Will consumers release control on an autonomous future?

By

Kevin Roberts

EY Global Automotive & Transportation Senior Analyst

Thought leader on mobility. Passionate about analytics, innovation and disruption.

7 minute read 21 Jul 2020

Technology has shifted the autonomous vehicle (AV) tale from science fiction to how fast companies can get them to market.

The debate around whether autonomous vehicles (AVs) are possible has shifted to how quickly companies can get them on the market. Yet like in so many facets of life today, their role in society faces new uncertainties. Complicating matters is COVID-19 and the impact on how people view mobility going forward; there are now serious questions regarding the long-term prospects of mass transit and shared mobility. The question now has become: can AVs solve these challenges, or will they be a casualty before they even launch? 

The case for AVs

The biggest case for an AV is safety. While human drivers have been improving with regards to safety over the intervening decades, helped largely by technology advancements, there remain far too many traffic fatalities. The World Health Organization estimates that in 2016 there were 1.35 million road traffic deaths globally; that averages out to around 3,700 people killed daily. The US Department of Transportation estimates that 94% of all serious motor vehicle crashes involved a driver-related factor, with the remainder being caused by environmental or technical issues. We could effectively reduce that number to near zero with AVs.

traffic fatalities

While the benefits are clear, the transition will take time, with hundreds of millions of non-AV vehicles on the road. Additionally, a recent study by the Insurance Institute for Highway Safety highlights that while AVs can quickly improve upon human sensing and incapacitation, there will need to be an explicit focus on planning and deciding, execution and performance and predicting to see the full reduction in crashes.

Beyond the potential to save lives, there are other benefits to AVs, such as the amount of time that is lost sitting in traffic. According to the 2019 Urban Mobility Report from the Texas A&M Transportation Institute, the average auto commuter in the US spends 54 hours in congestion; that time could effectively be freed up with the advent of AVs, allowing for more work or leisure time during their commute.

The reasoning for governments and consumers seems clear, but what’s in it for the companies developing the technology? How about US$8 trillion? Recent industry estimates put the global AV industry as an US$8 trillion opportunity, with ride-hailing potentially accounting for US$5 trillion, US$2 trillion for freight, and US$500 billion each for data insights and in-vehicle experiences. That US$8 trillion is a significant increase over the automotive industry today, which, according to the International Organization of Motor Vehicle Manufacturers, accounts for roughly US$2 trillion in gross revenue.

Highway towards the sea
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Chapter 1

What’s the holdup?

Autonomous capabilities are evolving, and questions remain around the best ways to promote needed connectivity to a vehicle’s environment.

If the above has you interested in an AV, you’re likely wondering when the technology will be available on the road for you to use. The answer — unfortunately — isn’t an easy one. What one means by “autonomous,” how to connect to these vehicles, use applications, regulatory uncertainty and consumer concerns are all currently clouding the outlook for when a commercially viable AV will be on the market. While the causes for concern are many, when we look at each in detail, we can start to get a better understanding of the timeline for AVs.

The road to full automation

The move to AVs isn’t likely to be a binary one, as we see more and more levels of autonomy added into our vehicles today. In fact, vehicles today already feature many advanced driver-assistance systems (ADAS), which are helping to make driving safer today while decreasing the need for and risk of human drivers.

We’re already seeing technologies such as collision warning jump from being installed on just 13% of the 2015 model year vehicles in the US to 60% in the 2019 model year. The expectation is that more and more ADAS technologies will become mandatory just like rear cameras have become in the US, blurring the line somewhat further between what is and isn’t an AV.

US: percentage of factory-installed ADAS equipment on light vehicles by model year (2015-19)

However, this evolution in safety is also creating issues for both drivers and vehicles. Level 3 — condition automation — solutions create potential issues regarding how long a driver can hand off operation and when they need to regain control. These gaps in human driving vs. automation can create situations where a driver becomes disengaged from the activity and could increase risk instead of decreasing it.

The fatalities that have been recorded for AVs have been from Level 2 or 3 and have featured drivers who had issues regaining control or not actively monitoring. While ADAS can reduce crashes, it also has the risk to create new safety issues.

With these risks in mind, we’re starting to see an emergence of Level 2+ functionality – partial automation – which increases safety but doesn’t allow the driver to remove themselves from operation completely. The question now is whether we can move from Level 2+ to Level 4 – high automation – directly.

Accidents

100%

of AV fatalities since 2016 have occurred in either Level 2 or Level 3 vehicles (not those with high automation, in other words).

Connected car

While uncertainty remains around the timing of a safe leap up to Level 4, there is no doubt that we’ll need to have reliable, pervasive, high-speed connectivity for this to take place. The need for such connectivity is critical to underpin vehicle-to-everything (V2X) communication, which would allow AVs to take advantage of numerous connection points to provide improved levels of safety to all, improvement in entertainment for riders, and more efficient travel-reducing congestion and emissions helping to not only reduce environmental impact, but boost the economy.

By one estimate from INRIX, congested roads in the US cost the economy US$88 billion annually, a cost that V2X could help dismantle.

The right technology to allow vehicles to interact with telecommunications networks, infrastructure, other vehicles and pedestrians will be critical. There is hope that 5G could be the technology to allow this to happen; however, with its rollout just beginning, we can’t expect full global use of 5G immediately.

Additionally, while 5G is an improvement over the current 4G system, I hazard to guess most people wouldn’t want to chance riding in a fully autonomous vehicle with the connectivity issues that cellular connections are known for, so further redundancies to ensure no connectivity losses will be critical.

While 5G is the clubhouse leader at this point, there are still competing technologies, such as Wi-Fi, that are being viewed as potential replacements or augmentations to 5G connectivity to fill the gaps in cellular service. The umbrella underneath V2X is broad and vast, with significant research and development needed to implement each of the supports underpinning; a potential delay in one or more of them could further delay the rollout.

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Chapter 2

The right AV for the job

COVID-19 has likely slowed the development of personal AVs. But it is driving the need for more pervasive contactless delivery options.

When you think of an AV, what comes to mind? Most likely you think of the freedom of no longer having to drive your own vehicle. However, that’s just one of the various types of AVs being developed. In fact, while COVID-19 has likely slowed the development of personal AVs, it probably has increased the need for more pervasive contactless delivery options. So, while we tend to view AVs as a monolith of sorts, there are several potential options that are being developed and some will likely be to market sooner than others:

  • Mobility-as-a-service (MaaS) — this is the type of AV most people tend to think of: a driverless, ride-hailing vehicle that they can summon from a phone that will take them where they need to go without the inconvenience of having to drive oneself. This is also the most complicated version of AVs to come to market, which face a litany of technological, regulatory and customer concerns before they can successfully come online. Additionally, the technology will likely be limited to select markets to start in heavily geo-fenced boundaries.
  • Personal AV — while much of the focus has been on MaaS AVs, if it evolves like traditional automotive technologies, we might see it on luxury personal vehicles first. Why? AVs are expected to add significant cost to a vehicle, which is already at historic highs, and traditionally new high-cost technology debuts first on luxury vehicles to recover initial R&D costs before becoming more ubiquitous across more mainstream models. While volumes would likely be extremely limited initially and face the same limitations discussed with MaaS, we’ll likely see a small pool of privately-owned luxury AVs mixing in with the more utilitarian MaaS AVs.
  • Commercial vehicle — while MaaS might be outside the mainstream, we’re likely much closer to Level 4 autonomy on freeways for commercial vehicles. This space would offer a quick return on investment, as you could take the driver out of the equation for the long-haul component and then reinsert them for non-freeway driving. The benefits here are many, including a possible solution to the growing driver shortage, and the elimination of workload concerns for drivers. So, while personal AVs might take longer to come to market, there is a good chance you could be driving alongside an autonomous truck soon.
  • Last mile delivery — last mile delivery has been receiving a great focus of attention as we balance social distancing requirements due to COVID-19. The ability to have goods packed into an AV and have it drive to a recipient’s house has obvious upsides in a social-distanced world. Add in a drone component for last mile delivery and one AV could service multiple homes on a single trip. Recent approvals for technologies in certain markets such as a robotics company based in the US, allowing the testing of its autonomous delivery vehicles on the streets of California or another US robotics company that offers autonomous deliveries in Milton Keynes in the UK mean that soon an AV could be delivering your groceries rather than having to use curbside pickup.

Concerns remain

Beyond technological concerns, there remain many questions regarding how AVs will be regulated and who will do so. If each individual country regulates independently, it will likely slow down global rollouts, as software will have to be customized and tested for each jurisdiction. This is a thorny issue, with seemingly few easy answers, but it is crucial for the cause of AVs that it is addressed before too long. 

Finally, there remains a question regarding whether consumers want an AV to begin with. A recent study by AAA found that 71% of US drivers would be afraid to ride in a fully self-driving vehicle. So, beyond technological and regulatory hurdles, there will also need to be a campaign from manufacturers, OEMs, tech companies and governments to convince consumers that an AV is safe for them and their loved ones to use.

The enormous potential and possibilities that a fully autonomous vehicle fleet would bring to the market seems to be so tantalizingly close, yet the remaining hurdles that must be overcome to make it a reality are daunting. The additional challenge of COVID-19 clouds the outlook for AVs even further as a shift toward more private ownership could dim the future of autonomous shared vehicles. Can all these trials be overcome in this decade? Perhaps, but not all at once. What will likely occur will be an accretive path to an autonomous future that will be highly application and regional dependent.

Summary

While the benefits of AVs are clear, the transition will take time. Hundreds of millions of non-AV vehicles are on the road, and automation capabilities continue to evolve for different use cases, with regulations developing in tandem across geographies. And then there’s the uncertain impact of COVID-19. The road ahead for AVs may be long, but there are opportunities on the horizon.

About this article

By

Kevin Roberts

EY Global Automotive & Transportation Senior Analyst

Thought leader on mobility. Passionate about analytics, innovation and disruption.