Autonomous Vehicle Insights

Autonomous Vehicles (Driverless Cars, Self-Driving Cars) will fundamentally transform mobility and usher in the next great leap in society.

Autonomous modes of transportation are used everyday in cities around the world everyday and with the introduction of autonomous vehicles usage will only grow. As the research around autonomous transportation has moved from the lab to the streets of the world, it’s impact has yet to be fully felt.

In the future individuals will subscribe to an autonomous vehicle brand as a service as opposed to owning and garaging an autonomous vehicle.

Morgan Stanley is projecting the shared mobility market to be worth $2.6 trillion by 2030.

To be prepared for this market opportunity, strategies have to be developed now.

To learn more about our autonomous vehicle strategy services, please visit our autonomous vehicle strategy section.

Our insights into autonomous vehicles from the labs to the startups to the traditional car manufacturers are listed below in the form of articles for your perusal.

Florida is Setting the Pace in Autonomous Vehicle Innovation

The regulatory environment in Florida under the leadership of Governor Scott and State Senator Brandes is helping to usher in the Autonomy Economy.

On the Florida Chamber of Commerce’s Bottom Line public affairs program, I discuss innovation in the autonomous vehicle community and Florida’s leadership in autonomous vehicle regulation.

Every aspect of transportation and mobility is going to change. For example, a child born in the last four years will never drive a vehicle on a public road. Full level 5 autonomous vehicles will take children to and from school with the parents of those children being fully in charge of the experience as when the child can exit the vehicle.

The future of transporting children to school in autonomous vehicles will be possible in Florida because of the regulatory environment that the State of Florida has created under the leadership of Governor Scott and State Senator Brandes.

Florida is opening the doors to allow the future of innovation to prosper. From children riding to school in autonomous vehicles to the tourism industry developing niche autonomous vehicle services, we are only beginning to scratch the surface of what is possible.

New businesses will be created in Florida around autonomy due to the regulatory environment and these homegrown businesses will help the State to usher in the Autonomy Economy.

Why America Needs a National Autonomous Vehicle Policy

Most concede the current debates regarding the role of federal and state governments in autonomous vehicle development and deployment are a healthy part this new technology’s evolving transformation of society.

At the time of this writing in the fall of 2017, the U.S. House and Senate had outlined essentially similar bills intended to establish a national framework for autonomous vehicle development, testing and deployment.

The details and differences in these bills will of course be hammered out, but there are manifest reasons why some type of national “framework” of guidance, rules and statues addressing autonomous vehicle development is a good prospect for America’s cities.

A national framework of common, consistent rules and regulations will allow cities to enact policies that benefit residents and encourage businesses to invest in the metro area. Cities could depend on these uniform policies to support initiatives that enhance the standard of living for residents living in a high-density environment: from reducing traffic congestion and quieting the streets to making the energy grid more responsive and reliable.

Electrification’s mixed promise

As the internal combustion engine begins to decline and electric motors become the more-dominant propulsion option, cities will be compelled to upgrade their energy infrastructure sooner rather than later; if cities do not start to bolster their energy grids now, the probability of rolling blackouts could become a frequent reality. Spurred by the needs of autonomous and increasingly-electrified personal and shared vehicles, cities could upgrade by adopting smart-grid technology, with battery storage and solar backup to support the increasing demand from electric vehicles.

Although the pace of adoption is indeterminate, vehicle electrification seems inevitable; UBS, for example predicts that by 2025, 14% of global vehicle sales will be electric—up from 1% today.

In the UK, the potential for significant new loads to cripple the grid perhaps is more dire than previously believed; the average household’s electric service reportedly cannot accommodate charging an electric vehicle and boiling a kettle at the same time. For now, that means merely a blown fuse, but in the future, a dramatic increase in electricity demand could lead to much more critical consequences.

Upgrading the energy infrastructure is a clear example of how a city can play to its unique strengths. For autonomous vehicle developers looking to test and deploy services in cities, a robust and ever-upgrading energy grid is an attractive incentive to operate in that town.

Cites as laboratories

With a national autonomous vehicle framework, cities will become the labs of tomorrow, to the benefit of all. Autonomous-vehicle technologies, services and business models will be perfected on the streets of cities under real-world circumstances, rather than in proving grounds.

Cities should experiment with new ideas and invite autonomous vehicle companies to operate in their city by showcasing their strengths. In Los Angeles alone, there is nearly 500 miles of paved streets on which to test autonomous capabilities.

The city of Los Angeles could leverage this uniquely “LA” asset, creating dedicated autonomous-vehicle lanes similar to the high-occupancy vehicle (HOV) lanes already found on Southern California’s freeways. These lanes could operate during select times or on select roadways or corridors.

Dedicated autonomous vehicle lanes could bring a palpable reduction in congestion—if Los Angeles updated its traffic signals with artificial intelligence. The stoplights would learn traffic patterns in real-time and update signaling accordingly.

In the future, on-demand autonomous vehicles will replace traditional buses, as they are more cost-efficient to operate and more convenient for the public. During select times throughout the day, cities could designate autonomous-vehicle lanes as school-bus lanes for children traveling to school. The dedicated AV bus lanes would ensure that children would get to school quickly and safely. During non-school commuting hours, these lanes would revert to conventional duty to channel autonomous vehicle traffic.

SAE Level 5 autonomous vehicles with artificial intelligence would be programmed to pick up a child at the correct time each morning. No more worrying about school delays: parents will automatically receive a notification advising of the school delay. Adults will know the autonomous school vehicle will automatically show up at the newly appointed time, allowing everyone’s morning to be more productive.

Unleashing the “autonomy economy”

These advances will come most quickly and efficiently only with an established national autonomous vehicle framework, as entrepreneurs will be encouraged to push the envelope and invest in new technologies that can scale across 50 states, all operating under the same rules and regulations.

Without a standardized national framework, companies and developers will hold back investment and innovations, perhaps looking to deploy services overseas, while assertive states such as Arizona, Florida, Nevada and Texas will continue to attract autonomous vehicle companies that make the decision to invest in local economies and create new high-paying jobs because of progressive autonomous-vehicle laws.

A national autonomous vehicle framework will unleash the “autonomy economy,” creating millions of new high-paying jobs in the United States. Cities will be able to play to their strengths and support innovation and local investment. Cities will be able to experiment with new ideas and implement policies and practices that better serve the public.

Cities truly are the labs of tomorrow—and a national autonomous vehicle policy will help automated driving technology reach its full potential for enhancing urban life.

Why America Needs a National Autonomous Vehicle Policy is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published in SAE International Autonomous Vehicle Engineering Magazine.

The Bumpy Road to Mobility-as-a-Service and What Adobe Can Teach Us

As the auto industry shifts from an ownership model to a Mobility-as-a-Service subscription model, the industry can learn a lot from Adobe.

On April 23, 2012 when Adobe announced the Adobe Creative Cloud SaaS (Software as a Service) model, the company billed the service as a radical new way of providing tools and services.

This was a radical move at the time but in hindsight, it was a brilliant initiative by Shantanu Narayen, Adobe CEO. During the first years of the transition to this new model, investors questioned the decision as net income dropped by almost 35% in 2013.

Almost a year after the initial announcement, Adobe announced it would no longer sell the Creative Suite software. Consumers would have to subscribe to the Adobe Creative Cloud to be able to use the software. This caused a considerable amount of uproar amongst Adobe customers, including over 50,000 signatures demanding the company to abandon the subscription model.

Some would argue that Adobe was actually helping small businesses and the average consumer as the company eliminated the thousand dollar investment to buy the software. Setting aside the Creative Suite software also played a part in countering the piracy market. Today, Adobe’s business is growing 22% year-over-year and the stock is up over 327% since the initial announcement in April 2012.

The same thing will happen in the auto industry when auto manufacturers stop selling vehicles to the public and transition to Mobility-as-a-Service subscriptions. Initially, publicly traded auto manufacturers will report large drops in income as vehicle sales will fall considerably and subscription revenue will not offset the drop in revenue.

There will be a considerable amount of uproar considering the vehicle will no longer belong to an individual and that individual will not be able to drive the vehicle. To help alleviate the uproar, vehicle manufacturers selling Mobility-as-a-Service subscriptions should host autonomous vehicle demo days in cities around the world to introduce the public to the service and explain the benefits.

Mobility-as-a-Service vehicles will be fully autonomous (SAE Level 5) with no steering wheel and no way for a human driver to take control of the vehicle. This will cause a certain amount of anxiety among individuals who are accustomed to driving a vehicle on a regular basis.

These vehicles will be shared and summoned on-demand when needed. The vehicles will not park at an individual’s residence, school or office: instead, they will always be in use. When an individual needs a vehicle, they will simply summon one with a click in an app or a voice command to their voice assistant such as Alexa. Depending on the activity, individuals will be able to summon an SUV or a coupe.

Mobility-as-a-Service subscriptions will be billed to a credit card on a monthly basis with a cancel anytime policy, eliminating the need for credit checks, down payments and repossessions. In short, this will lower the overall risk to the underwriter of the vehicle.

Today, we are starting to see the early signs of a Mobility-as-a-Service subscription model with Cadillac’s BOOK service. The BOOK service is a way for Cadillac to model behavior prior to rolling out an autonomous vehicle subscription service.

When a Mobility-as-a-Service such as Cadillac’s BOOK is introduced, the subscription will travel with individuals from city to city, having a negative impact on the overall car rental market.

In 2016, the total U.S. car rental market generated over $28 billion in revenue from car rental operations. On average, there were 2.3 million rental cars in service in the United States in 2016. As we move towards Mobility-as-a-Service, revenue generated from car rental operations will dramatically decrease as consumers opt for subscriptions instead of rentals.

The transition to Mobility-as-a-Service will occur slowly at first with accelerated adoption rates in select markets. When this transition occurs, the future of transportation will be ushered in giving on-demand mobility to every individual around the world.

While we are still in the early days of Mobility-as-a-Service experiments and autonomy, Adobe has clearly demonstrated that the road from a traditional business to a subscription service is fruitful and can lead to profound organic revenue growth, profits and return on investment for shareholders.

The Bumpy Road to Mobility as a Service and What Adobe Can Teach Us is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published on LA CoMotion.

From Internal Combustion Engines to On-Demand Electric Autonomous Vehicle Subscriptions

The days of the motor that powered the growth of the suburbs is coming to an end as the benefits of electric vehicles far outway those of the internal combustion engine.

UBS is predicting that by 2025, 14% of vehicle sales will be electric up from 1% today. While some would say that UBS is bullish on their call, others would argue that UBS is undervaluing the autonomy economy. Between 2025 and 2030 society will hit the tipping point with autonomous vehicles, as a majority of vehicles will no longer be sold to consumers.

Instead, consumers will subscribe to autonomous vehicle brands and summon vehicles on-demand. No longer will vehicles sit idle 95% of the time costing the owners/leases of the vehicle money. The average cost to own and operate a large sedan in the United States driven 15,000 miles a year costs consumers $9,451 a year, equaling $0.6300 a mile.

While the cost to own and operate an electric vehicle costs $8,439 a year equaling $0.5626 a mile. Even with traditionally higher costs, it is still more cost-effective to own and operate an electric vehicle than an internal combustion engine vehicle today.

As autonomy matures and manufacturers start to shift their business models to subscriptions from selling vehicles, the cost of transportation for individuals in a vehicle will plummet as a majority of vehicles will be shared.

While vehicles will be shared, there will not necessarily be multiple individuals in the vehicle at the same time. The concept of UberPool and Lyft Line is not the future of transportation. It’s an idea and a concept that appeals to a niche group, not the public as a whole.

Consumers like their independence and the convenience vehicles offer them for their lifestyles. Subscribing to a brand will allow individuals to summon the vehicle that fits their need for that time and place. For example, if a family of four is heading to the beach, they can summon an SUV. If mom and dad are going out for dinner, they can summon a sedan.

The vehicles consumers subscribe to will be electric and operate on a software platform that is fully integrated into the lifestyles of the brand’s customers. Brands such as Aston Martin have announced that every new vehicle by the middle of the next decade will be hybrid or electric.

A quarter of these vehicles will be 100% electric. As Andy Palmer, CEO of Aston Martin positions the iconic brand for the future, a subscription service will not be far behind as he is in the middle of a strategy to reposition the brand for the future.

In its 105-year history, Aston Martin has only sold roughly 70,000 cars. Which is a remarkable number considering the prestige of the brand. Over the course of history, Aston Martin has only sold 667 cars a year on average.

With the shift to electric and the advancements of autonomy, Dr. Palmer could strategically announce that one will no longer be able to buy an Aston Martin, instead, one will have to subscribe to the brand.

The starting price to purchase an Aston Martin today is $118,650. In the future, with a subscription, this price could possibly drop as low as $2,000 a month with no insurance, maintenance or charging costs as Aston Martin would self-insure and all ancillaries would be bundled into the monthly subscription.

Today, if a consumer were to buy an Aston Marton, the insurance would cost $232.06 a month on average. The annual oil change (10,000 miles) costs $1,400 in addition to tires, brakes, etc which will set consumers back a few thousand more a year. Factoring in gas and parking, the average yearly cost to own and operate an Aston Martin is well over $5,000.

High costs make the brand unattainable for most individuals. In the future, when you remove the cost of entry, the internal combustion engine and the monthly costs to operate, the Aston Martin brand becomes attainable to a larger percentage of the population.

When the brand becomes more attainable and multiple individuals are subscribing to vehicles, profits will increase which will allow Aston Martin to scale the brand. This scenario is only possible today due to the breakthroughs in electric and autonomous technologies.

As a society, we are just beginning to scratch the surface of the true benefits that an electric, autonomous future will offer us.

Whether you are interested in a luxury subscription or a traditional sedan, the end of the internal combustion engine will dramatically lower the cost of vehicles as society shifts towards a subscription model.

From Internal Combustion Engines to On-Demand Electric Autonomous Vehicle Subscriptions is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published on LA CoMotion.

Why U.S. must outpace China, Other Nations

Autonomous vehicles will usher in the single greatest change in society since the Industrial Revolution.

For this change to happen, Congress will need to deliver to President Trump a national autonomous vehicle framework bill that includes vehicles weighing over 10,000 pounds.

Upon signature by President Trump, the autonomy economy will officially be launched to the benefit of society, creating millions of new jobs through sustained economic growth. The economic impact of autonomous vehicles and the autonomy ecosystem is projected to grow to $7 trillion by 2050.

The economic growth of the autonomy economy will create millions of new jobs and save the United States $871 billion in annual economic loss and societal harm caused by motor-vehicle accidents.

Today, the roads of America are dangerous. In 2015, an estimated 433,000 large trucks were involved in police-reported accidents, resulting in 4,067 fatalities, a 4 percent increase from 2014. Some 74 percent of these fatalities were occupants of other vehicles traveling on the road. In 2016, over 40,000 individuals perished in a motor-vehicle accident. Ninety-four percent of these accidents were caused by human error.

Over the next 20 years, the number of individuals dying on the roadways of America will dramatically decrease if there is an autonomous vehicle framework in place that permits Level 5 autonomous vehicles to travel over state lines.

When an autonomous vehicle framework is in place, the roads of America will become safer and society will welcome the autonomy economy. The autonomy economy is an evolution based upon B. Joseph Pine II and James H. Gilmore’s experience economy theory, which states that businesses will develop memorable experiences for their customers and the memory of those experiences will become the product.

While the term the “experience economy” was first introduced in 1998, the shift to an experience-based economy has happened over the last several years. B. Joseph Pine II and James H. Gilmore were ahead of their time in correctly predicting the evolution of the economy towards a service-based economy.

When Gov. Rick Scott of Florida signed one of the first autonomous vehicles laws in 2012 — HB 1207, allowing testing in the state — he successfully established the foundation for the autonomy economy. Investments being made by the private sector in autonomous cargo shipping, autonomous vehicles and autonomous drones, and the space industry are creating hundreds of thousands of high-paying jobs with a net positive impact on the Florida economy.

The foundation Gov. Scott has established in Florida is one that the United States can build and expand upon. With investments being made in Silicon Valley, Southern California; Arizona; Detroit, Michigan; Florida; and Nevada; and with foreign investments being made by Softbank and Foxconn, the groundwork for the autonomy economy is actively being developed in the United States.

To unleash the full potential of the autonomy economy, we have to believe in the American dream by not prejudging the technology and its supposed negative impact on jobs. Instead, we need to look back in history and study similar technological advancements.

The Industrial Revolution created tens of millions of more jobs than it replaced over the course of history, and the U.S. economy has grown and matured significantly since then. When new inventions were introduced, such as the electric-powered washing machine, there was an uproar over job loss. In fact, the washing machine went on to create more jobs than it replaced.

The fear of autonomous vehicles replacing jobs and not creating new jobs is a classic case of history repeating itself. For the introduction of new technologies, history is our greatest guide to predict the future.

While we do not yet know the full extent autonomy and autonomous vehicles will have on society, we do know that if the United States does not lead on autonomy, other countries will step up and autonomy jobs will ship overseas.

We are currently seeing this very scenario happening in Singapore as NuTonomy, a Cambridge, Massachusetts-based autonomous vehicle start-up, is testing their technology overseas. If an autonomous vehicle national framework is not passed, we could see this same scenario occur in China, as U.S.-based technology companies have a desire to expand into China to tap into the growing population.

Capitalizing on this desire, China could strategically allow Level 5 autonomous vehicles to operate on every road in the country. If this happened, China could overtake the United States as the leader in the development and testing of autonomous vehicles.

The World Health Organization estimates 260,000 individuals perish on the roads of mainland China every single year. With over 700 individuals perishing on the roads of mainland China every day, that government has a clear motive to allow Level 5 autonomous vehicles.

U.S.-based companies could off-shore their autonomous vehicle testing and investments benefiting the Chinese economy — not the U.S. economy — if Congress does not act.

It would behoove Congress to act and pass an autonomous vehicle national framework for the benefit of society. An autonomous vehicle national framework will create millions of high-paying U.S. jobs, thus having a positive impact on the economy.

It is time for America to come together and collectively usher in the autonomy economy for the benefit of all Americans.

Why U.S. must outpace China, Other Nations is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published in The Washington Times.