The automotive industry is in the midst of a profound transformation. Electrification, software-defined vehicle architectures, and evolving mobility models are not just reshaping the product landscape – they are redefining how automotive companies innovate, operate, and compete.
Amid this global shift, Chinese OEMs are gaining ground rapidly. While many European and North American manufacturers continue to manage the complexity of legacy systems and organizational inertia, Chinese players are capitalizing on clean-sheet EV architectures, accelerated development cycles, and deep integration of software into both product and process.
To explore the strategic implications of this shift, we are pleased to welcome a distinguished expert to our advisory board. With more than 40 years of leadership experience across the global automotive industry-including senior roles at BMW, as co-founder of Canoo, and as part of Apple’s Special Projects Group-he brings a unique perspective at the intersection of innovation, engineering, and execution.
Key Topics from the Conversation
1. China’s lead is architectural
Chinese OEMs used the pandemic period to continuously advance their platforms and architectures. According to our advisory board member, their vehicles are “state of the art” in terms of both manufacturing quality and technical design. Especially in the EV sector, they rely on modern, well-designed architectures and reuse key components across entire model lines – without major or even minor changes. This speeds up development and production while reducing complexity.
2. Software sets the pace
Chinese OEMs began developing their own operating systems for vehicles 10 to 12 years ago – including the necessary control units and processing power. Today’s models come standard with at least Level 2+ or Level 3 autonomy, including lidar, cameras, and the required compute performance. Software, not hardware or traditional vehicle architecture, determines the development speed. New features are rolled out via over-the-air updates, and vehicles continue to evolve post-sale – following a model similar to Tesla’s.
3. R&D structures need a fundamental rethink
Chinese manufacturers work with fewer suppliers who act as system providers. The OEMs lead software development, while suppliers focus on hardware. As a result, many interface discussions and coordination activities typical in traditional Western R&D setups are eliminated. In addition, there are strong organizational ties between OEMs and their suppliers, enabling more integrated development, faster implementation and changes.
4. Future business shifts towards subscription models
Traditional vehicle ownership is losing relevance. Flexible models such as vehicle subscriptions are gaining traction. Customers can use a vehicle for as long or as short as they want, without long-term commitments. This model offers more freedom and is already established in the digital world. It is growing in the U.S., already widespread in China, and expected to gain momentum in Europe as well.
What does this mean for Western OEMs? The good news: Many OEMs in Europe and the U.S. have recognized the shift and are investing in electrification and software development. The transition is underway – but the challenges remain, particularly when it comes to efficiency, speed, and reducing complexity.
Our new advisory board member contributes valuable insights – drawn directly from hands-on experience and decades of international industry leadership.
“It’s not just about technology. It’s about organizational structure, decision-making, processes and the courage to eliminate old habits.”
