GM Ultifi – Out of GAS.

GM appears to go it alone.

• GM has announced a new end-to-end platform that aims to provide everything from systems management to infotainment, in what can only be a big demotion for Google’s role in GM’s plans.
• GM already has its Vehicle Intelligence Platform (VIP) which runs the vehicle infrastructure, and this has been designed so that further functionality can be added on top.
• This functionality has been named Ultifi which intends to turn a vehicle into a smartphone, but crucially one that is controlled by GM rather than Apple or Google.
• The system will provide over-the-air software updates, upgrades, personalisation options as well as apps and services.
• All of this data will be backed up in the cloud such that it can easily be ported from one vehicle to another when the user buys a new vehicle or rents one when he or she is away from home.
• GM is also keen for 3^rd parties to be able to write apps and services for its vehicles and cites this as the reason it has chosen Linux.
• I suspect that this means that GM has used Linux for VIP and then forked Android for infotainment.
• Despite making a lot of noise about using Google’s Android Automotive (GAS) in its vehicles in September 2019, it appears that this is no longer on the cards.
• Ultifi using GAS would mean that Google would be handling all the 3^rd party development and the apps but this is not what GM is saying.
• In this instance, it would be GM that is the 3^rd party and would develop its vehicle management and services for Google’s software but this is not how it is portrayed.
• Google Maps is displayed in the marketing video where GM is talking about designing its system to be open for 3^rd parties.
• This means it is Google that develops for GM and not the other way around.
• It would appear that like many of its peers, GM has sucked the Google lollipop and decided that it doesn’t taste very nice.
• This does not come as a big surprise because Google fully intends to do to vehicles what it has done in smartphones.
• This has been to turn the smartphone makers into commodity box shifters and siphoned out all of the margin for its own income statement.
• GM’s move is very risky as its ability to design a cool-looking easy to use interface for the infotainment unit is highly questionable but it is the right thing to do.
• This is because RFM research has long found that EVs and autonomous driving are going to severely reduce the demand for vehicles.
• Hence, in order to survive, the OEMs need another source of revenue, and their best option is going to be digital vehicle services.
• However, if one lets Google control that crucial vehicle interface, then only a tiny fraction of the value from digital services will filter back to the OEM.
• If the OEM controls the platform and it is successful (big if) then the share that they are able to earn will be much higher.
• Furthermore, RFM has calculated that the opportunity in-vehicle digital services could be very large and represents an opportunity that should be chased rather than surrendered.
• I think that GM has come to the same conclusion which is why it has opted for the high-risk strategy of building the entire end-to-end platform itself.
• Time will tell whether this pays off.