Autonomous vehicle viability: Steering into the future

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  Quantumrun Foresight
• January 16, 2024

Insight highlights

Autonomous vehicles (AVs) are transforming global transportation, with significant advances in the US, China, and the European Union (EU). Enhanced safety features, improved accessibility, and evolving urban infrastructure signify a shift toward more sophisticated and efficient transportation systems. These developments are reshaping consumer preferences, industry dynamics, and government policies, underlining a transformative era in mobility and urban planning.

Autonomous vehicle viability context

Autonomous vehicles (AVs) are rapidly evolving and making significant strides globally. In the US, Mercedes-Benz has achieved a notable milestone by becoming the first automotive company to introduce SAE (Society of Automotive Engineers) Level 3 automated driving. This system, named DRIVE PILOT, has gained approval in Nevada and California, marking a significant step in deploying AV technology in standard-production vehicles like the 2024 S-Class and EQS Sedan models. DRIVE PILOT is limited to certain speeds (e.g., up to 40 MPH in Nevada) and is designed to offer drivers conditional automation under specific conditions, enhancing driving safety and convenience​​​.

In China, the electric vehicle maker Xpeng plans to upgrade its advanced driver assistance software (ADAS) to make all its functions available across 50 mainland cities by 2024. Xpeng's ADAS is expected to include features like adaptive cruise control, automated lane-keeping, and collision avoidance systems. They also promise to improve the overall driving experience by providing greater comfort and ease, especially in complex driving environments, such as urban areas with heavy traffic.

Meanwhile, new regulations have been implemented in the European Union (EU) to improve road safety and enable fully driverless vehicles. These new rules are part of the Vehicle General Safety Regulation and are designed to respond to the need to improve vehicle and road safety. This regulation includes a comprehensive assessment of the safety and maturity of fully automated vehicles before they are allowed on the EU market. Starting from July 2024, all vehicle registrations in the EU must comply with these regulations, which are integral to the EU's 'Vision Zero' initiative, targeting zero fatalities and severe injuries on European roads by 2050. 

Disruptive impact

The widespread implementation of ADAS may lead to significant changes in the automotive industry and consumer behavior. As ADAS becomes more common, consumers may begin to prioritize vehicles equipped with these systems, valuing the enhanced safety and convenience they offer. This shift in consumer preference could spur automotive manufacturers to focus more on integrating advanced safety features and autonomous capabilities into their vehicles. Additionally, the increase in ADAS-equipped cars may reduce road accidents caused by human error, contributing to overall road safety.

On the economic front, the expansion of ADAS is expected to influence job markets and business models within the automotive sector. There may be a growing demand for professionals skilled in software development, data analysis, and cybersecurity to support the development and maintenance of these technologies. Car dealerships and maintenance services may need to adapt to cater to the specific needs of these advanced vehicles, potentially leading to new business opportunities and services. Moreover, insurance companies might adjust their policies and pricing structures, considering the potentially lower risk associated with vehicles with advanced safety features.

For government and urban planners, infrastructure may need to be updated to better accommodate these advanced vehicles, including developing more sophisticated traffic management systems and road signage. Governments may also need to update road safety regulations and standards to ensure they align with ADAS-equipped vehicles' capabilities. Furthermore, this trend could accelerate the development of smart city initiatives, integrating vehicle data with urban infrastructure to enhance traffic flow and reduce congestion.

Implications of autonomous vehicle viability

Wider implications of AV viability may include: 

• Enhanced accessibility for elderly and disabled individuals, improving mobility and independence.
• Shifts in urban planning and infrastructure development to accommodate AVs, leading to more efficient and organized city layouts.
• Changes in insurance industry practices, with a focus on underwriting policies that consider the reduced risk profile of AVs.
• Evolution of automotive industry jobs, with a shift towards more tech-focused roles, such as software development and cybersecurity.
• Increased demand for data management and security services, as AVs generate and rely on big data and real-time information.
• Governmental policy adjustments, including creating new regulations and standards for AV operation and safety.
• Environmental benefits from more efficient driving patterns and potential reductions in vehicle emissions.

Questions to consider

• Are you planning to buy an AV in the near future?
• What else needs to be done for AV adoption to become more widespread?