Top Five Takeaways from Connected & Autonomous Vehicles 2018
The topics relevant to connected and autonomous vehicles continue to grow as the automotive industry is disrupted by technology. Among dozens of presentations at Connected & Autonomous Vehicles 2018, ranging from maintaining differentiation for luxury automakers to shifting insurance models, five key themes stood out.
1. There is a land grab going on in the connected car space
There is a land grab going on in the connected car space and it is emanating from software companies rather than traditional players in the automotive space, such as OEMs. Amazon, Apple and Google have made inroads to get their products and services into the infotainment systems of vehicles, many of which compete with one another. On the smartphone mirroring front, Apple CarPlay is available in at least one model from each of the top 10 OEMs by global sales. Android Auto and Baidu CarLife are not far behind. On the voice front, Amazon Alexa is installed in vehicles from six of the top 10 OEMs by sales, an impressive number considering that Alexa has only been commercially available in cars since early 2017. The functionalities of these externally-sourced systems are limited either by structural issues, such as Apple CarPlay not being integrated with Apple Pay, or by automakers restricting features as they grapple with branding and liability issues as well as developing their own alternative software platforms.
2. Debate remains over when and where autonomous vehicles will become a commercial reality
Despite billions of dollars spent by OEMs and other automotive stakeholders in the past year alone, when Level 4 and Level 5 autonomous vehicles will become a mass market reality is the subject of debate. Chad Bailey, associate at Nokia Growth Partners, the venture capital arm of Nokia, commented that “full-scale autonomous adoption will take years” and suggested 20 years as a reasonable time horizon. Technology needs to be integrated into OEMs and issues like regulations and shifting ownership models still need to be addressed by stakeholders. Bailey identified Israel, Japan, Western Europe and China as the primary markets for early adoption as well as several non-point-to-point autonomous use cases, such as mining and valet parking, as early use cases.
John Walker, transportation marketing manager at Lyft, thinks that Lyft vehicles will transition to an autonomous mode with a safety driver over the next five to 10 years. Lyft already has partnerships with Waymo, nuTonomy, Drive.ai and Jaguar Land Rover in the autonomous vehicles space. There is already a 2% chance that Lyft riders who opt-in in Las Vegas will be picked up by an autonomous vehicle, for example. Walker predicts that Level 4 or Level 5 autonomy will be a reality in 10 years; Lyft has established a Level 5 lab to design autonomous vehicles specifically for ride sharing.
3. Tech-laden new cars will face growing recall risks unless advanced technologies can reduce defects
Technology features in new cars are powered by thousands of semiconductors, which are ripe for malfunction and recalls unless big data can be used to improve reliability. Michael Schuldenfrei, technology fellow at Optimal+, a big data analytics solutions company, referenced the fact that BMW and Audi have 3,500 and 7,500 semiconductors per car, respectively. Companies that are using bleeding edge technologies, such as BMW and Audi, do not have much data on the reliability of those technologies yet. The vast majority of recalls are in new cars and there is little communication from a data perspective between players in the value chain, such as chip manufacturers and system manufacturers, until things go wrong. This lack of communication will lead to costly recalls for all unless they can reduce defect rate through effectively leveraging their data according to Schuldenfrei.
4. GDPR will spur innovation in the connected and autonomous space rather than hinder it
The General Data Protection Regulation (GDPR) went into effect in the European Union on May 25, 2018 with the purpose of better defining rules on data sharing and privacy. EU residents now have the right to request a copy of all personal data that companies collect on them and for that data to be amended or deleted. Fines for violating GDPR range up to 4% of total turnover, a potentially massive sum of money for companies with a global presence like Amazon. While experts do not expect the European Union to make an example of any companies in the near term by levying the maximum fine, many consumers will likely exercise their new rights under GDPR due to the recent scandals with Cambridge Analytica and Facebook.
Amie Taal, CEO and founder of Stratagem Tech, identified privacy and security as “two of the biggest risks” in connected and autonomous vehicles. “We’re used to [security] patches,” said Gail Gottehrer, partner at Akerman, a law firm. GDPR will necessitate proactive privacy by design “at the outset,” Gottehrer said.
Companies operating in the connected and autonomous vehicles sectors are uniquely positioned to capitalize on GDPR rules because these sectors are new and therefore less burdened by reams of legacy data that does not differentiate personal from technical data. GDPR compliance will become a key business differentiator as consumers become increasingly concerned about their privacy rights and the risk of substantial financial penalties will dissuade investment in non-compliant companies.
5. New startups may solve some of the most practical issues in the connected and autonomous space
Connected and autonomous vehicles remain ripe for disruption as the sectors begin to mature. Of the several startups highlighted at the end of the conference, a solid-state LiDAR company called Quanergy showcased revolutionary technology that was both inconspicuous and cheap. While CEO and co-founder Louay Eldada remarked that Quanergy’s goal is to reduce LiDAR sensor technology to the size of a chip, he showcased a prototype that was roughly double the size of a deck of playing cards, could be concealed under sheet metal and had a unit cost of around USD200. While not the size of a chip, the Quanergy prototype is already much smaller, cheaper and less conspicuous than the fragile mechanical LiDAR sensors on many test vehicles today. Solid state LiDAR technology, such as Quanergy’s, can revolutionize the current autonomous vehicle industry through a product that can be integrated into today’s vehicles without clunky add-ons that cost thousands of dollars.