Co-innovation in the Automotive Industry

Co-innovation in the Automotive Industry

Naveen Joshi 01/01/2024
Co-innovation in the Automotive Industry

Co-innovation is set to improve the development of sophisticated next-generation vehicles that meet the changing needs of consumers.

Collaborating with tech companies and other automobile manufacturers results in innovative products and services that create new customer value.

The development of technology and evolution has always been consistent in the automotive industry. Every new research and development has led to a new technology or a new feature to enable manufacturers to stay on top of the game in the competitive market. Across the globe, the leading automotive manufacturers who build the best vehicles were always ahead of time. So how did they achieve this? 

Traditionally, automobile manufacturers were secretive about their research, development initiatives and the breakthroughs they achieved. The latest developments were informed to the top management and a few selected employees. Fast-changing consumer preferences, advanced digital technologies and environmental regulations continuously challenged automotive manufacturers. To stay competitive in the market, the manufacturers were forced to move away from traditional methods and explore new ways of collaborating with other stakeholders in the value chain to leverage their respective strengths and expertise.

Co-innovation in automobiles refers to a collaborative process where automakers work together with suppliers, technology companies and other industry stakeholders to develop innovative products and services. The objective of this development was to create the next generation of safer, more efficient and more convenient vehicles for drivers and passengers.
Co-innovation has become an increasingly important strategy for the automotive industry, as it enables companies to access new ideas, resources and technologies to develop path-breaking solutions and services while sharing the risks and costs associated with innovation. By working together, industry players can pool their resources and knowledge to develop outstanding solutions that would be difficult to achieve alone. Co-innovation can facilitate automobile manufacturers to gain deeper insights into changing industry trends that are paramount for growth and success.


A report published by Hitachi and Longitude on the benefits of adopting a co-innovation approach highlighted that 83% of automobile manufacturers adopted co-innovation to transform their businesses and could stay competitive despite the changing market trends. One of the main benefits of adopting co-innovation is engaging with the consumers to source and test car designs. The automobile manufacturers work with their potential consumers to gain their insights on design, keep them interested in the final product and ensure that their products are appealing.
The automobile industry is increasingly pressured to create designs that will reduce carbon footprints. For instance, European Union has declared that by 2050, only cars with zero emissions will be permitted for sale. Revolutionary technologies like artificial intelligence can create several opportunities to overcome these challenges. Co-innovation will also help automobile manufacturers jointly devise solutions to combat climate change. They can come together to develop technologies that facilitate clean and green transport. The automobile manufacturers who still hold onto their rigid ways must move with the changing tides or will be left behind.
Co-innovation in automobiles industry can help manufacturers provide state-of-art features to the end consumers. For example, previously, automobile manufacturers would install in-house music systems in the vehicles. Adopting a co-innovation approach, the manufacturers are reaching out to the best music system brands that are popular among consumers.
Let’s explore the rising trends among vehicles that facilitate co-innovation so that the end consumer can benefit.


Nowadays, drivers and riders demand connectivity with their cars akin to their smartphones, smart watches, laptops and other digital gadgets. Their expectations include high-quality entertainment systems, assisted driving and parking with direct payments from the dashboard. While manufacturing, automobile companies must integrate a digital technology component in the early stages to ensure that all the state-of-art features are seamlessly connected to provide an optimum user experience.
Co-innovation plays an important role in developing connected vehicle technology. The advantages of connected cars include using sensors and communication technologies to enable vehicles to communicate with other vehicles and the surrounding infrastructure. This technology can improve safety, reduce traffic congestion and enhance the driving experience.
The major auto players are engaging with technology companies to develop connected car solutions. For example, Volvo partnered with Ericsson to develop connected vehicles that made driving safer, more efficient and more entertaining. Over the years, their partnership has become strong, and both brands are working closely to develop the next generation of vehicles that will provide a world-class driving experience to their customers. Volvo uses the industrialized Ericsson Connected Vehicle Cloud (CVC) platform to deliver top-notch digital features like full-scale automation, telematics, entertainment, navigation and other vital services to all vehicles.


Electric vehicles are gaining momentum worldwide. World leaders and environmental experts across the globe are driving efforts to increase the usage of electric vehicles as an effective means to combat climate change, as it has zero tailpipe emissions. Co-innovation in manufacturing electric vehicles is important because the technology requires significant investment in research and development, and automakers are partnering with other companies to develop world-class electric vehicles.

For example, Tesla partnered with several companies to build its electric vehicles. In 2009, Tesla joined hands with Panasonic to obtain its core invention, the battery packs, which are an essential component of an electric vehicle. In 2010, Panasonic invested $30 million in Tesla, and in 2011, they entered into an agreement where Panasonic agreed to provide automotive-grade lithium-ion batteries. Around the same time, Daimler AG bought a 10% stake in Tesla. Both companies are working on integrating lithium-ion battery packs and charging electronics from Tesla into Daimler AG’s first 1000 units of two-seater electric vehicles. Besides, Tesla also partnered with Toyota and Lotus Engineering to develop electric vehicles.


Driverless vehicles mean less or no dependency on human drivers and delivery personnel. Companies like Apple, Uber, Tesla, Google and Mercedes-Benz are top players in the race to build driverless cars. Since there are no drivers, autonomous vehicles are all about enhancing the passenger experience. Therefore, attention to detail in every aspect of the design is crucial for improving the user experience. Considerable focus must be given to improving the efficiency and on-road performance, and safety of autonomous vehicles.

The critical feature that will determine the reliability of autonomous vehicles is the availability of on-field service stations if immediate repairs are required. To provide exceptional services, autonomous vehicle manufacturers must work with technology companies to improve the passenger experience. Thus, co-innovation in the autonomous vehicles industry is very prominent. For example, the world’s top autonomous vehicle manufacturers, like Toyota, Tesla, Audi, Volvo and Mercedes-Benz, rely on Nvidia, an AI solutions provider, for its navigation systems. Autonomous vehicles require advanced AI-enabled navigation systems that can safely traverse through infinite driving possibilities. Nvidia offers a cloud-to-car solution with Nvidia DGX systems with deep networks in the data center and Nvidia Drive PX that ensures lower-time delays and vehicles drive safely.


Hybrid vehicles are electric vehicles that can simultaneously utilize small internal combustion engines and electric generators. The main advantage of the hybrid vehicle is that it improves fuel efficiency and controls air pollution without the difficulties and maintenance requirements of conventional electric vehicles. Like electric vehicles, hybrid vehicles offer zero tailpipe emissions. Hybrid vehicles can overcome the biggest shortcoming of a traditional electric vehicle - limited driving range between charging cycles. Charging an electric vehicle takes anywhere between two to eight hours.

In comparison, refuelling a hybrid vehicle at a gas station is easier. The range-extending technology of hybrid vehicles works automatically while the car is in motion. Co-innovation in hybrid vehicles is very evident. Several automobile manufacturers partner with technology companies to purchase lithium-ion batteries or share advanced technology that benefits both parties. For example, Maruti joined hands with Toyota to develop green technology, hybrid vehicles, electric vehicles and CNG vehicles to reduce dependency on oil exports and control air pollution.


Undoubtedly, the automotive industry is undergoing a sea of change where top manufacturers are collaborating to redefine the next generation of software-driven vehicles. Co- innovation in automobiles  is not a recent concept, but it is gaining momentum as the world undergoes a transformation. It is an essential strategy for developing the next generation of vehicles in the automobile industry. By collaborating with other industry players, automakers can access new ideas and technologies while sharing the risks and costs of innovation. This can lead to a better quality of vehicles with improved performance.

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Naveen Joshi

Tech Expert

Naveen is the Founder and CEO of Allerin, a software solutions provider that delivers innovative and agile solutions that enable to automate, inspire and impress. He is a seasoned professional with more than 20 years of experience, with extensive experience in customizing open source products for cost optimizations of large scale IT deployment. He is currently working on Internet of Things solutions with Big Data Analytics. Naveen completed his programming qualifications in various Indian institutes.

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