Historically, smart cars have been conceptualized since the 1920s but Nicolas Hayek is said to be the earliest to invent a small car that was fuel efficient, environmental friendly and easy to park. Smart cars (also known as autonomous cars) use myriad techniques such as radars GPS and computer vision to perceive their environment; the control systems translate the information and identify appropriate paths for navigation and show obstructions to these paths. In 2014, SAE international provided a classification system based on the level of autonomy of smart cars. The six levels: No automation, drive assistance, partial automation, conditional automation, high automation, and full automation.
This article covers companies providing autonomous vehicles, connected car technologies, driving assistance, on-board diagnostics (OBD), infotainment, security and fleet management products and services for autonomous vehicles.
Problems and Implications
Some of the problems faced by investors and smart cars’ manufacturers include:
Software reliability: Software engineers report that building car software can be complicated process because there are millions of software parts with a lot of states. There will be combination of states that would not get tested because of their rarity. This puts up the issue of code reliability in smart cars.
Loss of jobs: As this technology becomes widely adopted, there is a fear among professional drivers that their jobs would become obsolete.
Public image: According to Juniper Research, in 2019, one in five vehicles on public roads would be smart cars. The inability to update to and embrace the latest technology can be a significant drawback in one’s public image.
Privacy: Smart cars usually have the vehicle’s location integrated into a software interface that other people have access to. This can lead to the risk of automobile hacking and illicit sharing of information through the sharing of vehicle protocols. Further use of private data can implicate car owners if their vehicles are used in terrorist attacks.
Moral reasoning: Programming of autonomous cars is questioned when the car is put in an unavoidable crash. Decision making in this stage is still a controversial topic among supporters and opponents of the technology. Popular questions that come up include: What would the car do if it had an option of running into a car or swerving somewhere else, potentially killing passengers and other pedestrians?
There have been over 1050+ companies in the sector, 348 funded in last 5 years, $4.9B invested in last 2 years. The most active investors are: Intel Capital, Y Combinator, Maniv Mobility, Trucks Venture Capital, Techstars etc. There are 5 categories of companies here:
Autonomous Vehicles: Companies providing software specifically targeted towards enabling autonomous driving. The most active investors are: Techstars and Y Combinator. There are six subsectors here: Fully autonomous Vehicle Makers, Semi-Autonomous Vehicle Makers, Self-Driving Technology, Vision Solutions, Mapping and Fleet Management Solutions. A notable company in this sector is Tesla (2003, Delaware, $7B) specializes in electric cars, energy storage and solar panel manufacturing.
Connected Car Technologies: Companies providing technologies that allow vehicles to communicate with moving parts of the traffic system around them. There are 5 subsectors here: Network Enablers, OTA Updates, Connected Car Platform, Data Management, V2X Solutions. TTTech is a notable company in this sector, they work in the industrial and transportation sector providing safety controls that improve the safety and reliability of their electronic systems.
On Board Diagnostics: With an overall investment of $462M. There are two subsectors: Devices and Usage Based Insurance. Metromile (2011, Redwood, $50M) is a notable company here, they offer insurance called pay-per-mile – a usage based insurance where users pay a base rate along with a fixed rate per mile; they also have a driving app.
Infotainment: With an overall investment of $447M and three subsectors: Hardware, Software, Content and Related Services. Parrot (1994, Paris, $35.1M) is a company here. They provide connected products like drones, gardening and car kits for consumer.
Safety and Security: With an overall investment of $458M and five subsectors: Accident Detection and Notification, Driver Fatigue Detection, Smartphone Distraction Avoidance, Dash Cans, Vehicle Cybersecurity.
Some benefits of using smart cars include:
Safety: According to a report by Mckinsey and Company, it was estimated that the widespread use of autonomous cars could reduce the overall auto accidents in the US, save thousands of lives and prevent up to $190B in damages. Accidents caused by human errors and distracted or aggressive driving are usually eliminated by autonomous cars.
Pollution: These cars reduce pollination – smart cars do not contribute to noise pollution and since they do not use as much fuel as regular sized cars, chemical pollution is also reduced.
Cost: Safer driving reduces the cost of securing and maintaining vehicle insurance. The cost of purchasing fuel is also reduced as most smart cars are fuel efficient or hybrid.
This sector has a lot to offer to millennials and older generation and with the integration of Internet of Things into every facet of the industry, investors and entrepreneurs can reap double benefits.