Conference Presentation, Keynote
The Autonomy Ecosystem: The Value Chain (3 of 8)
- The transition from gas-burning to electric, self-driving fleet vehicles is expected to occur "at the very beginning" of its lifecycle and may accelerate "a lot faster than any of us are expecting," triggering profound shifts in the automotive value chain.
- Future consumer decisions will prioritize brand loyalty and safety over vehicle make and model, rendering physical attributes like door sounds irrelevant while prioritizing reliability, battery life, and safety.
- New market structures may include intermediate operators leasing fleets to fleet operators, with fleet operators potentially self-leasing, and a "whole new set of entrants" arising as the electronics and software portion of the value chain matures.
- Vehicle form factors are predicted to expand significantly, including single-occupant cars, cargo vehicles potentially featuring robotic arms instead of steering wheels, and buses with capacities ranging from 2 to 64 seats operating on prescribed routes.
- The "smartphone-ness" of vehicles and the role of electronics and software are set to accelerate, with industry forecasts projecting that by 2030, 50% of total car manufacturing costs will go to electronics and software providers.
- Advanced mapping technologies will enable "centimeter accurate 3D Maps" where sensors infer road rules, providing critical decision-making data for self-driving cars, while companies like DeepMap seek to leverage this for safer vehicle design.
- The software environment may evolve into a dominant operating system licensing model similar to Microsoft Windows, an open-source model like Android, or a mix of full-stack and modular companies, though the specific future winner remains uncertain.
- Incumbents have already invested in software, sensing systems, and charging infrastructure, but the outcome of a "fierce" battle for fleet ownership between existing players and new entrants from China or Silicon Valley remains unresolved.
- While the outsized cost of battery components seen in 2017 is a temporary phenomenon due to collapsing prices, the long-term value chain is defined by an increasing focus on electronics and software.
- The industry anticipates "big questions" regarding software will be answered "over the next couple of years," with the overarching expectation that consumers will benefit from safer and cheaper transportation solutions.