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Posted on Sep 29, 2015

Autonomous car future will demand tech company and automaker collaboration

Autonomous car future will demand tech company and automaker collaboration

This article original posted on usatoday.com

With tech companies interested in engineering the next generation of vehicles as well as outposts of major automakers determined not to be left behind by the coming revolution, who will win this race?

The answer is easy: consumers.

That’s one of many conclusions to be drawn by a new report from Deloitte Consulting, out Thursday. In “The Future of Mobility: How Transportation Technology and Social Trends Are Creating a New Business Ecosystem,” the firm’s argues that transportation shifts over the next five to 15 years will reduce the cost of personal transportation from 97 cents to 31 cents per mile.

Deloitte lays out the future this way. Tech companies are seen as the disrupters, companies such as Google, Uber and Tesla that are rethinking the traditional approach to cars who “do not have vested stakes to protect.”

Automakers are called the insiders, who do have a stake in ensuring a very gradual pace of change that preserves legacy investments in manufacturing and research. “So far, none of the incumbents appear prepared to make big bets on radical change,” the report says.

 But while technology giants and legacy automakers at present seem to be battling for autonomous and driver-assist tech bragging rights, the two will become bedfellows if only to share in the massive $2 trillion automotive industry pie, or roughly 11.5% of GDP.

insider - disrupter

That view is best exemplified by the approach Google is taking toward getting into the car game. The Mountain View-based company has stated publicly that it would seek an experienced manufacturing partner for its autonomous vehicles, perhaps in contrast to Apple which remains both mum on the topic of a car project – despite ramping up hires in this arena – as well as a notorious skeptic of co-branding.

“Right now the space is crowded with players with different objectives, but ultimately success will require working together even while posturing” about tech supremacy, says Scott Corwin, one of the authors of the report and a director of Deloitte’s strategy and operations practice.

As consumers, get set for four phases of mobility, he says. The first is anchored to our presently shifting view of car ownership, which will give way to a coming phase where access will be considered more desirable than possession as typified by car-sharing and ride-hailing options.

The next two phases take us from the driver-assist technologies that increasingly are common in cars – such as warnings when you wander out of a lane or automatic braking – toward full autonomy and accessibility. Deloitte estimates that over the course of these four phases, the cost of transportation will drop from owner-operator rates of nearly $1 per mile to an autonomous and shared lift costing one third the price.

states of mobility

This last and admittedly futuristic vision is “not likely to debut in cities that are as dense as New York or San Francisco,” says Corwin. Intriguingly, Google just started logging autonomous-car testing miles in Austin, Texas.

Corwin echoes the report in pointing out that the other speed bumps in the road for the four-phase evolution are government regulation and psychological acceptance of driverless cars sharing the road with human motorists.

“Government regulations are one thing, and they’ll have to be worked out, but I think we’ll eventually get over the fear” of self-driving cars, says Corwin. “Some drivers out there today simply aren’t that safe. And ultimately the promise of all this tech is safety.”

Google’s self-driving cars have been in more than a dozen accidents after a million miles of testing, but in each case the fault has been with the human driving the traditional vehicle, most often rear-ending the Google car.

While it may well take a while to get to this new vision of the automotive future, the destination is a rosy place, according to the Deloitte report. Specifically, it’s a land where vehicles never crash, traffic jams are rarities, energy demands drop, parking lots vanish, and police refocus on crime since cars won’t break the law.

Sounds idyllic. But it may still be a ways down the road.

“In our ongoing conversations with auto industry leaders, they repeatedly and collectively argue that outsiders simply do not appreciate the sheer complexity of developing a vehicle today, the challenge of introducing new advanced technologies in a vehicle’s architecture or the rigor and inertia of the regulatory environment,” the report says.

“But the interplay of the converging forces of change may be less predictable and lead to faster upheaval than they think. Automakers might be overestimating how much power they have to manage the course of future events.”

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