Autonomous Vehicles - Impact and Who Is Winning The Technology Race

Although autonomous vehicles (AVs) are not expected to be fully deployed for some time, the intrigue and interest level amongst those within the automotive industry and the general population is sky high. In addition to the primary benefits of making our roadways safer and reducing auto-related fatalities, AVs will have dramatic positive impacts on how families, employees, seniors, and the disabled live their everyday lives. The ongoing development and ultimate deployment of AVs is and will continue to create significant opportunities across all sectors of business.

Why the Autonomous Vehicle craze?

Numerous studies have been published over the past two years, and presented below are highlights of the 2018 Securing Americas Future Energy (SAFE) study^[1] on the future impact of AVs. This study was based on research and individual reports led by three economists: former Bureau of Labor Statistics Commissioner Erica Groshen, former Senior Fellow at Resources for the Future W. David Montgomery and Compass Transportation CEO Richard Mudge. The SAFE 2018 study details the following:

• Significant economic benefits from the widespread adoption of AVs could lead to nearly $800 billion in annual social and economic benefits by 2050, mostly from reducing the toll of vehicle crashes, but also from giving productive time back to commuters, improving energy security by reducing dependence on oil, and providing environmental benefits. The $800 billion annual benefit is detailed in the following:

  • Public Benefits by 2050

    • Congestion Mitigation - $71 Billion

    • Accident Reduction – Economic Impact - $118 Billion

    • Accident Reduction – Quality of Life Improvements - $385 Billion

    • Reduced Oil Consumption - $58 Billion

  • Consumer Benefits by 2050

    • Value of Time - $153 Billion

    • Reduction in Cost of Current Taxi Service - $10 Billion

For original equipment manufacturers (OEMs) and technology companies, the investments in research and development of this technology is driven by data that suggests the AV market is estimated to grow from $54.23 billion in 2019 to $556.67 billion in 2026, according to Allied Market Research estimates^[2].

The Players in AVs

The high-profile companies currently leading the way in AV development are Ford, Waymo (a Google spinoff) and General Motors (GM) but there are estimated to be over 150 companies working on developing this technology in some capacity. There are ongoing debates as to who is currently leading the pack and who will end up the leader by 2030 when AVs are expected to take over the roads. Other big-name companies not far behind the pack include but are not limited to Uber, Tesla, May Mobility, Intel-Mobileye, BMW-Intel-FCA, Zoox, Voyage Auto and Apple. Of these, the ultimate winners will be the companies that have the strategy to successfully commercialize their technology.  

Due to high investment costs, there are countless partnerships, alliances and investment deals that are continually reshaping this space. To exemplify the importance of teaming, in early July, Volkswagen agreed to invest $3.1 billion into Ford’s Argo AI self-driving unit. As part of this agreement, Volkswagen will be sharing with Ford in Europe its modular electric vehicle platform called MEB (Modularer E-Antriebs-Baukasten). In June, Waymo announced a partnership with Renault and Nissan that will look to bring its driverless rides for passengers and deliveries to France and Japan. Currently, Waymo operates its Waymo One robotaxi service in Phoenix, Arizona and is conducting testing in other locations domestically but nowhere outside the U.S  Uber has various partnerships including one with Volvo in which Uber agreed to purchase up to 24,000 vehicles from 2019 to 2021 which will be outfitted with Ubers AV technology.

When will you see AVs in your area?

It is not clear as to when there will be more widespread roll out of AVs. Optimism that existed last year as to when and how many AVs you will see on the road in 2019 have had to be tempered as companies still seem to be in the pilot and test phase. Waymo’s Waymo One vehicle launched in Phoenix in December 2018 with a fleet of approximately 600 test vehicles and still operates the same sized fleet today. GM recently announced that it will not be rolling out self-driving taxi service, originally targeted for 2019, but will instead dramatically increase the number of test vehicles on the road in the San Francisco area. Ford announced that it will have 100 AVs on the road for testing in Miami and Washington, D.C. by the end of this year. Uber, which had halted its AV road testing after its much-publicized March 2018 accident in Arizona, resumed testing in the beginning of this year in the Pittsburgh, PA area.        

While most of the aforementioned companies have scaled back on expectations, Tesla, remains overly optimistic. In April of this year, Tesla CEO Elon Musk indicated that Tesla will have over a million Tesla vehicles on the road with full self-driving capabilities in 2020.     

Near term, AVs are more likely to be seen in controlled settings and situations. For example, May Mobility operates six passenger golf carts in Detroit, Providence, R.I. and Columbus, Ohio. The AVs operate on controlled routes for short distances at no more than 25 miles per hour.  

There is less clarity, and more uncertainty as to which company will be the first to mainstream AVs, and when we will see AVs impacting everyday life. However, it is clear that companies will continue to invest billions in hopes that they win a large share of the AVs race by 2030.

 

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[1] America’s Workforce and the Self Driving Future June 2018.  Published by SAFE.
[2] www.alliedmarketresearch.com/autonomous-vehicle-market