The self-driving car industry is growing up. Valuations of self-driving car companies and private investment in these companies are exploding.  Bloomberg reports that private investment in self-driving and connected car companies in the second quarter of 2018 is more than the total private investment in this sector in the prior 4 years combined!  Morgan Stanley has raised its valuation of Waymo from 70 billion in 2017 to 175 billion. But this is only the tip of the iceberg. Below the surface, a major restructuring of the auto industry is underway where self-driving car companies are ..read more

Since 2014, many companies have applied in California for testing self-driving cars. The list of companies which have received a permit can be used as a measure for the innovation process associated with autonomous vehicle technology. The graph below shows how the number of companies active in California has only increased gradually from 2014 to the third quarter of 2016. A steep increase follows in 2017. The slope softens in the first half of 2018. Of course it would be premature to conclude that we are already seeing the beginning of the end of the S-curve which is so typical for innovation ..read more

The two recent fatal accidents with self-driving cars by Uber and Tesla have not led to the major backlash which many people had predicted. While this does not come as a surprise (the predictions ignored the long history of technical innovations, where accidents have rarely slowed or even halted the advance of a technology), nevertheless, the two harrowing accidents increase the concern of the public and of regulators about the safety of self-driving cars. Therefore this is the right time to perform a more careful analysis of the risk profile of this technology. As we will show in the followin ..read more

Across the world billions of dollars are committed every year for new public transport and road infrastructure projects: commuter rail, subways, new roads, bypasses, tunnels, bridges, etc. Committees spend years planning these projects; it often takes more than a decade until a project is implemented. Once completed, we expect the projects to yield their benefits over many, many decades. Over the last century planning and estimation processes have been refined; they work reasonably well. Unfortunately, current processes can not and do not take self-driving vehicles into account. But it is now ..read more

In the next five years the first fully self-driving cars will become available for purchase. This will happen after the first fleets of self-driving taxis appear in our cities. How will this affect the demand for private cars? We can expect consumers to react in multiple ways: In the high end of the market, additional demand will be generated by price-insensitive customers who greatly value their personal time and greatly value their own life. For many affluent consumers who spend significant time at the wheel, full self-driving capability will be a must have and they will not wait until the e ..read more

Neither the auto industry nor politicians have yet grasped a key implication of self-driving vehicle technology: it fundamentally changes the electric vehicle range problem – which is the key limiting factor for the adoption of electric vehicles. Batteries are currently the biggest cost factor for electric vehicles; their production is costly; their enormous weight (a Tesla Model S electric battery with a capacity of about 85kWh weighs a little more than half a ton) also reduces the energy efficiency of electric cars. But the ability to drive autonomously changes the way vehicles will be used ..read more

After the race for fully self-driving cars heated up in 2016, 2017 became a year with exciting developments – many billions of dollars changed hands for self-driving car related acquisitions(1) and many collaborations were started(2). But besides progress, 2017 also showed some limits: Tesla was plagued by defections from their SDC team and had to cancel their fully autonomous coast to coast test drive planned for the end of 2017 and shift the target date for their fully self-driving capability back by 2 years. Volvo effectively cancelled their planned Gothenburg self-driving car trials (by ch ..read more

Self-driving mobility services are likely to be adopted quickly in high density urban areas. In these regions, car ownership is likely to fall significantly. Several studies have shown that one autonomous taxi might provide sufficient transport capacity to service the mobility needs which are currently fulfilled with 6 to 10 privately owned vehicles. These studies have considered local motorized mobility in large cities such as Ann Arbor, Lisbon, Austin and others. But how will autonomous fleets impact mobility and car ownership in less densely populated areas? About 86% of the US population l ..read more

How will autonomous car technology generate profits? Among the many different business models – from self-driving mobility services to models centered on data, advertising or entertainment – platform-oriented business models are currently receiving much attention, not the least because Waymo seems to be leaning towards them. The term “platform” can be understood in different ways: In the automotive context it is usually understood as a car platform where many different models share the same technology under the hood which reduces development costs and allows economies of scale. In a more gener ..read more

Please join us for this 1-day workshop on October 24 in Frankfurt, Germany or on November 2 in Auburn Hills, USA. The workshop examines the disruptive implications of self-driving car technology and the strategic consequences for the auto industry, its suppliers and related industries. The workshop will be led by Dr. Alexander Hars. Program highlights The workshop begins with a review of the current state of the global, distributed innovation process related to self-driving cars, and examines the underlying technical, economic, legal and geopolitical factors upon which it depends. Key implic ..read more