Autonomous vehicles

Strong socio-economic issues

by Nicolas BEC

The autonomous vehicles market will have a profound effect on the car industry’s future worldwide. And LTE-V2X and 5G technologies will play a decisive role. The timeline for the emergence of fully autonomous vehicles was recently extended, citing overly optimistic predictions on the technologies’ maturity.

A high potential market with a host of challenges ahead

The march towards fully autonomous vehicles has begun, but no veritable adoption is expected in this market before 2030. A great many trials still need to be conducted under real life conditions. Cybersecurity, the ability to manage every possible road condition, regulation, public acceptance, cost and accountability commitments from automakers beyond Level 3 autonomy are just some of the additional hurdles that still need to be overcome.

IDATE DigiWorld estimates that Level 3 and 5 autonomous vehicle sales will reach 55 million and 170 million units, respectively, in 2040.

Delayed adoption of category 4 and 5 autonomous vehicles

Evolution of vehicle sales by autonomy level

Source : IDATE DigiWorld in "Autonomous vehicles"

A fiercely competitive market dominated by veteran players

A great many players are involved in developing autonomous vehicles, and now looking to coordinate with one another to achieve greater efficiency.

To date (especially luxury) automakers are in the strongest position to develop this innovation, which is viewed as the natural progression of their core business. Equipment suppliers, meanwhile, are focusing on designing technological solution components.

Other players, such as telecom operators, chipset makers and IT companies are also eyeing opportunities in this market. All have specific areas of expertise that are vital to the emergence of the autonomous vehicle, which will be growth outlet for their businesses.

At the same time, Internet and ride sharing companies are concentrating on the supply of Mobility-as-a-Service (MaaS) solutions.

A sector dominated by automakers

World's leading autonomous vehicle companies

Source : IDATE DigiWorld in "Autonomous vehicles"

Adoption constrained by acceptance

The purpose of the autonomous vehicle is to optimise road travel. So it needs to prove its ability to reduce traffic, be safer and more energy efficient before users are likely to embrace it.

The 5GAA association is thus working to devise economically viable solutions for installing the necessary infrastructures. As it stands, the ecosystem appears to be moving towards a business model based on sharing, rather than one of individual car ownership. Which is why several car manufacturers, such as PSA, have elected to withdraw from the B2C segment.

Users’ mixed reactions to the driverless car can be attributed in part to a lack of trust in this new technology. Carmakers have thus opted to gradually incorporate these technologies, to demonstrate their usefulness step by step, especially in luxury vehicles.

Varying levels of acceptance for autonomous vehciles

Consumer acceptance levels for autonomous vehicles, by country

Source : KPMG in "Autonomous vehicles readiness index", 2019

Connected cars

Connected cars, meanwhile, are already gaining some economic traction. Previously confined to only high-end models, connected services (infotainment, telematics, etc.) are being adopted more and more by car makers.

This is due in large part to the fact that, from a regulatory standpoint, connectivity has become mandatory for the most recent vehicles (e.g. eCall in Europe). And business models are evolving as a result.

Car-makers are pushing these connected services as part of the sales process, offering buyers a free trial period. This traction can also be put down to rising electric car sales, all of which are connected by default (cards updated at charging stations).

We expect to see 612 million connected vehicles (with an on-board module) on the roads worldwide by 2025. A very large percentage (more than half) of that total will be found in Asia-Pacific.

Around 500 million connected vehicles on the road in 2023

Regional progression of connected vehicle numbers

Source : IDATE DigiWorld in "Connected cars"

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