Gears to code: Auto part makers focus on software for EV shift

“A traditional vehicle today would have, say, a 100 lines of code, an advanced vehicle would have 200, and an autonomous vehicle would have 500 lines of code. To that end, we have about 119 software engineers in our business now. We’re moving in a direction where software is becoming extremely critical in the vehicle,” Sunjay Kapur, chairman of Gurugram-headquartered Sona Comstar, told The Indian Express.

Earlier this year, Sona Comstar, which supplies auto components to original equipment manufacturers (OEMs) across the globe, acquired a 54 per cent stake in Serbia-based Novelic for 40.5 million euros. With the Novelic buy, Sona Comstar expanded its team of software engineers and added capabilities of semiconductor chip design, radar sensors design, signal processing, and perception and sensor fusion software.

As cars metamorphose from heavily-engineered mechanical devices with hundreds of moving parts to a software-driven contraption on wheels with less than two dozen moving parts, a large proportion of traditional components are rapidly becoming redundant.

According to Vinnie Mehta, director general of Automotive Component Manufacturers Association of India (ACMA), 40 to 50 per cent of components used in conventional internal combustion engine (ICE) vehicles are not required in EVs. In this context, auto component makers are focussing on technological competency to ensure sustainable growth in the long run.

“The future of the vehicle is completely a tech vehicle and to stay relevant, you have to be investing in technology to create more exciting products,” said Mehta.

Noida-based Spark Minda, a leading auto component manufacturer with a market cap of Rs 8,900 crore, is entering the software segment through technology licence agreements with tech firms like Korea-based Daesung Eltec and Gurugram-based LocoNav to integrate advanced driver assistance systems (ADAS) and telematics software into their hardware portfolio.

ADAS uses a combination of sensors, lidars, radars and cameras to improve passenger safety by assisting the driver with necessary feedback and prompts.

Vehicle telematics allows for the collection of a variety of vehicular data on a centralised system to boost performance and safety.

Spark Minda is also developing an in-house advanced engineering team to boost its software capabilities.

According to Shradha Suri Marwah, president of ACMA and managing director of Noida-based Subros, a major manufacturer of automotive condensers, the lines between traditional engineering and tech are getting increasingly blurred. “The whole mobility space is now becoming very technology driven. Technology is getting embedded not only in the design stage but also into the shop floor. It’s happening across the board,” said Marwah.

Auto component suppliers are also revving up the hiring of software professionals, as car-making transitions from traditional manufacturing to an increasingly software-driven business amid the ICE to EV shift. “We are now able to attract better talent than ever before because the industry is becoming a more tech-advanced space. It’s not being seen as an automotive industry, rather it is being seen as a tech industry,” said Kapur of Sona Comstar.

Positioning the auto component industry as a tech industry is also crucial to attract talent. “We are not seen as an exciting industry and we don’t pay as well as conventional tech companies. But the moment you position yourself as a technology company, you are able to attract and retain talent. However, if the perception remains that of a brick and mortar company, you will not be able to attract tech talent. And of course, to retain talent we have to pay them commensurate salaries. We face competition from tech companies that pay much higher than we do,” said Mehta.

In its FY23 annual report, Tata Motors, which also owns a stake in Tata AutoComp Systems, announced a drive to recruit over 800 skilled workers for digital and engineering positions to enhance ADAS and artificial intelligence capabilities in its cars. It has also partnered with Santa Clara-based graphics processor maker NVIDIA to build new Jaguar and Land Rover vehicles on the trademarked NVIDIA DRIVE software-defined platform from 2025.

Japanese carmaker Honda Motor plans to double the number of software programmers it employs over the next seven years to around 10,000 by 2030, according to a Nikkei report. This would involve deepening its partnership with Pune-based software company KPIT Technologies, alongside building its own software engineering team.

A senior Toyota Kirloskar Motor executive said that the parent company, the world’s largest carmaker, has launched retraining programmes for workers for the transition and that software engineers make up for a significant chunk of its mid-career hires, led by the company’s autonomous driving unit.

Amsterdam-headquartered Stellantis, formed after the merger of the Italian-American conglomerate Fiat Chrysler Automobiles and France’s PSA Group, and is now the world’s fourth largest automaker, plans to hire over 1,000 software engineers in India by 2025, including for its autonomous vehicle plans.

Amid this transition, software is also proving to be a weak link for legacy automakers, with Volkswagen AG, the world’s second-biggest carmaker, having to put off new vehicle launches because of software glitches.

In its latest annual report, Tata Motors also notes that it may not be able to keep up with R&D efforts launched by its competitors to retrofit software upgrades to reduce emissions in diesel vehicles. “There is a risk that these R&D activities…, will not achieve their planned objectives or that our competitors will develop better solutions and will be able to manufacture the resulting products more rapidly, in larger quantities, with a higher quality and/or at a lower cost than us,” it said.

In a report prepared by Grant Thornton for ACMA, Kapur notes that availability of a skilled workforce is going to be a major challenge going forward. “The latest technologies in the electronics industry are constantly evolving, and workers need to be constantly upskilling to stay ahead of the curve. Hence, collaboration between the industry, education institutions and centres of R&D becomes vital,” he flagged in the report.

The report, released in September, also notes that the use of software in auto-electronics in India is still in “early stages of maturity due to limited linkages between information technology companies and automotive manufacturers”. Greater collaboration between relevant players will help in the localisation of software-driven automotive electronic products and significantly reduce the domestic industry’s import bill.