Daily Update: Software-Defined Vehicles Are Reshaping the Industry

Today is Friday, May 31, 2024, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global .?Subscribe?to be notified of each new?Daily?Update.?

Once upon a time, a car was just a car — sheet metal, chrome, rubber and “rich Corinthian” leather, powered down roads and highways by the carefully controlled combustion of hydrocarbons. But nothing stays simple. The biggest trend in the automotive industry is the connected, autonomous, shared and electric (CASE) vehicle. This technology requires a robust computing architecture that combines cloud computing, edge computing and peerless connectivity. A recent “Autology” podcast from S&P Global Mobility, featuring principal research analyst Manuel Tagliavini, covers the fast-developing connected and software-defined vehicle market.

Most drivers are exposed to edge computing in their automotive experience, even if they don’t think of it as, or aren’t aware of, edge computing. Many software-enabled attributes of modern vehicles — safety features such as advanced driver assistance, battery monitoring in electric vehicles and self-driving capabilities — are examples of edge computing. Edge computing operates close to the source of data generation in applications where timing is critical. This is especially important for self-driving vehicles, which must be capable of reacting to their environment in real time, regardless of 5G or cloud connectivity. Smart traffic lights and EV charging stations are also places where edge computing plays a role in transportation infrastructure.

While edge computing will remain important for time-sensitive operations, today’s edge computing infrastructure is also connected to a broader, cloud-based network . 5G networks, which combine low latency and high bandwidth, allow vehicles to communicate with each other and transportation infrastructure. For autonomous vehicles, information is processed at the edge and then shared with all interconnected vehicles.

“The cloud is not just an adjunct technology for the automotive sector, but a fundamental pillar that supports the evolution of vehicles into interconnected, intelligent and autonomous machines,” Tagliavini said. “The integration of cloud services into the automotive industry signifies a shift toward more software-defined vehicles where continuous improvement and innovation are possible through seamless updates and connectivity.”

Cloud connectivity allows vehicles to constantly update, evolve and improve, and to use integrated AI for early diagnostics. Connectivity is adaptable and intelligent. This presents a new business model and revenue opportunity for original equipment manufacturers with subscription and on-demand services, allowing consumers to customize vehicles after their purchase. For some OEMs, the software-defined vehicle can become a platform for continual updates and upselling. S&P Global Mobility anticipates that this could become the fastest-growing revenue stream for OEMs and startups.

Today is Friday, May 31, 2024, and here is today’s essential intelligence.

Written by Nathan Hunt.

Sustainability

Listen: How Singapore-Based Investment Firm Temasek Is Mobilizing Green Capital For Emerging Markets

In this week’s episode of the ESG Insider podcast, we sit down with Steve Howard, vice chair of sustainability for Singapore-based Temasek, a global investment firm with a net portfolio value of $287 billion as of March 31, 2023. Steve was a keynote speaker at the annual S&P Global Sustainable1 Summit in London May 8. In an interview on the sidelines of the event, he explains the green investment opportunities and challenges Temasek sees in emerging markets.

—Listen and subscribe to the podcast from S&P Global Sustainable1

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Economy

Default, Transition, and Recovery: 2023 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study

Tight financing conditions was the main cause of emerging market defaults in 2023, with Latin America as the epicenter, and no specific industry concentration. In 2023, the number of corporate defaults in emerging and frontier markets decreased to 19 from 26 in 2022. Last year's defaults represented 12% of the global total, sharply down from 31% in 2022. The protracted high cost of debt imperiled companies with unsustainable capital structures, leading to distressed exchanges (53% of defaults) and missed payments (26%).

—Read the article from S&P Global Ratings

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Capital Markets

Why Is Passive Investing On The Rise In South Africa?

Explore what’s driving increased interest in indexing and the growing role of custom index solutions in South Africa with S&P DJI’s Marius Baumann and Chris Rule of 10X Investments.

—Watch the video from S&P Dow Jones Indices

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Global Trade

Commodities, Shipping In Focus In Watershed South African Election

Polls opened in South Africa's most consequential election in decades on May 29 as the ruling ANC faces the prospect of losing its majority, with implications for commodity flows, mining and global shipping. If the African National Congress, which has ruled Africa's most industrialized nation since the end of apartheid, wins less than 50% of the vote, it would have to seek smaller coalition partners. A 40% vote share would force it to partner up with more prominent rivals, including the far-left Economic Freedom Fighters and MK, run by former president Jacob Zuma, or the liberal Democratic Alliance.

—Read the article from S&P Global Commodity Insights

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Energy & Commodities

How The 2024 Polls Could Impact India's Top 5 Steel, Metals Markets

India's ambitious growth plans, which require continuing investments in infrastructure, are expected to fully support the country's metals demand. Irrespective of the outcome of ongoing elections in India, no major policy changes are expected as India looks to maintain its economic priorities and keep the conversation moving on energy transition, industry sources told S&P Global Commodity Insights. This means India is seen to continue to boost spending on infrastructure, manufacturing and construction in the coming years — all factors pointing to improved demand for steel, iron ore, coking coal and scrap.

—Read the article from S&P Global Commodity Insights

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Technology & Innovation

China EV Startups Struggling To Stay Afloat

The world's largest electric vehicle (EV) market is a gladiator battle. Close to 50 producers in China are offering about 90 EV brands and 430 models, and most are loss making. Incumbents are relentlessly upgrading and expanding their portfolios while new entrants strive to catch up. Within this arena, only some will survive and thrive.

—Read the article from S&P Global Ratings

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Featured Events & Webinars

2024 South Africa Conference: Between A Rock And A Hard Place (June 4, 2024)

This event will discuss potential policy shifts following the May general elections, sovereign-bank nexus in light of the implementation of a resolution regime and S&P Global Ratings’ outlook on South African corporates. Hear from S&P Global Ratings' senior analysts, renowned industry experts, engage in interactive panel discussions and connect with other market participants in person.

—Register for the in-person event from S&P Global Ratings

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