The combination of ride-hailing and driverless technology will mean that car ownership no longer makes economic sense for many. Rather than making a substantial investment in the purchase of an asset that will sit in the driveway unused 90% of the time, while depreciating in value at a rate of 20% a year, we will be able to summon an AV on demand to take us to work, a restaurant or a weekend destination. Similar to ride-hailing services offered by companies like Uber, AVs represent the next logical step – just without the driver.
Gaining traction
While a future of fully autonomous vehicles on our roads is still likely a decade or more away, the nascent industry is racing ahead at a frenetic pace. Uber and Waymo notably, have been testing the technology for a number of years already. Uber is running a self-driving trials on the streets of Pittsburgh, while Waymo recently launched its first commercial autonomous ride-hailing service in the Phoenix area.
The major automakers (OEMs) are realizing that they need to take AVs seriously, because they will redefine their industry. Audi recently pledged to spend almost 14 billion euros on electric mobility and self-driving technology through 2023. Much of that work will take place at its Autonomous Intelligent Driving (AID) subsidiary near Munich. General Motors and Ford both have AV divisions perfecting the technology as well, known as Cruise and Argo, respectively.
But to achieve the promised sea-change in mobility, cross-industry collaboration will be key, because the technical challenges of developing fully autonomous cars remain daunting. The vehicle’s ability to perceive and correctly identify objects around it is one of the biggest hurdles. That’s why the automakers are partnering with suppliers and technology companies for things like LIDAR sensors and perception software, which are key ingredients to autonomous driving.
Dawn of a new era
One market in particular where AVs offer a potential route to relief from overburdened road infrastructure is China. As the world’s largest automotive market, with 30 million annual light vehicle sales in 2018, it also suffers from some of the worst levels of traffic congestion and pollution on the planet. China therefore has many incentives to promote alternative mobility and self-driving cars are already having a major impact on its automotive industry.
The country’s mobility-services market has grown at double-digit rates over the past several years, and accounts for about 10% of China’s total car sales. At this rate of adoption, mass deployment is only a decade away and autonomous vehicles will make up over 40% of new vehicle sales by 2040, according to McKinsey.
Ultimately, AVs will have a profound impact on mobility, the economy, and society as a whole. To realize the promise of safer, less congested roads will require automakers and tech firms to join forces to develop the AV ecosystem of tomorrow. The technology is still being perfected, but consumer expectations are rising rapidly and the dawn of a new era of mobility is just around the corner.
Find out about how Solvay is partnering with OEMs in the new mobility space through our Technyl® offering for e-mobility.