Throughout its history, the automotive industry has been remained relatively un-disrupted, with the majority of the control staying with the major automakers in the industry. While Tesla disrupted the traditional model for manufacturing, selling, maintaining, and updating cars – the control has simply shifted from other manufacturers to Tesla. While there is a large amount of choice in where to purchase your vehicle and physically maintain it, there traditionally has not much choice when it comes to the internal coding of your vehicle. If you were lucky, your local mechanic also had some coding abilities, and would have some basic code modifications available for purchase. In the early days, these codes included adjusting the noise level of the chime when the driver’s door was left open or unlocking all of the doors automatically at ignition shutoff. These codes were typically very basic, and did not progress very far, as mechanics were happy getting paid multiple times for installing for the same codes.
The public (via the internet) quickly caught on to what some mechanics were doing, and the coding modification market exploded. More complicated codes were being created and distributed primarily for free on forums online – the ability to use any of the cameras (rear view, blind spot) on a car at any speed, adjusting heated seat temperature based on the external temperature reading, automatically displaying individual tire pressures on start-up, and many more. At the same time, some coders were working on decentralizing the performance ECU tuning market, which was previously viewed as a black box for automotive tuning. It was previously looked at as a black box because with a proprietary device connected, engines could have significantly improved performance without adjusting any of the physical qualities of the engine.
Automotive manufacturers typically limit the performance of their engines and parts so they can perform adequately in a variety of conditions. With aftermarket sales increasing by over $50 billion USD in the past 5 years to ~$300 billion, consumers are trying to get the most out of their vehicles. ECU tuning allows drivers to customize their driving experience each and every time they start their engines. The tuning can range from increasing fuel to air ratios and adjust shift timing to increase horsepower and performance, to optimizing for fuel economy. Some tunes on BMW’s, which are notorious for having limited engines, have seen increases of 60 horsepower and increases of 5 miles per gallon without any physical modifications. The decentralized disruption has seen automakers release their own versions of performance tunes with the same physical components, and performance tuning houses shift their focus from low end ECU tunes to high end ECU tunes coupled with physical part replacement. There are also extremely low volume car manufacturers who rely on external tunes due to not having the internal capabilities and funding to complete a full tune themselves. This has also led to an increase in the prevalence of ‘kit cars’ which are cars that arrive in parts and are assembled by the end user (or a mechanic of their choice). Kit cars hold much higher value for their price than cars typically bought from manufacturers, as consumers are not paying for the brand.
Decentralized tuning for both performance and functionality has increased significantly in popularity with the significant growth of smartphone performance and capabilities. Functionality tuning has become primarily smartphone app based, and it has become as easy as tapping a few buttons to completely change the functionality of your vehicle. Historically, tuning was typically only done by enthusiasts who were comfortable with their mechanic or had the individual skills to execute the work themselves. The decentralization of tuning encourages non-enthusiasts to try and customize their vehicle with some simple changes, and without the intimidation of having to go through a mechanic. With personalization and customization becoming more popular with consumer goods, it only makes sense that one of the most expensive purchases a consumer can make can be tailor made to an individual’s preferences. The prevalence of the disruption is also indirectly impacted by the network effect, as with higher adoption of the technology, there are more and more amateur coders who are releasing unique code which further improves the functionality of the disruption. The influence of these amateur coders has allowed tuning to become much less complex, and there are currently packages that will install the ‘best’ features of your car with a click of a button.
The question now becomes what the next step for decentralized tuning is – we have seen Tesla send tuning updates via WiFi. There are rumours that 3D printers will soon be able to print performance parts that can be combined with performance tuning to significantly increase the performance of stock cars. Many auto manufacturers have attempted to disincentive tuning by voiding warranties, and in some cases, refusing to work on cars that have had tuning work completed.
References:
https://www-statista-com.proxy1.lib.uwo.ca/statistics/323192/automotive-aftermarket-size-in-the-united-states/
https://www.dinancars.com/
Strategy in the Age of Decentralization 