swamy kotagiri, magna international
An interview with the Chief Technology Officer and President, Power & Vision Division, of Tier 1 Auto Supplier Magna
Ali Tabibian: 00:13 Welcome, welcome, welcome everyone to this episode of Tech Cars Machines. My name is Ali Tabibian, that has not changed. Neither has the fact that I'm with GTK Partners, and as always also you can find more about me and affirmed via the links in the episode notes. With this episode, we're starting a number of interviews with executives at key suppliers to the Global Automotive Industry.
Ali Tabibian: 00:38 The phrase Tier 1 suppliers that you'll hear us use during this episode refers to the suppliers that sell directly to the car companies. Tier 2 suppliers, sell components and sub components to the Tier 1's and Tier 3 sell raw materials to the Tier 2's. The Tier 1 suppliers are the ones that are responsible for making sure that all the parts, and the systems that they're delivering. Including those from the non automobile guys like Intel and NVIDIA, which are the subject of these podcast series occasionally. To ensure that all the parts from all these people are automobile grade and that means that they can stand up to the heat, the vibration, and the lifetime supply requirements that are reasonably unique to the automotive industry.
Ali Tabibian: 01:21 As our listeners know, we don't mess around here at TCM, when we started Thematics Sequence, boy, we started big. In this and the next episode we're bringing you executives from two of the largest five suppliers to the automobile industry in the world. First today, it will be Magna and next episode will be with ZF, that's spelled Zee F but ZF is a German company and that's why it's pronounced the way it is.
Ali Tabibian: 01:49 Magna International headquartered in Canada and ZF headquartered in Germany, are as I mentioned two of the top five, and the other three include Continental and Bosch also from Germany, and Denso from Japan. What's interesting is if you look at the list of top automobile suppliers, the first U.S. names are in positions number eight and number 21. Yes. My American friends, we're not number one, when it comes to automobile supply.
Ali Tabibian: 02:16 Generally, in terms of the revenue breakdown of these suppliers, you'll notice that about half their revenues tend to come from their home region. For example, with Magna, about half its revenues come from North America and the rest is divided in between the two other major regions for automobile suppliers and that tends to be Europe, mainly Germany and France as well as Asia, mainly Japan and China.
Ali Tabibian: 02:41 Also, interesting when you look at the list of top 100 suppliers, and we'll try to put a link to them in the episode notes is that, you wouldn't recognize any of the names unless you were a part of the industry or somehow familiar with the industry. There're few names actually that would catch your eye, but that's only because they're part of a larger better conglomerate like a Panasonic, a Hitachi, or a Samsung.
Ali Tabibian: 03:03 That's really surprising because these companies are huge. The top entities like our guests Magna and ZF have about 40 to 50 billion dollars of annual revenues each. Number 100 on the list has revenues of 1.4 billion. When I was looking at this list, I did some back of the envelope calculation, and I came to about 1 trillion of revenues. There are probably around 30,000 parts on average and the internal combustion engine vehicle, and everything from the screws on up for the most part have to meet specific requirements for the automobile world.
Ali Tabibian: 03:37 When you look at the vendor list, you'll see phrases like the following defined what their business is about, and I'm just going to read a few of those for you. Powertrain solutions, chassis systems, steering systems, advanced driver assistance, transmission, breaking, seating, wiring harnesses, infotainment. While none of these names will be surprising to you just by reading them out, you can imagine how many major components and systems need to go into an automobile to make it work.
Ali Tabibian: 04:07 Today, we're with the largest automotive supplier in North America, Magna International, and our guest Swamy Kotagiri. Who is the chief technical officer as well as unusually the president of Magna's Power and Vision Division. What's interesting about the power and vision division responsibility that Swamy has is that, it includes the products that Tech Car Machines listeners, love to hear about. Radars, cameras, and then the suite of software that brings together the sensing and delivers insight to the automobile manufacturer to do something interesting with that automobile.
Ali Tabibian: 04:44 One of the great pleasures of my career as well as doing this podcast series, and I really mean this sincerely is the people I get to sit down with. I've really been so fortunate to have been with many, many accomplished individuals and those, accomplishments are clear. Just look at Swamy's LinkedIn profile, which will link into. Their accomplishments, may be clear, but one of the great pleasures of my interactions with them is that they're also frequently just great human beings, very warm and also with extraordinary personal stories and maybe those two are somehow connected. You'll hear and sense all of this in my interview with Swamy, so let's get to it.
Speaker 2: 05:27 Tech Car Machines, subscribe here or at gtkpartners.com.
Ali Tabibian: 05:34 Welcome listeners. We're here in Troy, Michigan, just outside of Detroit with Swamy Kotagiri who has been very kind enough to take this time to bring you his insights, which are very vast on the world of automotive supply. Swamy is the chief technology officer as well as the president of Magna's powertrain business, which if I'm not mistaken, Swamy also includes most of the technology portfolio in that of the four divisions of Magna.
Swamy Kotagiri: 06:02 First of all, it's a pleasure to be on your podcast and thanks for giving the opportunity. I wouldn't categorize it as much to say this is the only tech part of Magna. I think this addresses some of the key pillars that have been often discussed in the automotive industry today, which is the electrification, the autonomy, and the connectivity. But, overall, if we look at the Magna product portfolio, I would say we are addressing the larger picture of mobility as a whole.
Ali Tabibian: 06:35 Great. Thank you. Swamy, as I was getting ready for the podcast and reviewing some of the public collateral, it was pretty interesting how almost anything, much of the collateral about the company in the last year has been about the renegotiation of NAFTA. Maybe using that as an indication of how global Magna is, give us a sense for the scope of the operations where you are? What you do as a company? I know the listeners are always interested on the personal side as well. What brought you to the world of automotive and Magna in particular?
Swamy Kotagiri: 07:09 Magna is a phenomenal company in many aspects. It's a global from the perspective that it's in 29 different countries or 170,000 people about 40 billion in revenue per year and continues to grow. If you look back into the history of 60 years, from a Magna life growth story. I think one of the other interesting aspects of Magna is it touches our interfaces with many products innovate. We have the structural systems, whether it be metal or non-metal, pretty much actually material agnostic. Being able to do a different structural in non-structural systems in a vehicle.
Swamy Kotagiri: 07:52 We do seats, all types of seats from the power and region segment that you talked about really consists of the power train, which is the drive line and the transmission systems. We're talking of Magna electronics, which addresses all these sensors, the computer, the software and the algorithm which actually provide different features. Whether it be adaptive cruise control, it be automated valet parking and so on and so forth for all levels of autonomy, and also provide what I call the software and the brains and the ECUs of the world for electrified components. Whether it's an electrical augmented display in a mirror or a transmission control unit, or a drive line unit and so on and so forth.
Swamy Kotagiri: 08:38 Then we also have a division that deals actually and through the entire value stream for inside outside mirrors, mechatronics, which is all the closure systems as well as lighting both tail lamps as well as head lamps. If you take it one step forward, which I think is unique from many aspects, Magna has what we call the full vehicle assembly, in our division. Which contract manufacturers vehicles for OEMs in addition to participating or working in long with OEMs in complete vehicle engineering.
Swamy Kotagiri: 09:17 If you look at the broad portfolio of Magna, we're touching many aspects of the vehicle, it's just not only global in what it engineers manufacturers, but it's got a very broad perspective in the automotive industry.
Ali Tabibian: 09:30 Excellent. If I'm not mistaken, I think, some BMW 5 Series variance are made by Magna. Do I have that right?
Swamy Kotagiri: 09:38 Yeah, you do have that right. We make a certain volume of the BMW 5 Series in our division, the Vehicle Assembly Division Magnus Tire in grants, Austria. We have the capability there roughly to make about 200,000 vehicles a year. It has a very long and rich history of making different types of vehicles. We've been making the Mercedes G Wagon for over 35 years, if you're interested in the famous Aston Martin that was used in the James Bond movies that was made in our facility. A lot of the Chrysler vehicles produced for Europe in Europe were also made in that facility. We just finished last year, the Mini Countryman, which was also out of that facility. There's a long rich heritage of full way can assembly from that location.
Ali Tabibian: 10:34 Great. Thank you for that. That's one of the reasons why we're very excited to be here because that understanding of, if you're the full stack of the vehicle, everything that goes into the vehicle being able to produce it. We find is really quite interesting when you do get into talking as we will later in autonomy and electrification. When you have that ability to deliver the whole, then you can make a series of decisions about what the components should look like. That's about making the whole better, as opposed to a particular view from a particular supplier. I think that's a very, very interesting as we get through it, especially when we get to autonomy, and the issues of form factor, user interface and all that. Then I know it was a big part of what you're already delivering. Swamy, how did you wind up in the automotive industry? What brought you here? What excited you, what got you in the first place?
Swamy Kotagiri: 11:21 I did my bachelor's in Mechanical Engineering from India. Worked for a couple of years as an industrial engineer and then decided to pursue further studies and in '93, 1st January I ended up in Oklahoma State University talking to a professor there for the last three months before that. Then, various set of circumstances and I found some really interesting project on, materials in different aluminum alloys and so on. That class that was in Stillwater, Oklahoma during my master's in mechanical engineering.
Swamy Kotagiri: 11:57 I spent my two years there specializing, I shouldn't say specializing, more focused on the material side of things as well as the structural mechanics piece of it. I finished end of 2014, I finished my masters, came to Dayton, Ohio looking for a job, and Detroit was not too far away and through my job search, ended up at General Motors as a structural engineer doing Finite Element Analysis. On vehicle bodies and frames during durability analysis, nice vibration handling, safety crash analysis and so on. Magna was the supplier of the chassis for the track program at that point of time. Then I came across Magna in 1998, ended up joining Magna and I've been here since then.
Ali Tabibian: 12:53 You've traveled a long way since the $40 I think, that you had in your pocket.
Swamy Kotagiri: 12:59 That's one interesting story. As I was going through the process, some of it was called serendipitous courage, not knowing what I was getting into and some of it was just looking for a better opportunity. As I went through the process of learning how interesting the master's program was, I did not really want to depend too much on anything. At the same time, I did not want to create anxiety for my parents, that point of time by explaining to them the risk I was going to take. I don't know whether you call it courage or something else, but it worked out in the end.
Ali Tabibian: 13:39 It's a great story. I share a little bit of it as well and when I look back, it's such a relief not to have a lot of choice. There're very few things, you have to do, you don't have a choice and you go do them, and it's cathartic.
Swamy Kotagiri: 13:56 Absolutely. Absolutely. It's funny and feels great when you look back at it, but at that time it was not that funny. When I was going to a process that the funny story was I came to Dallas, and as I landed in Dallas, I had the connection to go to Oklahoma City and they had a snow storm in Oklahoma, which was not very common. I was coming from India, I had not seen snow before that time. There I was with the $400 that was left. The story is I converted enough Indian rupees that I had a total of $3,000 in that time, and $2,600 who was the certified check to the university because that was the first semester fees.
Ali Tabibian: 14:41 Welcome to America.
Swamy Kotagiri: 14:42 Welcome to America. Then I had the 400 which I thought was good, to cover me for the first month or two and I was sharing an apartment with three other students actually. As I realized that was about $260 for the first month to cover the room rent and sharing expenses and so on and so forth. So, $140 was a big buffer in my mind at that time, not very well planned, but since the person who was supposed to come receive me was not there because he couldn't make it because of the snowstorm. I ended up taking gail limousine service, it was a phenomenal service but it cost me 100 bucks. That's how I ended up with 40 bucks in my pocket.
Ali Tabibian: 15:28 That's right. An early start in the world of transportation.
Swamy Kotagiri: 15:31 Absolutely.
Ali Tabibian: 15:31 Have the exposure. To really what ... and actually you know what? That's a really interesting segue way here. It was an amazing vehicle that, that aircraft that brought you here and then in the midst of a snowstorm, the kind that 200 years ago would have been utterly impossible. There's still a vehicle in the shape of an automobile that managed to pick you up and take you where you were going. Talk about changing the course of humanity with what those vehicles can ... what those two transportation modes of have done.
Ali Tabibian: 16:04 Currently, when people look at the automotive market, ACES comes up a lot. There's autonomy connectivity electrification sharing, in your mind, how much more can this world of transportation either in the four categories that I just mentioned or whatever category you think is more important, whatever angle you would like to speak it up. How will the transportation industry change the lives of, what is certainly a growing and probably an aging population in most places. How will it change the most?
Swamy Kotagiri: 16:34 From my perspective, mobility is a simple definition of trying to move people or goods from point A to point B. The important aspect is how do you do it in a way that is efficient, affordable, sustainable, and maybe at least to my age group, how do you still keep it exciting? As you talked about it, whether the mode of transportation is by air or by water, on land. It's gone through a significant change, just as an industry by itself.
Swamy Kotagiri: 17:06 I think what's really become interesting over the last 10 years is how much it is impacted by what's happening in other domains. You touched on some of the key aspects which is electrification, autonomy of different levels, connectivity, all of this actually are influenced by what's happening in the power storage and power generation sensing. A lot of it is also influenced by legislative and regulatory requirements, macro trends of urbanization. How do we address the last mile, first mile? How do you manage movement of people and goods in a high density urban locations? A lot of these are starting to impact the industry, right? For example, when you talk about electrification, it's largely impacted by legislation.
Swamy Kotagiri: 18:02 If you look at a fleet level from an OEM perspective, they're looking how do you manage C02 emissions at a fleet level. In certain other regions like in China, they are looking for A quality, and obviously certain demographic is looking at, addressing, doing my share in terms of keeping the environmental sustainability for the future. There's certain many aspects that actually come together in driving your trend, that's electrification.
Swamy Kotagiri: 18:36 If you look at it from terms of autonomy, it's comfort, convenience, it's safety, it's better utilization of an asset. When you get to a full autonomy, it's better utilization of land, right? Congestion, how do you reduce congestion? It's not easy to pinpoint one key aspect that drives any of these things, but in the end you've taken all of this. You're changing the entire landscape of mobility.
Swamy Kotagiri: 19:05 The last part of the ACES that you talked about, which is shared, again addresses all of this to say that if you had a car that could drive by itself, and if you had a car that was electric, which means as an example in the future sometime. I can demand the car to come so it doesn't have the deadhead. It's not just going from point A to B, it can be at a location where it's comfortable and convenient when you wanted it's available. You're addressing the need in some cities where you're saying, "If you're not zero emission, you don't want to have a vehicle coming in."
Swamy Kotagiri: 19:43 What if the power train or the vehicle, whatever medium it is, has the ability to be zero emission in city centers, but be able to switch over to something else when it goes beyond in the transitional time. When the battery technology and the infrastructure, and the range anxiety all go away, it could be all electric. There's a lot of these things that are driving, but all ultimately lead to what I was saying, from a consumer perspective, you want to be able to get to point A to point B in a safe way, in a comfortable and convenient way, but you should have the option to be exciting when you need it.
Swamy Kotagiri: 20:24 I mean, I would like to be driven around, you're getting from here to the airport on a Friday afternoon, but on a Saturday or Sunday on a windy road, I don't mind taking the wheel. I think there is this optionality that is required and that's what is making, the current landscape so exciting.
Ali Tabibian: 20:46 Absolutely. Thank you. Let me ask you this, you've certainly got a very experienced, a lot of experience long tenure in the automotive industry and especially in the Tier 1 supplier segment. Has it ever been that as many things are changing in the industry as we have today, do we? Is it really a special time from that perspective or is that really just what everybody thinks of their own time? Whenever it may be that it's somehow different?
Swamy Kotagiri: 21:13 I think if you look at it in the context of things, I think we're definitely on a little bit of a logarithmic scale. It's an exponential growth than just being linear. Like I said before, I think that is largely influenced by the information sharing and the ability to connect the dots of the progress made in different domains. The way you're able to compute and how fast you can compute and how much you can and at the latency at which you can do has made some of the things possible today. For example, [inaudible 00:21:49] per lane assist or maneuver or an AB. It wouldn't have been possible 10 years ago. Right? If you didn't have the compute capability, if you didn't have the software that we're talking about. I think it's the biggest impact that's happening right now, is because of the confluence of everything coming together. Maybe I'm a little bit biased, but I would definitely like to think we have the more interesting times.
Ali Tabibian: 22:14 It certainly feels like it from a practitioner in this space. I'm not obviously on the inside of these companies, but as a practitioner, somebody who studies this space. It does seem like more than actually even other segments that are being influenced by all of these technologies. Just the fact that average vehicle is a $35,000 vehicle and is an important purchase for people. There's a lot more that you can do to it, in a lot more that people will tolerate in terms of is customization and segmentation of what it offers them. That just makes it a really exciting platform to deploy all of these technologies
Swamy Kotagiri: 22:49 One of the key things where you mentioned his car as a platform. I think it's a platform of technologies in so many ways, think of electrical, mechanical, hydraulic, software. I mean, think of a discipline in engineering or science. It finds application in this and it just ... I mean, think about it, like you said, at $35,000 a product that has to be reliable for 15 year time period roughly, from an automotive industry. A lot of the people don't realize the complexity involved there, of the different circumstances and conditions in which this product has to live from that snowstorm.
Ali Tabibian: 23:31 -20, -30 degrees.
Swamy Kotagiri: 23:33 In the snowstorms for a person who lives in the vehicle for two months at some place and comes back and starts, and wants to be ready to go in the next one minute. For us to be able to say that, we are making this product for the next five years, but we have to provide the pipeline for spare parts for the 10 years after. There is a lot of these things that people don't realize what it takes to make one and keep one running. I think the robustness and the reliability that is required in this product that we as consumers expect is in orders of magnitude higher than what you see in most of other products. I mean, there're some things, obviously like airplanes and things like that, but for $35,000, what you expect from this product is amazing and we don't realize that or think about it on everyday basis. It is wondrous just in the world of combustion engine, how much work has to go into containing that explosion essentially and protecting you from the vibration and the noise in the heat and all that? That then drives the vehicle along, it's really just astonishing.
Ali Tabibian: 24:43 Absolutely. Goes into it. We make millions of them and if you look at the person we put behind the wheel of all of this phenomenal machines.
Swamy Kotagiri: 24:53 That's right.
Ali Tabibian: 24:54 We don't expect too much from the person sitting behind. Right?
Swamy Kotagiri: 24:56 That's a good point. That's a good point.
Ali Tabibian: 24:59 Swamy, when there's a lot of technology interaction between the automotive world and obviously the various fields of technology that you mentioned, one of the interesting things about that is the way a company like Magna is reacting to incorporating these technologies into its workflow. If I just look at your, let's say the way you do your partnerships or what you choose to develop yourself. It's really interesting to look at partnering with a main mobility or an innovative or an investment in Lyft or delivering your own platform and deciding how much of it you're going to deliver and how much of the OEM finishes off that experience. Tell us a little bit about how that world is developing? How that's changed? How you decide what you want to deliver? What you want to partner? What you want to own and when you want to invest?
Swamy Kotagiri: 25:51 I think from a mobility perspective as we talked, we are looking at the overall value stream of the ecosystem going forward. I think it's going to be, it's emerging and nobody can pinpoint exactly what it is going to be five, 10 years from now. We believe it's going to be a hybrid model at least in the near to mid term, when I say that for the next 10 years.
Swamy Kotagiri: 26:14 What I mean by that is, you're going to have a certain amount of personal ownership, but you're also going to have consumers using mobility as a service. Depending upon the circumstance and the use case that you have, which really means you are changing the entire ecosystem of insurance based on usage transaction of a vehicle, like I'll drive the vehicle from point A to point B, but I don't need it from, XAM to YPM, but I don't want to be giving my car keys to somebody. Their asset could be used during that timeframe by somebody else either for personal use or for doing chores or transportation of goods and so on and so forth. I think there is going to be a mix of different business cases, as well as different use cases that are being demanded by the consumers, we are looking at this overall. The innovation is not constrained only to the product, it is going to the product, the process, the material, how do you deal with the information and even business models that you can come up with. We have to look at it from a very broad perspective. Magna has a very rich heritage of 60 years, for bringing many products to commercial scale first in the market, but we are now also looking at, are there certain products that are going to change based on technological developments in a different field. We talked about, for example, in chips or sensors. Even in our factories, we actually looked at the robotic technology that is used in the medical industry for surgery. All I thought was if the dexterity of the robotic and the tooling is good enough for surgery, how do I effectively use this for certain assembly operation for pick and place?
Swamy Kotagiri: 28:13 I'm not underestimating the cycle times and the reliability that you need in automotive, but that's a question to ask. We always say, what is the question you're asking? Are you asking the right question, so you can start looking in the right domain? One good example I always talk about is, when I started my career, we always talked about when we did cash analysis on a vehicle, injury numbers and hit numbers and looking at constraints.
Swamy Kotagiri: 28:42 The fundamental question at that point of time we were asking as an industry is, how do you keep the driver and the passenger safe? The underlying premises there is an accident, but if the question changes to how do I prevent an accident? You're looking for a different solution. For example, now is how do I start the car? How do I sense it? What do I take? I think a lot depends on what question you're asking.
Swamy Kotagiri: 29:12 We try to reply that approach through the entire organization, whether it is the material or the process or the business model. We ask all our divisions and I don't think it's a one man show or one team show. There are 170,000 people working and the question to ask is, what is the most painful thing that you wish you could change? It could be a person working on an assembly cell who could come back and say, "I wish this could be done differently." Which actually brings up a question and one of my favorite quotes is from Einstein where he says, "If you have a problem, try defining the problem and understanding it for 95% of the time. Most probably if you define it well, you will find a solution."
Swamy Kotagiri: 29:59 That's how we're approaching it, and we also call it what? In our organization, we call it problem statement, is how well can you define a problem without making it to automotive specific, so that is understandable to a larger audience. For example, we do a process called hot stamping. We look at dyes and we are looking fundamentally for a material that has a high thermal conductivity, but has enough toughness to handle the part that comes in at 850 degrees centigrade.
Swamy Kotagiri: 30:39 If you ask an automotive person, when I was working on this technology and myself, we were looking for high very red dye material. Doesn't mean a whole lot for a professor of sitting in a university or a student, but if I go and say, "I'm looking for a material with the thermal conductivity of X and with the Vickers hardness of so much." Doesn't have to be automotive, it could be in some other industry.
Swamy Kotagiri: 31:05 Is the same thing we apply to sensors for example, you're not trying to specify a lens or a chip specification or whatever. That's how we started looking at Radar. The icon Radar that we ended up doing, started off with that question is, if I have to have a reliable system combined with other senses like camera, what would I like to have? We said, "What if I can have a digital imaging possible with the Radar and if I have a range that is far, let's say I'm going at 120 kilometers per hour and I have to do AB and I need to have redundancy one is camera. What's the other one? What's the other sensor?" We said if that sensor had a range of 300 meters with the vertical resolution of less than one degree with a field of view of 150.
Swamy Kotagiri: 32:03 We rode the specification as a desire, and then worked on the how and the what. The first question is why am I doing this technology? I think that replies pretty much across our whole innovation approach. To the next step now once you define it, you don't have to be doing all of it yourself, right? There's things happening on the outside. Once this problem definition is there, we look work with VCs, we look at research institutions, we look inside the organization, we look at other domains or other industries, and we go there and work with them and all kinds of models are possible.
Swamy Kotagiri: 32:50 That's how we are looking at it broadly to try address both sides. One is the evolutionary next step of taking the product to the next generation, but also disrupting what we have to see. What's the next quantum leap?
Ali Tabibian: 33:05 That's very, very interesting. Thank you. If I could just divide it maybe in a course late and that is obviously not as nicely as you did. There's the out in portion of it which has a scouting function almost to it. What could be out there that might be useful to us. Secondarily, it was the in out version defined the problem, but also be aggressive and casting a wide net. Tell people what you want done and then not over constrained with how you'd like the answer to come back and see what that net captures.
Swamy Kotagiri: 33:36 I think it's absolutely important to keep your view really broad, and it depends on which part of the cycle you are in the development. When we're defining a problem and looking at it, it's a very wide net, but we also have every call it a thorough diligence process, from a fundamental science perspective to say, "Does this technology or an idea or whatever that we have in front of us, does it hold water?" That's a discipline approach now. Don't stop an idea, look at the idea, but put it through its paces very quickly, and we call it fail fast and fail cheap.
Swamy Kotagiri: 34:23 The funnel is very broad and wide in the beginning, but it gets narrow quick as you go through the different phases, going through. I think you got to get to the focus part once you say that, "Okay, this is the technology, this is good." Because, once you're committed to a program in an automotive industry or to a program you need a lot of focus at that point. That's where the engineering discipline, the ability to scale a concept to making millions of these things with the robustness and reliability that comes to play. For us that's a big value that we bring to the table, and a lot of the startups that have worked with us have found that to be really useful. The OEM looked at us and say, "We like the idea, but we also see the strength of Magna was launched many programs before to say that they're going to stand behind it and get it done."
Swamy Kotagiri: 35:22 It's a symbiotic relationship between us and the startups there that gives them the chance to work with a large organization through Magna. I mean, I hate to use the word large, the one of the key things from Magna that I like and which keeps me going every day. I characterize Magna really is a large startup. I mean, I've done several roles magna from a research engineer to finite element analysis engineer to a testing and validation, to product release and so on.
Swamy Kotagiri: 35:56 If you have an idea and if you have a sane business case, there is no box around you. It's the inherent DNA of a startup, it's just that we're a large startup.
Ali Tabibian: 36:10 You have to do things on a different scale, but it's same you have to be just as quick essentially.
Swamy Kotagiri: 36:14 Absolutely.
Ali Tabibian: 36:16 Let's talk a little bit about, you mentioned the OEMs there, one of the interesting things, if I just look at your partnerships, let's say, is that there are sometimes with the people you'd expect like BMW on autonomy, and sometimes they're with the so the next step away from the manufacturer of the vehicle in this case Lyft. Now, I know Lyft has its own autonomous vehicle development program, but tell us a little bit about how that's maybe a little different from what would normally happen at the Tier 1 supplier environment? Which I was pretty clear you were selling to the vehicle manufacturer as opposed to the tech enabled service provider essentially, which is what a Lyft is. What's in it for both sides to cross that line a little bit?
Swamy Kotagiri: 37:00 The cooperation between Lyft and Magna was fundamentally addressing the L4, L5 ecosystem. From our point there is a huge market from L1 to L3, if you look at the features that go into making the different levels of autonomy inspite of all the discussions and all the talk, very instilled single digits in terms of penetration. There's a significant market to be heard, but you have to have a roadmap how to get to Level 4 and Level F towards full autonomy.
Swamy Kotagiri: 37:36 I think there is a lot of lessons learned from L4 and L5 that you apply in L1, 2, 3, that is one aspect of it. I think the engineering discipline, the release, the automotive requirement vehicle, we use the word very often, auto qualification of technologies. That is something that we've done over and over again, but from the software perspective and almost the existential need for Lyft, to be able to replace the driver with a full autonomy. I think is a great symbiotic relationship for us.
Swamy Kotagiri: 38:14 That's how we looked at it, going back to ... we're just trying to see all our mobility, where it is going and how do we play it all? They have the need almost, like I said, existential need to get there and they can push that. How do we take this in a way that is pragmatic, realistic, robust and reliable? We can bring that to the table. It's again, useful to them, it's useful to us. We thought that was a great way to take it forward rather than everybody tried to do things on their own.
Swamy Kotagiri: 38:46 From a BMW perspective, you talked about it or any of our OEMs. We continue to work with them on the road roadmaps because it's touching both tight. On one hand we get to see a wide variety of architectures of what the OEMs are looking for, and therefore gives us a call it a bird's eye view of where the industry's going, and we can develop what we call the building blocks. Let me give you an example, when you talk about autonomous system, there is the sensor suite, there is the call it the domain controller or the compute, there is the software. If you break it down, they're the building blocks. The specifications that are to one OEM might be a little bit different than the other, but if I have the right base foundation they can get to one, to the other application very easily. I think the trick is in figuring out what those building blocks are and how do you create that building blocks.
Ali Tabibian: 39:45 Swamy, you've been very kind with your time and I want to be respectful of it. I was thinking of asking you maybe to take the Max 4 platform, and describe it a little bit of sort of consolidating everything that we've discussed. I think inherently it will also answer the question of which parts you think are near term in an application versus on. Do you think that's a good way to go, as the next question or is there something else that we put on the list here that you would prefer to?
Swamy Kotagiri: 40:13 No, Sure. We can answer that. I think from my fundamental philosophy, again, going back to the building blocks. I think our intent or objective in the Max 4 was, to show that we can get to Level 4 autonomy in urban location without taking away the pragmatic use of the vehicle. If we look at the Max 4, it still looks like a production vehicle. It has-
Ali Tabibian: 40:40 It's a Jeep in this case, the executive.
Swamy Kotagiri: 40:42 Right.
Ali Tabibian: 40:43 For our listeners, Swamy shows off the vehicle in the banner photo of his LinkedIn profile, go there and take a look. We'll link to your profile in our website.
Swamy Kotagiri: 40:50 Absolutely. I think we're very proud of it, I mean if you open the trunk, if you go inside, it's like a regular Reiko. Going back to my building blocks, we wanted to demonstrate the capability of the camera systems that Radar, the LIDAR, the domain controller, obviously the software that goes along with it, which we think is really the building blocks that enable the Level 4 driving.
Swamy Kotagiri: 41:16 Actually, we apply the same philosophy to electrification, we look at electrification as a whole, and we believe that the high voltage and the 48 world architecture is going to play a significant role and more than 50% of the vehicles will be hybrid in some way, shape or form, whether it's micro, mild, PHEV, 48 world high voltage.
Swamy Kotagiri: 41:39 We tried to create the building blocks, like we have the transfer case, we have the machine, we have the in water, we have the dual clutch transmission. Different ways of combining this can address one of the 50 poetry in architectures that is out there. That's how we look at it. Max 4 was a way to demonstrate the different technologies that Magna has, as a holistic system and what it means to our customer, which is the OEM or to the consumer.
Ali Tabibian: 42:12 If I recall correctly, two things were also there. One was a stronger emphasis on the user experience, so the user interface. The second was that it's designed for upgradeability, is that correct? Is that an interesting point to flush for the listeners as well?
Swamy Kotagiri: 42:29 Absolutely, I think as we said, the industry is going through a transformative change and it's not crystallized exactly what the direction is. One of the most important things in this flux time, is to be able to come up with system architectures that are flexible both up and down. As an example in the Max 4 the domain controller, architecture is too prognostic. We can use an Intel loader renaissance or something else.
Swamy Kotagiri: 42:58 The architecture is done in such a way that you can go to Level 4, but you also can go to Level 2. Reconfigurability and flexibility and modularity, is the key to surviving these times right now.
Ali Tabibian: 43:12 Let me ask a silly question. Is it reconfigurable in the field? In other words, a consumer vehicle is deployed, there are a few million out there. I think there's an example of this actually with Tesla where they said, "Okay, well if the current NVIDIA processor isn't enough for full autonomy, will upgrade everyone." Is it upgradable in that sense or is it mainly within the realm of design inside the OEM? That's highly configurable?
Swamy Kotagiri: 43:37 I think it's more the latter for certain aspects of what I was trying to explain in the domain controller, so it's not an emailed report every time, so if you have an architecture that's reconfigurable and modular, you can build off the same platform for different variants of the vehicle and the changer always are much simpler. That is one aspect of it.
Swamy Kotagiri: 43:57 On a feature side it can be done on the field like we're talking about. How do you architect the vehicle with the right power level? If you have that thought process in the region to look forward the next five years, eight years and 10 years, then certain aspects of that would be call it upgradable or reconfigurable in the field.
Ali Tabibian: 44:17 That's right. That's right. Well, that's beautiful because there are a lot of people who have views on it, as we talked about geo limited or a closed field applications. They're a lot of people who would be able to use that the entire platform today, for a particular use case that isn't necessarily, making that next Ford F50, F150 or the next step Camry on top of this platform. That's great.
Ali Tabibian: 44:43 Swamy, anything else that we should have covered or you'd like to touch on?
Swamy Kotagiri: 44:48 Honestly, it's a call out to anybody who's in this field or want to come in that field. Automotive is an amazing field, if whether you're a mathematician, you're a physicist, you're an electrical engineer, you're a data analyst. Think of a field, I mean, there is no better place to be to try your skills than automotive industry, especially Magna.
Ali Tabibian: 45:14 Especially Magna. It's interesting too the ... we had something we were doing in the world of connectivity, and a few of the entities, a few of the people involved were asking me where it's a good location with respect to, into automotive world to work on connectivity related issues and that depending on where you think a lot of the processing will happen. Most of it at the edge or in the core. There's some really interesting networking issues that have to get resolved.
Swamy Kotagiri: 45:42 Absolutely. We talked about this, it is not a fundamental field of science that doesn't apply here, and it's still in a flux. If you have a great idea, come with it, most probably the industry will look at it.
Ali Tabibian: 45:56 Great. Thank you so much. It's been a real pleasure.
Swamy Kotagiri: 46:00 Oh, thank you so much. My pleasure. Anytime.
Ali Tabibian: 46:02 Great.
Swamy Kotagiri: 46:03 Bye. Bye.