSED MANUFACTURERS RESPONSIBLE FOR 52%OF 2023 GLOBAL TRANSPORT EMISSIONS In terms of geographical coverage,20(67%)of the assessed automobile manufacturers are headquartered in the East Asia and Pacific region,with 11 companies based in China,followed by Japan with seven and the Republic of Korea with two-see Figure 4.The remaining ten automobile manufacturers are headquartered across other regions,with five in Europe and Central Asia,three in North America and two in South Asia.Half of the other transportation manufacturers are headquartered in Europe and Central Asia,followed by five companies in East Asia and Pacific and two companies in North America.In terms of ownership,23(77%)of the automotive manufacturers are publicly listed,six(20%)are state-owned and one is privately owned.Similarly,ten(71%)of the other transportation manufacturers are publicly listed,three(21%)are state-owned and one is privately owned.FIGURE 4:REGIONAL DISTRIBUTION OF THE ASSESSED COMPANIES BY HEADQUARTER The following sections of the report present an overall summary of the benchmark results,detail the five key findings and provide summaries of technical topics from companies ACT assessments.6 Emissions coverage for trains cannot be properly estimated since two of the three assessed companies do not report emissions data,while the other one sold products responsible for 41%of sectoral emissions in 2022.It should be noted that rail-related emissions are far lower than those from other transportation modes.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 8 Summary of results The average score for the 30 automotive manufacturers evaluated in the 2024 Automotive and Transportation Manufacturers Benchmark was 23.9 out of 100,with the ACT assessment contributing 17.0 points(out of 60)and the social assessment contributing 6.9 points(out of 40).Transportation manufacturers scores followed the same trend,only performing half a percentage point below the automotive manufacturers in the overall score.Both sectors showed comparative performance,with the larger differences noted between regions of companies headquarters.FIGURE 5:AVERAGE SCORES BY REGION AUTOMOTIVE MANUFACTURERS FIGURE 6:AVERAGE SCORES BY REGION TRANSPORTATION MANUFACTURERS The average scores per region were noted to be higher for companies headquartered in Europe and Central Asia followed by North America,for both automotive and transportation manufacturers-see Figure 5 and Figure 6.It is interesting to note that automotive manufacturers in both regions performed similarly in their ACT and social assessments,with an average difference of only 3.2 percentage points.In contrast,the transportation manufacturers in Europe and Central Asia outperformed those in North America by almost 10 percentage points on their overall scores.The laggards are concentrated in the East Asia and Pacific and South Asia regions,with the lowest performing group being transportation manufacturers headquartered in East Asia and Pacific.FIGURE 7:AVERAGE SCORES BY ECONOMY TYPE Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 9 Similarly,when looking at score distribution by type of economic development-see Figure 7,companies headquartered in advanced economies outperformed those in developing and emerging markets,with a wider difference observed for the transportation manufacturers.Following the pattern observed in other WBA Climate and Energy benchmarks,automotive and transportation manufacturers that are publicly traded outperform those owned by government-see Figure 8.For both automotive and transportation manufacturers,there is a wide gap between the ACT and social performance scores of publicly traded and government-owned companies.This can be partly explained by the level of disclosure required from publicly traded companies.The performance of Chinese companies is discussed further in this section,since the government-owned companies in this benchmark are exclusively headquartered in this country.From the 44 companies assessed in the 2024 Automotive and Transportation Manufacturers Benchmark,only two companies are privately owned,meaning we cannot draw significant conclusions from their comparative performance.FIGURE 8:AVERAGE SCORES BY OWNERSHIP TYPE Country policies and regulations on climate have an impact on how companies position their transition plans and business models.Europes main legislative body has set strong CO2 standards for LDVs,a 55%reduction target by 2030 and a 100%reduction target by 2035,with exceptions for carbon-neutral fuel vehicles(EU 2022).Some member states,such as Austria,Denmark and the Netherlands,plan to phase out ICE vehicles earlier,by 2030.To some extent,the underlying policy environment in the geographies that car companies operate in can be observed as exerting an influence on the benchmark scores.Companies headquartered in Europe have on the aggregate better ACT and social scores,which are clearly higher than the companies from other investigated regions.Presently,the United States lacks a binding federal ICE phase-out policy.In September 2022,the National Blueprint for Transportation Decarbonization(NBTD 2022)set aspirational goals:100%zero-emission vehicle(ZEV)sales for heavy-duty vehicles(HDVs)by 2040 and 50%for LDVs by 2030.Consistent with the less ambitious policy set-up,companies headquarters in the United States also rank lower than European ones.Automotive manufacturers exhibit varying levels of performance across both ACT and social dimensions in the benchmark.Notably,as seen in Figure 9,only seven companies attain more than 50%of the total ACT score(30 points),and none attain more than 50%of the total social score(20 points).Scores are negatively impacted by companies with poor disclosure practices,particularly those headquartered in East Asia.Key areas for improvement include enhancing disclosure of emissions,including scope 3,setting emissions reduction targets,increasing transparency in research and development(R&D)disclosures and developing comprehensive transition plans.The gaps underscore underperformance in the ACT dimensions compared to leading practices.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 10 FIGURE 9:CORRELATION BETWEEN SOCIAL AND CLIMATE PERFORMANCE Although there is a positive correlation between ACT and social scores,certain companies,such as Tesla,achieve a strong ACT score but have their overall score reduced due to weaker social performance.Medium and large manufacturers are distributed across the performance spectrum.Toyota Motor,for instance,ranked as a mid-performer and Volkswagen as a top performer,despite both being the largest automotive manufacturers with similar vehicle production volumes.The regional headquarter location also appears to have a significant influence on performance outcomes.Chinese automotive manufacturers in the context of the current and other global benchmarks In the 2024 Automotive and Transportation Manufacturers Benchmark,11 Chinese automotive manufacturers were evaluated,achieving an average ACT score of 6.7(out of 60 points)and a social score of 1.1(out of 40 points).This is significantly lower than the overall average score of 17.0 for the ACT and 6.9 for the social dimensions for the 30 automotive manufacturers assessed in total(see above).Even though a strict comparison of scores between the 2021 and the 2024 assessments of automotive manufacturers is not entirely accurate,it is worth noting that,on average,Chinese companies appear to rank lower in the 2024 benchmark iteration.The lower performance of Chinese companies mostly results from the revised ACT Automotive methodology,which introduced more stringent data requirements,a comprehensive assessment of scope 3 emissions,detailed evaluation of management practices and a greater emphasis on policy engagement.In particular,the following changes were observed with the adaptation of the ACT methodology and the addition of the social assessment:Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 11 Low level of publicly visible required information from the published disclosure:o ACT score average for Chinese companies was at 39%of the all-company average.o Three companies scored low due to the lack of English disclosure.o None reported scope 3 emissions.o Only two companies could be scored on the reported share of low-carbon vehicles.o Only one of the five Scope 1 and 2 emission targets had enough detail for scoring.Poor performance on social and just transition:o Social score average for Chinese companies was 16%of the all-company average.o Seven companies scored zero on social and transition metrics,with the top performer earning just 10%.Figure 10 compares the evaluation criteria of WBAs 2024 Automotive and Transportation Manufacturers Benchmark with those from 2023 ICCT and 2023 Lead the Charge benchmarks on the automotive low-carbon transition.Chinese companies scored highest in ICCT,relatively lower in WBAs benchmark and lowest in Lead the Charge.2023 ICCT emphasises zero-emissions vehicle(ZEV)sales targets,including plug-in hybrid vehicles(PHEVs),class coverage and technical performance areas where Chinese manufacturers perform strongly.In contrast,2023 Lead the Charge focuses on sustainable supply chains and human rights,highlighting areas for improvement.The 2024 Automotive and Transportation Manufacturers Benchmark combines stringent assessments of scope 1,2 and 3 emissions,share of low-carbon vehicle(LCV)sales,management practices and policy engagement,revealing gaps in data transparency and strategic planning.Despite producing 53%of the worlds EVs,Chinese companies face challenges in meeting the comprehensive standards of the 2024 Automotive and Transportation Manufacturers Benchmark.The benchmark offers a holistic assessment,integrating companies transition planning and accountability to their workforce,and provides valuable insights for Chinese companies to enhance their overall performance and align with peers worldwide.To address these gaps,Chinese companies must prioritise completeness and transparency in their disclosures,with a focus on articulating their progress in the low-carbon transition and social impacts.This could soon gain urgency as these companies are building factories in regions such as the European Union,which will make them subject to enhanced disclosure regulations from local markets.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 12 FIGURE 10:EVALUATION CRITERIA OF GLOBAL AUTOMOTIVE BENCHMARKS Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 13 Five key findings This section presents the five key benchmark findings,outlining the most significant challenges and opportunities for achieving a just low-carbon transition in the automotive and transportation industries.Key findings 1 through 4 address the automotive industrys preparedness for the transition,covering climate and social aspects.Key finding 5 specifically focuses on transportation manufacturers.A more detailed analysis of the findings for individual ACT assessment modules is covered in the technical summary in the next section.Key finding 1:Transition of the automotive sector is stalling as companies fail to scale their electrification commitments globally Driven by supportive policies and growing momentum,electric vehicle(EV)7 sales doubled from 7%in 2021 to 14%in 2023.Yet,on the long-term,the transition is at peril.No automotive manufacturer is determined to phasing out fossil fuel vehicles from their production lines by 2035.Commitments to full electric sales are only made for specific markets and by six companies.As a result,only about 40%of vehicles in 2035 are expected to be fully electric according to company planning,far below the 100%needed to meet the 1.5C climate target.EVs are steadily transitioning into mass-market products across an increasing number of countries.EV sales doubled from 7%in 2021 to 14%in 2023,and this growth is expected to continue.Declining battery prices which narrow the cost gap with internal combustion engine(ICE)vehicles,and heightened competition among automotive manufacturers to offer EVs across a broader range of vehicle classes,are key drivers of this trend.Additionally,government policies aimed at promoting EV adoption are gaining momentum.For example,in the European Union,stringent emissions reduction targets for vehicles are pushing automotive manufacturers to scale up their EV offerings.Despite these encouraging trends,the anticipated growth in the EV market remains insufficient.The International Energy Agencys(IEA)2023 Net Zero Roadmap projects EV share of global light-duty vehicle(LDV)sales to rise dramatically,from 20%in 2023 to 67%by 2030 more than a three-fold increase within seven years and to reach 100%by 2035.While current EV sales trends are broadly in line with the roadmaps 2030 projections,automotive manufacturers are at risk of falling significantly behind by 2035 due to commitments that are limited in scope and geography.Notably,none of the assessed companies have pledged to fully phase out fossil fuel vehicles from production by 2035.Furthermore,only six manufacturers have committed to 100%EV sales in specific markets,with five targeting Europe and one the United States.Even if all automotive manufacturers fully achieve their publicly disclosed phase-out targets and Chinese companies meet the national goal of 40%new energy vehicle(NEV)sales,only about 38%of vehicles globally are projected to be fully electric by 2035 under current company plans-see Figure 11.This estimate is optimistic,as any shortfalls in meeting these targets could leave significantly more 7 The ACT Automotive methodology acknowledges only battery-electric vehicles(BEVs)and fuel cell electric vehicles(FCEVs)as low-carbon vehicles.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 14 ICE vehicles on the road.Such projections fall drastically short of the 100%EV adoption required to align with the 1.5C climate target.FIGURE 11:ELECTRIC VEHICLE SALES GAP Moreover,the fragmented nature of the EV market reflects regional disparities.In 2023,EV sales were predominantly driven by companies headquartered in China(53%),the United States(23%)and Germany(12%)Together,these three countries accounted for approximately 88%of global EV sales,underscoring the geographical concentration of EV adoption and the uneven development of EV industries across countries.Automobile manufacturers rely on relevant ecosystems to enable an effective transition to the electrification of their fleets.Clear public policies,such as ICE bans with clear deadlines,subsidies to stimulate the market demand for EV uptake and deploying extensive charging infrastructure,are essential.Additionally,companies should engage positively in policy advocacy rather than hindering the shift to electrification.The change required will not happen without coordinated efforts from regulators and companies.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 15 Key finding 2:Automotive manufacturers are not financially committed to a low-carbon future Despite planning for a low-carbon transition,there is little evidence of companies financially committing to their goals.Only seven of the benchmarked companies,representing 28%of total vehicle production,have committed to increasing low-carbon investments by 2025.Of these,only two have disclosed financial commitments at the level required for a low-carbon transition.Lacking sufficient low-carbon investments to facilitate change,the market is lagging.In 2023,automotive manufacturers relied primarily on fossil fuel vehicle sales,with low-carbon vehicle revenue averaging at only 17%for the nine companies that disclosed this data.Without substantial investments and strategic financial planning,it is unclear how automotive manufacturers will navigate to a low-carbon future.To successfully transition to a low-carbon future,it is essential for companies to have time-bound,comprehensive action plans backed by clear financial commitment,outlining exactly how the company aims to shift its business model,assets and operations to align with the latest climate science recommendations.Automotive manufacturers were assessed on transition planning based on several best practice elements.Of the 30 benchmarked companies,90%have a transition plan in place and 60%have a moderate to high score(over 55/100)on these best practice elements.This indicates that companies have mapped pathways towards a low-carbon transition,at least on paper.However,the benchmark results tell a different story when it comes to practice.Quantified financial elements are crucial to any transition plan.These include financial projections,cost estimates,financial viability assessments and financial risks and opportunities.While over half of the benchmarked companies include quantified financial elements in their transition plans to some degree,only two companies have clearly integrated these elements into their greater business strategy.Overall,44%of the companies included no financial content in their transition plan.This lack of financial commitment becomes increasingly alarming when looking at low-carbon investments.Here again,only seven companies,representing 28%of total vehicle production from all assessed manufacturers,have committed to increasing low-carbon capital expenditure by 2025.Only two of these companies have disclosed a financial commitment at the level needed for a low-carbon transition.Considering that the technological pathways towards a low-carbon transition are clear for the automotive industry,this lack of financial commitment reveals a missed opportunity.Furthermore,without low-carbon investments to facilitate necessary changes,the market is lagging.In 2023,automotive manufacturers relied primarily on fossil fuel vehicle sales,with low-carbon vehicle revenue averaging at only 17%for the nine companies that disclosed this data.Despite adequate transition planning,companies are financially prioritising business as usual.Without substantial investments and strategic financial considerations,it is unclear how automotive manufacturers will take action on their transition planning and navigate to a low-carbon future.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 16 Key finding 3:Automotive companies must urgently strengthen oversight of battery suppliers to achieve complete decarbonisation In a 1.5C world,battery production will dominate upstream emissions from electric-vehicle production.Only two companies representing 6%of the EV market require suppliers to meet 1.5C-aligned emissions goals,and none have specific targets for battery suppliers.Meanwhile,12 companies,accounting for 30%of the EV market,are advancing innovation and collaboration with suppliers to support EV production.11 companies,covering 60%of the global EV market,are moving to in-house battery production,potentially boosting low-carbon efforts through tighter control.To drive full decarbonisation of the sector,in-house production needs to be rationalised,while external production should include explicit emissions targets.Effective supplier engagement strategies are essential for decarbonising the automotive sector,particularly for addressing the high emissions associated with battery production.While EVs have environmental advantages over traditional ICE vehicles,the production of battery-electric vehicles(BEVs)faces distinctive challenges in a 1.5C world.Battery production stands out as the most significant source of upstream emissions in EV production,accounting for as much as 60%of the emissions in this category(McKinsey 2023).Among the automotive manufacturers assessed,28(93%)companies have supplier engagement strategies in place for full decarbonisation of the sector,but they communicate these only in general terms and lack actionable levers,such as quantified emissions targets or practical action frameworks.Only two companies,BMW and Kia,have incorporated quantified,science-based emissions reduction targets into their key procurement templates.Overall,there is an urgent need for companies to align their supplier engagement efforts with global climate targets,requiring not only more actionable engagement strategies but also mechanisms to reinforce supplier accountability.Of the assessed companies,25(83%)focus on understanding and changing supplier behaviour for the low-carbon transition by embedding action levers,such as information collection,and engagement and incentivisation,into their strategic plans.Meanwhile,12(35%)of the companies have committed to engaging suppliers through innovation and collaboration,a more practical action lever likely to change the market and support EV production.Including action levers within the supplier engagement strategy is not only a best practice but also correlates with better performance in terms of emissions intensity.12(40%)companies committed to include action levers from all engagement types,while only 4(13%)have not yet incorporated any types of action levers into their strategy to engage with suppliers-see Figure 12.Companies that are committed to engaging with suppliers through all engagement types(BMW,Mercedes,and Renault)and to conducting regular supplier audits were observed to reduce their scope 3 related to category 1(purchased goods and services)emissions intensity between 2021-2023.Although this evidence suggests that improving supplier engagement could enhance emissions reduction upstream,poor data disclosure on scope 3 emissions prevents the establishment of a more definitive relationship and its consistency across the sample.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 17 FIGURE 12:ACTION LEVERS EMBEDDED TO ENGAGE SUPPLIERS In-house battery production is adopted by 11(37%)of the assessed companies,with an additional seven(23%)companies in the planning phase of producing batteries within three years.This approach offers greater control over the emissions footprint of EV manufacturing while achieving cost-effectiveness in advancing EV production.However,this trend must be balanced with strategies to engage external suppliers effectively.If companies fail to extend their decarbonisation frameworks beyond in-house operations,this will leave a substantial portion of the automotive supply chain outside the scope of emissions reduction initiatives.Integrating external production with explicit emissions targets will be essential to closing this gap.Key finding 4:Without an increased focus on reskilling,the automotive sector remains unprepared for a low-carbon future and risks leaving at least 1.3 million workers behind Producing EVs requires different skills than those that have been needed for producing ICE vehicles.While many companies offer educational programmes for their staff,only four of the assessed companies are committed to reskilling their existing workforce,and none have shown that they have a process to understand what skills are lacking to successfully decarbonise.About 1.3 million workers are currently employed by the 13 companies that scored zero on all fundamentals of reskilling and upskilling their workforce for a just transition.Overall,automotive manufacturers lack the commitments,processes and educational programmes to ensure a workforce with the skills needed to be successful in a decarbonised future.Failing to prioritise risks to workers could jeopardise the automotive industrys ability to decarbonise in a just way.Transitioning to EV manufacturing,requires at least as many workers as ICE vehicles,when accounting for battery production(Cotterman et al.2024).However,autoworkers need to be equipped with a range of new and evolving skills compared to those needed so far to produce ICE Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 18 vehicles.Despite the evolving skills that are required,only four companies are committed to reskilling their existing workforce in the low-carbon transition.This risks leaving many workers with outdated skillsets and no suitable job opportunities,more so if the new jobs are created in different places.While the transition to EVs is well underway,it is still crucial to understand exactly what skills will be needed,when and in what quantities,to make sure that the low-carbon transition can stay on track.None of the assessed companies disclosed a process to identify the skill gaps that may arise during the transition,which shows that all automotive manufacturers may be unprepared for and lack an understanding of the challenges that lie ahead.The details of how companies plan to decarbonise their business remains vague,and companies are not financially committed to the low-carbon future.Without facing the reality of decarbonisation,companies remain unprepared for what it will mean for their workers.Many automotive manufacturers offer some sort of educational programmes for their staff to make sure they have the skills needed to do their current jobs.However,these efforts rarely extend to other impacted stakeholders and fail to consider equality of opportunity for women and other vulnerable groups,who are more likely to be left behind at times of transition.Of the assessed automotive companies,13 scored zero on all fundamentals of reskilling and upskilling for a just transition as they have no related commitments or processes in place.This means that the 1.3 million workers they employ may be at a serious risk of being left behind in the transition.If these gaps persist,companies risk not only failing to meet the demands of a decarbonised future but also abandoning workers whose specialised skills may soon become obsolete.Automotive manufacturers must embrace their responsibility to ensure a just transition.The need to urgently decarbonise their business should not be used as an excuse to make unjust choices that exclude the current workforce from the opportunities created in the electrification of the industry.While the number of jobs in the sector is expected to remain relatively stable,companies need to understand what the future of work may look like and engage in reskilling initiatives.This should be paired with efforts to expand EV production in the same locations where ICE manufacturing is being phased out,ensuring a just transition for the workforce and local communities.Key finding 5:More ambition needed from transportation manufacturers to address the decarbonisation challenges ahead Technological uncertainty and reliance on long-lived assets from transportation manufacturers-building ships,trucks,trains,and aircraft-result in a more challenging path to decarbonisation.However,their response is subdued.In 2023,low-carbon R&D across all companies accounted for just 5%of total research spending,despite its critical role for developing the necessary clean technologies.Only three companies have a client engagement strategy covering more than 90%of scope 3 emissions,missing out on an important lever for achieving sector-wide decarbonisation as the manufacturer products will be decades in operation.A full transport-system transformation is therefore dependent on transportation manufacturers increasing their ambition.The full decarbonisation of the transport system requires strong and ambitious transition plans from transportation manufacturers beyond the automotive industry.Research on key companies producing aircraft,ships,trains and trucks shows that despite facing more complex decarbonisation pathways,Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 19 the low-carbon commitments and performance of these companies remain comparable to those of automotive manufacturers.This lack of extra effort is notable,given differences in technological readiness and the long lifespan of these transportation assets.While automotive manufacturers focus on fleet electrification,other transportation manufacturers face the challenge of navigating multiple fuel options,including ammonia,hydrogen,liquefied natural gas(LNG)and methanol.Limited infrastructure,regulatory uncertainty,high costs and operational complexity further hinder progress.In contrast,the automotive sectors simpler electrification approach,supported by mature technology and robust infrastructure,enables faster carbon reductions.To add to this,other transportation manufacturers lag even further behind than automotive manufacturers on some key issues.Only 29%of the assessed transportation manufacturers disclosed upstream emissions,in comparison to 47%of the automotive manufacturers.Of the assessed transportation manufacturers,11(80%)show significant shortcomings in their climate engagement strategies,encompassing policy,actions and impact,scoring less than half of the possible points.This is especially concerning given the long lifespans of planes,ships,and trains,and the need for robust climate strategies to reduce emissions from their use.In cases where companies did have client engagement strategies,these often lacked adequate coverage and depth.Only three(20%)of the companies provided evidence of engagement activities with clients resulting in measurable impacts,and just one PACCAR demonstrated a clear link between its strategies and potential energy savings or emissions reductions from its sold products.Furthermore,the assessed transportation manufacturers fail to provide clear disclosures regarding both their R&D spending and capital expenditure(CapEx)dedicated to advancing low-carbon technologies.None of the companies outlined plans to increase future CapEx in this critical area,and current allocations to low-carbon R&D remain alarmingly low,averaging at just 5%of total research spending.This lack of transparency and commitment underscores a significant gap between the industrys needs and actionable progress towards decarbonisation,rendering the outlook for a successful decarbonisation of the transportation sector bleak.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 20 Technical summary This section provides an in-depth look into the ACT assessment results of the 2024 Automotive and Transportation Manufacturers Benchmark.It only discusses the results for the automotive manufacturers as the profiles and number of automotive companies covered in the benchmark allows to draw insights at the industry level.The summary is arranged by topic,drawing on analyses from the individual ACT performance modules and indicators.The table below outlines the modules and indicators discussed under each topic.For more information about the ACT performance scoring,please refer to the dedicated ACT Automotive methodology.The 2024 Automotive and Transportation Manufacturers Benchmark has only utilised public sources of data,primarily from companies disclosure in sustainability,integrated,annual or financial reports.Complementary data,such as that included in the CDP climate questionnaire or other sources,was also considered.provided it was publicly available.TABLE 1:TECHNICAL SUMMARY TOPICS AND THE ACT MODULES AND INDICATORS COVERED Technical summary topic ACT modules/indicators Targets Module 1 Emissions performance Modules 2 and 4,specifically Trend in past emissions and Locked-in emissions indicators Investments Module 3 and Low-carbon CapEx indicator Climate oversight and governance Indicators 5.1,5.2 and 5.4 Transition planning and scenario analysis Indicators 5.3 and 5.5 Supplier and client engagement Modules 6 and 7 Trade associations and policy engagement Module 8 Low-carbon business activities Module 9 Targets A public-facing decarbonisation target is an indication of corporate commitment to reducing emissions.Companies without ambitious targets are unlikely to be adequately committed to decarbonising.Targets provide a direction towards which companies can align their strategy,CapEx and R&D to deliver the requisite emissions reductions.The emissions reduction targets set by the automotive manufacturers in the benchmark fall short of what is needed to drive a low-carbon transition at the required scale and speed.Of the 30 assessed companies,almost a third are yet to set any target,more than three quarters have not yet set a net-zero target for their scope 1 and 2 emissions and almost half have not set net-zero targets that include their scope 3 emissions.What targets have been set?Out of the 30 automotive manufacturers assessed in this benchmark,23(77%)have publicly disclosed an emissions reduction target.The seven(23%)companies without any emissions reduction target contribute to at least a third of the combined scope 1 and 2 emissions of all the companies covered in the benchmark.This includes BYD,Changan Automobile,Chery Holding Group,Dongfeng Motor Group,FAW,JAC Motors and SAIC Motor.There is a clear lack of emissions reduction commitment Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 21 from Chinese companies,which is problematic considering that 11(37%)of the 30 benchmarked keystone companies are headquartered in China.Scope 1 and 2 emissions make up a smaller proportion of an automotive manufacturers total emissions than scope 3 emissions.However,it is important for organisations to set targets for their operational emissions,over which they have total control,to demonstrate their intentions to transition.Out of the 30 automotive manufacturers in the benchmark,19(63%)have a target for their scope 1 and 2 emissions.The majority of companies without such a target are Chinese,namely BYD,Changan Automobile,Chery Holding Group,Dongfeng Motor Group,FAW,Geely Holding,Guangzhou Automobile Group,JAC Motors and SAIC Motor,except for Kia and Tesla,both of which have not set isolated scope 1 and 2 targets.Kia has only set a vague net-zero target for its scope 1,2 and 3 emissions by 2045.Teslas net-zero target for its scope 1,2 and 3 emissions does not even include a target year.Under an ambitious EV adoption scenario,fleet electrification will lead to upstream scope 3 emissions being predominant in the overall emissions of automotive manufacturers.Therefore,having scope 3 emissions reduction targets in place will only become more important.Yet,only six(20%)of the companies have set targets to reduce their upstream scope 3 emissions:BMW,Hyundai Motor,Mercedes-Benz,Renault,Stellantis,Tata Motors.Further,only Hyundai Motor reported both near-and long-term targets.No Chinese,American or Japanese company has a target to tackle upstream scope 3 emissions.Currently,downstream scope 3 emissions represent the majority of emissions in an automotive manufacturers value chain.However,half the companies assessed have not set targets to reduce emissions in the use phase of sold products.Once again,no Chinese company has a target to reduce these vital emissions.To align with the IEAs Net Zero Emissions by 2050 Scenario,all car and van sales will need to be zero-emission by 2035(IEA,2024).However,only 18(60%)companies have set net-zero targets covering all scope 1,2 and 3 emissions,and no company has net-zero targets aligned with the IEAs recommended timeframe.Tata Motors and Mercedes-Benz are the only two companies that target net zero across all emissions prior to 2040.Two more companies target net zero by 2040,three by 2045 and ten by 2050.Tesla does not even provide an end year for its target.Moreover,only one net-zero target,set by Stellantis,could be scored for alignment with a 1.5C pathway.Automotive manufacturers questionably lack the crucial transparency required around inclusive net-zero targets,such as disclosure emissions intensities and use of carbon offsets.Are the targets ambitious enough?To determine whether a companys target is aligned with its 1.5C pathway,and is therefore sufficiently ambitious,ACT methodologies require a company to disclose sufficient detail on each target.Only 18(60%)companies in the 2024 benchmark disclosed enough information surrounding their targets,such as emissions intensities,activities and use of carbon offsets,which would enable their targets to be assessed.In total,19(63%)companies were found to have targets for their scope 1 and 2 emissions.Out of these companies,15(50%)disclosed enough information for their targets to be assessed for alignment with a 1.5C pathway.Among these companies,Stellantis stands out with its aim to reduce its scope 1 and 2 emissions by 50%by 2025,75%by 2030 and 100%by 2050,compared to 2021.It is the only company in the benchmark that has both a near-and long-term scope 1 and 2 emissions target aligned with its 1.5C pathway.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 22 Further,15(50%)of the companies were found to have targets for their downstream scope 3 emissions.Out of these companies,only seven(23%)disclosed enough information for their targets to be assessed for alignment with a 1.5C pathway.Among these companies,Tata Motors stands out as the only company with a short-term target aligned with its 1.5C pathway,but it still lacks a long-term target.Hyundai Motor Hyundai Motor has improved its target setting compared to the assessment in 2021.Hyundai Motor is one of the few companies in the current benchmark to have set upstream scope 3 emissions reduction targets.Further,it is the only company to have set both near-and long-term targets for this scope of emissions.It now also has several downstream scope 3 emissions reduction targets.For its scope 1 and 2 as well as scope 3 emissions,Hyundai Motor has set targets at gaps no longer than five years,starting from 2030 until 2050.Yet,as with most companies,it fails to publicly report data on emissions intensity for its downstream scope 3 emissions targets and on carbon offsets for its net-zero scope 1,2 and 3 emissions target.Another element assessed in the benchmark is the time horizon of emissions targets.The ideal set of targets should be forward-looking enough to cover the majority of the lifetime of a companys assets and should include sufficient interim targets that incentivise action in the present.Of the assessed companies,19(63%)have set emissions targets for 2050.Yet,among these,only four(13%)have also set interim targets for 2025 and 2030,namely Geely Holding,Renault,Stellantis and Suzuki.Moreover,none of the companies have set regular interim targets at gaps of no more than five years extending until the end year of their long-term target.When assessing targets,the ACT methodology also measures companies historic target achievement and current progress towards active emissions reduction targets.In total,three(10%)of the companies are on track to achieving all their emissions targets,while 14(47%)of the companies scored zero on this indicator.Emissions performance The indicators on trend in past emissions intensity compare a companys rate of emissions reduction over the previous five years with the rate required by its 1.5C pathway over the coming five years.The past emissions trends of automotive manufacturers are assessed for the following sources of emissions,which remain the main contributors to these companies overall emissions:upstream emissions associated with purchased materials(scope 3 category 1),emissions from manufacturing operations,and downstream emissions arising from the use of sold products(scope 3 category 11).Trends in past emissions are assessed using emissions intensities,whatever the scope of emissions.Additionally,the locked-in emissions from sold products are also compared with companies 1.5C carbon budget.Alignment of past emissions intensities:emissions from manufacturing operations Of the 30 automotive manufacturers,24(80%)reported sufficient data to enable an assessment of the past trend in their scope 1 and 2 emissions.Among these companies,13(43%)reported a five-year time series starting from the reporting year.Three(10%)of the companies,all Chinese,did not report scope 1 and 2 emissions at all.All companies from Europe and Central Asia,North America and South Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 23 Asia reported their scope 1 and 2 emissions for the last three years,compared to 60%from East Asia and Pacific.The average score for the past scope 1 and 2 emissions trend for the 24 companies mentioned above is 59%.In total,11(37%)of the companies scored 100%,showing a trend aligned with their 1.5C pathway.This demonstrates the capability of a decent share of automotive manufacturers to decarbonise their own operations,which is a positive outcome,even though scope 1 and 2 emissions represent a minor share of their overall emissions.However,many companies scored 0%for their past scope 1 and 2 emissions trend due to no disclosed data(six companies)or poor performance(five companies).Further,all companies receiving nil scores are either Chinese or Japanese.Alignment of past emissions intensities:upstream emissions from purchased materials Of the 30 automotive manufacturers,15(50%)reported their scope 3 category 1 emissions,among which eight(27%)reported a five-year time series starting from the reporting year.The assessment considers emissions intensities for the main sources of upstream emissions for automotive manufacturers:aluminium,batteries(for EVs),glass,plastics and steel.None of the assessed companies reported data on upstream emissions intensities to allow for a proper estimation of trends,consequently receiving a score of zero on the related indicator.Companies should more clearly disclose emissions data related to materials used in the vehicles they manufacture,especially considering that with fleet electrification,these emissions are expected to become the largest contributor to companies overall emissions.Alignment of past emissions intensities:downstream emissions from use of sold products Of the 30 automotive manufacturers,18(60%)reported sufficient data to enable an assessment of the past trend in their scope 3 category 11 emissions.Among these companies,nine(30%)reported a five-year time series starting from the reporting year.In total,11(37%)of the companies,all Chinese,did not report scope 3 category 11 emissions at all.All companies from Europe and Central Asia,North America and South Asia reported their scope 3 category 11 emissions for the last three years,compared to 25%from East Asia and Pacific.The average score for the trend in past downstream emissions from the use of sold vehicles for the 18 companies mentioned above is 20%.As a result of its full battery-electric fleet sales,only Tesla scored 100%,showing a trend aligned with its 1.5C pathway.On the other hand,18(60%)of the companies scored 0%for their past trend in these emissions due to no disclosed data(12 companies)or poor performance(six companies).What amount of emissions are automotive manufacturers locking in with their sold fleet?The locked-in emissions indicator compares projections of companies cumulative absolute emissions resulting from the use of their sold vehicles against the cumulative carbon budget allocated based on their 1.5C pathways,for the five years following the reporting year.To score this indicator,projections of sold vehicles(units per year)and projections of average emissions intensity of these vehicles are required.Strikingly,none of the 30 assessed automotive manufacturers reported this information.Consequently,future vehicle sales and emissions intensities were estimated in-house to allow for scoring companies on the locked-in emissions indicator.The maximum score was obtained by Tesla,which is the only automotive manufacturer in the benchmark solely selling low-carbon vehicles(with a 100V fleet).Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 24 BMW and Tesla By selling BEVs only,Tesla is the only company in the benchmark with no emissions arising from the use of sold products the main source of emissions for automotive manufacturers.Tesla holds a unique place in the industry because it does not sell any fossil-fuel powered vehicles,transitioning away from which is identified as the main lever for the industry to decarbonise.The company has also significantly reduced its scope 1 and 2 emissions intensity.While the company has not disclosed this data,it has been calculated to have dropped from 0.63 to 0.37 tonnes of carbon dioxide per vehicle(tCO2/vehicle)between 2021 and 2023.However,Tesla can improve its disclosure of emissions data for previous years to allow for a more insightful assessment of its past emissions trend.The company should also disclose more information about emissions associated with its purchased materials(by far its largest source of emissions)and its plans and actions to reduce these emissions.In its 2023 Group Report,BMW disclosed a five-year time series for its scope 1 and 2 emissions intensity,which decreased from 0.40 to 0.28 tCO2/vehicle between 2019 and 2023 an average yearly reduction of 7.5%.This rate exceeds BMWs 1.5C pathway.The company also disclosed its average global fleet-wide carbon emissions(scope 3 category 11 emissions).These emissions have dropped from 218.5 to 185.4 gCO2/km for BMWs passenger cars between 2019 and 2023 an average yearly reduction of 3.8%.This rate demonstrates BMWs efforts to decarbonise its sold vehicles,even though it does not fully align with the companys 1.5C pathway.The company should additionally disclose more information about the emissions associated with its purchased materials(by far its largest source of emissions)and its plans and actions to reduce these emissions.Investments FIGURE 13:DISCLOSURE OF INVESTMENTS AND PATENTS IN LOW-CARBON TECHNOLOGIES In the IEAs Net Zero Emissions by 2050 Scenario,EV sales need to reach around 65%of total car sales in 2030(IEA 2024).To reduce their emissions and help maintain revenues in a low-carbon economy,automotive manufacturers must ensure that the majority of their capital expenditure(CapEx)and research and development(R&D)spending goes towards advancing and patenting new low-carbon technologies,such as batteries and fast-charging infrastructure.Yet,19(63%)of the assessed companies do not disclose their low-carbon CapEx shares,while 20(67%)do not disclose their low-carbon R&D investment shares-see Figure 13.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 25 Capital expenditure Recent studies show that from 2022 to 2023,investment announcements in EV and battery manufacturing totalled almost USD 500 billion,of which around 40%has been committed(IEA 2024).Yet,of the 30 automotive manufacturers assessed,only 11(37%)disclosed the proportion of CapEx they have invested in low-carbon technologies in 2023.Of the companies that disclosed this information,eight(73%)spend less than 40%on low-carbon technologies.The three leaders in this area:Tesla,Ford and Tata Motors,invest 100%,73%and 71%,respectively.The average low-carbon CapEx share for the 11 reporting companies is 39%.All companies headquartered in Germany and India disclosed their low-carbon CapEx.This share falls to 67%for companies in the United States and 14%for companies in Japan,while no evidence was found for companies in China disclosing their low-carbon CapEx.Companies based in the United States allocate 87%of their CapEx to low-carbon technologies on average.In contrast,companies in India and Germany allocate only 50%and 28%,respectively.Future investment plans demonstrate a companys commitments and reflect its internal planning towards a low-carbon transition.Yet,of the assessed companies,only four(13%)publish information on their planned low-carbon CapEx share for 2025,signalling significant inaction overall.The average share of this planned investment constitutes 69%of the four companies total planned CapEx.The two leading companies,Tesla and General Motors,both plan to invest 100%.Companies headquartered in the United States thus lead in both disclosing more information on their planned low-carbon CapEx shares and investing the largest proportion of their planned CapEx in low-carbon technologies.Research and development Investment in R&D is necessary to reduce the costs and speed up deployment of innovative low-carbon technologies.Out of the 30 automotive manufacturers assessed,29(97%)reported information on their R&D expenditure;however,only ten(33%)reported information on how much of this is dedicated to low-carbon technologies.Tesla,Mitsubishi and Mahindra lead in low-carbon R&D shares,with investments of 100%,47%and 47%,respectively.The average low-carbon R&D share for the ten reporting companies is 34%.About 67%of companies headquartered in Germany and the United States disclosed their low-carbon R&D.This share falls to 50%for companies in India and 43%for companies in Japan.No evidence was found for companies in China disclosing their low-carbon R&D.Companies based in the United States allocate 60%of their R&D to low-carbon technologies on average.In contrast,companies in Japan and Germany allocate 30%and 28%,respectively.Non-mature technologies are key to addressing some of the intractable,hard-to-abate emissions from different sectors.Consequently,the ACT assessment methodology rewards companies for their investments in these technologies.Around 35%of global CO2 reductions between now and 2050 will result from low-carbon technologies that are currently in the demonstration or prototype phase(IEA 2021).Yet,none of the companies disclosed the share of their R&D investments in non-mature technologies.Low-carbon patenting Low-carbon patenting activity is an important indicator of a companys ability to transition and develop new low-carbon business models.Evidence of low-carbon patenting activity could only be found for one of the assessed companies,Ford,with 20%of its patents targeting low-carbon technologies.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 26 Climate governance and oversight Corporate climate oversight and governance help ensure that companies include the low-carbon transition in their strategic plans and address other environmental challenges.By having a structured framework for climate oversight,companies can set and meet emissions reduction targets and commit to achieving the Paris Agreement goals.Climate governance For 24(80%)of the assessed companies,there was evidence indicating the presence of board-level oversight of climate-related issues,with responsibility for the organisations corporate direction resting with either the board of directors or the chief executive officer(CEO).Four(13%)of the companies reported oversight of climate change resting with a level below the board and CEO.Two of the assessed companies lacked disclosure in English that could indicate the existence of an established structure dedicated to climate governance.Despite 93%of the companies in the benchmark having oversight of climate issues from at least the board or an employee one level below the board,only five(17%)of the companies were found to have significant expertise in climate change and the low-carbon transition,which informs strategic investment planning and decision-making.Four out of these five rank at the top in the benchmark overall:Mercedes-Benz,Ford,BMW and Stellantis.In the ACT methodology,climate expertise is characterised by five key attributes:possessing academic or professional qualifications specifically related to climate change and the low-carbon transition(excluding purely energy-related backgrounds);professional experience in roles or organisations focused on climate change and low-carbon initiatives;active membership in organisations that drive corporate knowledge on these issues;and demonstrating technical knowledge through recent publications/outputs on the impacts,risks and solutions associated with climate change.Having at least three of these attributes is considered significant expertise.Climate-related incentives Out of the 30 assessed companies,only 14(47%)reported having management incentives linked to climate change mitigation.For 13(43%)of the companies,management incentives were set at the highest level of decision-making authority in the organisation(responsible for guiding its overall strategy and direction).The remaining 16(53%)companies did not report any climate-related incentives.None of the companies headquartered in China had climate-related incentives.Companies provide different types of monetary rewards for achieving climate-related performance,including annual bonuses,bonuses as a percentage of salary,salary increases and other forms of incentives over both the short and long term.Among the companies in this benchmark,the most popular type of incentive was the inclusion of monetary rewards within the companys short-term incentive plan in terms of annual bonuses.This was observed for eight(27%)of the companies.The remaining companies with climate-related incentives adopted a long-term view by making incentives part of equity,increasing the likelihood of a successful low-carbon transition.Transition planning and scenario analysis Companies should establish a time-bound action plan outlining how they will adapt and prepare for a low-carbon transition.This action plan should include medium-and long-term targets,quantified Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 27 objectives and financial commitments.The plan should also be informed by climate scenario analysis to ensure its ambition is sufficient to align with a 1.5C pathway.Transition planning Overall,only three of the 30 automotive companies assessed,BYD,FAW and JAC Motors,appeared to lack any elements of transition planning.Notably,no English-language disclosures were found for FAW and JAC Motors,while for BYD,evidence of a transition plan was absent despite available disclosures.Among the remaining 27 companies,16(59%)demonstrated convincing evidence of a transition plan that covers all business units and operations as well as upstream and downstream activities related to the companys production operations.However,none of these plans were fully aligned with a low-carbon future.The assessment revealed significant variability in companies readiness for the transition,with the scores indicating differing levels of commitment and detail.Key elements of robust transition planning include setting clear,measurable objectives that can be monitored and reported.In 2023,24(80%)of the assessed automotive companies disclosed at least one quantified,time bound measure of success see Figure 14.Among these,two-thirds provided two or more objectives with both qualitative and quantitative details aligned with a low-carbon scenario.Examples of such measures include setting greenhouse gas(GHG)emissions reduction targets,shifting to a 100%electric fleet and committing to phase out fossil-fuel powered vehicles,expanding the manufacturing facilities of EVs and their components and increasing the capacity for renewable energy generation.FIGURE 14:MEASURES OF SUCCESS FOR A LOW-CARBON TRANSITION PLAN To achieve their decarbonisation goals,companies should develop both short-and long-term actions for the next five years and beyond.While 26(86%)of the companies disclosed examples of measures they expect to implement in the short term,only 50%of these have developed comprehensive plans that contain detailed descriptions of these actions.Similarly,while 22(74%)of the companies disclosed a description of planned long-term actions,detailed descriptions of relevant and achievable long-term actions were observed for only 47%of them.This eight(26%)companies without long-term commitment to actions see Figure 15.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 28 Commitments by companies to establish processes for reviewing and updating their transition plan were found to be missing across 23%of the assessed companies.Of the 30 companies,only 11(37%)disclosed a commitment to review and update their transition plan at least every five years,with a defined process in place a process ACT methodologies consider to be fully-low-carbon aligned.Similarly,evidence of commitments by companies to report their progress against their transition plan and any material change annually,with a defined stakeholder feedback process,was found to be missing across 30%of the assessed companies.FIGURE 15:ALIGNMENT OF KEY TRANSITION PLAN ELEMENTS IN ASSESSED COMPANIES Another critical aspect of a robust transition plan is the inclusion of financial considerations,such as financial projections or indicators,and how decarbonisation aligns with the companys long-term vision and business strategy.Failing to present convincing evidence of financial considerations in the transition plan weakens the credibility of companies,as it becomes unclear whether they are embedding carbon reduction efforts in key operational activities.For 15(50%)of the companies assessed,no evidence was found of quantified financial content,such as projections,cost estimates or other estimates of financial viability associated with the transition plan,although these might have been referred to within the plan see Figure 15.At a country level,a pattern can be observed whereby companies located in Europe,Japan and the Republic of Korea give a strong indication of having more mature transition plans in place.This can be inferred from the existence of a higher number of key elements of their transition plans attaining low-carbon aligned classification as per the ACT Automotive methodology see median values in Figure16.FIGURE 16:MATURITY GAP IN KEY TRANSITION PLAN ELEMENTS For companies headquartered in a given country,the gap between the best and worst company transition plans is the narrowest in the Republic of Korea and the largest in Japan.Admittedly,European policy towards signalling the end of the ICE has been one of the most progressive and,on aggregate,companies headquartered in the region have produced compelling transition plans.Nevertheless,not all companies have interpreted the policy environment in the same way and only Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 29 half of the key elements composing their transition plan are low-carbon aligned.Companies located in the United States,India and China show evidence of less mature transition plans,revealed by a significantly lower median number of low-carbon aligned key elements.BMW and Nissan Motor Both BMW and Nissan Motor have transition plans in place that encompass all business units and operations and the rest of the value chain,including both upstream and downstream activities.The transition plans of both companies consider short-and long-term actions to be implemented to make the low-carbon transition a reality.Examples of these actions include expanding the product range of BEVs,expanding the infrastructure for electromobility,increasing renewable energy production and integrating circularity measures in production methods.Furthermore,both companies commit to reviewing and updating their transition plans at least every five years for continuous relevancy and efficacy and have established a process to do so.Both companies also commit to reporting progress against their transition plans on an annual basis.In terms of financial content,both companies have addressed key financial aspects of their transition plans and integrate an internal carbon pricing system in their financial assessment.Climate change scenario testing and analysis has also been employed to inform the companies transition plan development following the Intergovernmental Panel on Climate Changes(IPCC)well-below 2C pathway.Scenario testing and carbon pricing Companies should develop their transition plans based on a 1.5C scenario to ensure alignment with global climate goals.However,more than 40%of the 30 automotive companies have not conducted any scenario analysis.Only 11(37%)of the companies have conducted an analysis using three or more scenarios,including a 1.5C scenario.Furthermore,18(60%)of the companies have reported leveraging scenario testing to inform the development of their transition plans,but only one company provided comprehensive results expressed in qualitative,quantitative and financial terms translated into value-at-risk.Additionally,among the 30 companies assessed,only six(20%)demonstrated the use of a carbon price embedded in cost calculations as a financial indicator.For the remaining 24(80%)companies,no evidence was found of the consideration of a carbon price,either qualitatively or quantitatively.Notably,only two(7%)of the companies,Nissan Motor and Mitsubishi Motors Corporation,aligned their carbon pricing with a low-carbon scenario and integrated it into the financial scenario used for strategic business decisions.This lack of widespread adoption of scenario analysis and financial tools,such as carbon pricing,highlights a critical gap in the industrys readiness to navigate to a low-carbon future.Overall,when all indicators are considered,the analysis highlights both progress and significant gaps in transition planning among automotive companies.While most companies have started incorporating measurable objectives,short-and long-term actions and some level of financial consideration into their plans,the lack of alignment with low-carbon scenarios and inadequate detail in critical areas remain major challenges.Companies that fail to address these gaps risk undermining the credibility of their transition efforts,potentially impacting the decarbonisation of the automotive industry.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 30 Hyundai Motor Hyundai Motors scenario testing encompasses a comprehensive analysis of all its business units and operations and the rest of its value chain,from upstream procurement and direct operations to downstream demand for its products and services.This testing spans a medium-to long-term timeframe,extending up to 2050,and includes evaluations of social,technological,environmental,economic and political shifts following the recommendations of the Task Force on Climate-Related Financial Disclosures(TCFD).The company assesses the potential impacts of global temperature increases under three scenarios:the IEAs Net Zero Emissions by 2050 Scenario(NZE)with 1.4C,the Announced Pledges Scenario(APS)with 1.7C and the Stated Policies Scenario(STEPS)with 2.4C,considering assumptions around the following six key aspects:the global energy mix,carbon pricing,emissions trading systems,low-carbon technology shifts,strengthening of global regulations and physical risks.Additionally,Hyundai Motor has provided the results of its scenario analysis in qualitative,quantitative and financial terms,ensuring that the company is prepared for various future developments.Supplier and client engagement The automotive manufacturing industry plays a pivotal role in shaping emissions across its value chain,relying on suppliers from energy-intensive sectors,such as steel,glass,and,notably,batteries.Upstream emissions covering raw material production,component manufacturing(e.g.batteries)and logistics represent 60-70%of total life cycle emissions in internal combustion engines(ICE)and hybrid electric vehicles(HEVs).In EV production,battery manufacturing alone can account for up to 60%of GHG emissions in the supply chain(McKinsey 2023).For instance,producing a 40 kilowatt-hour(kWh)battery for a mid-sized battery-electric vehicle(BEV)results in emissions ranging from 35 to 70 kilograms of CO2 equivalent per kWh,depending on the carbon intensity of the energy used(IEA 2024).To enable a comprehensive low-carbon transition,it is crucial for automotive manufacturers to develop robust engagement strategies with both suppliers and clients.Supplier engagement Overall,automotive manufacturers demonstrate moderate performance in terms of climate-related supplier engagement.On average,the companies received 49%of the points available for supplier engagement strategy and activities.Despite their position in the supply chain and the importance of indirect emissions for their own decarbonisation,few companies have implemented comprehensive supplier engagement strategies.Of the 30 automotive manufacturers assessed,28(93%)reported having some form of strategy to engage with suppliers.However,only 12(40%)have effectively implemented these strategies by employing all three action levers:information collection,engagement and incentivisation,and innovation and collaboration.Among these companies,only two,BMW and Kia,have incorporated quantified,science-based emissions reduction targets into their key procurement templates.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 31 FIGURE 17 SCOPE OF CLIENT AND SUPPLIER ENGAGEMENT STRATEGIES In total,16(53%)of the companies assessed have a supplier engagement strategy that encompasses over 90%of their procurement spending or covers more than 90%of supplier-related scope 3 emissions see Figure 17.The remaining 14 companies failed to explicitly define the scope of their supplier engagement strategies,indicating room for improvement in disclosure practices.While 28(93%)of the companies assessed reported having some form of supplier engagement strategy,only 23(77%)of the companies have established emissions reduction requirements for their suppliers.BMW and Kia are the sole companies to have implemented quantified,science-based emissions reduction targets directly in their key procurement templates.Furthermore,BMW and Kia require suppliers to report progress against these targets,reflecting a higher level of accountability and more effective mechanisms for tracking progress.This disparity underscores the urgent need for wider adoption of measurable and enforceable supplier engagement practices across the automotive industry to achieve significant reductions in supply chain emissions.Only five(17%)of the companies mandate their suppliers to publicly report emissions,which is a key step in enhancing transparency and driving accountability across the supply chain.While 11(37%)companies include GHG reduction or reporting requirements in their supplier selection and contract renewal processes,only six(20%)exclude suppliers who fail to make significant improvements after engagement.Through stringent measures,such as exclusion,automotive manufacturers can effectively push their suppliers towards better sustainability practices.Further,only nine(30%)companies evaluate the impact of their strategies using quantitative measures,while 17(57%)either do not assess or disclose the effectiveness of their strategies.At a country level,companies based in China,India and the United States lag behind in setting GHG emissions reduction goals and requiring their suppliers to publicly report emissions.In contrast,European companies are leading the way in supplier GHG disclosure requirements,while Japanese companies are increasingly embedding GHG emissions reduction and reporting criteria into supplier selection and contract renewal processes.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 32 BMW BMW stands out as the top-performing company under the supplier engagement module.The company has set a science-based,1.5C-aligned emissions reduction target throughout its entire product life cycle.This target is included in its supplier code of conduct,which requires suppliers to report on their GHG emissions,implement decarbonisation measures,report progress and participate in the CDP Supply Chain Program.The company also includes education initiatives in its engagement strategy and cooperates with suppliers to promote the use of green electricity and other decarbonisation measures.Moreover,BMW measures and discloses the impact of its strategy in quantitative terms.Client engagement Automotive manufacturers demonstrate poor performance in terms of climate-related client engagement.On average,the companies received only 23%of the points available for client engagement strategy and activities.Among the 30 companies assessed,12(40%)lack a client emissions reduction strategy.In total,22(73%)of the companies have implemented various measures to encourage their clients to reduce emissions.Toyota Motor Corporation stands out as the only company with quantified GHG emissions reduction target(s)included in its client engagement strategy.Additionally,only four(16%)of the companies disclosed the impact of their client engagement activities in quantitative terms.Most of the companies assessed disclosed client education and information sharing as the most common engagement strategies.Financial incentives are largely limited to existing state subsidies.Ford stands out as the only company to use all action levers suggested in the ACT methodology in its client engagement strategy,namely education and information sharing,collaboration and innovation,compensation and customer motivation.Despite existing efforts,the automotive industrys approach to client engagement generally lacks clear objectives,active initiatives to promote low-carbon vehicles over conventional ones and quantitative measures to assess effectiveness.Moreover,the majority of companies client engagement efforts are concentrated in mature low-carbon vehicle markets,such as Europe,North America and China.To achieve the low-carbon vehicle sales necessary for meeting the 1.5C scenario,companies must expand their client engagement strategies to developing markets,such as India and Japan.Trade associations and policy engagement Negative lobbying by the worlds largest automakers was found to increase the risk of a global transition to electrification(InfluenceMap 2024)The current misaligned policy positions and advocacy of the leading automotive manufacturers constitutes a significant obstacle to operationalising climate-friendly policies in the automotive industry.Many of the companies are found to still support policies that favour long-term ICE vehicles,driving opposition to climate-science based policies aiming at the reduction of global GHG emissions.This active negative strategic pressure from the major automotive companies undermines the global climate targets and slows down the unavoidable transition towards fleet electrification that will lock consumers and society in an ever-rising demand for fossil fuels.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 33 Strength of engagement strategies Trade alliances,associations,coalitions and think tanks are key means through which companies can indirectly influence climate-related policy.Yet,18(60%)of the assessed automotive manufacturers have not disclosed how they govern their relationships with these influential parties see Figure 18.Furthermore,over 63%of the companies do not have a process in place to monitor and review the climate policy positions of the alliances,associations,coalitions and think tanks they are members of.Additionally,26 out of the 30 automotive manufacturers fail to disclose an action plan for addressing instances when the associations they support are found to oppose climate policies.Only four companies mentioned action plans to withdraw funding,suspend or end memberships in alliances,associations,coalitions or think tanks when they oppose climate policies or engage in climate-negative activities.FIGURE 18:HOW COMPANIES ENGAGE WITH CLIMATE POLICIES Out of the 30 assessed companies,only 12(40%)are not members of or do not provide funding to any alliances or associations with climate-negative activities or positions,but significantly,the remaining majority of the companies do engage with influential parties who are linked to negative climate actions.Support for the Paris Agreement and climate initiatives On a more positive note,19(63%)of the assessed companies publicly support significant climate policies,though 16 of the companies do not explicitly commit to the Paris Agreement.Despite this stated support,and on the pragmatic side,only 11(37%)of the companies have implemented a monitoring and review process to ensure their policy positions align with the Paris Agreement goals.In terms of collaborations with local authorities,a good number of companies,21 out of 30,actively participate in small-scale or pilot projects to implement climate-related partnerships.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 34 Ford Ford ranks at first place in the policy engagement module,with a score of 93%.The company has implemented an engagement policy that covers all its subsidiaries and business areas,and all operational jurisdictions.Moreover,the company publicly discloses all associations,alliances and coalitions of which it is a member.Ford supports a range of coalitions and associations and its impact on climate is aligned with the Paris Agreement goals.It has a process,implemented by the board of directors,to annually review its memberships and the results of this process are shared with management for action.The action plan includes advocating for Fords position independently and withdrawing or ending memberships where necessary(for example,the company withdrew its membership from the Engine Manufacturers Association in 2023,after the association opposed the implementation of Californias clean truck regulation an action not aligned with Fords ambition for a zero-emissions transportation future).Further,the company engages in initiatives against climate change and its GHG goals are aligned with the Paris Agreement and supported by the Science Based Targets initiative(SBTi).Ford is committed to the UNs Business Ambition for 1.5C pledge,as well as the New Deal for Europe initiative.Additionally,the company collaborates with local authorities to reduce emissions in different countries,including projects to deploy alternative fuel infrastructure,fleet regulation and life cycle assessment.Low-carbon business activities Companies must adapt to stay profitable in a low-carbon economy.They need to transition away from high-carbon business models to ensure that all revenue stems from low-carbon products and services.The ACT assessment focuses on two key aspects of companies businesses:the share of income from low-carbon products and services and their actions to embrace new low-carbon business models while phasing out high-carbon ones.Revenue from low-carbon products and services Electric car sales keep rising and could reach around 17 million units in 2024,accounting for more than one in five cars sold worldwide(IEA 2024).Yet,only nine(30%)of the assessed companies disclosed their share of revenue from low-carbon products and services.These nine companies collectively reported an average low-carbon revenue share of 17%.Only Tesla,reported a low-carbon revenue share of over 30%,with all its revenues originating from low-carbon activities.Changan Automobile and Mercedes-Benz follow,with 26%and 14%,respectively.Overall,all three companies in the benchmark headquartered in Germany disclosed information on their low-carbon revenue shares,while only 67%of the companies in the United States and 18%of the companies in China did so.No evidence was found of companies in India or Japan reporting their share of revenues from low-carbon activities.Companies headquartered in the United States earn the largest proportion of their revenue,specifically 52%,from low-carbon products and services,whereas companies headquartered in China and in Germany have low-carbon revenue shares of 17%and 13%,respectively.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 35 Termination/phasing out existing high-carbon business models Strikingly,none of the benchmarked companies has pledged to fully phase out fossil fuel vehicles from production by 2035,which is a necessity to align with the 1.5C climate target.Except for Tesla,which already only sells zero-emission vehicles.Moreover,only six automotive manufacturers have committed to 100%EV sales in specific markets,with five targeting Europe and one the United States.This shows significant inaction on the part of companies,threatening their very survival in a decarbonised economy.BYD and Tesla Since Tesla only sells BEVs,its business model is aligned with a low-carbon economy.Moreover,Tesla produces its batteries in-house at three of its plants.In 2023,Tesla deployed slightly less than 15 GWh of energy storage,accounting for USD 1 billion in revenue.Its mature battery manufacturing business model is scheduled to more than double in size to 40 GWh.In 2023,BYD was responsible for nearly a quarter of all BEV and PHEV sales worldwide and was the second-largest battery manufacturer globally(IEA 2024).It plans to grow both of these mature business models.Changes to business models The low-carbon business models identified for the automotive industry were defined in line with the EU Taxonomy for Sustainable Activities.These recommendations focus on the actions considered most critical for achieving a global net-zero transition.To demonstrate they are implementing these business models,companies were required,at a minimum,to show active exploration through collaborations,pilot projects or research funding.Future-oriented exploratory actions were not taken into account.Creation/expansion of low-carbon business models This dimension evaluated the extent to which companies are currently producing low-carbon vehicles and are positioned to scale up their production,alongside the development of essential technologies and low-carbon transport enablers to support and grow their market share.Automobile manufacturers were specifically evaluated on their production of battery-electric light-duty vehicles(LDVs);manufacturing of other non-LDV low-carbon vehicles,such as buses,trains and e-scooters;development of battery infrastructure(i.e.in-house battery production)and development of EV charging infrastructure.The IEAs Net Zero Roadmap expects EVs to represent 20%of the global LDV fleet in 2023.Currently,three(10%)of the assessed automotive manufacturers are aligned with this target.Notably,Tesla is the only company to exclusively produce low-carbon vehicles,followed by BYD,with more than half of its production comprised of low-carbon vehicles,despite a decline in its low-carbon vehicle share in comparison to 2021 levels and Changan Automobile.Guangzhou Automobile Company and Dongfeng Motor Group have also made significant progress,rapidly increasing the share of their low-carbon vehicles to 20%and 16%,respectively,in just five years.The remaining automotive manufacturers either have low-carbon vehicles accounting for less than 20%of their fleet or fail to disclose adequate information regarding their breakdown of EVs(BEVs,PHEVs,FCEVs)or the size of this business model.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 36 Further,five(17%)of the 30 assessed companies plan to double this in size over the next five years.While the other 15(50%)companies also plan to increase their production share of electric LDVs,there is no evidence of commitments to double this share within the next five years8.The remaining 10(33%)companies lack specific growth plans for low-carbon vehicles.While some automotive manufacturers outline intentions to expand the production of PHEVs alongside BEVs,or aim to increase the number of EV models,the projected growth of their business models cannot be reliably estimated.In-house battery production is adopted by 11(37%)of the assessed companies.BYD and Tesla are the forerunners.The cumulative in-house battery production capacity of BYD for 2023 is 151 GWh,positioning the company as one of the biggest battery manufacturers in the world.Tesla,on the other hand,deployed slightly less than 15 GWh of energy storage,accounting for almost 1.1 billion in revenue.Changan Automobile has established a joint venture with Contemporary Amperex Technology(CATL)for a battery production capacity of 30 GWh.This accounts for 4.5%of the companys total investments.Further,Ford is investing 6%of its revenue in 2023 to EV production factory,which includes investments in battery production.The remaining automotive manufacturers either lack evidence of in-house battery production or are still in the early phases of shifting from outsourced battery production to in-house capabilities.In relation to the scheduled growth of battery production capacity,Mercedes-Benz and Honda Motor,in addition to the previously mentioned companies,have announced plans to expand their capacity.However,none of the companies have committed to doubling their production capacity within the next five years9.None of the assessed automotive manufacturers allocate more than 20%of their efforts towards developing EV charging infrastructure.However,eight(20%)of the companies have concrete plans to expand their EV charging networks.Among them,Tata Motors stands out with an ambitious goal to at least double the size of its charging network within the next five years.As part of this plan,the company aims to install over 22,000 public chargers across India over the next 12-18 years.Actions to decarbonise activities within the existing business models This dimension relates to actions the company is taking to decarbonise the activities making up its existing business model,to transition to lower carbon overall.The three main activities companies are assessed on are:vehicle-as-a-service offerings,such as usage-based subscription models;component-as-a-service offerings,such as battery leasing models;and end-of-life management to increase recyclability.Of the 30 assessed companies,17(57%)reported having vehicle-as-a-service offerings as an activity to decarbonise their existing business models.Yet,for all these companies,this remains a non-mature activity,still in the pilot stages,and is estimated to apply to less than a quarter of the activities being considered for all companies,except for Geely Holding,which has a more mature model due to its subsidiary Volvo AGs Volvo on Demand service.Only five(17%)of the companies have scheduled growth plans for this activity.Renault and Stellantis both plan to double it in size over the next five years.However,the poor performance of automotive manufacturers overall in relation to vehicle-as-a-service offerings is alarming given its high importance for the global low-carbon transition.For eight 8 The ACT Automotive methodology scores growth of business models low-carbon aligned if business models are scheduled to at least double in size over the next five years.9 The ACT Automotive methodology scores growth of business models low-carbon aligned if business models are scheduled to at least double in size over the next five years.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 37(27%)of the companies,this activity impacts the most relevant life cycle phase of the business model in terms of emissions.Component-as-a-service and end-of-life management are both activities of medium importance for the global low-carbon transition.Five(17%)of the companies reported having component-as-a-service as an activity to decarbonise their existing business models.However,this activity is estimated to apply to less than a quarter of the activities being considered for all companies,and none of the companies plan to grow it.Further,22(73%)of the companies reported end-of-life management to increase recyclability.However,this activity only applies to over three-quarters of the activities being considered in the case of BMW and Hyundai Motor.While four(13%)of the companies have scheduled growth plans for this activity,only Toyota Motor Corporation plans to double this activity in size over the next five years.Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 38 Appendix:Companies in the 2024 Automotive and Transportation Manufacturers Benchmark WBA builds on academic research introducing the concept of keystone actors,inspired by the ecological term keystone species.Just as keystone species have a disproportionate impact on their ecosystems,the largest companies in an industry significantly shape their sectors and systems.WBA has adapted this idea to identify keystone companies the SDG2000 using five guiding principles:Dominance in global production revenues or volumes within their sector Control of globally significant segments of production or services Global connectivity through subsidiaries and supply chains Influence on global governance processes and institutions A broad global footprint,particularly in developing countries The Automotive and Transportation Manufacturers Benchmark applies this framework to companies in the Motor Vehicle&Parts(ISIC 2910)and Construction&Engineering(ISIC 4390)sectors.Metrics were collected to confirm companies meeting at least one keystone criterion.Subsequently,the following keystone companies were identified.N Company name Country of headquarters Automotive manufacturers 1 BAIC China 2 BMW Germany 3 BYD China 4 Changan Automobile China 5 Chery Holding Group China 6 Dongfeng Motor Group China 7 FAW China 8 Ford United States of America 9 Geely Holding China 10 General Motors United States of America 11 Great Wall Motor Company China 12 Guangzhou Automobile Group China 13 Honda Motor Japan Stuck in neutral:How automotive and transportation manufacturers are failing to drive essential change 2024 Insights Report 39 14 Hyundai Motor Republic of Korea 15 JAC Motors China 16 Kia Republic of Korea 17 Mahindra and Mahindra India 18 Mazda Japan 19 Mercedes-Benz Germany 20 Mitsubishi Motors Corporation Japan 21 Nissan Motor Japan 22 Renault France 23 SAIC Motor China 24 Stellantis Netherlands 25 Subaru Corporation Japan 26 Suzuki Japan 27 Tata Motors India 28 Tesla United States of America 29 Toyota Motor Corporation Japan 30 Volkswagen AG Germany Transportation manufacturers 31 Airbus France 32 Alstom France 33 Boeing United States of America 34 China State Shi
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