AI: More Than Self-Driving Cars

Hendrik Cornelissen, Investment Team at Plug and Play Tech Center

Think AI is all about self-driving cars? Think again. Automotive AI has a broad range of applications, beyond just self-driving cars, which you rarely hear about. From enhancing manufacturing processes to revolutionizing car sales and insurance, AI is driving the industry into a new era.

Manufacturing

In the 1950s, Toyota changed car manufacturing with its lean process, leaving many competitors behind. Today, we're on the brink of another major shift as AI begins to reshape management practices. Imagine having the ability to forecast inventory needs, streamline assembly lines, and spot bottlenecks before they happen. Take BMW’s Spartanburg plant in South Carolina, for example. They created a digital twin of their facility to let AI manage inventory and schedule their production process as efficiently as possible.

AI is transforming the manufacturing landscape, making operations smarter, faster, and of higher quality. For instance, computer vision technology is now frequently used in quality control, spotting the smallest defects with the highest accuracy. This not only elevates the quality of products but drastically cuts down on waste, repairs, and the risk of having to recall products.

Another trend to keep an eye on is the use of robotics. For decades, manufacturers have heavily relied on large, bulky, specialized robot arms to carry out a narrow set of tasks in the assembly process. 

These machines, while very efficient for specific operations, offer limited flexibility. However, we're now on track for significant change with the emergence of humanoid robots, a development that promises to reshape the entire factory floor. Companies such as Tesla, Boston Dynamics and Figure are creating robots that can almost replace human workers. Their remarkable hand dexterity sets them apart, allowing them to handle a wide range of general tasks much more efficiently than traditional robot arms. Together with computer vision capabilities, they are capable of picking up and managing inventory, as well as putting together complex components with precision.

Sales

The use cases of AI in the automotive industry extend beyond the factory floor and play a significant role in transforming car sales. Since the pandemic, more and more people have become comfortable with buying their cars online. Of course, many people think of Tesla when they think about online car sales. Other manufacturers are trying to catch up. BMW has expressed their plan to sell 25 percent of their cars online by 2025. By now, almost all major car brands have incorporated a chatbot on their website to provide around-the-clock, personalized customer service. These chatbots assist potential buyers in choosing a car that best suits their preferences, answering queries, and, in some cases, even handling paperwork. AI has the potential to take over the job of car salesmen entirely. With the onset of AI video generation, the interaction does not necessarily have to be limited to a text interface. Soon, it will be possible to talk to an AI car sales agent directly over video. They will be able to take care of the entire sales process, from helping configure the car to giving discounts you are eligible for and doing the paperwork.

Insurance

AI is also set to play an important role in automating car insurance. Machine learning algorithms can assess drivers’ behavior, driving conditions, and other critical data points to personalize insurance rates. This not only ensures a fairer pricing system but incentivizes good driving behaviors. But AI can also help insurers to quickly asses damages after an accident. AI-driven startups like Tractable offer insurers to speed up the entire claim process. The AI can recognize the type of damage, give a cost estimate, and let body shops know which parts they need to order.

“AI is transforming the manufacturing landscape, making operations smarter, faster, and of higher quality.”

Another possible application of AI is in Predictive Maintenance. AI can analyze data from connected vehicles to anticipate potential issues before they turn into expensive problems. Sensors embedded within the cars collect data regarding various vehicle components, which AI algorithms then analyze to provide early warnings about potential failures. For example, the startup Viaduct is creating an online platform that helps vehicle makers and people who manage vehicle fleets to gather real-time data from their vehicles. This allows them to use AI to predict future issues. By doing this, they lower the risk of cars breaking down unexpectedly, which makes the vehicles last longer and keeps drivers safer.

The automotive industry is expected to experience significant transformations in the immediate future besides having self-driving cars. From smart manufacturing techniques to revolutionizing sales and service experiences, AI is steering the automotive industry toward an exciting future.