In the coming 30 years autonomous vehicles are expected to pass from the galactic roads of science fiction onto the everyday tarmac. The changes are however not expected to happen overnight. According to McKinsey & Company, a considerable development period, consisting of ten steps, will gradually affect the wider vehicle value chain and ultimately radically transform driving as we know it.
The phenomenon of autonomous vehicles (AVs) is expected to radically transform the way we relate to the cars we already have, but also to the ways we commute. Changes that will likely have economic and also social consequences. So what will the changes entail for the everyday person and for their economic activity? To define the consequences of the technology, consulting firm McKinsey & Company turned to interviewing 30 experts across Europe, the US and Asia, combining their conclusions into ‘Ten thought-provoking potential implications of self-driving cars.’
The insights about the potential effects of the technology are considered along three broad categories: before such vehicles are commercially available to individual buyers, when they are in the early stage of adoption, and when they become the primary means of transport.
Consultancy.uk provides a summary:
Era one – AVs not yet available to consumers
1. The first trend expected to affect the market early is the rise of AV technology in non-regulated areas, such as farms, mines and warehouses. The technology is able to take over routine work from traditional workers, operating heavy equipment like tractors, excavators and forklifts.
2. Car OEMs face a decision, they need to decide whether the will lead, enter, follow, or flounder. The analysts expect that ‘premium incumbents’ are set to develop and add AV content to their already existing businesses.
3. New mobility models arise, including pay-per-use models such as car sharing and peer-to-peer car rentals, which are already starting to change the mobility market in general.
Era two: AVs enter the early-adoption phase
4. According to McKinsey, the proliferation of AVs represents an opportunity for car OEMs. As a result of the safety-critical nature of AV technologies, customers might be more inclined to turn to OEMs for services, rather than ‘independent’ operators.
5. Insurance coverage of vehicles is projected to change rapidly with the development of the technology, from focussing on the individual to technical failures, as the human factor is expected to more and more be left out of the equation.
6. In the midterm, companies may transform their supply chains as increased automation seeks to become highly efficient and flexible. The authors note that “a fully automated and lean supply chain can help reduce load sizes and stocks by leveraging smart distribution technologies and smaller AVs.”
Era three: AVs go mainstream
7. The technology is expected to free up 50 minutes a day for users, which can be used for working, relaxing or accessing entertainment. “It could also create a large pool of value, potentially generating global digital-media revenues of €5 billion per year for every additional minute people spend on the mobile Internet while in a car,” the authors note.
8. A further consequence is an improvement in the ability to park, with a potential reduction of 5.7 billion square meters in required parking space in the US. The reduction follows from self-parking AVs that do not require open-door space for dropping off passengers when parked, allowing them to occupy parking spaces that are 15% tighter.
9. AVs are expected to be considerably safer than human controlled devices. For every person killed in a motor-vehicle accident, 8 are hospitalised and 100 are treated and released from emergency rooms. The overall annual cost of roadway crashes to the US economy was $212 billion in 2012. Taking that year as an example, advanced AVs could have reduced accidents by up to 90%, potentially saving $190 billion.
10. One further factor that is expected to come from a high level of investment in AV is the development of robots for consumer applications, as the two share many technologies and a similar infrastructure requirement. This could push humanity toward the development of both through investment in one.