Danai Pathomvanich
Aug 24, 2015
Although it may be a decade before driverless cars occupy our highways, self-driving or autonomous cars will redefine our world.
In a recent McKinsey article, Michele Bertoncello and Dominik Wee interviewed 30 experts across Europe, the United States and Asia and arrived at several thought-provoking implications that I would like to share with you.
“....the ultimate role that automotive vehicles (AVs) could play regarding the economy, mobility and society as a whole will be profound,” the authors said.
1. Industrial fleets lead the way
The authors said it’s unlikely that any on-road vehicles will feature “fully autonomous” drive technology in the short term (for instance, by 2020–22) but AVs are already a reality in selected applications that feature controlled environments, such as mining and farming.
In the medium term (through 2040), on-highway trucks will likely be the first vehicles to feature the full technology on public roads.
“Prototypes already exist, and companies are currently developing the software algorithms needed to handle complex driving situations.”
In the near future, we will also be seeing adjacent AV construction and warehousing sector equipment applications: including excavators, forklifts, and loaders.
2. Car OEMs face a decision
Automakers worldwide will likely define and communicate their AV strategic positions in the next several years by following four strategic stances:
1) Premium incumbents
Established premium players with extensive customer bases and strong technical and commercial legacies will probably take an incremental approach to AVs. They will gradually introduce increasing levels of advanced driver-assistance systems (ADAS) in their vehicles.
2) Attackers
New industry players such as high-tech giants, first-tier and mobility suppliers will develop “radically new” vehicle architectures that focus on the “accessible mobility” consumer segments to capture volumes quickly and sustain ancillary business models.
3) Fast followers
These original equipment manufacturers (OEMs), capitalizing on their significant technical and commercial legacies will likely invest in AV research and then wait until core technology vehicle-level costs drop as the premium sector penetration grows.
4) Late entrants/nonadopters
According to the authors, these automakers will avoid entering the AV market in the short to medium term.
3. New mobility models emerge
While OEMs develop autonomous vehicles, new transport-mobility innovations are already hitting the road.
These include pay-per-use models: car sharing, carpooling, “e-hailing” taxi alternatives, and peer-to-peer car rentals.
Companies such as Grab-Taxi and Uber are attracting huge investments and experiencing impressive growth rates.
4. The car-service landscape changes
When AVs enter the early adoption phase new opportunities emerge for OEMs.
Given the safety-critical nature of AV technologies, the authors said customers may prefer strict adherence to OEM service processes and the use of original service equipment when it comes to maintaining and repairing AV systems.
5. Car insurers may shift business models
Currently, car insurers provide consumer coverage in the event of accidents caused by human error.
“This change could transform the insurance industry from its current focus on millions of private consumers to one that involves a few OEMs and infrastructure operators, similar to insurance for cruise lines and shipping companies.”
6. Companies reshaping supply chains
Autonomous vehicles and technologies will optimize industry supply chains and logistics operations as companies use automation to increase efficiency and flexibility.
“AVs in combination with smart technologies could reduce labor costs while boosting equipment and facility productivity.”
7. Accident rates drop
By midcentury, the authors predict AVs will reduce car accidents in the United States.
“If AVs reduce accidents by 90 per cent, it could potentially save $US190 billion annually in the US.”
8. AVs accelerating robotics development for consumer applications
AV growth will spur robotics developments for consumer applications (including humanoid robots) because they share similar technologies.
“These include remote advanced sensing, hyperprecise positioning/GPS, image recognition, and advanced artificial intelligence.”
In addition to sharing technology, AVs and robots could benefit from using the same infrastructure, including recharging stations, service centers, and machine-to-machine communication.
