DRIVERLESS CARS ARE POISED TO DELIVER BENEFITS FOR DRIVERS, INVESTORS—AND EVEN THE UK ECONOMY
By: Richard Lightbound, CEO of ROBO Global EMEA
In the world of robotics, many ideas that once seemed to be the unattainable dreams of forward-thinking visionaries are quickly coming to life. Robot-assisted surgery is delivering better patient outcomes at less cost. Automated warehouses are making it possible for retailers like Amazon and Ocado to fulfill customer orders faster and cheaper than ever. Amputees can now control robotic limbs with their minds. Agricultural robots are revolutionizing how crops are planted, monitored, fed, weeded, watered, and harvested. The list of transformative and often industry-disruptive innovations in robotics, automation, and artificial intelligence (or “RAAI”) grows longer every day.
While Parliament may not typically come to mind when discussing innovation of any kind, British finance minister Philip Hammond caused many heads to turn last week when he announced that the new budget would include measures to encourage the development of driverless cars. He went on to say that he wanted the UK to be one of the first countries to allow driverless cars—as soon as 2021. “Some would say that’s a bold move,” said Hammond, “but we have to embrace these technologies if we want the UK to lead the next industrial revolution.”1
It’s no surprise that Parliament is focused on taking whatever steps are necessary to kick the UK economy into super drive. With Brexit scheduled to take effect on March 29, 2019, the country has just over a year to build an economy that can function independently of the EU. Perhaps that challenge was just the catalyst that was needed to get the country to embrace all that RAAI has to offer.
That said, though Parliament may have seen the light when it comes to the potential of driverless cars, not everyone is so enthusiastic. Why? Giving up physical control over the cars we drive can make any driver feel at risk. But the numbers tell a different story. The World Health Organization recently reported that about 1.25M people are killed in car accidents every year. Even more, the report states that “without sustained action, road traffic crashes are predicted to become the seventh leading cause of death by 2030.”2
Luckily, that “sustained action” is coming in the form of driverless cars. Independent think-tank RethinkX recently stated that “we are on the cusp of one of the fastest . . . most consequential disruptions of transportation in history,” and predicted that 95% of US passenger miles will be made by autonomous, electric, on-demand vehicle fleets within 10 years of receiving widespread regulatory approval.3 Perhaps RethinkX’s most dramatic prediction is that the number of passenger vehicles on American roads will likely drop from 247M today to just 44M by 2030—just 13 years from now.
If you’re still not convinced that driverless cars are destined to be an integral part of the very-near future, consider the major investments that are being made in this sector today:
- In February, Ford invested $1B in a joint venture with autonomous vehicle tech firm Argo AI to create a separate company with the mission of outfitting Ford vehicles with self-driving technology.
- In March, Intel announced its acquisition of Mobileye, a leader in computer vision for autonomous driving technology, for $15.3B in an effort to position Intel as a “leading technology provider in the fast-growing market for highly and fully autonomous vehicles.”
- In September, Chinese search engine Baidu Inc. (BIDU.O) announced a 10B yuan ($1.52B) autonomous driving fund to speed up its technical development and compete with US rivals.4
- In October, driverless tech startup Nauto announced that it has hired executives from Microsoft and Alphabet’s self-driving arm Waymo to continue to expand its geographic reach and build on its partnerships with investors such as General Motors, BMW, and Toyota.
- In October, Delphi, one of the world’s largest automotive suppliers, announced its acquisition of Boston-based self-driving car startup nuTonomy for $400M. NuTonomy already has autonomous taxis in operation in Singapore and will soon begin testing self-driving vehicles in Boston.
- Just last week, Uber announced a plan to buy up to 24,000 Volvo cars by 2021 to partially replace today’s freelance drivers with a fleet of fully autonomous, on-demand passenger vehicles.
The momentum is clear: across the automotive supply chain, innovators are racing to deliver safe, automated vehicles that can help save lives and, perhaps, bolster economies around the world—including within the UK. Investors seeking to take advantage of this momentum would be wise to seek out diverse opportunities across the automated vehicle supply chain. To help, the ROBO Global Robotics & Automation Index offers investors broad exposure to the entire value chain of RAAI, including more than 10 companies who are dedicated to bringing the vision of driverless cars to life.
1 Hammond: Driverless cars will be on UK roads by 2021, BBC News, November 19, 2017
2 Road Traffic Injuries Fact Sheet, World Health Organization, May 2017
3 Driverless cars may kill off the world’s deadliest invention, The Financial Times, November 2017
4 China’s Baidu launches $1.5 billion autonomous driving fund, Reuters, September 20, 2017
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