August 26, 2016    4 minute read

The Innovative Race For Autonomous Driving

Welcome To The Future    August 26, 2016    4 minute read

The Innovative Race For Autonomous Driving

Autonomous vehicles represent the current hot technological trend of the automobile industry. Where once muscle, power, and loud engines were the norm, there is now an on-going race to develop autonomous, energy efficient cars that will allow users to do much more than just driving.

Potential Benefits

It is no news that many spend hellish hours in the car driving to and from work. Hours that could be spent being productive or just relaxing in preparation for a long day at the office, and as a way to immediately disconnect after work.

To have a clearer picture, the following graph from the Washington Post shows how many days on average people spend commuting.

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Clearly, autonomous cars could be a great way to reduce stress levels, and allow users to choose how they want to spend this time.

Another main aim of autonomous vehicle developers is to further promote car sharing with the goal of reducing levels of congestion in cities, therefore increasing expansion opportunities for car sharing companies. Reducing levels of congestion is both positive for the environment and the efficiency of public transport. According to the American Public Transportation Association, “without public transportation, congestion costs would have been an additional $21bn” and “every $10m in operating investment in public transportation yields $32m in increased business sales.” Indicating that if autonomous vehicle producers manage to develop proven safe vehicles, it is in the interest of governments to support the adoption of this technology.

Furthermore, there are also opportunities for in-car entertainment. Autonomous cars could allow users to equip their car with a large variety of entertainment technology equipment like consoles, foot massager machines or DJ mixing tables.

The Race To Domination

It is no surprise that an investment opportunity with so many possible channels of revenue generation is attracting so many players to join the development race. On the one side, there are the automakers, which according to a report by Thompson Reuters are currently ahead of the race in terms of patent filings.

On the other side, technology companies are seen as the most trusted players to develop this technology, according to AlixPartners. This demonstrates that both types of companies can benefit from competitive advantages by collaborating with each other. Examples of these strategic moves include General Motors investing $500m in start-up Lyft or Google working with Fiat Chrysler.

Long Road Ahead

Even though potential gains from this technology are vast, there are numerous unknowns that could slow down its expansion or halt it all together. The recent car crash in Texas of a man driving a Tesla on autopilot on August 19th adds to the numerous crashes that have already been reported due to the use of this technology. Tesla recently removed the autopilot description from its Chinese website as an indication that the technology is yet not ready to be fully autonomous and drivers should remain vigilant while driving. The recent car crashes make the idea of autonomous driving even more stressful than self-driving. This could reduce the number of drivers willing to test the technology, which could slow down the development process.

The following graph provides an image of how the adoption of autonomous vehicles could play out in the long-term.

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Conclusion

Clearly, there are still many unknowns that could determine the extent of autonomous driving vehicles adoption. As a result, companies pursuing the development of this technology have to focus on achieving high success rates when publicly testing their vehicles.

Investing in this technology is a long-term bet with a wide range of possible scenarios, but one that could disrupt transportation. The large sums of money being invested, and the high degree of competition for being the first company to make a successful breakthrough shows how bullish these companies are. Even the Queen of England in her May speech announced that the UK wants to be at the forefront of autonomous driving technology.

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