The global shortage of semiconductors or chips in the aftermath of the Covid-19 led pandemic has eased as per a report by Crisil. A development that led most automakers to cut down production significantly and postpone the launch of new models or to put them to production through 2020, 2021, 2022 and a good part of 2023 has finally eased to iron out any supply chain disruptions that may be there. 

Expected to address and improve predictive demand forecast, the better availability of chips should enable better production schedules. By FY2025-26, Crisil analysts are of the opinion that demand-supply dynamics should be more balance with additional manufacturing capacities getting commissioned. 

With the chips possessing distinct electrical properties that make them the cornerstone of all electronic equipment and devices, it is the auto industry that has come to use them for a variety of functions as automobiles turn increasingly software driven. While the computer and communication equipment (C&C) segment consumes roughly 63 percent of the chips produced, the auto industry consumes roughly 13 percent of them. The other industrial segments consume about 12 percent. 

With new developments such as autonomous and EVs, the use of semiconductors in automobiles is only slated to rise. With passenger vehicles the recipient of most technological innovations ahead of other segments such as two-wheelers, three-wheelers and commercial vehicles, it should not come as a surprise that they consume about 1,500 chips on average – the highest among all automobile types. 

As more advanced electronic features are incorporated, the use for chips increases. The electric passenger vehicles, for example, use almost twice as many chips as internal combustion engine (ICE) passenger vehicles do. The improving supply and slowing demand for computers and mobile phones is therefore looked upon as a blessing in disguise for automobiles and their manufacturers. 

Anuj Sethi, Senior Director, CRISIL Ratings, mentioned, “The chip shortage faced by Indian passenger vehicle makers is easing, with current availability at 85-90 percent of total requirement. The production loss on account of the chip shortage, which had halved to about 300,000 PVs on-year in fiscal 2023, is estimated to have further declined to under 200,000 PVs by the end of September 2023.”

Most passenger vehicle manufacturers are currently operating at near optimal capacity utilisation due to stronger-than-anticipated demand. New orders to be serviced remains high at about 700,000 units at the end of September 2023. 

The easing of chip shortage should help automakers honour new orders with better prediction and faster production. Global automobile demand, severely impacted by the Covid-19 pandemic, made a strong recovery in the latter part of FY2021-22. It caught automobile manufacturers off guard as they had not placed substantial orders for chips. 

The surge in demand for personal computers, laptops and mobile phones, driven by work from home, virtual learning and remote healthcare services, led to a significant chip procurement challenge for the automakers. 

Geographically, the chip ecosystem is skewed, with western nations dominating chip architecture, design, manufacturing equipment, specialised materials and chemicals. Semiconductor fabs1 on the other hand are concentrated in eastern nations, such as Taiwan and South Korea.

Given the criticality of chips in the defense and aerospace industries, the United States and the European Union have offered incentives of about USD 100 billion for localisation of semiconductor fabs. As a result, many global players are slated to spend about USD 360 billion towards setting up new facilities, which would be operational by 2025 and 2026. 

In the Indian context, demand for chips will continue to increase over the medium term, driven by the gradual rise in EV adoption and growing demand for advanced feature-laden ICE vehicles.

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Accenture and Google Cloud have announced that Volvo Cars has signed on as the lead industry partner for Horizon, an open-source software development platform designed for car makers and automotive suppliers to build, test and deploy software on the Android Automotive Operating System.

The Horizon platform unifies cloud-native development tools, virtual testing environments and artificial intelligence workflows. Volvo Cars is migrating its global software development environment for the Android Automotive Operating System to the platform to accelerate engineering processes and virtual testing across its global development teams.

Insights gathered from Volvo Cars' deployment will be used by Accenture and Google Cloud to refine the platform and expand its generative artificial intelligence features for automotive and industrial manufacturers.

According to metrics provided by Accenture and Google Cloud, testing speeds using virtual Cuttlefish-based Android Automotive environments can improve by up to 9 times, while infotainment feature development costs can decrease by up to 40 percent. Software build times, which previously required up to two hours, can yield feedback within minutes through caching and build pipeline optimisation.

Remote access to virtual and physical device farms allows engineers to test software without requiring local physical test equipment, while virtual workbenches enable developers to set up development environments in seconds.

Gregor Zetsche, Head of Connected Experience, Volvo Cars, said, "We’re building some of the most complex products in the world, which requires a development environment built to match. As Horizon’s lead industry partner, we can directly solve our toughest engineering challenges and empower our teams to deliver new experiences faster than ever."

Juergen Reers, Global Automotive & Mobility Lead, Accenture, said, "Horizon enables a faster, more flexible and efficient way to deliver software-defined vehicle features. Its standardised, repeatable and scalable processes help deliver reliable, high-quality software products, while significantly reducing time to market. Horizon will allow Volvo Cars’ engineers to focus on what matters most: creating differentiated vehicle experiences and continuously delivering new value to drivers through software at high speed."

Henry Bzeih, Global Director for the Automotive Industry, Google Cloud, said, "Software now defines the automotive brand. Horizon on Google Cloud gives Volvo Cars the ability to move faster while releasing high-quality software and features on a cadence that matches the expectations of modern mobility. This is how next generation digital experiences reach drivers at agile speed."

Accenture and Google Cloud are working with additional automotive and industrial organisations to expand adoption of the Horizon platform across international markets.

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Emerson has announced the expansion of its test and measurement research and development (R&D) facility in Bengaluru, which it claims is an additional 50 percent.

The investment increases capacity at the site to develop software-defined and automated validation technologies for industrial customers.

The Bengaluru facility operates as Emerson's NI Software Centre of Excellence and represents the company's second-largest test and measurement R&D centre globally. Engineering teams at the site hold product responsibility for test software platforms, AI-enabled engineering capabilities, systems engineering technologies and radio frequency test software. The tools serve clients across the semiconductor, aerospace, defence, transportation, life sciences and manufacturing sectors.

Ritu Favre, President of Emerson's Test & Measurement business, said, "Bangalore plays an increasingly strategic role in Emerson’s global test innovation network. The site combines deep expertise in test software and AI-enabled engineering and validation technologies with close connections to rapidly evolving industries. This investment helps customers manage growing product complexity, streamline validation and bring new innovations to market faster."

The expansion provides capacity to advance automated validation workflows and integrated test platforms as hardware complexity increases across shortened product development timelines.

Emerson's investment aligns with domestic growth in semiconductors, electric mobility, and aerospace manufacturing driven by initiatives such as the India Semiconductor Mission and the National Electric Mobility Mission Plan.

Alongside the R&D centre, Emerson operates a second Bengaluru location dedicated to application engineering, calibration services, sales and customer support.

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Digital payment infrastructure company ToneTag has launched an in-car fuel payment system at the Global Fintech Fest 2026.

The solution is developed for TATA.CARS under the name DrivePay and integrates National Payments Corporation of India's UPI Circle framework for Internet of Things devices to enable direct fuel payments at IndianOil retail outlets.

The DrivePay platform integrates payment capabilities into connected vehicle infotainment screens. Drivers can simply pay at fuel stations from the vehicle dashboard without using mobile applications, physical cards, or external payment terminals.

The service also incorporates IndianOil’s XTRAREWARDS loyalty scheme, automatically crediting reward points to customer accounts without requiring mobile number inputs during checkout. Following the initial demonstration at GFF 2026, deployment will begin across IndianOil outlets ahead of a wider rollout.

Vivek Kumar Singh, Co-Founder and Director – Labs, ToneTag, said, "Payments are rapidly moving beyond traditional interfaces such as cards and smartphones, and connected devices are emerging as the next frontier for commerce. With DrivePay, powered by ToneTag, we are bringing an IoT-based UPI Circle payment experience directly into the connected vehicle. This initiative with IndianOil, TATA.CARS and NPCI demonstrates how payment infrastructure can seamlessly extend into connected devices, enabling the vehicle itself to become a secure payment interface. We believe this is an important step towards a future where mobility, payments and commerce are seamlessly connected."

The project combines IndianOil's retail distribution network, TATA.CARS' vehicle hardware, ToneTag's payment processing software and NPCI's UPI transaction network. ToneTag plans to extend its connected vehicle payment systems to additional automotive original equipment manufacturers and mobility providers.

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Hyundai Motor India, one of the leading passenger vehicle manufacturers, has introduced the Hyundai Bluelink Remote Immobiliser security feature for the Hyundai Venue and Venue N Line models.

The feature is available on the connected-car-Navigation-Cockpit equipped HX10 variant of the Venue and the N10 variant of the Venue N Line.

The security system allows vehicle owners to immobilise a parked car via the Hyundai Bluelink mobile application, preventing engine restart in scenarios involving key cloning or unauthorised access.

In cases of suspected theft, users can trigger the immobiliser remotely, locking the engine start capability once the ignition is turned off. The system operates alongside network-dependent live location tracking to assist vehicle recovery. For safety reasons, the software does not cut power or shut down an active engine while the vehicle is in motion.

The feature is being deployed via a Controller Over-the-Air update leveraging Hyundai's Software-Defined Vehicle (SDV) architecture. Eligible Venue and Venue N Line models sold since November 2025 will receive the update automatically without requiring physical service centre visits. The ccNC system allows over-the-air updates across up to 19 individual vehicle controllers.

Furthermore, From September 2026, the remote immobiliser will be standard equipment on HX10 and N10 variants, with plans for phased implementation across other Bluelink-enabled models.

Tarun Garg, MD and CEO, Hyundai Motor India, said, “With Hyundai Bluelink now powering over eight lakh connected vehicles in India, we continue to strengthen our connected mobility ecosystem by delivering meaningful innovations that address evolving customer needs. Hyundai Bluelink Remote Immobiliser offers customers greater control and peace of mind by enabling them to remotely secure their parked Hyundai VENUE or VENUE N Line and respond quickly in the event of suspected theft, while incorporating safeguards that prioritise customer safety. Importantly, this feature also demonstrates the future-ready potential of Hyundai’s Software-Defined-Vehicle architecture. Through a seamless Controller Over-the-Air update, we are introducing an important new capability to eligible model variants without requiring customers to visit a workshop.”

At present, Hyundai Motor India offers the Bluelink connected car system across 11 of its 15 vehicle lines in the country, providing functions including emergency crash notifications, vehicle diagnostics, remote telemetry and voice command controls.

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