The automotive industry is undergoing a digital transformation born out of the necessity to address labor shortages and sensitive supply chain intricacies. Extended Reality (XR) is a key piece to this technical shift, reshaping how vehicles are designed and engineered. Integrating XR into automotive processes not only helps address ongoing challenges, but also opens doors to new opportunities in vehicle innovation. By streamlining design and enhancing collaboration with XR, automakers can ensure they stay top-of-mind in a market with a sizable appetite for innovative features.
To seize these opportunities, automakers require a comprehensive adoption strategy that accounts for workforce mindset and technical capabilities.
Challenges Plaguing the Automotive Industry
The automotive industry faces several significant challenges that XR can help alleviate:
- Supply Chain and Product Complexity: With the rise of Electric Vehicles (EV) powertrains, Software-Defined Vehicles (SDVs), and increasing demand for customizability, managing supply chains and product complexity has become more difficult. This complexity often leads to production delays and inefficiencies.
- Aging Workforce and Loss of Expertise: The automotive industry faces a shortage of skilled labor, exacerbated by the exodus of experienced workers. These shortages result in a knowledge gap that slows down production and innovation.
- Downtime Costs: Unplanned downtime is a growing issue in the automotive industry, with significant costs associated with halting production. Reducing downtime and streamlining maintenance processes is critical to improving profitability.
How XR Can Address These Challenges
XR technologies offer several solutions to the challenges faced by automotive manufacturers:
- XR Connects Geographically Dispersed Teams: By enabling remote collaboration in virtual environments, XR allows teams in different locations to work together in real time. Resultingly, automakers improve decision-making and reduce delays in design and manufacturing processes.
- XR Allows for 3D Design Reviews of Products Before Manufacturing: Automotive manufacturers can use XR to conduct comprehensive design reviews in immersive 3D environments, making it easier to spot and resolve potential issues before committing to physical prototypes.
- XR Enables Virtual Simulation of Prototypes: XR allows manufacturers to test digital twin models of vehicles, reducing the need for costly physical prototypes and speeding up the design and iteration processes.
How Automakers Should Approach XR Adoption
Successfully implementing XR in the automotive industry requires careful planning and execution. ABI Research insists that automakers should take the following actions when implementing XR tools into their design and engineering workflows:
- Start with Low-Hanging Fruit Use Cases: Begin by identifying simpler, high-impact use cases, such as design reviews or remote collaboration. These use cases can deliver quick results and demonstrate the value of XR. Over time, it’s essential to evaluate progress and adjust as necessary to ensure long-term success.
- Foster Change in Corporate Culture and Offer User Training: For XR to be successful, organizations must prioritize employee training and create a culture that embraces new technologies. Providing users with intuitive and easy-to-use interfaces helps ensure widespread adoption.
- Promote Strong Collaboration Between IT and Business Units: The successful integration of XR technologies requires close collaboration between Information Technology (IT) and business units to ensure that systems are aligned and objectives are met.
Table 1: Key Timelines for Automotive XR Users
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Short term (1–2 years) |
Medium term (3–5 years ) |
Long term (5+ years) |
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To learn more about how XR can drive innovation in the automotive industry, download our whitepaper: Automotive Immersive Engineering.
About the Author
Matilda Beinat, Research Analyst
Matilda Beinat is a Research Analyst within ABI Research's Strategic Technologies group, with a focus on Augmented Reality (AR) and Virtual Reality (VR). Coverage includes devices, content, platforms, and use cases across consumer and enterprise applications.
