For the best part of 130 years the automotive industry has been a force for innovation and economic growth. Now, in the early decades of the 21st century, the pace of innovation is speeding up and the industry is on the brink of a new technological revolution: “self-driving” cars.
Morgan Stanley Research analysts held brainstorming sessions with top executives in the auto industry to help develop a specific vision of what the industry’s future might look like. In doing so, they claim to have broken new ground on the topic of driverless cars by focusing on areas that have not yet been addressed. Specifically, they determined:
- A timeline for adoption
- Highlighted global implications
- Quantified the socio-economic benefits
- Examined investment implications, including categories such as long-haul freight delivery, telecommunications services, semiconductors, media and software.
The authors of a report titled “Autonomous Cars: Self-Driving the New Auto Industry Paradigm” also claim to have come up with a variety of potential solutions to the industry’s most pressing obstacles. The report indicates:
Autonomous cars are no longer just the realm of science fiction—and the social and economic implications are enormous. Cars with basic autonomous capability are in showrooms today, semi-autonomous cars are coming in 12-18 months, and completely autonomous cars are set to be available before the end of the decade.
According to the lead author Ravi Shanker of Morgan Stanley Research:
“With US drivers driving 75 billion hours a year, autonomous cars are poised to have a much greater impact on society as a whole than most people give them credit for.”
Autonomous cars “can drive one of the most significant transformations of the automobile in its history.” In addition to their many practical benefits, autonomous cars can contribute $1.3 trillion in annual savings to the US economy, with global savings estimated at more than $5.6 trillion. The report attributed the savings to a number of factors, such as a decline in costs for fuel and accidents, as well as $507 billion in annual productivity gains, since people could work, not drive, in their cars while commuting to work.
The report’s authors believe that the main barriers to autonomous vehicle growth include questions around liability in the event of an accident, customer acceptance and infrastructure development. Despite the potential roadblocks Morgan Stanley’s Shanker indicated: “It is now clear to us that not only are autonomous cars real, but also they are likely to come around sooner than most people think.”
It is clear the new technology associated with driverless cars could provide solutions to some of our most intractable social problems—the high cost of traffic accidents, transportation infrastructure, the millions of hours wasted in traffic jams, and the wasted urban space given over to parking lots, just to name a few. The implications could also be profoundly disruptive for almost every stakeholder in the automotive ecosystem.
As various participants in the automotive ecosystem grapple with the impact of these potentially disruptive new technologies, many are starting to embrace the possibilities. Intel, for example, recently launched a $100 million Connected Car Fund because, says Mark Lydon, director at Intel Capital: “Intel is looking to apply its expertise in consumer electronics and systems intelligence to the development of smarter vehicle technologies.”
Everything, from how we move goods to how we move ourselves around, is ripe for change.
How do you feel about driverless cars?