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BlackBerry Limited (NYSE:BB) Barclays Global Automotive and Mobility Tech Conference Call November 30, 2022 2:00 PM ET
Tim Foote - Investor Relations
Mattias Eriksson - President of IoT Business Unit
Conference Call Participants
Dan Levy - Barclays
Great. Thank you, everyone, for joining. I’m Dan Levy. I lead Autos Research Coverage at Barclays and glad to have you as we continue the Barclays Global Automotive and Mobility Tech Conference. We’re touching on now the opportunity in automotive software and we have with us BlackBerry that should give us really interesting insights with us is Mattias Eriksson, who’s the President of BlackBerry IoT as well as Tim Foote, who leads Investor Relations effort. So Mattias and Tim are going to run through a series of slides and then we will go through a series of questions, fireside chat style.
Anyone who wants to ask questions, please submit the questions via the viewing pane. There is an option there and I can ask those questions anonymously or you email me directly firstname.lastname@example.org, email@example.com and I'll ask those question-and-answer. So Mattias and Tim, thank you so much.
Great. Thanks, Dan, and let's bring up the slides. Welcome to the BlackBerry IoT session. I was asked to provide just a couple of basic slides here to frame the real discussion. So I'll go through this fairly quickly. Hopefully, most of you are aware of the things that I will cover here but just for context. We have a Safe Harbor statement. And just as a recap for everybody here.
BlackBerry IoT is an investment in the rapidly evolving intelligent B2B stack. Simplistically, at the top level, the business has secular trends driving the growth of these segments, essentially more devices, B2B devices at the edge. Each of these devices are becoming more intelligent, more compute, connectivity, sensors, memory, etcetera. And as they become more intelligent, they almost, by definition, end up being software-defined and that's where we come in. Our core offering in the IoT BU is our QNX advanced microkernel real-time operating system that typically sits at the bottom of these advanced edge B2B devices in between the SoC and the rest of the layers of that sophisticated stack. I think not just cars but robots, high-end medical equipment, industrial automation, etcetera, etcetera. We are very focused on automotive. And we are focused on automotive for one simple reason.
We believe -- and there's plenty of evidence for it but there's no more advanced IoT edge compute device in the modern car today. There's more compute, more connectivity, more sensors, more memory, more cloud interaction in the car than in any other device. And by winning and satisfying customers in the automotive industry, we believe we get a head start on the rest of the segments that are, quite frankly, moving in the same direction when it comes to advanced software stacks at the edge.
Quickly or I should say briefly, you are familiar with our footprint in automotive. We've been serving automotive for quite some time, originally as an integrated vertical IVY stack, all the way from the chipset to the HMI, that changed 5, 6 years ago, we pivoted and we are now deploying for all compute domains as foundational software. 250 million vehicles, 45 automakers, 10 out of 10 of the largest auto OEMs users, 7 out of 7 of the largest Tier 1s, 24 out of 25 of the EV start-ups that matter, etcetera, etcetera. We have a strong footprint in automotive and is getting stronger. What has happened in the last 12 months after we set this BU up, we have had tremendous progress and the new structure has allowed us to be very focused in terms of execution and investment, etcetera, etcetera. On the left-hand side, I have a couple of bullet points for you. The first 2 quarters of this fiscal year, we grew 23%.
You should put that in context obviously, a difficult macro environment. We have guided long-term for the next 5 years, roughly 20% CAGR organic growth. So we feel good about the first couple of quarters. Obviously, you know this is a high operating leverage business. So the margins are high. Maybe some of you are not aware of what is arguably the most important leading indicator for this business, the design win. So you know how it works -- we work with various types of OEMs. We get a design win. And then as that is being ready for production, we get development seats and services and so forth. And then there's a long tail of royalty coming as the production ramps -- so wins today, they are royalty revenue for us, '24, '25, '26 and beyond. In the first half of fiscal '23, the first 2 quarters, we had more dollar design wins in those 6 months than we have ever had for any previous full year period very significant momentum in spite of the macro turbulence.
And that really comes from this secular trend of the evolution of the software-defined car and all the work that is going on with regards to software for the OEM. So we reported out the backlog, the royalty backlog, I should say, Q1 fiscal '23, 560 million. And one of the things that we're going to talk quite a lot about at CES is we spent an enormous effort last year with many customers and partner outlining a revised 5-year technology roadmap. And I know it sounds a little bit weird to talk about 5-year road maps but that is the length in which you need to plan in order to be at the cutting edge here. And we're going to talk quite a lot about the progress with that at CES this year and I hope to see some of you in January in Las Vegas. Just to give you a couple of examples. We are -- as assessing the slide here, we have validated the road map.
We have made a lot of progress over the last 12 months on things that have been in the cooker for quite some time. We have the next-generation kernel coming up. The microkernel doesn't change that often. In the last 35 years, I think we've changed it 3 times. This is a re-architecting of the kernel to cater for linearity beyond 8 cores. So as you scale the number of cores and you get more compute capacity, the performance requirements are very different. And we've been working on this for roughly 3 years now. We have been in early access with key partners for a while. We believe we will be GA this in the second half of next year and we have some demos at CES. If you're following us, you have probably seen a couple of the announcements this week at reinvent [ph].
So one of the things that we have been working on for a while and we continue to work on for the next 12, 18 months is the clarification of QNX, extremely important in many different contexts and we can come back to that during the -- Q&A. That was announced formally this week. And then obviously, IVY has been iterating the POCs, as we have announced previously and we are making tremendous progress on that road map and we hope to be able to have a GA announcement around IVY for next year at CES. Let me stop there. A little bit of context before the Q&A.
Great, I want to start because I think we know that the trend of software in automotive is just becoming more and more pronounced. You’re sitting right on top of that trend. You’re very involved. So maybe you could just help us with a bit of a visualization?
Walk us through what a typical vehicle software stack looks like maybe all the way from the compute, the hardware all the way up to the application layer. What are each of the layers and then where do you sit? What are your solutions in each of those layers?
Yes, great question. And let me start at the top level and then we can come back and do clarifications. So simplistically, at the top level, what is happening is obviously all OEMs and they are all at various stages of evolution in this decade-long transformation that is ongoing on the software side. All OEMs are stepwise moving from the decentralized ECU architecture that we're all familiar with for many years which became untenable. 100, 150 ECUs all across the car, single function, maybe a couple of functions, towards what -- most people have started calling domain compute. And when I say domain compute, I mean things like there's a digital cockpit domain that has a compute stack. There is an ADAS domain that has a compute stack. There is for body and chassis, a compute stack evolving.
There is -- for drive train, electrification or hybrid or whatever it is that you're doing, there's a sophisticated compute stack with a layered software implementation that is involved. The gateway is becoming more compute-intensive. And ultimately, at some point, this will land in high-performance compute, whatever you mean by high-performance compute. But it's a process that runs over many years here and all the OEMs are at different stages of maturity. In the decentralized ECU architecture, there was really no need for something like QNX. So that implementation for single function, we had basically no opportunity. In all of these domains and the most important ones, the most sophisticated ones today is the digital cockpit and the ADAS compute domain. We are winning. We are sitting at the bottom of that stack close to the SoC and we provide the foundational software layer upon which they'll then layer various types of middleware, they lay the application layer. They might have what they call a CarOS sitting on top of us. And we are basically supporting all the OEMs and their partners in this evolution. There are many misconceptions about who we compete with and who we partner with.
And so, let me just take the most obvious ones upfront here. So first of all, we do not compete with Google. For those of you who -- have been following us for many years, you know that when we had that integrated IVY stack obviously, we were competing with them because we went all the way up into the HMI layer. We realized many, many years ago that, that was an untenable situation. So we pivoted that vertical stack to the foundational software for all compute domains. Typically, when you see an Android implementation for digital cockpit, we sit underneath with our hypervisor and we typically also have an advanced virtualization framework, the Virtuo [ph] implementation on top of that hypervisor to help the peripheral sharing and so forth. We do not compete with the chipset partners. So if you take the ADAS stack as an example, there’s lots of press in general about the progress of NVIDIA for DRIVE and Qualcomm for ride. And when you dig underneath that, you realize that every NVIDIA DRIVE implementation has our operating system after that implementation. Every Qualcomm Ride implementation has us as part of that implementation. So we work very closely, obviously, given where we sit in the stack with the chipset partners.
And then the one that is probably most confusing in general because it varies so much by OEM, it’s this notion of the CarOS. And in general, our OS is part of those Oss. So if I take the last publicly available announcement from us, you take CARIAD and Volkswagen and VW.OS. QNX is part of that OS. So you have sort of a nested your multiple OS is in the car and they are nested and that’s part of what is a little bit confusing.
Missed off there, I might not have covered all the questions.
You know, that’s a helpful visualization. So you have the RTOS and you also have the hypervisor piece as well?
And middleware on top of that and frameworks depending on what the partner wants to implement, yes.
Right, so where are we in this transition, right? So you’re saying there’s no need for QNX in a decentralized ECU structure but is it fair to say that we’re still very early into this software transition?
Yes, very early is unfair because people have been working on it for quite some time. But there is definitely an inflection point -- there have been an inflection point in, I would say, the last 2 years. I mean, money is pouring into this from the OEM and the technology partners because everybody realizes that the future is going to be software-defined and it's going to play out at least over the next 10 years. So, if I look at the design wins that we have for launches '24, '25, they still have not approached full HPC implementation so all the OEMs are working really hard on this. It's a very difficult problem to solve. From my perspective, it's probably the most interesting software problem across any industry at this point in time, how to develop a sophisticated software-defined vehicle. So this is going to continue for quite some time and it varies significantly across different OEMs, where they're at.
Okay. Let's talk about the involvement of the OEM, because I think we know on a simplistic level, there is a push by -- everyone says okay, the legacy automakers want to copy Tesla. Tesla controls a lot of their, own software. They do a lot in-house? They do their own middleware, etcetera. give us a sense why this is not feasible. And maybe you can talk a bit to what has happened at VW with CARIAD that VW tried to bring a lot in-house and it’s been choppy?
Yes, so I mean, if you take a step back, I wouldn't say that it's impossible but it's a very, very difficult problem. I mean being the CEO of an OEM today is an incredibly difficult job. You are hit from all angles by a number of different really big megatrends and solving all of them simultaneously is very, very difficult. Why is the software transition particularly difficult? Well, it's particularly difficult because software is one of the most nonlinear functions there is if you look at a company. You can have one software engineer or you can have 100 software engineer, that one guy can make -- have a higher output than the 100 people that you hire. So it's not just throw people at the problem and it's fixed. So I do think it's fair to say that most OEMs have a strong interest in controlling the software stack as this transition goes through.
And that is a major shift, not just on the technology side but also on the commercial side. And for us, for example, there is more and more OEMs requiring direct commercial agreements with us. And I think that's good because I think that makes it easier for us to help them and support them and so forth. That said, on this transition and this is actually at the heart of our value proposition. If you make a strategic call that somewhere along this 10-year journey I am going to own the entire software stack. And I'm going to do that because a big chunk of the value creation and value capture for the car is going to be software-defined. As I go through that journey, how do -- where do I focus my resources, my precious software resources. And our part of our proposition is you should not focus on the plumbing of the software stack.
You should take your precious software resources and focus them higher up in the stack where you drive direct consumer benefits, direct partner benefits, things that customers can see and touch and so forth and let us worry about the underwear and how to interface with the chipsets and so forth and that resonates. It resonates because it reduces complexity for them quite significantly. It improves time to market. It lowers their overall cost. It just shrinks the problem to something more manageable and that is a big trend for us. We see a lot of people that maybe initially had said, I am going to do all of this myself saying, why am, I actually trying. It is hard and slow and it’s not necessarily differentiating for me. So let me focus on where it matters. You had a sub question I think I missed -- probably be up [ph]. Sorry -- yes, I asked a lot yes.
No, that's great. So is it fair to say then the -- you focus on the plumbing, the automakers focus on the application layer or what generally touches the customer. Is it fair to say that with the exception of Tesla to maybe a little bit of myth-busting here? Even though OEMs want to own the software stack, aside from Tesla, there really won't be many others or any others that will want to own or do their own middleware, ADAS, hypervisor, etcetera?
Well, so as with all interesting problems, the devil is in the details. So I think you can control the software stack without writing all the code. And in our particular example, one you control the software stack or RPs. You sign the contract directly with us you put pressure on us you iterate our road map and give us a seat at the table. So and you do that at multiple layers in the various stacks. Just because an OEM has made the strategic decision to own the software stack, it doesn’t mean that there won’t be a mix of commercial software pieces, open source pieces, some code they write themselves, some code comes from someone else. There are different ways of controlling the stack. It doesn’t necessarily mean that you need to write all the code. And Tesla is such an unfair example because there’s such an outlier. I mean it is obviously truly amazing what they managed to achieve. There are very few Tesla’s in the world.
Let's talk about the competitive environment. Google is not a competitor, the chip players are not competitors but we have seen, for instance, Wind River, they're focused on RTOS and Greenhill as well. So maybe you can give us a sense of the competitive environment. Is it a market of several key players? And how does Aptiv's acquisition of Wind River change the environment?
Yes, so let me talk about it broadly and then you can follow-up with specifics. So, the picture that we have been making for the last 7 years supply so there's sort of 2 camps of competition. We had the traditional embedded software vendors, Wind River and Greenhill fits into that category. They are [indiscernible] not so much motor quite frankly we don't run up against them that much anymore but our side. I mean, Wind River - is tremendous sort of break the car and the growth we have for digital cockpit and ADAS, the 2 most sophisticated stacks is a good indicator of how that is playing out. Then you have the other camp which is you go back, again, 5 years or so, it was almost a religion among everything is going to become open -- please help us fix this. So I think those are sort of the 2 categories of competition.
And then, again, as you get into specific industries and deals, there's obviously much more to say. And then I think you had a question around the Aptiv acquisition. So Aptiv been a partner and customer for us. There's no doubt in my mind that this will affect our future business with Aptiv. We still have business with them but obviously, that is going to be affected. It's not material for us in the overall business so from that perspective, not a big deal. I think Wind River has shifted focus over the last several years on the TPG. I think they have spent a lot of time on studio. They spend a lot of time on their cloud offering, maybe invested a little bit less than the performance in the embedded software. I don't have the details, so I can't really comment on the details here. And I think it's a very important area but it's also an area that is very, very difficult to manage.
And the reason it's a very difficult to manage area is because you have the cloud majors and hyperscalers like AWS and Google and Microsoft and so forth. That already provides a portion of that offering in the cloud. I think that is a challenge for them and we'll see how that plays out. In addition, I think if I look at the traditional value chain of the automotive space, where you have a very powerful, strong sophisticated sourcing machine relying on Tier 1s and Tier 2s. I think now if more and more of the car is becoming software defined, I think one of the things the OEM really wants is they want to separate hardware and software.
So providing an integrated solution, adding foundational software and development tools and so forth to a hardware business and then expecting the OEM and say, yes, I’m going to take all the strategic stuff from one vendor. I think there’s an issue -- but the future will tell.
And as far as the competitive environment, just to go back a little bit, another announcement we saw was GM forming a partnership with Red Hat and that's the help on in vehicle operating systems. Is that competition or is still -- there's still place for QNX in that stack?
Yes, so that will fall in that second category. So first of all, I don't have any insider information around what exactly they are doing and so forth. A lot of the public statements are, quite frankly, a lot focused on tooling and so forth. And I think that makes sense. Obviously, that would not be a problem for us. I think at the end of the day, someone like Red Hat and IBM can obviously take an initial resource approach, branch the open source code line and safety certify and so forth. I think they have publicly stated they want to go to ASLB, ASLB is not option. You need to be at ASLD. They have yet to certify it. Let’s see how it plays out. I come back to the fundamental paradox.
So as you drive into the highest requirements for safety and security, in order to get there, you need to branch the software. And if you’re branching, the software, you lose the benefits of open source to a large extent. And I think that is the fundamental question. What we are focused on is we believe there is value from taking advantage of all the benefits that open source has, as you build the entire stack and then taking advantage of the bits and pieces in that stack that require specific capabilities, specific IP and rely on commercial software vendors for it.
We feel we have pretty good traction at present with that approach. And so far, we’re going to continue down that path. Maybe you can talk a bit about some of your award wins and what’s driving this or what’s the path to grow from these. We know that you had an award with BMW. You’re working with CARIAD. I mean you have -- I think you showed unless you’re working with everyone in the industry but maybe talk about some of the recent award wins and sort of what the growth path -- broaden the offer or -- what the state is to get the scope of your offer [ph]?
Yes, so obviously, as you saw in the stats, obviously, we work with a lot of players. And at the heart of our business model is we are a component ingredient provider and it's not about us, it's about the customer that we are in that stack. It's not necessarily public knowledge and so forth. And quite frankly, a lot of our contracts state that we cannot without their written permission, tell you which deals we're in and so forth.
What I think you can do is if you look at the overall market and you look at the progress that we are announcing, if you just take the statement I made initially here, more design wins in the first 6 months than we've ever had for any previous year, you realize that we are in more stacks than we are able to announce. The growth path for us is very simple. It's -- if you focus on automotive, it's the statement around more sockets and more layers. So as the compute domains become more sophisticated. There is room for QNX. There's a market opening up. We believe we have a strong proposition there. Depending on the strategy, we get just the basic foundational RTOS or hypervisor or we get some middleware and frameworks.
And then, I think over the next several years, we will see a third one emerging which is if I have trusted QNX with my 2 main compute domains, there is benefit of using QNX in other commute domains, even if I can find a solution that is similar because everything QNX does is needed for that particular compute need. Because at the end of the day software developers is a scarce resource and I want to reduce the friction and make it as easy as focus on the sensor data and what they do with stuff from the digital cockpit domain. This across domains it is always agnostic, it is hardware agnostic. So it's a very clean solution and it does not make claim to the date that we are not billing data leg, the data is the OEMs which is obviously very important to them. So we are not trying to monetize the data.
What we are trying to do which I think also resonates is that if they use that sort of cloud edge platform they can instead of again building plumbing for sensor data processing. They can focus on deploying the damn models. So they can have all their engineers focus on how do I deploy a machine learning model to get the use case. How do I deploy one use case. They can start working on that as opposed to building foundation to work on what's going to generate for the customer right.
I think that generates. It's a complex solution because the architecture is evolving and many people have already done some work and so it is difficult to abandon work that you have done to go from something new. But we feel great about the progress. You might have seen some of the showcases posh connected where we showcased with Nestle [ph] and actually car.
At CES we'll again do more work on this and actually an important footnote is as we put QNX in the cloud, we are also putting IVY in the cloud which allows to accelerate the ability to test and write implementation for these synthetic sensors and machine learning models. So we feel good about.
Right, let’s grab with because I know we’re close to be at time here. For those who aren’t familiar maybe you could walk us through the [indiscernible] per vehicle fee walk us through the revenue model to understand QNX?
So obviously there are some ins and outs here and things are changing little bit. But simplistically for the core business the QNX software development platform we have three sources of revenue. As you start building sophisticated software stack you need the development tools and you buy license for making use of the tools that we provide to later on making use of QNX. So we get typically upfront payments for that usage. Some customers when they do that they also want a little bit services could be on security, safety security, consultations, help particular implementation or whatever that continues to building as they make the decision. So, when they have made the decision to okay it’s going to be QNX then typically buy even more development seats from us and they start ramping the genuine integration and that’s when our service organization kicks in and we help in the area that they want to help and so forth. But the service piece is not a standalone business for us it’s an enabler to get the software platform.
And then to your point when they have grown through all the work to get ready for production and production kicks in we get a fee for every car that is produced. And it’s important it’s not every car sold it’s every car produced and that is helpful in the current macro environment and that typically runs for many, many years. And throughout those many, many years what also happens and will become more important in the future is they maintain the development tools that they have. They require some extra service. And we believe that at some point will be a growing business because people are going to manage the car throughout the life cycle and they’re going to make changes to the software and they’re going to need additions and so forth. But 3 sources, development seats, services and then royalties. That’s how the business flows.
Okay. We're slightly over time. But I want to thank you Mattias and Tim very insightful, very interesting, especially as the theme of automotive software is becoming much more relevant and much more [indiscernible]. Let’s close the session [ph].
End of Q&A
It’s human nature to be curious, and people have an undying desire to answer every question that comes to mind.
With advances in technology and the connectivity of the internet, questions that might have gone unanswered for eternity have come to a conclusive resolution.
However, even with all of the information at our disposal, there are some questions that simply do not have answers.
There are many questions that have gone unanswered forever and will most likely continue to cause confusion in the minds of those who just need to know. And that list of unanswerable questions is huge.
Some of the questions that plague us are about the concept of time, science, or philosophy. Others are random, weird, or funny and are centered around curiosity, not a bonafide need.
Below is a list of thought-provoking questions that may leave you baffled, send you out in search of real answers, or make you double over in laughter.
1. If God made everything, who made God?
2. Do ghosts exist and, if so, how do we know?
3. How did life first start?
4. Is there anything that can travel faster than light?
5. How did we first determine there was a consciousness and a subconsciousness?
6. Do beings on other planets consider us aliens?
7. If everyone has their truth, how do we know what the real truth is?
8. Why are cars built to go faster than the speed limits?
9. What came first, the sun or the Earth?
10. How far east can you travel before you start traveling west?
This next set of questions can take you down an endless trail of confusion, thinking and rethinking your answers. In the end, you'll have to accept you simply don't know.
11. Was math invented by humans or simply discovered?
12. When you forget a thought, where does it go?
13. What makes you uniquely you?
14. If rules are meant to be broken, why make them in the first place?
15. What do people who have been deaf since birth hear when they think?
16. What do blind people see when they dream?
17. If you try to lose on purpose, but accidentally win, did you win or lose?
18. If you are expecting the unexpected, isn’t the unexpected now expected?
19. When your soul leaves your body, does it look like you?
20. If Adam and Eve were the first and only people, aren’t we all related?
21. If you enjoyed wasting time, were you really wasting time?
22. Who was the first teacher’s teacher?
23. When you wait for your waiter to come take your order, aren’t you now the “waiter”?
24. What exactly was the first person to milk a cow really trying to do?
25. What is the exact definition of perfect health?
26. Do animals have a subconscious?
27. Will reincarnation ever be possible, or does it already exist?
28. Do you really need a license for a self-driving vehicle?
29. Is it possible to know it all?
30. Can technology be used to control our emotions?
Time is a big topic. Because we use it to decide when birthdays, holidays, and other special occasions occur, there tend to be many unanswered questions about the concept.
31. When did time first begin?
32. Is there a reason you are here at this point in your life?
33. Does time end at some point?
34. Will time travel ever be possible?
35. Why do we keep time?
36. Who decided age is based on rotations around the sun?
37. If the early bird gets the worm, why do they tell you that good things come to those who wait?
38. Who created the first calendar and how’d they know where to start?
39. How do we know the future is not actually the past and vice versa?
40. Will there come a time when people will live forever?
41. Will people still drive in 20 years?
42. Does time always move forward?
43. Are past, present, and future real?
44. Is time infinite or will it one day run out?
45. Does time really exist or is it a shared mental construct?
Science has resolved a lot of questions for humankind over time. Still, there are many curiosities for which there are still no answers.
46. Is the Earth alive?
47. Where does the universe begin and end?
48. If you drill a hole through the middle of the earth and leap through, are you falling or floating?
49. Were there people that existed before the universe?
50. If everyone on Earth leapt into the ocean at once, would we flood the world?
51. Do caterpillars know they will morph into butterflies or do they just like cocoons?
52. If we evolved from monkeys, why are there still monkeys running around?
53. Who decided February should have 28/29 days while all the rest had 30/31?
54. Will a journey to the center of the earth ever really be possible?
55. Will we ever find a cure for cancer?
56. How long before people can opt to clone themselves?
57. Is there life on other planets?
58. Will we one day be able to back our brains up on storage devices?
59. If a human being is genetically enhanced, are they still human?
The questions in the section won't necessarily change our lives if answered, but will definitely garner a chuckle or two.
60. Why do people bake cookies but cook bacon?
61. At what age does old age begin?
62. How do you know your life isn’t just one crazy hallucination?
63. If you hit yourself and it hurts, are you weak or are you strong?
64. If something is described as “indescribable,” hasn’t it just been described?
65. How would you look up the word “dictionary” in the dictionary?
66. How far up do bald people go when washing their faces?
67. Why do people say “slept like a baby” when babies wake up throughout the night?
68. If a cyclops closes its eye, is it winking or blinking?
69. Are eyebrows facial hair?
70. Can you talk down to a person taller than you?
71. Are prisons equipped with emergency exits?
72. If you dive into the fountain of youth but can’t swim and drown, will you still live forever?
73. If Cinderella fit the lost slipper perfectly, how did she lose it in the first place?
74. If a word is misspelled in the dictionary, how do we find it?
Do you know someone who randomly asks questions that make you wonder how they got there? Well, there are some things they might have tossed around in their strange minds.
75. What are dreams made of?
76. How long will people remember you once you die?
77. Why set goals if everyone is eventually just going to die?
78. Are soulmates really a thing or do two people just like each other a lot?
79. Why do we have belly buttons for our entire lives?
80. What do they call French kissing in France?
81. What is the wealth and fame threshold for being “assassinated” and not “murdered”?
82. Do dentists go to other dentists?
83. If R-rated movies are for adults, why do children act in them?
84. Are braces removed when someone dies?
85. Since tomatoes are a fruit, should ketchup be considered a smoothie?
86. Does hating hateful people make you a hateful person?
87. If the number 2 pencil is most widely used, why is it not number 1?
88. If people forget about you after you die, did you really ever exist?
89. Do we all hear sounds the same?
Many thinkers have attempted to provide responses to philosophical questions. But there are some that might forever plague us.
90. Are we actually free-willed or are our actions predetermined by destiny?
91. What happens after you die?
92. Is it really possible to be objective?
93. What is the purpose of human beings?
94. What is God?
94. What is the Devil?
96. Who decided what was right and what was wrong?
97. If killing is so wrong, what makes us kill people who kill other people?
98. Was there a time when nothing existed?
99. Is karma real or are we just making it up so people will be kind?
Some questions can only be described as "weird." Sure, we might want to know, but is it really necessary?
100. Which came first, the fruit called “orange” or the color?
101. Are we really living or are we actually dying slowly?
102. At what point does it go from partly sunny to partly cloudy?
103. Why does glue not stick to the inside of the bottle?
104. In the word “scent” which letter is silent: the "s" or the "c"?
105. What is the color of a mirror?
106. If it loses its wings, is it still a “fly”?
107. Why does a “cold” make your body temperature hot with fever?
108. If you drop soap on the floor, is the floor now clean or is the soap now dirty?
109. How do we know when it’s “all said and done”?
110. What came first, the chicken or the egg?
NyRee Ausler is a writer from Seattle, Washington, and author of seven books. She covers lifestyle and entertainment and news, as well as navigating the workplace and social issues.
GK Q&A for Class 12: Here we are providing Q&A covering various sections of general knowledge, including science, polity, history, geography, current affairs, etc., which not only help them increase their IQ level but also help them grow on a personal and academic level. Take the quiz below!
GK Q&A for Class 12: The 12th class is the most crucial phase of education where students are asked to make several decisions, like which course to choose after 12, stream, which competitive examinations they will face, etc. General Knowledge or General Awareness is an important section for most competitive examinations. Here we have compiled some important Q&A covering various courses so that students will gain knowledge and also help them prepare for competitive examinations. The quiz will definitely help you in preparing for future competitive examinations and also in cracking entrance tests for colleges and universities.
Therefore, general knowledge is a significant aspect of a student's life that can't be ignored. Though it is not always prescribed in the syllabus, it also forms an important foundation for intellectual building. Take the quiz!
Solve| 50+ GK Q&A for Class 10
1. Where is Chota Char Dham, a famous Hindi pilgrimage circuit, located?
Ans. It is located in the Indian Himalayas, in the Garhwal region of the state of Uttarakhand. The Hindu pilgrimage circuit consists of four sites, namely Yamunotri, Gangotri, Kedarnath, and Badrinath.
2. The SVAMITVA scheme is implemented by which ministry?
Ans. It is a Central Sector Scheme of the Ministry of Panchayati Raj. On April 24, 2021, that is on National Panchayati Raj Day, the scheme was launched by PM Narendra Modi after the successful completion of the pilot phase of the scheme (2020–2021) in 9 states. The SVAMITVA Scheme is a reformative step towards the establishment of clear ownership of property in rural inhabited areas by mapping land parcels using drone technology and providing a "Record of Rights" to village household owners along with the issuance of legal ownership cards (Property cards/Title deeds) to the property owners.
3. What is the theme of Earth Day 2022?
Ans. Earth Day is observed on April 22nd annually to protect the planet from things like pollution and deforestation. The Day was founded by American senator Gaylord Nelson for environmental education. The theme of World Earth Day 2022 is "Invest In Our Planet".
4. What is Aurorae?
Ans. They are produced by the collision of charged particles from the magnetosphere of Earth which arise due to solar winds.
5. Which scheme has been selected for the Prime Minister's Award for Excellence in Public Administration 2020 under the category "Innovation (General)-Central"?
Ans. The UDAN (UdeDeshkaAamNagrik) Scheme has been selected for Prime Minister’s Award for Excellence in Public Administration 2020 under the category “Innovation (General) – Central”.
6. The atomic theory of matter was first proposed by whom?
Ans. John Dalton's most influential work in chemistry is his atomic theory. His theory is based on the law of conservation of mass and the law of constant composition.
7. Who propounded the law of segregation?
Ans. Gregor Mendel proposed a model where pairs of "heritable elements," or genes, specify traits. He studied the inheritance of traits in pea plants. He defined the law of segregation. When gametes are made by an organism, each gamete receives just one copy of a gene that is randomly selected and is known as the law of segregation.
8. What is the Doctrine of Lapse?
Ans. The Doctrine of Lapse was introduced by Dalhousie who was the Governor-General. It was the pro-imperialist approach to expand the realm of the British Kingdom in India. It was used by him to annex the independent Indian States. Basically, it was an idea to annex those states which have no heir means states have no heir they get lapsed the right of ruling and it will not be reverted by adoption.
9. Who is the writer of Neel Darpan, the Bengali play?
Ans. Dinabandhu Mitra wrote the Bengali play named Neel Darpan.
10. Where is Shirui National Park (SNP) located?
Ans. It is located in the state of Manipur in India. It was established in 1982.
11. Who is popularly known as the father of modern medicine?
Ans. Hippocrates is considered to be the father of modern medicine.
12. Who was the first chairman of the National Commission for Women?
Ans. Jayanti Patnaik was the first chairman of the National Commission for Women.
13. What is Manganin?
Ans. Manganin is an alloy of copper, manganese, and nickel. It has virtually zero temperature coefficient of resistance.
14. Nokrek Biosphere Reserve is located in which state of India?
Ans. Nokrek Biosphere Reserve is located in Meghalaya.
15. Name the sport that is associated with the Ryder Cup?
Ans. Ryder Cup is related to Men's Golf.
Solve| 50+ GK Q&A for Class 9
16. Who discovered Nickel?
Baron Axel Fredrik Cronstedt, a Swedish chemist and mineralogist, prepared an impure demo from an ore containing niccolite (nickel arsenide).
17. What is the RoDTEP Scheme?
Ans. RoDTEP stands for the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. The scheme would refund to exporters the embedded central, state, and local duties or taxes that were so far not been rebated or refunded. Therefore, placing India's exports at a disadvantage. Under the scheme, the rebate would not be available in respect of duties and taxes already exempted, or remitted, or credited.
18. What do you mean by Etchplain?
Ans. It is a plain that is formed in a place where the bedrock undergoes a considerable amount of subsurface weathering, corrosion, and decomposition deep underneath in a process commonly referred to as etching.
19. When was the Indian National Congress (INC) founded?
Ans. INC was founded on December 28, 1885, on the premises of the Gokuldas Tejpal Sanskrit School in Bombay. It was presided over by W.C. Banerjee and attended by 72 delegates. A.O. Hume played an instrumental role in the foundation of INC.
20. What is the difference between White Gold and Yellow Gold?
Ans. White Gold is more durable than Yellow Gold.
21. The disease "Karnal bunt" is found in which cereals?
22. Who was the last Mughal Emperor of India?
Ans. Bahadur Shah II, also known as Bahadur Shah Zafar, was the last Mughal emperor of India. He was a poet, a musician, and a calligrapher. He was more of an aesthete than a political leader. He was born on October 24, 1775, in Delhi and died on November 7, 1862, in Rangoon [now Yangon], Myanmar.
23. In which Indian state is the Harauti language spoken?
Ans. Harauti also known as Hadauti or Hadoti is a Rajasthani language.
24. What do you understand by Freight on Board?
Ans. It is also known as Free on Board (FOB) which is a term used to indicate who is liable for goods damaged or destroyed during shipping. This term affects the buyer's inventory cost adding liability for shipped goods and increasing inventory costs and reducing net income.
25. What is the theme of World Haemophilia Day 2022?
Ans. The theme of World Haemophilia Day 2022 is "Access for All: Partnership. Policy. Progress. Engaging your government, integrating inherited bleeding disorders into national policy". World Haemophilia Day is observed on April 17 to spread awareness about haemophilia and other inherited bleeding disorders. The day is celebrated in honour of Frank Schnabel, who was the founder of the World Federation of Haemophilia.
26. Who first proposed the atomic theory of matter?
Ans. John Dalton
27. The book titled “1283” illustrates the career of which Football legend?
28. What does ”Global Dimming” mean?
Answer: Gradual reduction in the amount of global direct irradiance at the Earth’s Surface.
29. Which viceroy of India withdrew the Doctrine of Lapse?
Ans. Lord Canning
30. Harauti Language is spoken in which Indian State?
Solve| 50+ GK Q&A for Class 8
1. Which of the following were the Moderate leaders?
A. W. C Banerjee
B. Gopal Krishna Gokhale
C. R.C. Dutt
D. All the above
Explanation: The first or early phase of Indian Nationalism is also termed as Moderate Phase (1885-1905). Moderate leaders were W.C Banerjee, Gopal Krishna Gokhale, R.C Dutt, Ferozeshah Mehta, George Yule, etc.
2. Which of the following are the symptoms of Haemophilia?
A. Big bruises
B. Bleeding into muscles and joints
C. Both A and B
D. Neither A nor B
Explanation: Haemophilia is a medical condition that is mostly inherited. In this, the ability of the blood to clot is severely reduced. Therefore, a minor injury can cause severe bleeding. Symptoms are big bruises, bleeding into muscles and joints, spontaneous bleeding, etc.
3. In which of the following states Hornbill festival is celebrated?
C. Himachal Pradesh
Explanation: Hornbill festival is celebrated in Nagaland.
4. Consider the following statements.
1. 1905 – Congress session in Banaras. Presided over by Gopal Krishan Gokhale.
2. 1906 – Congress Session in Calcutta. Presided over by Dadabhai Naroji.
3. 1907 – Congress Session in Surat on the bank of the river Tapti. Presided over by Pherozeshah Mehta
Which of the statements given above is/are correct?
A. Only 1
B. 1 and 2
C. 2 and 3
D. All the above
1905 – Congress session in Banaras. Presided over by Gopal Krishan Gokhale.
1906 – Congress Session in Calcutta. Presided over by Dadabhai Naroji.
1907 – Congress Session in Surat on the bank of the river Tapti. Presided over by Pherozeshah Mehta
5. Consider the following statements regarding ICOMOS.
1. It is a global non-governmental organization associated with UNESCO.
2. It is located in the United States.
Which of the following statements is/are correct?
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: ICOMOS stands for the International Council on Monuments and Sites. It is a global non-governmental organization associated with UNESCO. It is located in Paris, France.
6. Who of the following is the chairman of the Parliamentary Affairs Committee?
B. Prime Minister
C. Home Minister
D. None of the above
Explanation: Home Minister is the chairman of the Parliamentary Affairs Committee.
Solve| 60+ GK Q&A for Class 6
7. On which of the following principles electron microscope work?
A. Faraday's law of Electromagnetic induction
B. Quantum phenomena
C. Wave Nature of electrons
D. None of the above
Explanation: Electron microscope works on the principle of the wave nature of electrons.
8. Low clouds are also known as .......
D. All the above
Explanation: Low-level clouds (cumulus, stratus, stratocumulus) that lie below 6,500 feet.
9. Which of the following statements is/are correct?
1. On 12 November 1930, First Round Table Conference was held.
2. On 5th March 1931, Gandhi Irwin Pact was signed.
3. On 23rd March 1931, the Trial of Bhagat Singh, Rajguru, and Sukhdev.
A. 1 and 2
B. 2 and 3
C. 1 and 3
D. All the above
On 12 November 1930, First Round Table Conference was held.
On 5th March 1931, Gandhi Irwin Pact was signed.
On 23rd March 1931, the Trial of Bhagat Singh, Rajguru, and Sukhdev
10. Consider the following statements regarding the India Meteorological Department (IMD)?
1. It was established in 1890.
2. It is an agency of the Ministry of Earth Sciences.
Which of the following statements is/are correct?
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: IMD was established in 1875. It is an agency of the Ministry of Earth Sciences.
11. With which of the following enzymes do cows digest cellulose?
Explanation: Cows digest cellulose with the help of beta-amylase.
12. In which of the following state, Mekadatu Dam is located?
A. Tamil Nadu
Explanation: Mekadatu Dam is located in Karnataka.
Solve| 50+ GK Q&A for Class 5
13. Consider the following statements regarding the structure of cells.
1. Plasma Membrane is the outer covering of each cell. It is present in cells of plants, animals, and microorganisms.
2. Cell Wall occurs in animals and is present outside the plasma membrane.
Which of the following statements is/are correct?
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: Plasma Membrane is the outer covering of each cell. It is present in cells of plants, animals, and microorganisms. Cell Wall occurs in plants and is present outside the plasma membrane.
14. What is Puthandu?
A. It is also known as Puthuvarudam or Tamil New Year.
B. The date of the festival is set with the solar cycle of the lunisolar Hindu calendar, as the first day of the Tamil month Chithirai.
Select the correct answer
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: Puthandu is also known as Puthuvarudam or Tamil New Year. The date of the festival is set with the solar cycle of the lunisolar Hindu calendar, as the first day of the Tamil month Chithirai.
15. Name a Prime Minister of India who did not face the Parliament?
A. Morarji Desai
B. Charan Singh
C. Gulzari Lal Nanda
D. None of the above
Explanation: Charan Singh was the only PM who did not face the Parliament.
16. Which of the following books is/are written by Dr. B.R. Ambedkar?
A. The Problem of the Rupee: Its origin and its solution
B. Castes in India: Their Mechanism, Genesis and Development
C. The Annihilation of Caste
D. All the above
Explanation: All the above-mentioned books are written by Dr. B.R. Ambedkar.
17. Consider the following statements.
1. In 1945 – Shimla Conference or Wavell Plan was proposed by Lord Wavell to solve the political deadlock.
2. In 1946, Cabinet Mission Plan was announced by PM Clement Attlee.
Which of the following statements is/are correct?
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: In 1945 – Shimla Conference or Wavell Plan was proposed by Lord Wavell to solve the political deadlock. In 1946, Cabinet Mission Plan was announced by PM Clement Attlee.
18. In which of the following year Prevention of Money Laundering Act was passed?
Explanation: Prevention of Money Laundering Act was passed in 2002.
19. Consider the following statements regarding Naba Barsha.
1. It is the celebration of the new year in West Bengal as per the Bengali Calendar.
2. It is also popularly known as the PoilaBaisakh.
Which of the following statements is/are correct?
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: Naba Barsha is the celebration of the new year in West Bengal as per the Bengali Calendar. It is also popularly known as the PoilaBaisakh.
20. What is Neptune?
1. It is a coastal anti-ship cruise missile.
2. It is capable of the destruction of naval vessels in a range of 300 km.
Which of the following statements is/are correct?
A. Only 1
B. Only 2
C. Both 1 and 2
D. Neither 1 nor 2
Explanation: Neptune is a coastal anti-ship cruise missile. It is capable of the destruction of naval vessels in a range of 300 km.
BlackBerry Ltd. is making its QNX operating system, which is used to power cars and edge computing devices, available on Amazon Web Services Inc.’s cloud platform.
BlackBerry announced the update today at AWS re:Invent 2022 in Las Vegas.
Originally known as a handset maker, BlackBerry has over the past decade shifted its focus to the enterprise software market. The Waterloo, Canada-based company now generates most of its revenue from selling cybersecurity tools and software for powering connected devices. QNX, the operating system that BlackBerry is making available on AWS, is one of its flagship products.
QNX is a specialized operating system that can be installed in a vehicle to power its instrument cluster and other subsystems. According to BlackBerry, the software has been deployed in more than 215 million vehicles worldwide.
QNX is what’s known as a real-time operating system, or RTOS. An RTOS is a specialized type of operating system that ensures applications complete important processing tasks within a specific time frame. The ability to complete processing tasks without unexpected delays is important for many vehicle subsystems, particularly those that are involved in managing a car’s movement.
QNX includes features that optimize the reliability of a vehicle’s core software components. According to BlackBerry, QNX ensures that a failure in one software component won’t cause the others to malfunction. Additionally, the operating system can automatically restore malfunctioning software thanks to a built-in recovery tool.
BlackBerry will now enable automakers to run QNX in Amazon EC2 cloud instances. According to the company, an automaker’s developers can use a cloud-based deployment of QNX to develop and test new vehicle software. Tasks such as evaluating the reliability of a new application are simpler to carry out on cloud infrastructure than on a test vehicle running QNX.
Developers can use cloud-based QNX deployments alongside another BlackBerry offering called IVY. IVY is a suite of software tools designed to help automakers more easily process data from their vehicles’ built-in sensors. Some components of the toolkit are designed to run on a vehicle’s onboard computer, while other components are hosted in AWS.
According to BlackBerry, both QNX and IVY can run on EC2 instances powered by AWS’ Graviton2 processor. Graviton2 is an internally-developed processor that AWS debuted at re:Invent last year. It promises to provide up to 40% better price performance than comparable chips.
“Connecting our partners with other leaders around the technology that is transforming industries is what powers the innovation possible on AWS,” said Wendy Bauer, general manager of AWS Automotive. “Unlocking the potential of the cloud via our Graviton2 processors and seeing the ways companies like BlackBerry are making meaningful change – and helping enable hardware parity in automotive development — is energizing for AWS and the industry at large.”
BlackBerry has made the cloud version of QNX available in early access to a select group of customers. According to the company, those customers include automakers as well as a number of major auto parts suppliers.
BlackBerry says that the availability of QNX in AWS will also benefit companies beyond the auto industry. It envisions customers in the robotics, medical equipment, industrial controls, aerospace and defense sectors using cloud-based QNX environments to support their software development projects.
Q. I have a 1998 Ford Crown Victoria that is losing coolant, I have checked the system for leaks and haven’t found any. Even after being parked for a few days there are no wet spots on the ground. The oil is clean with no signs of no moisture in it. I am adding about a quart of coolant a week, what is the issue.
A. The problem is most likely a leaking cylinder head gasket. The standard procedure is to pressure test the cooling system and if the system holds pressure, then the next step is to look for an internal leak. You can purchase a kit that uses a special chemical to look for exhaust gases in the cooling system. These kits are $35-$50 and are easy to use and quite accurate.
Q. My daughter has a 2007 Toyota Camry Hybrid. Lately the car has started to vibrate/slide as she brakes, as if the ABS system is engaging even though the road is clear and dry. The light with the squiggly lines will appear briefly. No other lights activate. Our mechanic has been able to experience the issue but has not been able to fix the issue. Any advice?
A. The anti-lock brake system uses sensors at each wheel that monitor wheel rotation. What you describe as a phantom ABS application can usually be traced to a rusted or cracked ABS tone wheel. A careful inspection and some testing should be able to pinpoint the problem.
Q. My Mazda 2014 CX-9 has about 55,000 miles on it. During a couple of four-hour drives on the highway I noticed a hum coming from the car. After some novice detective work figured it to be the right rear wheel bearing/hub was the problem. I removed the assembly and replaced it with a “sorry to say” economy brand part I purchased online. I road tested it and for about 300 miles of highway driving, no sounds. Unfortunately, after a few hundred more miles the same “hum” is back, although less intense. I did more internet research, and some comments were that this brand failed prematurely. And other sites mentioned a bit of a sophisticated install process. The replacement of this bearing hub is straightforward: remove defective part and install replacement. Four bolts hold the assembly to the rear axle assembly, and you just remove and reinstall the axel nut. Mixed recommendations on the torque specs for the axel nut: 200ftlbs/258ftlbs. Do you think I just got a lemon part? Did I install it incorrectly? Not like the old days when you’d repack the wheel bearings and “set” them with rotating the wheel and tightening and backing off the holding nut.
A. I suspect you may have gotten an inferior part. You are correct the replacement of the bearing is fairly simple. According to AllData the technical database I use, the attachment bolts should be tightened to 58–75-foot pounds and the axle nut is tightened to 175-202 foot pounds of torque.
Q. I have three simple questions that I can’t get an answer for so I’m coming to you. What window wash fluid do you recommend, especially in the cold Northeast states, are there any window treatment products do you recommend that shed water or prevent fogging and are gas additives worth the money? My car is a 2015 Kia Soul, but I’m sure the advice applies to most cars.
A. When choosing windshield washer fluid (which is basically soap, water and alcohol) look for fluid that will protect against freezing to at least 20 degrees below zero. Some fluids will have additives that do a better job of removing bugs and other debris and some will bead water. What ever fluid you choose, the best results come from a clean windshield. Clean the windshield inside and out with a good quality window cleaner and then go over the windshield with a clean microfiber cloth. Regarding window treatments, I have tried some and had mixed results, so I tend to stay away from them. If you are trying to prevent fogging, first make sure your defroster is set to fresh air. Fogging happens when there is a temperature differential of the inside and outside of the windshield. A DIY method to prevent fogging is to clean the window with shaving foam. I haven’t tried it on my car but it works on my bathroom mirror. Regarding fuel additives, adding a fuel injector cleaner periodically and using a gas line antifreeze just before cold winter temperatures can’t hurt, although typically not necessary if you use quality fuel and keep the fuel tak at least half full to prevent moisture.
Q. My 2008 Suzuki XL7, runs great but the RPM (idle speed) will dip or hesitate? Again, it runs great on the highway. I think it’s the timing belt or serpentine belt is off, what do you think?
A. A worn timing or serpentine won’t cause an engine to idle poorly. I suspect there is a fuel issue. This could be a clogged/dirty fuel injector, vacuum leak or even a sticking exhaust gas recirculation (EGR) valve.
Q. Let me first say that I enjoy the insight that comes from you on both your radio show and Newsday. My question is about thread sealant. When doing routine repairs on my vehicles (brakes, suspension etc.) is it advisable to use thread sealant as an additional measure of safety or is it ok to just tighten nuts and bolts according to manufacturer’s specification?
A. Topically use a thread locker (Loctite is one) when that bolt is under extreme stress or instructed to by the vehicle manufacturer. If the fasteners are something that is something that are removed periodically, I wouldn’t use thread locker, just tighten to manufactures specifications.
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Remember that time the internet chastised BMW for charging a subscription fee for heated seats? BMW eventually put on its flame suit and clarified that its subscription was only for owners that didn’t purchase heated seats initially, yet that still meant it had the parts installed in every car that could subscribe, but didn’t offer it to the consumer unless they paid up. This type of behavior is becoming more frequent in the auto industry, proving that pushing consumers towards services that earn automakers recurring revenue is, unfortunately, the future.
Subscriptions are a love-hate relationship that have existed for decades. You subscribe to music and video streaming services, pre-curated dinners, entertainment, delivery services, or maybe even a box with dog toys in it. It’s only natural that the auto industry would tap into the same market.
With changes to technology and the legacy auto sales model, the auto industry is already doing exactly that. The writing has been on the walls of executive offices for years, and companies are pivoting to offering software to enable automakers to sell vehicles with features more akin to the subscription-as-a-service design. It’s time to take a serious look at the future of cars because heated seats are just the cushion for what’s to come.
What’s Driving Change
Wall Street loves subscriptions. We’re not just talking about the auto industry here—in general, a subscription is a way to achieve annual recurring revenue, something that helps to predict the health of a company outside of just the amount of products it sells in a year. And since stock prices are generally forward-looking, it makes sense to base a company’s valuation on something that it will continually earn from.
The next decade will prove to go down as one of the most interesting in automotive history—perhaps only second to the introduction of the modern automobile. You see, the ice is thawing and the golden age of the combustion engine is coming to a close, albeit with some well-placed resistance from enthusiasts and silver-haired people in positions of power. But like life’s three guarantees, the rise of the electric car is inevitable.
The average new car buyer is more interested in EVs than ever before. And why wouldn’t they be? Every modern automaker is pushing EVs as they work to achieve a high-volume output of battery electric vehicles. And one of the biggest selling points of an electric car is its reduced operating cost over the lifespan of the vehicle. That sparks one big question from both automakers and the network of dealerships that sell their cars: where is the after-sales revenue coming from?
According to automakers, the answer is software. Whether it be subscription-based, or one-time purchases to increase power output, automakers are looking to the digital world to increase profits even more. Stellantis CEO Carlos Tavares anticipates that the company will rake in $22.5 billion in software sales alone by 2030.
Alongside the rise of EVs comes a world of connected cars. The ability to phone home to the mothership (and in some cases, one another) enables automakers to rake in huge sums of cash through software sales, data collection, and cost-cutting means once thought to be impossible. Picture an invisible person riding alongside you at all times, collecting every iota of data about your driving and the environment, then beaming it back to the mothership to be analyzed by clusters of computers. That’s the power of connected cars.
Dealerships, however, aren’t really getting a direct cut of the revenue once the car leaves the lot, which means that the traditional car dealership model could be in for a big change, too.
Legacy automakers are married to the dealership model. Like it or not, they rely on these franchises to handle the maintenance, repair, and sale of their vehicles.
With the rapid transition to electrification, many new automakers have begun to pop up, and these companies have specifically avoided the idea of utilizing distributed dealership franchises to handle the after-sales experience. This direct-to-consumer model has sparked quite a bit of controversy in the industry, especially amongst new car dealers that rely on the legacy model in order to stay afloat, but it has been hugely successful at improving the amount of money that stays in the OEM’s pocket. In fact, Ford CEO Jim Farley recently suggested that the direct-to-consumer, fixed-price model has a $2,000 price advantage over legacy automakers.
Ford CEO Jim Farley shows off the F-150 Lightning
When you walk into a dealership, you typically aren’t being offered a subscription to anything since after-sales subscription purchases don’t exactly make the dealer more money. For example, buying a subscription to start your car remotely from the OEM’s app is money directly into the automaker’s pocket and not to the dealer. However, a car salesperson is conditioned to talk up features that might bring an OEM a subscription purchase later on—like pushing a trim level that adds built-in hotspot functionality might result in a higher trim level being sold, essentially driving up the price. But the dealership doesn’t actually get money from those subscription services that the customer purchases to actually use the feature.
Despite not making money on the subscription models, some dealerships still foresee it as a potential way to streamline their own operations.
“I really like the subscription model because it leaves the economies of scale and allows for a broader use case for the vehicles I stock. It has strong benefits for the fleet market over retail, quite frankly,” Ryan Pritchard, Chief Revenue Officer of Pritchard Companies, a national enterprise of automotive dealerships, said. “For example, power windows and power locks. Some fleets want it, some don't. But a dealer could stock just one vehicle that can activate [the feature].”
That streamlining could potentially save the dealership operational expenses down the road. And in reality, it’s not like the dealership makes a ton of money on the front end of a new vehicle purchase anyway. Instead, the dealership might focus on how much it can make through the backend of the deal through avenues, like financing and OEM incentives.
But where uncertainties start to arise are with after-sales service. Dealers make substantial revenue from vehicle service, and that could be a real problem when looking into the future of the auto industry.
The average age of an on-road vehicle is just over 12 years. Given that some states are looking to ban the sale of gas cars by 2035, it could be very possible that EVs make up the vast majority of vehicles on the road by 2050. By this time, the dealership model could be significantly disrupted given the lack of vehicles coming in for general maintenance items. While it’s impossible to suggest that EVs won’t need repairs, maintenance items—oil changes, brakes, gaskets, and other items linked to combustion powertrains—may be significantly reduced. And as automakers become more seasoned in building out technologically complex vehicles, the trips for electronic-related repairs could also be reduced.
While automakers don’t lose money on service directly—the cost of labor is revenue generated by the dealership—they do lose out on the revenue generated by part sales, meaning the need to make up for that loss somewhere else, like subscription fees and software sales.
The lack of regular maintenance could eventually become a big problem for dealerships in the future. In fact, this may pivot the entire vision of what a new car dealership actually is. Instead, the dealer might become a pseudo-fulfillment center, where customers can preview models, take delivery of made-to-order vehicles, or bring their car in for service when it’s needed. The dealership might also focus on core services, such as sensor calibrations, battery refurbishing and conditioning, or other general maintenance items, albeit less frequently than with an ICE vehicle.
And that face, the physical location where a customer can go, makes all the difference, according to Pritchard.
“Somebody has to own a relationship,” he said. “It comes down to having a responsive service network. And in order to do that, I really think it would be fruitful to not cancel the dealer.”
Consumers Don’t Like Subscriptions… Yet
It’s no secret that the average car consumer—at least from an enthusiast standpoint—is very anti-subscription. Nodding back to BMW’s heated seat subscription snafu from earlier this year, many consumers responded by bashing the automaker. Some swore off the brand altogether due to its continued stance towards subscription models, and others maintained that once a vehicle is equipped with hardware, the owner of the vehicle should have every right to use the hardware that is essentially standard.
Consumers have a particular bone to pick with automakers who like to constantly remind owners of the pay-to-win mentality. Audi, for example, was berated for doing exactly that in the new E-Tron just months prior to BMW’s debacle.
In both of these cases, the feature responsible for the backlash was available to purchase up-front but ultimately wasn’t selected. This is something that Pritchard believes needs to be fixed before consumers ultimately accept the idea of subscription models.
“The feedback I received was, ‘I didn't ask for heated seats, I bought the base model. And now I'm reminded every day that I don't have the heated seats,’” said Pritchard. “So I think for this model to work, the consumer has to have the option to opt-in and pay for the feature in full upfront, versus the alternative.”
If automakers fix this glaring in-your-face issue and sensibly make subscription options available, it could push some consumers towards subscriptions rather than away. Behind the curtain is the hidden potential for the consumer to save a bit of cash.
Cars are also becoming more expensive thanks to the amount of tech packed in. As automakers purchase a higher volume of components to achieve both modularity and price benefits (again, economies of scale), it becomes possible to stuff these components into vehicles at little-to-no extra cost. Tesla, for example, recently hiked the price of its Full Self-Driving (but not really) Beta software to $15,000. That’s not exactly chump change—it’s enough to raise a vehicle’s monthly payment by around $300, and if the owner purchases a new car, the feature doesn’t travel with the owner. Instead, an owner can opt to subscribe to FSD Beta for $199 per month and not have any long-term financial commitment.
For a consumer, this means the ability to potentially enable features once locked behind higher-cost trims à la carte and possibly even save money in the long term should they only purchase features seasonally. For automakers, it means double-dipping with no extra cost.
The potential cost savings, combined with a new generation of car buyers, just may be the ticket for subscriptions to become favorable.
“If it's rolled out appropriately, I think [a subscription] lends itself to a very attractive model for a new generation,” Pritchard said. “Right now, the people that buy cars are the same people that bought CDs, whereas tomorrow, the people who are subscribing to cars are the ones subscribing to Spotify, or subscribing to Netflix. So you've got this millennial mindset that I really think this is accommodating.”
Two Winners: Manufacturers and Big Data
Manufacturers really are the winner in the end when it comes to subscriptions. While the consumer may see a benefit, automakers are seeing dollar signs—and not just at the business-to-consumer (B2C) level, either. In fact, multiple companies have launched efforts to help automakers generate revenue up and down the supply chain with business-to-business (B2B) revenue models.
This revenue is achieved by partnering with a service that provides data brokering capabilities like BlackBerry’s IVY. Automakers can essentially sell the anonymized data collected from their vehicles to Tier 1 suppliers—think Bosch or Magna being able to learn about its components in real-time and for diagnostic purposes without ever having to physically touch one of its components again because the vehicle is connected and automatically supplying this telematic information to the OEM.
“You get to know your vehicle better. You know how it's been utilized in [different] markets and you can see the interactions of how the car has been used and operated,” Blackberry's Vice President of IVY, Peter Virk, said in an interview with The Drive.
He pointed out that people have been driving ICE cars for the last half-century. “So OEMs have gotten very good at knowing how those cars operate. But EVs are a bit of an unknown. Are people always supercharging? Trickle charging them? Waiting till they're empty? Always topping them up? What are the weather challenges happening? And so forth. There's a whole piece that the OEMs use themselves to Boost their product. That helps the whole ‘saving money’ piece.
“Then, there's the element of making money,” Virk went on. “So this is where the OEMs could say, ‘Okay, if we've got these data points together, and these ecosystem providers, we could start to generate revenue by selling a new software-defined feature, function, or service.’”
Companies like Sonatus are working to make these data points not just readable, but also actionable on a software level through what is essentially a software-defined vehicle. Jeff Chou, the CEO and co-founder of Sonatus, told The Drive that this opens up virtually limitless possibilities for automakers to act on data points and incorporates existing hardware into brand-new vehicle functions for additional revenue.
For example, if an automaker wanted to spice up its winter package, it might use the logic from Sonatus’ system to learn the outside temperature of the vehicle, the weather forecast in the vehicle’s current location, and the vehicle’s typical departure times to know when to flip on heated seats so that they are ready for the driver by the time they are ready to drive. Or, of course, that functionality could be baked into an automaker’s app, which a subscription fee is then associated with. Another prime example is parental controls. Sonatus’ software integration opens up the capabilities for parents to set a digital profile for teen drivers that provides geofencing capabilities, driver behavior alerts, and even time restrictions around the hours someone can drive—almost like an enhanced version of a valet key.
It also enables automakers to continue earning revenue after the vehicle leaves the dealership and even beyond the first owner by coupling used vehicle buyers to the subscription model later on in life.
“It’s like a laptop, you don't buy them on day one for what they do on day one,” said Chou, referencing new vehicles. “They evolve over the course of your ownership. And we see vehicles in the same way.”
“[Automakers] need to have a reason why people upgrade every three to seven years when they buy a new car. A subscription model helps ease that pain so that they're not paranoid, like, ‘How do I convince my customers to buy a new car?’ Well, the answer is you're not making money on the printer. You're making money on the ink. So what you want to do is you want to sell the platform—the car—but then to get the upgrades, that is when you have a subscription.”
Chou said that Sonatus also offers data brokering services, much like BlackBerry’s IVY, and expects that to be a large portion of supplier-stack revenue for automakers.
Other Forms of Revenue Generation for OEMs
Data-driven subscription products will soon be a huge profit driver for automakers on both the B2B and B2C sides. There are also two other areas that companies like BlackBerry and Sonatus expect automakers to tap into for profit.
The first is usage-based products. Insurance is something that the auto industry has been seeing a lot of. It started with those pesky little OBDII dongles, but has since progressed to in-car telematics that are wirelessly beamed to insurance providers. Some OEMs, like Tesla, are even building out their own insurance products as an additional revenue stream.
Likewise, predictive maintenance falls under the same category. Automakers can enhance their visibility into service needs beyond the typical mileage-based service intervals, predictively pumping maintenance needs to the owner and dealer simultaneously for additional revenue. And in a world where dealer profits may ultimately be disrupted by the move towards electrification, this could be a big help in increasing service revenue for dealerships.
Speaking of electrification, don’t forget about usage-based charging subscriptions. Automakers may look towards partnering with large EV charging networks to form tiered or usage-based charging tied directly to the vehicle (so as long as it supports ISO 15118).
The second category is something we’ve seen poked at before: in-vehicle purchases. Automakers have begun to tap into this market already by offering owners the ability to treat their cars like a marketplace to order food, beverages, or parking straight from the vehicle’s infotainment screen. Some automakers may be looking to take a cut directly from the payment processor or reap advertisement fees from partnering companies that may want to advertise their products inside of the vehicles.
As the old guard passes the torch to younger car buyers, automakers are questioning whether or not the idea of car ownership is ultimately appealing. In sprawling urban centers, many commuters have ditched the idea of four wheels altogether. In 2019, the Wall Street Journal published an article showing that fewer teens were springing for licenses than ever before.
Obviously, cars aren’t going anywhere anytime soon. And automakers clearly need customers in volume in order to sell vehicles at an affordable price, meaning this could be perceived as a potential problem in the future. So the answer might be turning the complete vehicle ownership experience into a subscription.
If that sounds familiar, it’s because some automakers have tried to do exactly that before ultimately hanging up their hats. Dealers weren’t happy with the idea of being cut out of the loop, either, which may only be part of the reason these services didn’t take off. But what if a customer can look to one provider and pay for all of their vehicle needs? Think registration fees, insurance, and maintenance—all in the form of a single payment to one company. The subscription pill might be easier to swallow if customers are already used to microtransactions and subscriptions in the vehicles, which is exactly why the in-car subscription could soon begin to make its way to a new car near you in the coming years.
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Q. I was following my wife as she was driving her 2017 Toyota Camry down the highway last week heading to Maine. When she first got on the highway there must have been a gallon of water that came out of the tailpipe. Is this serious?
A. When an internal combustion engine burns a gallon of gasoline it makes nearly a gallon of water. Generally, this water gets so hot it disappears as steam vapor. If your wife’s car in driven primarily short distances the water collects in the muffler. When she accelerated out on the highway the collected water was forced from the exhaust system. This is completely normal and also explains why muffler systems rust from the inside out.
Q. I have a 2002 Hyundai Elantra that has a crankshaft seal leak. The mechanic is suspicious that the engine has a problem. As of right now he is saying that I might be looking at as much as $2500 to fix the oil leak. Can you give me some advice?
A. There have been problems with the thrust bearing wearing on the 2.0-liter four cylinder engines in some Hyundai models. When these bearings wear or in some cases fall out all together the crankshaft “walks” in the engine block and causes the crankshaft seal to leak. To replace the bearings is a big job, taking nearly 13 hours. At 20 years old it may make more sense just to live with the oil leak.
Q. My check engine light came on and I had a diagnostic check, and nothing was wrong. Since then, the light comes on once every two weeks. What should I do?
A. If the check engine light comes on there is a problem of some kind. When the light is on, go back to the repair shop and have them check the car for a trouble/fault code. This code won’t pinpoint the exact cause of the problem but will lead the technician to the proper repair.
Q. Electric vehicles are always in the news and in fact I don’t go a day now without seeing some electric vehicle. But my question is when will we see real self-driving cars?
A. Self-driving cars are divided into different levels of autonomy from 0 to 5. At Level 0 you are in full control, Level 1 is typically smart cruise control, Level 2 has some steering assist and Level 3 the car drives itself until it can’t and then the driver needs to jump in and take over. Level 4 is full self-driving on certain roadways and finally level 5 is completely self-driving on all roads and in fact the car may not have a steering wheel. Currently Mercedes Benz is offering some Level 3 car in Europe and may be offering them here sometime next year in their new line of EQ electric vehicles.
Q. My car coolant and transmission fluid started mixing causing my transmission to fill up with a yogurt like substance. I believe the head gaskets are blown out what is the best solution for this?
A. If it were a head gasket there would be coolant in the oil and oil in the radiator. In the case of your car, there is oil in the coolant and coolant in the transmission fluid, which indicates the transmission oil cooler has failed. The transmission cooler is part of the radiator. Depending on how long the fluids have been mixed together the transmission may need an overhaul and cooling system completely flushed out as well as the hoses and thermostat replaced. Sometimes you can get lucky and flush out the cooling system and the transmission and the everything will operate as designed.
Q. I always read your column, and but now I would like your honest opinion. I have a 2003 Mazda Miata that I bought new. It has 115,000 miles and is well taken care of and I love this car. However, I just paid $1200 to have a new brake line replaced, an axle seal leak fixed and some other maintenance stuff. I have been averaging $1000 for repairs every year for a few years, sometimes a bit more. Friends say get rid of it, it’s too small, it’s too old, I’m too old and it’s a money pit. The problem is short of buying a new Miata there isn’t anything I like better. I like the simplicity of this car, and how much fun it is to drive. Is this crazy? My other car is a 2015 Lexus LS, what do you think?
A. Repairing an old car is always cheaper than buying a new car. If the Miata is structurally sound (some Miatas can get very rusty), fairly dependable and satisfies your needs, spending $1000 a year isn’t crazy. For many cars today $1000 would be two and three months of car payments. Although at some point you may need to consider a replacement when dependability becomes more of an issue. Since you also own a very dependable Lexus, I vote to keep and repair the Miata. By the way, who says you are too old to drive a Miata, certainly not me.
Q. Do you really send a personal replay to every question you get? I think you once wrote that there are no stupid questions. I have a couple of questions that I want to send and feel they may be too trivial.
A. Yes, I will try to answer every question, in fact readers if you don’t hear from me in a few days, email me again. And like my fourth-grade teacher said, the only stupid question is the one you didn’t ask. Although just to prove the point, I think the original source of that statement is Confucius who said “the man who asks a stupid question is a fool for a minute, the man who does not ask a stupid question is a fool for life” So readers was it Confucius?
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