The Autonomous Vehicle Market
Work on autonomous vehicle technology began more than 20 years ago in the United States, under three U.S. Army demonstration projects setting out to prove how unmanned vehicles could be used in rough terrain. This was followed by the DARPA Grand Challenge in 2004 and 2005, and the DARPA Urban Challenge in 2007, where the public and universities could form teams and vie for prize purses of $1 million to $2 million. However, it wasn’t until about a decade ago that we began to see the rise of a commercial market, driven by future estimates for on-demand taxis, mobility for older adults and persons with disabilities, and autonomous trucking for transportation of cargo. According to the Nikkei Asian Review, nearly $40 billion has been invested to date to realize the financial return from these future markets.
The Google Driverless project known as Waymo, began in 2009, and the company has invested about $3 billion to date. Toyota, BMW, Daimler, Nissan, Volvo, Uber, Cruise, Nuro, and Tesla are all racing for autonomy with nearly $20 billion more invested. In China, Didi Chuxing, Baidu and WeRide add another $5 billion and with the investment into self-driving trucks and buses, the autonomous vehicle investment nears $40 billion.
So, how far has $40 billion fueled the current autonomous industry?
In our July Leaderboard, we published a chart of current levels of autonomous driving from SAE International. Many companies have incorporated Level 2 and 3 technologies into their vehicles, such as cruise control, hazard warning and automated parallel parking, and to some extent automated steering and acceleration in limited conditions, however, attaining a true Level 4 and certainly complete autonomy at Level 5 has been elusive.
Yet, the strategies for future financial payoff continue to drive the industry. The taxi and ridesharing industry in the U.S. is expected to reach about $285 billion per year in the next decade.
According to a Goldman Sachs’ Future of Mobility report, ride-hailing and ride-sharing autonomous driving and delivery, micro-mobility and even eVTOL (flying cars/taxis) stand to disrupt profit pools that they estimate exceed $700 billion, and venture backed startups and incumbents, according to these analysts, will attempt to address over $7 trillion in spending. This report states that more than $120 billion in venture capital has been invested in these markets over the past 10 years.
In addition to the monetary rewards from autonomous vehicle sales, trillions of dollars can be saved by realizing an autonomous vehicle market. This includes savings from accident avoidance and loss of life to more efficient use of roads and less investment in driving infrastructure. We can increase work productivity by more than 10 percent by eliminating traffic jams and being able to work while being driven by an autonomous vehicle. More than $5 trillion alone is projected to be saved from activating a more efficient supply chain, facilitated by large truck delivery in one-day shipping across North America. Near-term savings of 30 percent can be achieved through lower fuel costs.
Criteria to realize the market:
More innovators. The field of AI and machine learning is very new and much of the talent is located in universities around the world.
More advanced and less costly equipment that will let the vehicle perceive a 360-degree environment: cameras, radar, lidar.
More advanced batteries, especially in electric vehicles that can manage the high demand for on-board computers.
Designated roads for testing that lead to regulatory approval.
Safety records to convince the public and transportation industry to embrace autonomous mobility.
The Indy Autonomous Challenge is addressing many of these criteria to advance the technology for autonomous transportation and fuel the market. Thanks to the 500+ participants from 39 universities worldwide in this first-of-its-kind competition, the IAC has the innovators. Thanks to the Indianapolis Motor Speedway, it has the testing facility. Thanks to IAC sponsors, and Clemson University’s Deep Orange-12 program, the challenge has what could be the most optimized autonomous vehicle in existence today, the modified Dallara IL-15. And, when spectators see these vehicles safely racing at speeds of up to 200 mph, they will further embrace the idea that autonomous vehicles will be safe for family driving.