An Autonomous Car Roadmap for Suppliers

Autonomous vehicles, with their promising pilot programs and enormous potential, make headlines in business and technology news every day. Self-driving cars and trucks promise to dramatically change the economics of nearly every industry, and it seems likely that eventually many people will no longer feel the need to own a car or even know how to drive.

However, the path to this driverless future is more complex than a first glance might suggest. Fully autonomous cars are likely to remain a small-volume market for some time. In the interim, assistive technologies will play a much larger role in the industry, as drivers come to rely on technology that guides them and supports their driving decisions. Mastering these new technologies will be essential for automakers and suppliers, and doing so will help build the capabilities they will need to deliver reliable, autonomous cars. The implications for toptier suppliers are that they will need to play in two closely related but distinct segments:

• Advanced driver assistance systems (ADAS). For at least the next decade, most consumers are more likely to buy vehicles that use technology only to assist drivers—things like automated emergency braking or assistive parking—rather than fully autonomous cars (see Figure 1). The deployment of assistive technologies such as radar and computer vision will depend on consumers’ willingness to pay for features based on these technologies, and most are not willing to pay much more than they do now. But costs will drop as volumes scale. Increasingly, automakers will be required to include advanced safety features if they want to keep their top safety ratings. Other features, such as advanced cruise control or lane-changing assistance, will rely on the same basic hardware and could be activated with software upgrades.

• Autonomous driving (AD). Fully autonomous vehicles are likely to remain elusively expensive for most car buyers over the next few years, provided they become accessible to private customers at all and regulations evolve to allow autonomous driving. But they will become increasingly attractive to taxi services and other shared mobility service providers who can justify their expense because it reduces their costs by replacing some drivers. While autonomous vehicles are currently possible, they require an extensive and expensive set of sensors and software along with exemptions from standard regulations. So far, their use is mostly limited to pilots within geo-fenced areas. Although the size of this opportunity will depend on a range of factors related to urban density and consumer acceptance of car sharing, the market for fully autonomous vehicles is likely to remain small over the next 5 to 10 years. Even so, the market for these vehicles will be an important development platform, as carmakers and suppliers climb the learning curve required to build and market fully autonomous vehicles.

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