Automotive industry: what does the future hold for this market?

No doubt about it, we are living through a big change in the history of  the automotive industry. Robotics, mobile cloud, batteries, DNA sequencing, blockchain and other huge advances, are about increase productivity and enhancement in domains like health or transport over the next few years. This poses large questions on several issues like; what can we expect for the future of our market, employees, economy, etc…?

This domain reflects perfectly what’s possible when Innovation is the driving force! It combines a lot of key innovation advances to afford us a new vision of the road ahead: robotics, artificial intelligence, technology that serves a better environment, data, strong factory, high precision and design, safety and comfort… all those promises and much more.

Automotive industry: a long road done!

Since the beginning of time, we never stopped thinking about the way we can optimize our movements. From carriages to cars, from cars to autonomous vehicles! The statement is that our actual automobiles can be very dangerous. But this is not a fatality! From studies we know that more than 80% of road accidents have been caused by human error. Most people believe that autonomous vehicles could prevent more than 27,000 deaths per year. Safety is not the only improvement on our way to shifting towards SDVs (Self-driving vehicles), reducing carbon emission is also a key part of the project. More than 9 577 patents were created in Europe in 2017 (EPO,2018 about Innovations like advanced internal combustion engines and hybrid electric, plug-in hybrid electric, battery electric and fuel-cell hybrid electric vehicles… It’s the first trend driving the automotive industry transformation. The second major trend is the increasing level of automation towards fully SDV, and it’s the one that interests us in this article.

To illustrate our statement we rely on a study from the European Patent Office. This study provides a comprehensive picture of current trends and emerging leaders in SDV technologies. While companies are facing a race to innovate in smart, connected and automated vehicles the patent applications in this field allow us to identify emerging leaders in autonomous vehicle technologies and trends related to them. The study also mentions that Europe has a good position on key technologies related to autonomous cars. Below is some information we have selected on this study:

  • The study shows that for SDV domain, half of the top 25 companies, including the top of the list, are not traditional automotive/transport companies, but ICT firms.
  • T. Kearney in 2016 predicted that by 2025 SDVs are expected to be commercially available with an estimated potential market of some several hundred billion dollars per year by 2030.
  • Since 2011, patent applications relating to this domain increased by more than 330%, a growth rate that is more than 20 times faster than that for patent applications in general at the EPO. “Almost 18 000 patent applications relating to SDV technologies have been filed with the EPO in the last ten years, almost 4 000 of them in 2017 alone” from EPO study.
  • The top 25 applicants mentioned above represents 40% of all autonomous vehicles patent applications between 2011 and 2017.

 

“Automotive and digital technologies are both traditionally very innovative sectors and the report shows that there is a crossroads where the two sectors meet, which is marked by significant changes in its patent landscape. As patents are filed ahead of the appearance of products in the marketplace, information from patents can offer unique insights into the direction a technology is heading in, and which companies and countries are in the lead.” António Campinos, EPO President.

 

What’s the destination for Automotive industry?

Last month, Waymo LLC, the covert subsidiary of Google’s parent company, Alphabet Inc., brought out their robo-taxi service under a new brand and compete directly with Uber and Lyft. For this first step they have chosen to play it safe and kept a person at the wheel in case anything goes wrong, and the service is only available to 400 test families in suburban Phoenix.

 

« Our self-driving vehicles just crossed 10 million miles driven on public roads. » John Krafcik, CEO, Waymo Team.

 

We now know that the automotive industry is approaching a big turn in its history with several factors related to it:

  • The demand for electric vehicles (EVs) is experiencing a strong growth since 2015 ( cf: figure1.). Lithium-ion cells experiencing a price decrease, earlier than we thought, and at the same time, manufacturing a traditional Internal Combustion Engine (ICE) powertrains increasing.
  • The “sharing economy” will change drivers habits. That will impact the automotive industry production by shrinking demand in some sectors while boosting some others. Market orientation is already changing.
  • Autonomous vehicles and semi-autonomous cars arriving on the market and will change much more than one industry.

 

Figure 1: source : https://www.iea.org/gevo2018/

 

To conclude, if you have an innovation project related to transportation you should be prepared to have serious competition. Everyone wants to be well positioned for this historic turn in the industry! As we always recognize at Innovation Intelligence, keep yourself informed about your competitors moves using dedicated tools.

If you are interested in discovering how to gain time and value on your innovation project by having control over your competitive environment and your networks, feel free to join us at our next webinar where we will introduce you to a unique tool to help you manage such topics, through a use case on autonomous vehicles:

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Sources:

https://medium.com/waymo/where-the-next-10-million-miles-will-take-us-de51bebb67d3

https://www.bloomberg.com/news/articles/2018-11-13/waymo-to-start-first-driverless-car-service-next-month

https://www.brookings.edu/blog/up-front/2018/12/13/the-robots-are-coming-lets-help-the-middle-class-get-ready/

https://www.epo.org/news-issues/news/2018/20181106.html

https://www2.deloitte.com/global/en/pages/about-deloitte/press-releases/consumers-pump-brakes-on-autonomous-vehicle-adoption.html

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