The disruption of the automotive industry (3/5)
By: Kristof Drossaert
Tags: Self Driving Cars, Mobility, Cars, Disruption, Automotive

The automotive industry is one of the last remaining industries that didn’t undergo a full transformation yet. Reason being, the slow adoption of new technology and long lifespan of the products. But nonetheless, slowly the disruption is kicking in hard for the traditional OEMs.

In this series of articles I discuss the different trends and movements that impact what, until recently, seemed to be a stable industry. I talk about the challenges and opportunities.

(Don’t forget to read up on part 2 here: https://medium.com/@kristofdrossaert/the-disruption-of-the-automotive-industry-2-5-e2dc6891de9e)

Autonomous cars and data monetization.

Based on the new technology impulse that electric driving has given to the car industry we see more and more OEMs launching their autonomous driving projects. The fact that ‘new kid on the block’ Tesla showed the world that it was possible, created a mind shift for the younger customers.

The fact that now in Europe it becomes more ‘acceptable’ to drive an automatic gearbox gives a big boost to full automated driving. Because all of us spend hours and hours in traffic jams every, why not spend that time more useful.

Levels of automation

Although it often comes across as something new and futuristic, we already had different levels of automation in most of our cars. Adaptive cruise control, emergency braking and pedestrian detection were features I already had in my Volvo 7 years ago. Currently also mainstream car brands have these features on their well-equipped cars and it’s no longer a toy for the rich.

The current step for the industry is assisting while driving, active lane-keeping, improved collision prevention, fully automated parking, …. This is no longer a gimmick but already available on a lot of cars. For now it’s often still an expensive option, but over time this will also become mainstream. And as always you see luxury brands taking the lead, while their audience is willing to pay for these extra’s.

Next step will be the car making important decisions for the driver, active overtaking/lane-changes, autonomous highway driving and active speed limiting are closer than you might imagine. Some OEMs are already experimenting at some level with this technology and it will not be long until highway driving is autonomous in most newly build cars.

Fully autonomous driving is not yet something for tomorrow, but will surely follow. Most complex challenges to overcome will be interconnectivity between cars, cars that are still from a previous generation (thus not autonomous) and people. Because the most unpredictable factor in the equation is human. If you let computers do all the decision making and communicating amongst each other, there would not be any issue. But pedestrians, people behind the wheel in non-autonomous cars and other unpredictable situations make autonomous city-driving a real challenge.

But even to this respect, there is no single doubt that it’ll not happen in the future. The speed with which computers can make calculations, predictions and different scenarios of outcome far exceeds the human brain. The impact of automation on behavior and car use will be touched upon in the next article of this series.

Legislation and moral choices

As with all new evolutions, legislation and government are lacking behind. But the technology will drive the decision making. At the time the first car was introduced there were no laws either. So I’m quite confident that under pressure of the innovations new legislation will follow. Even so that the laws will not be very limiting, because currently car accidents are responsible for a very high number of deaths and injuries every year. Autonomous driving can drastically decrease this number.

Remarks often heard are; ‘What about moral choices?’, ‘What will happen if an accident is non-avoidable, what decision will the computer make?’, ‘Who’s the computer trying to protect, the driver or the pedestrian?’ This is indeed a pain point very difficult to answer. But the same question actually goes with a human driver. Only in that case you have someone accountable.

The philosophical question could also be; “If we can limit the number of injuries by 95%, should we then still care about the morality of the car?” It’s a very touchy and difficult debate that withholds a lot of OEMs to really go full out on the development of autonomous cars. Because of course every injury is one too many. That’s why brands strive to 0 fatalities, it’s a goal, but in the end extremely hard to reach.

However this will not stop the evolution towards full autonomy, but it is surely slowing down the progress.

Big data and data monetization

With these changes the engine no longer is the center of your car. No, the computer, the brain of your car, is. In this process this brain is collection tons of information from different datapoints, inside your car and outside.

Part of a future business model for car manufacturers is the sales of this data. Information about traffic, environment, your driving behavior, your cars vitals, your media use inside the car, … can help different suppliers/partners. Think about insurance companies, car aftersales programs, city-mapping, commuting patterns, new store locations, weather channel optimization,… the potential is endless.

Not only car manufacturers will be able to sell data, but also the owners will be able to. Because in a fully autonomous car, you’ll have time to kill, making it very interesting for media-providers and game developers to connect with you. As with all data in the future it’ll become a trade. You give up a part of your privacy by sharing data, you’ll get extra services and value in return.

(Also read up on the next article in the series on new mobility business models: https://medium.com/@kristofdrossaert/the-disruption-of-the-automotive-industry-4-5-2ac95db0e768)