A switch to autonomous vehicles could happen more quickly than anyone thought. So what will people buy?
The introduction of autonomous vehicles will have a huge effect on the car market, but not for the obvious reasons—and not necessarily in the time frame that most people expect.
Numerous sources say one automakers are very concerned about what kinds of vehicles people will buy once cars are autonomous. What will differentiate one car from another? And what will become of brands such as Porsche, Lamborghini, Ferrari and Maserati, when customers no longer care about the rumble of an oversized gas-guzzling engine under the hood or a dozen different gauges that make it look like the cockpit of an airplane.
All that stuff looks and sounds cool today, but pretty soon it’s all going to look like it belongs in a museum. Why settle for a tiny gauge when you can have a 5K screen with surround sound?
Once steering wheels are optional—level 6 on the NHTSA’s autonomous driving scale—and autonomous cars are ubiquitous, expensive sports cars could well be confined to amusement parks. On public roads these cars won’t be allowed to drive faster than the speed limit allows because they will be electronically connected to information about road conditions and traffic. And no one will want to feel the road when they could be sitting in a well-padded seat.
Initial projections are that these changes won’t occur for at least 20 to 25 years, but those time frames may be wrong. In a presentation at the Embedded Vision Summit last week, Lux Research Vice President Mark Bünger noted that the changeover could happen significantly faster.
“Typically, if you have something that becomes a standard, it takes 20 to 25 years to have it ubiquitous,” Bünger said. “But if you look how cars are used today, most of the trips we take are useless, and 98% of the time a car is idle. When you drop off your kids at school, that’s an active trip. When you return home, that’s a dead trip. If you drive to the grocery store, that’s a dead trip. When you drive back home with groceries, that’s an active trip.”
Using this logic, if people rethink how they use cars, then only about 10% to 20% of the cars really need to be replaced. “At that number, this could be done in three to five years,” he said. “This could happen really quickly. And for other cars, you could retrofit or require a retrofit. There will be new business models for ride sharing, utility megawatt hours of energy storage, and all of this will amplify and accelerate the introduction of new cars.”
Bünger said car companies are extremely worried about this because it would slash the number of new cars sold every year. Many people, particularly in urban areas, wouldn’t even buy cars. In fact, there are several estimates by analysis firms that 30% to 35% of all traffic in a city is looking for a parking space.
For those who do want their own cars, the real emphasis will be on the comfort level and the personal electronics inside the car. And under the hood, which more accurately might be a computer closet, the emphasis will be on how quickly data is processed to how well a car can adapt to road conditions. This will include everything that chipmakers have been wrestling with for years—chip architectures, throughput to memory, advanced power management, and regular firmware and software updates.
In fact, the coolest cars may be more about the personal use of internal space and the reliability of the vehicle rather than how the driver connects to the outside world. And that can be very worrisome for a supply chain that has been in place for more than a century.
Maybe early on media delivery in cars will matter but at the end of the day folks will just use their personal devices, so glasses – it’s more familiar and a much more versatile device.
The decline in new car sales will be more severe than expected. One needs to factor in the used car market. Once car as a service takes off, the used car market will be flooded by offers, pricing collapses, depreciation is accelerated. If a new car loses 50% of its value after 2 years, that’s gonna have quite a significant impact on new car sales.
Sports cars will be fine at first and they can have much more advanced driver assist features but there is nothing to stop CaaS providers from offering such cars that they make – with CaaS the customer doesn’t have to always ride the same type of vehicle.