Today we continue our ongoing series looking at the ways technology is transforming various industries by discussing the automotive industry. Many of today’s biggest startups and upstarts are in this field, from Uber to Tesla, so these companies frequently find themselves in the spotlight.

What are the biggest takeaways about the state of technology, the IT budget, and security and compliance concerns in the automotive industry?

Know Your Industry

Here are the big trends to keep watching in the auto industry:

  • Autonomous Vehicles: With Google, Tesla, GM, and more, entering the self-driving car “race,” it is almost inevitable that these vehicles will be approved for public roadways in the near future. The advancements in AI and other technology are vital components of this trend, and car manufacturers’ R&D allocations will reflect this. We’re already seeing this impact the logistics industry, especially in the UK, and expect this to impact the U.S. market quickly as well.
  • Ridesharing: While millennials may not be shying away from purchasing cars as much as was initially thought, ridesharing is still a major component of the “gig” economy and a very popular mode of transportation in cities for travelers and locals alike. If this trend gains more of a foothold, it may indeed impact car sales. The development and refinement of Uber, Lyft, and other apps will also be significant as ridesharing becomes more mainstream.
  • Car Companies Are Software Companies: Cars are now a part of the Internet of Things, as new vehicles today use different kinds of firmware and wireless technology for maintenance and consumer purposes. This is the new normal for the auto industry, meaning that car manufacturers are now also becoming tech companies. The features of connected cars are a convenience, but also a security concern, as explained below.
  • 3D Printing: There is no question that the advancements in 3D printing will have an impact on the manufacturing space. This is true for automotive suppliers as well. From on-demand parts printing (think no need to maintain inventory for replacement parts), to real-time printing on the assembly lines, manufacturing rules are changing. Automotive manufacturers and suppliers alike are evaluating new products and new business models to keep them competitive throughout the changes to the industry.

Your IT Budget

They say that your car is the most expensive computer you’ll ever own, so auto manufacturers’ and their suppliers’ IT budgets must reflect this. For the most part, they already do. In 2014, automakers spent about $102 billion on R&D, almost four times the amount spent in the aerospace and defense sectors. It’s crucial that any player in the automotive industry recognizes its interconnectedness with technology, and sets the IT budget accordingly. From the small parts supplier to the OEMs, technology capabilities have become a competitive advantage, and companies are racing to keep up.


With more connectivity comes more attack surfaces, a lesson that FCA and other automakers have learned firsthand. As the cars we drive become connected to the Internet and more reliant on software applications for end-user operation, the more security becomes not just a concern, but also a matter of life and death. The importance of securing all of the software and technology used in privately owned vehicles (POVs) cannot be overstated; otherwise a hacker could do something as simple as remotely fiddle with a car’s radio, or bring an entire fleet to a standstill.

Rapid recovery from potential hacking attacks will also be extremely important. FCA’s fleet currently does not allow it to push software updates to vehicles in the field, so in response to the Wired hack, FCA vehicle owners needed to download a software update themselves, or take their vehicle to a dealership. In the future, we should definitely expect more manufacturers to follow Tesla’s lead and allow remote software patching for all vehicles.

While not entirely technologically related, we also see a need for security around ridesharing companies like Uber and Lyft. Background checks on drivers have been a point of controversy for some of these companies, but any organization that allows contractors/employees to quickly apply and be approved to work with the public using a widespread, publicly available app must ensure proper vetting.


Much of the technology advancements in the automotive industry are still in their infancy, especially driverless cars. Congressional hearings have already been held on the topic, and we can certainly expect new regulations to be in place by the time this new technology reaches the mainstream.

However, new regulations in the automotive industry may quickly become complicated due to the intersection of so many different technologies and sectors. In addition to NHTSA and EPA rules, advances in technology may mean that auto manufacturers will find themselves more heavily regulated by the CFPB, FCC, and perhaps even the Department of Homeland Security given the possibility of a widespread hacking attack.

Moving Forward

As automotive technology continues to advance in leaps and bounds, perhaps the most important thing to keep up with is security. All the features in the world will do a manufacturer no good if they are hit by a nasty public data breach. However, even if ridesharing surges in popularity and we see a dip in auto sales, car manufacturers themselves aren’t going anywhere. As we advance toward a future of fewer cars with a larger proportion of self-driving vehicles, any manufacturer that wants to survive must keep up with the technological pace and contribute innovations to be successful.