Automated Vehicles Are Around the Corner

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Ford, the company to first put millions of horseless carriages in every American garage, now intends to be a leader in putting driverless cars on the road. CEO Mike Fields promises to deliver a self-driving car for the masses by 2021. But this is just the latest industry player salvo in the race to build autonomous vehicles – a race, we should point out, that has been going on for more than 150 years.

The first autonomous technologies emerged as early as the 1860s, with the development of the self-propelled torpedo. Just a decade after the Wright brothers, autopilot was already available for airplanes. Over time, bits and bytes of automated technologies have made it into everyday life, in big ways and small. The Mars Rover, for example, explores the distant planet guided by engineers on earth, and small drones are now wedding photographers.

But these semi-autonomous feats are, experts say, much easier than building a self-driving car able to successfully navigate roads, human drivers, pedestrians, road construction and a myriad of other complex interactions. Yet, for all of these challenges, autonomous vehicles are quickly becoming a reality.

There are two types of AVs: semi-automated vehicles, in which some level of user-intervention is required. An example is Tesla’s AutoPilot, which allows hands-free operation. However, a driver is still responsible for the car. By contrast, fully automated vehicles “can drive from point A to point B and encounter the entire range of on-road scenarios without needing any interaction from the driver.” 

Americans have been slowly adapting to semi-autonomous vehicles for several decades already. Over time, they’ve purchased cars with adaptive cruise control, collision detection, automated brake systems, and self-parking. Tesla’s AutoPilot pushed the boundaries by enabling cars to change lanes on their own.

The technologies that make car autonomy possible include software, optical cameras, sonar and radar sensors. As a result, industry experts expect electronics and software to be 50% of the cost of the vehicle by 2030. It’s not hard to see why the automotive industry and its supply chain are quickly being disrupted.

In fact, a mix of technology and automotive companies along with government partnerships are accelerating development. Nissan has partnered with NASA; General Motors acquired startup Cruise Automation for $1 billion; and Mercedes-Benz is testing autonomous buses in Amsterdam. Nearly every automaker has something in the works.
But those most poised to lead this disruption are tech companies. Google and Uber each plan to build ride-sharing fleets of self-driving cars, with the latter expecting its fleet to be driverless by 2030. If either are successful at creating this new paradigm of ride-sharing services, the rate of car ownership is certain to fall. In fact, PwC believes these services could reduce the number of cars on the road by 99%.

But auto isn’t the only industry Automated Vehicles are likely to disrupt. With direct access to the Internet, connected cars will enable “automated links to all other connected objects, including smartphones, tracking devices, traffic lights, other motor vehicles — and even home appliances,” says PwC. The market potential for connected car services is expected to triple to €122billion by 2021 as demand and prices for digital services rises.

This opens the door for dozens of industries that will see their businesses substantially changed. Imagine, for example, visiting a retailer but placing your order with an on-demand shipper. Hotels may offer self-driving touring vehicles. The automotive industry will offer more mobility services, as well as branch into other industries, such as insurance.

While experts see many advantages to self-driving cars – drivers stand to gain 50 minutes more per day, for example – 63% of consumers are still hesitant to purchase an autonomous vehicle because they perceive them to be less safe.
That perception is likely to change, however, as shared autonomous vehicle services become more common. Which means just as we’ve come to accept cruise control and planes navigated by autopilot, experience will raise our comfort level, making mass-marketed driverless cars all but a certainty.

AVs are becoming a reality


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