A WARDS INTELLIGENCE SPECIAL REPORT

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autonomous-vehicles-report

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ABOUT THIS REPORT

Rapid advancements in technology, including more sophisticated radar, vision and lidar sensors; the expanding capacity and capability of microprocessors; faster-responding actuators and controllers; and the promise of machine learning via complex, artificial-intelligence-driven software, has the auto industry on a march toward automated driving.

Costs today are prohibitive but are likely to decrease by orders of magnitude in the next 10 years. Consumer acceptance remains far from certain, but that too is expected to shift rapidly once people get accustomed to the capability and convenience promised by fully automated vehicles.

However, much still is to be determined, including how and when the market will take shape worldwide; where the best near-term business cases are with retail customers, commercial-vehicle operators and mobility-service providers; and which automakers and suppliers/disruptors will emerge as the dominant players in this new industry sector.

This report examines all those issues in detail. Among the findings:n North America will lead in early adoption of autonomous vehicles,

followed by Europe, but China will take control in 2027 and account for more than 40% of the market by 2030.

n Policymakers need to move more quickly and consistently to ensure development continues on pace and automakers can be confident of monetization opportunities.

n The best near-term business cases for Level 4 AV technology are likely in the commercial-vehicle sector.

n Ride-hailing services will launch small-scale and pilot AV programs by 2019, but such services won’t begin to become commonplace until the 2025 timeframe.

n Full Level 5 autonomous vehicles won’t be available to individual car buyers until closer to 2030 or beyond, but it will be important in the meantime for automakers to scale up and monetize their R&D efforts by offering more advanced driver-assistance system and crash-avoidance technology to retail customers.

n Five automakers have emerged as clear leaders in AV development and positioning, three of which are based in Germany. The best-positioned automakers have access to the most advanced technology, established stakes or strategic partnerships in mobility schemes, developed aggressive electrification plans and control strong brand positions.

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n Six companies are leading in AV development and market positioning among suppliers/disruptors. Those considered most likely to be successful have unique technology, are involved in strategic development projects with key OEMs and others, currently have strong supply relationships with automakers and are in position to serve as technology integrators in AV product programs.

Included in The Autonomous Vehicle Roadmap are verbatim Q&As with key industry executives, results of an exclusive Wards Intelligence industry survey and a detailed global forecast.

This report was researched and written under the direction of Wards Intelligence Research Director David E. Zoia.

CONTRIBUTORS Denis Ulicny, Senior Industry Analyst Haig Stoddard, Senior Industry Analyst Amy Howes, Data Analyst Christie Schweinsberg, Senior Editor Susan Kozik, Director, Content Design

ABOUT WARDS INTELLIGENCEWards Intelligence has served the automotive industry’s information needs for more than 90 years as a world-leading provider of automotive insights and analysis. Based in metropolitan Detroit, Wards Intelligence provides historical context and forward-looking perspective on all aspects of the automotive business.

Our staff of automotive analysts and industry researchers offers global and regional forecasting, historical data, trend analysis and industry insight through online tools and databases, special content conferences, intelligence reports and consulting services, with a focus on providing clients with reliable, responsive customer service and support.

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TABLE OF CONTENTS

I. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1• TECHNOLOGYROADMAP - SAE LEVELS 2-5 - SURVEY:AVUSEBYFIRSTADOPTERS• POWERTRAINS• POLICY - SURVEY:PACEOFGOVERNMENTREGULATIONS• CONSUMERTRENDS - SURVEY:GREATESTOBSTACLESTOAVS - SURVEY:CONSUMERADOPTION• BUSINESSCASES - MAGNA FORECAST ON GLOBAL ADAS PENETRATION - SURVEY:LIKELYINITIALAVUSES• WARDSAUTOINTELLIGENCESTRATEGICREPORTCARD - GRADING THE OEMS - GRADING THE SUPPLIERS/DISRUPTORS

II. TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . 24• SURVEY:GREATESTBENEFITSOFAVS• LEVEL0-5AVDEFINITIONS• LIDAR,RADAR,CAMERAS• ADVANCEDRIVER-ASSISTANCESYSTEMS• COMMUNICATIONS• TELEMATICS• ARTIFICIALINTELLIGENCE• CYBERSECURITY

III. MARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34• ADOPTIONRATESCENARIO1• ADOPTIONRATESCENARIO2• ADOPTIONRATESCENARIO3• ADOPTIONRATESCENARIO4• ADAS/AVMARKETVALUESCENARIOS• HOWAVROLLOUTMAYHAPPEN• GLOBALFORECAST2030(BYREGION)• FORECASTGLOBALSHAREOFAUTONOMOUSVEHICLES• SURVEY:EARLIESTADOPTERMARKETS

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IV. AUTOMAKERS . . . . . . . . . . . . . . . . . . . . . . . . . 42• BMW• DAIMLER• FIATCHRYSLER• FORD• GENERALMOTORS• HONDA• HYUNDAI• JAGUARLANDROVER• PSAGROUP• RENAULT-NISSAN-MITSUBISHI• TESLA• TOYOTA• VOLKSWAGENGROUP• VOLVO

V. SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73• APPLE• APTIV• AURORA• BAIDU• BOSCH• CONTINENTAL• DENSO• HITACHI• INTEL/MOBILEYE• LYFT• MAGNA• MICROSOFT• NVIDIA• NXP• PANASONIC• SAMSUNG/HARMAN• UBER• VALEO• VISTEON• WAYMO• ZENUITY• ZF

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VI. Q&As . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118• MAGNA’SSWAMYKOTAGIRIANDKELEISHEN• NVIDIA’SDANNYSHAPIRO• TOYOTA’SGILLPRATT• VISTEON’SSACHINLAWANDE• ZENUITY’SDENNISNOBELIUS

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134• WARDSINTELLIGENCE2018AUTONOMOUSVEHICLESTRENDSSURVEY

• DOTVISIONFORSAFETY2.0• DOTDESIGNATEDAVTESTSITES• GLOBALLIGHT-VEHICLESALESFORECAST• GLOBALAUTONOMOUS-VEHICLESALESFORECAST• AUTONOMOUSVEHICLESSHAREOFTOTALLIGHTVEHICLESBYREGION

• GLOBALSHAREOFAUTONOMOUSVEHICLESBYREGION• REGIONALYEAR/YEARPERCENTCHANGEOF

AUTONOMOUS VEHICLES

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A car that drives itself has been the vision of futurists almost since the automobile was invented, but the concept didn’t begin to exhibit real potential until the turn of the century.

That’s when the U.S. Defense Advanced Research Projects Agency (DARPA), formed amid the Sputnik frenzy in 1958 to close the technology gap with Russia, hosted its first Grand Challenge event.

The 2004 contest called on developers to produce a vehicle that could travel on its own along a 150-mile (240-km) stretch of Interstate 15 from Barstow, CA, to the Nevada border. A winner went undeclared after not a single entrant made it to the 8-mile (13-km) mark.

But rapid progress followed. The next year, five vehicles finished the course. Five years later, Italy’s University of Parma operated an autonomous car 9,940 miles (16,000 km) through nine countries before ending its journey in Shanghai. In 2012, a self-driving Audi TT navigated a twisting 12.4-mile (20-km) road to the top of Pikes Peak, CO, in a run that took just 27 minutes. A 2017 test by suppliers Continental and Magna saw AVs achieve another technical feat, traveling through a tunnel from Detroit to Windsor, ON,

I. OVERVIEW

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Canada, and over a bridge from Sarnia, ON, to Port Huron, MI.

Although additional development is needed, Wards Intelligence believes the industry now is entering a second stage in the autonomous-vehicle era, where the focus is moving beyond the systems and software needed to make AVs work and toward creation of new profit centers made possible by this emerging technology.

“We’re having true business discussions now – less so of ‘Let me show you what we can do,̓ ” Danny Shapiro, senior director-Automotive for chipmaker NVIDIA, told The Wall Street Journal on the sidelines of CES 2018 in Las Vegas.

In recent months, signs have emerged as to the direction several automakers, suppliers and tech firms plan to follow as they make their initial forays into a variety of potential AV business sectors.

In January 2018, Waymo, which singlehandedly has piled up more than 4 million miles (6.4 million km) of real-world automated driving, placed an order for “thousands” of Chrysler Pacifica minivans from Fiat Chrysler Automobiles with the intention of launching an AV ride-hailing service in Phoenix and Atlanta by 2019.

In March 2018, General Motors announced it would invest $100 million in Michigan manufacturing facilities to produce Chevrolet Bolt EVs without steering wheels or pedals for mobility-fleet use beginning in 2019.

Mercedes has Level 4 fleet plans for 2020, and BMW and Ford are aiming to place AVs into mobility services by 2021. Other automakers have similar targets, including Hyundai (2021), Volkswagen (2022) and Volvo (2021).

Many are looking at opportunities in the commercial-vehicle sector, as well, eyeing both light- and heavy-duty applications for AVs around package- and cargo-delivery schemes.

Beyond the potential fleet-type uses, automakers and suppliers are gearing up to offer new advanced driver-assistance system (ADAS) features, initially through their luxury brands, to monetize their AV R&D investments near-term and warm up consumers to the functionality and benefits of automated driving.

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TECHNOLOGYTo properly discuss the timetable and likely market targets for autono-mous vehicles requires an understanding of where the industry is today and what signals the arrival of the next stage in AV development.

This report adheres to the six levels of automated driving statistics as spelled out by the SAE and explained in greater detail in Chapter II. Currently, the industry is solidly in the Level 2 stage with the proliferation of ADAS offerings such as lane-keeping technology, automatic braking and adaptive cruise control (ACC).

LEVEL 2

Level 2 is considered the hands-off/eyes-on stage in which the human driver must continue to pay attention to the operation of the vehicle and be prepared to take over immediately. Even the most advanced ACC systems available today, such as General Motors’ Super Cruise, Tesla’s Auto Pilot and the Mercedes Distronic technology, are Level 2 systems that require constant attention from the driver.

LEVEL 3

The industry should creep toward Level 3 in 2018 with the introduction of highway pilot technology such as Audi’s Traffic Jam Assist system that is expected to reach European markets later this year. Level 3 marks the hands-off/eyes-off stage, where the vehicle pilots itself on the highway from entrance ramp to exit without requiring attention from the driver.

It is important to note that the Audi system is not all the way there yet. It is

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limited to speeds of up to 39 mph (63 km/h), whereas a full Level 3 system should be able to function at maximum freeway speeds and possibly even beyond today’s posted limits. Achieving those high speeds will take faster, more accurate decision-making and require new electronics architectures designed around the concept of sensor fusion, Audi officials say.

Several suppliers, including Aptiv, Visteon, Aurora, Magnetti Marelli, Mentor Graphics, Baidu, Zenuity and Magna, are working on single multi-domain controllers designed to collect raw data from vehicle sensors tied to steering, braking, radar, vision and other systems and crunch the information at high speed to determine the vehicle’s path forward. The move to a centralized processor is expected to cut onboard microcontrollers by 60 or more.

LEVEL 4

Level 4 calls for a vehicle without a steering wheel or pedals (or in which such driver controls become inoperable) that can travel autonomously within a geofenced area, technology best fitted to fleet applications. At Level 4, if the AV were to freeze, the fleet operator would take over control remotely to get the vehicle back on the road.

Undoubtedly, AV performance still needs to improve overall, as evident in the March 2018 incident in which a pedestrian was struck and killed by a self-driving Uber test vehicle (Volvo XC90) in Tempe, AZ. Uber immediately suspended testing in Arizona, California, Pittsburgh and Toronto and said it would not seek a renewal of its testing permit in California. Other suppliers and automakers also temporarily shut down testing until the cause of the accident could be determined.

The event has heightened concern about whether automated-driving technology is up to the task. Take AVs out of the rather ideal climate of Arizona and their ability to perform consistently becomes even less certain.

However, we believe confidence remains high among automakers, suppliers and other developers that Level 4 can be achieved as mobility services advance beyond the pilot stage over the next two to three years.

LEVEL 5

At Level 5, AVs no longer are restricted to geofenced territories and can travel without a human driver – either in the vehicle or acting remotely – anywhere a standard vehicle can go. At this stage AVs will need even more advanced artificial intelligence and machine-learning capability, making

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their market timing more difficult to predict and their inevitability less certain.

Because interest in AVs is being driven in part by a desire to reach zero fatalities worldwide, automated driving must be safer than human driving if the technology is to reach critical mass. That’s a tough task, particularly when it comes to the vehicle reacting quickly and properly in the one-in-a-million “edge cases” that are likely to arise, making Level 5 capability far from certain.

Visteon CEO Sachin Lawande noted some of the technical challenges ahead in a presentation to a 2017 Baird investor conference. For AVs to be safe, he said, they must be able to detect objects at least 650 feet (200 m) ahead and determine the way forward with lightning speed. At 70 mph (113 km/h), Lawande pointed out, a car travels nearly 200 ft. (60 m) every two seconds and takes about 330 ft. (100 m) for it to come to a complete, comfortable (non-panic) stop.

Making the leap from Level 2 to Level 4 AVs will take a 40-fold increase in processing horsepower, from 500 gigaflops today to as much as 20 teraflops, Visteon says. Even a more basic Level 3 highway-pilot system will require a still-considerable 10 teraflops of computing capacity, a level that exceeds supercomputer speeds of just a decade ago.

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AUTONOMOUS VEHICLE TRENDS SURVEY

When will fully autonomous vehicles be widely used by first adopters?

PERCENTAGE OF RESPONDENTS

When will fully autonomous vehicles be widely used by first adopters?

Source: Wards Intelligence 2018 Autonomous Vehicle Trends Survey

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