An electrifying car race in NYC symbolizes changes in the auto business; Formula E moves to Montreal where changes will be on display

Car lovers can’t help but follow Formula E, aka the “electric street racing series.” It has celebrity—Leo DiCaprio and British billionaire Richard Branson shared its headlines when the race used the streets of NYC as a track. It also has substance. The event has generated interest in sustainability and conversation around electric-powered vehicles, just one of several forces shaping the future of the auto industry. At Panasonic Automotive’s Silicon Valley base in Cupertino, CA, we often hear questions about vehicle trends. Here’s our take on a few of the most interesting—from industry changes spurred by electrification to extreme customization, and to a new vision for what people will be doing in future vehicles.

1. An electrifying race to electric vehicles

In a summer dominated by electric vehicle news, Formula E grabbed headlines with vehicles that are climate friendly and quiet. “With it being an electric vehicle, there’s no delay from when you put the throttle down to when it gets to the wheels,” Mitch Evans of New Zealand, who drives for Panasonic Jaguar Racing, told the AP. Drivers now head to Montreal for the next race on July 29.

Formula E cars aren’t designed for the average consumer, but there are plenty of electric and hybrid vehicles on the market, and that’s expected to grow. According to research firm Wood Mackenzie, the number of electric vehicles will reach almost 100 million by 2035. As drive trains move to electric, which many experts believe are less complicated and expensive to make than gas powered engines, barriers to entry fall so it becomes possible for smaller companies to enter the business of manufacturing vehicles and for large brands to offer more customized models. Indeed, the move to electric has spurred big changes in the automotive industry’s supply chain.

2. Enabling extreme customization

Some of the best car ads point to what buyers want: design, reliability, safety, advanced infotainment, sustainability and other special features. Platform, not so much. The world’s largest automakers—with portfolios spanning mass volume vehicles to high-end luxury models–are grappling with ways to re-purpose platforms across brands and models to deliver features to suit the brand and the buyer. The same principle applies to startup car-makers: they’re looking for a common platform and customizing it for a special user experience.

Displays are an area where you see rich customization and innovation including a next-gen augmented reality head-up display, demonstrated earlier this year at CES. At the show, Panasonic and Qualcomm announced a next-gen in-vehicle infotainment concept system powered by Android. We’re also working with IBM on a cognitive vehicle infotainment system using Watson. Panasonic’s work in customization and connected car solution development recently paid off in a major telematics deal.

3. Creating a new experience inside autos

Extreme customization, new electronics technology and autonomous driving are shaping how designers think about what people will be doing in future vehicles. Haptic sensors, augmented reality displays, concert-style acoustics and eCockpit environments are generating buzz. Although debate swirls around the date for full autonomous driving, already people are using autonomous features in vehicles. We are confident that as tech progresses, and people grow accustomed to driverless features, expectations will shift. The personal spaces concept envisions that as you move from place to place, from car to home to living room, airport, stadium seat, you will have a personal connection to the space you’re in, but also an information connection to the space. And future autos will acknowledge that personal and information connection.

Amid the eye-popping displays at CES, a small metal device, not much larger than a shoebox for a pair of Uggs, drew crowds of techies jostling for a close up. The device is a scalable “ePowertrain” platform including a power unit, charger and motor. Its small size struck me—especially compared to the 300-pound or so gas-fueled motor in my own car. The Panasonic ePowertrain is designed to reduce lead time for vehicle development. The renewable energy innovation and others like it are helping to fuel what Bloomberg New Energy Finance calls an “EV revolution.” As early as 2022, the cost of electric powertrains is expected to be at parity with internal combustion engines, and when that happens, we’ll see electrification take off.

Disruptive tech leading to trillions in economic value

A few years ago, McKinsey identified renewable energy, AI, advanced robotics, IoT and mobile internet among two dozen disruptive technologies that would account for trillions of dollars in economic value in the decade ahead. Panasonic is deeply engaged in almost half of these technologies. That’s important because when you’re creating entirely new experiences, chances are, you’re going to need to stitch together many of these technologies into an integrated solution. With its wide range of expertise, Panasonic is uniquely skilled at bringing together these technologies.

For the past 100 years, Panasonic has been all about creating a better experience for the consumer. We’ve done that through consumer electronics products and home appliances. More recently, we’ve increasingly created these experiences in partnership with businesses and government entities through integrated solutions that impact the lives of our customers’ customers. Our future is focused on finding ways to apply our breadth of expertise in disruptive technologies to make radically new experiencespossible. Here’s a look at a few we’re working on.

AI & retail therapy

Artificial intelligence has been called the most disruptive force in technology in the coming ten years, and at CES 2018, AI shaped everything from robots to home appliances to future stores. Retail industry analysts observe that stores using AI may see a competitive advantage and those that ignore it may not see their next birthday.

One Panasonic retail innovation at CES employs a mix of cameras, image processing technology and artificial intelligence to detect a person’s emotions. Think about the power this integrated solution brings to a salesperson who tailors her approach to a shopper who enters an establishment in a happy mood. The tech mix can also help a salesperson think about different approach for a person who enters the store in low spirits. Early results from one retailer using face recognition in a store show that shoppers registering as happy spent a third more than other patrons.

20 times greater mobile internet

Mobile Internet is another disruptive technology expected to account for significant economic value. Until fairly recently, the airline cabin was one of the last places where the digital world did not intersect with a physical environment. That meant at 30,000 feet, you couldn’t stream your latest binge-watching program.

Panasonic aims to change that with our third-generation technology. The network, when paired with a new satellite modem, is designed to offer bandwidth up to twenty times greater than what was previously available. It’s expected to open up new possibilities in Internet browsing, video streaming and voice applications.

These are just a few examples of how disruptive technologies are enabling us to bring physical products into the digital world. The work creates consumer experiences that are richer, more rewarding, safer and with less of the friction that frustrates our lives today. For business and governments delivering these experiences can mean more satisfied consumers and constituents and better, more efficient workflows.

To global automakers, there may be no more important recognition than the J.D. Power Initial Quality Study. The research looks at problems vehicle owners encounter in the first 90 days of ownership. Quality is determined by the number of problems that occurs per 100 vehicles. If a model gets a low score, that means few problems, and a high-quality ranking. In J.D. Power’s 2017 report, the Ford brand shot up the list. It achieved its highest ranking since the study was launched, placing fourth overall and second among non-luxury makers. "The Ford SYNC^® 3 Infotainment System is a primary contributor to Ford Motor Company’s strong performance," according to J.D. Power.

"As Ford accelerates the pace of innovation, we believe this best-ever quality ranking demonstrates our new technologies are reliable and easy to use," said Bennie Fowler, Ford’s Group Vice-President, Quality, after the study came out this summer.

Innovations that work

Vehicles are way more complex than smart phones, but few consumers want to think about a car’s complexity. Car buyers want "wow" technology. They want to jump in their car and have their infotainment system work as easily and quickly as their handheld. What we've learned after almost a century of consumer technology development at Panasonic, is that the "wow" wears off quickly—if the machine doesn’t work. Companies that successfully introduce innovations design them so consumers intuitively understand their features. With intuitive use comes delight, trust, and ultimately, from a consumer’s perspective, technology that disappears behind the experience it supports.

Voice recognition that hears over Bruno Mars

One interesting example is voice recognition technology. Some of the earliest voice recognition work dates to the 1950s. Back then, Bell Labs announced a machine that could understand a voice’s simple sounds, kind of like baby talk. Today consumers want vehicles with voice recognition technology that understands what they’re saying at the same time horns are blaring, passengers are talking, while Bruno Mars croons in the background. They hate it when the voice recognition system gets it wrong.

The good news is that cloud computing can provide more data processing power than ever, which enables speech recognition tech to more easily handle evolving grammar rules, word choices and an individual’s speech amidst background cacophony. As a result, consumers can use wow speech recognition tech without worrying about how to make it work. In fact, during a test with consumers, SYNC 3 was able to decipher what users were saying despite having their mouths full of food.

Consumer-centric approach

Panasonic took on the SYNC 3 project in 2013. With our consumer electronics experience and more than 60 years’ experience as a Tier 1 auto supplier, Panasonic had already established itself as a leading global supplier for in-vehicle technology for brands such as General Motors, Fiat Chrysler Automobiles, Toyota and Daimler and others.

Ford SYNC 3 is a prime example of the consumer-centric approach Panasonic takes when developing solutions. Its role was to lead SYNC 3’s software and hardware design, development and implementation for a fast, easy-to-use system with enhanced response to driver commands.

Fast track to market

Panasonic is one of only a few auto suppliers that offers full end-to-end software and hardware development capabilities to automakers. When we became involved SYNC 3, we knew it would have unique challenges, and be on a fast track to market. Ford leaders made decisions early that would ensure we hit the challenging 18-month timeline. Fundamentally, Ford recognized Panasonic’s historic success creating infotainment systems that rank high with consumers, and shared the idea that technology—even wow technology–should fade into the background, behind the experience it supports. Ford set up the project almost like an internal initiative with Panasonic software developers and engineers collaborating with their counterparts at the OEM. That meant if changes had to happen, they could happen fast.

Moving rapidly with quality can be done on large collaboration programs such as SYNC 3, but a supplier can’t do it alone. Ford did a fantastic job exposing SYNC 3 to its development fleets before the technology went into market. We did it too—gave out cars to non-engineers to test out the infotainment system and let us know how things worked. The result was high quality and robust design.

Today SYNC 3 scores so well, it’s considered a competitive advantage for Ford.

Looking for the next SYNC 3

Coming up with solutions that will provide OEMs a competitive advantage in the future is the crux of what we do. The Harvard Business Review in a recent article makes the case that to develop a great idea, you should start by imagining the worst idea possible. Silicon Valley is a place where you can see some of the worst ideas, but also some of the best. To soak in those newest ideas on consumer experience, electronics, autos and disruptive innovations, Panasonic has a Silicon Valley office that works with startups and the region’s largest players. We also learn a lot from customers. Ford, for instance, plans to have a fully autonomous vehicle by 2021, operating without a steering wheel or gas pedal or brake pedal.

Without doubt, self-driving cars represent wow technology. One area we’re concentrating on is machine vision so that the autonomous vehicle sees what’s going on around it. Panasonic’s history in acoustics, cameras, light detection, sensors and other innovations gives us the know how to lead in the area of object detection vision. We are also working on the car cabin and the passenger experience of tomorrow. Ever drive with someone who maneuvered too fast around corners, or followed too closely to the car in front? A future autonomous car will have to learn its passengers’ preferences for driving style, speed, horn use, and approach in poor weather. We’re doing lots of work around how algorithms learn consumer preferences and helping to define the future of driving.