THE autonomous vehicle industry is growing by the second. According to a study from Intel and the research firm Strategy Analytics, the driverless vehicle industry will be cultivate around US$7 trillion worth of economic activity and new efficiencies annually by 2050.
Automated transportation addresses various inefficiencies in the current industry model, including:
Low utilization: On average, cars are used 4 percent of a day, with an available seat-mile utilization of barely 1 percent.
Consumption of finite resources: Cars consume 500 billion gallons of fuel per year, accounting for 45 percent of global oil demand.
Public safety: There are roughly 3,500 fatal traffic incidents per day globally. The Intel study estimates that more than half a million lives will be saved between 2035 and 2045 due to autonomous vehicles’ potential for greater safety. Furthermore, public safety expenditures would be reduced by more than US$234 billion over the same period.
As well as addressing many significant problems which have arisen from today’s auto industry, autonomous vehicles are set to vastly disrupt many industries.
“The industry implications for recasting the global mobility model extend far beyond just the auto industry, affecting large tranches of the economy and the investment landscape,” said Adam Jonas, head of auto and shared mobility research at Morgan Stanley.
Research by Morgan Stanley has highlighted various sectors beyond the auto industry which are set to experience both disruption and opportunity from autonomous vehicle growth.
Original equipment manufacturers (OEM) and suppliers
OEMs and suppliers to the auto industry are set to face new competitors with advantages in software, consumer electronics and cost of capital. Many companies may struggle to recruit and retain the best talent. It is thought the companies with the most superior technology, or quality and scale for key features such as fuel efficiency and safety, will be best positioned for business growth.
The growth in the autonomous vehicle industry could mean auto dealers stop selling cars altogether, and instead evolve into a 100 percent service model.
Morgan Stanley proposes that autonomous trucks may offer substantial growth and cost-cutting opportunities to fleet operators that can apply optimal technologies to transform their existing networks.
Producers of lithium are presented with a “chicken-and-egg” problem, where higher demand for electric vehicles cannot be met without an increased supply of battery-grade lithium – yet this supply will not be produced until electric vehicles show greater end-market demand.
According to Morgan Stanley, businesses in this sector will do well from a significant increase in consumer adoption of electric vehicles.
This industry would benefit from increasing the amount of plug-in charging points, as electric vehicles see a prolific growth in consumer adoption.
The semiconductor industry
Though this industry has benefited from the general digitization of vehicles and driving for decades, the growth in autonomous cars is set to increase this further.
As cars become even more complex, demand for automotive semiconductors will continue to rise steadily and provide a major new long-term growth.
According to research by Mckinsey, between 1995 and 2015 semiconductor sales to automotive OEMs increased from US$7 billion to US$30 billion.
Internet, media and IT hardware-software companies can get creative about how passengers can pass their time in autonomous cars. Commuters spend a lot of time in their cars, with the average driver wasting around 42 hours sitting in traffic jams each year. This presents a powerful opportunity for content creators to fill these hours with entertainment options.
Telecoms and communication
Telecommunication businesses will play a vital role in preparing the roads for automated vehicles. Both mobile and fixed networks will form the foundation for their functionality. The success and viability of autonomous vehicles will be dependent on the availability of reliable and widespread connectivity. Without such, these vehicles will be unable to communicate with other vehicles and their traffic, map and emergency systems.
The increase in autonomous vehicles is presenting many growth opportunities for sectors beyond the auto industry, with just a few mentioned above. As this increase rises, it is inevitable other sectors will be figuring out how they can also come along for the ride.