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What Will 2020 Mean for Self-Driving Cars?

While the corona virus has strengthened the use cases for autonomous vehicles, the economic impacts from the virus could also spell the end of the line for a lot of development teams. Bloomberg’s article delves into what the post-covid world means for the industry. [1]  

As the Covid-19 pandemic started hitting the continental U.S. in March, almost all the self-driving developers from Waymo to Cruise announced that they would be grounding their entire fleets. This was as much due to safety concerns from the backup drivers as it was due to concerns for the safety of users. [2] At the same time, many car companies (who are bankrolling the development of self-driving technology) have also grounded their bread and butter production of vehicles – and are bleeding money. Car sales in April 2020 were down almost 80 percent compared to 2019. [3] This doesn’t sound like it could bode well for the self-driving future. 

However, on the other side of the coin, e-commerce and online grocery shopping have been booming – and there’s never been better demand for contactless delivery solutions. [4] If anything, the pandemic has vastly sped up the deployment of autonomous delivery robots from makers such as Starship Technologies, Nuro and JD Logistics. People are also understandably avoiding public transport, so the demand for ride-hailing is likely to make a fast recovery after lockdowns are lifted – ridership in Hong Kong for Uber has already recovered more than 80% from its corona virus lows. [5] 

So what does this mean in aggregate then? On the one hand, the field of self-driving vehicle developers are going to be narrowed down. On the other, demand for such vehicles have been given a strong boost. Former General Motors executive Larry Burns offers the analogy of runners in a marathon with an unexpected cliff in front of them: “The strongest runners are still going to get over it. It will take them longer, but there’s a chance they may be able to accelerate on the other side.” [1]

The most likely dropouts will be the smaller startups as well as large car companies for which the technology is secondary to their primary business of manufacturing vehicles. There will also likely be a consolidation of efforts, with a shift from go-it-alone approaches to joint ventures, like Ford and Volkswagen’s joint venture (Argo AI) or the one between BMW and Daimler. What was essentially risky venture capital slung scattershot across dozens of startups will instead get behind a few select efforts. 

The article also includes a list of who Bloomberg considers to be the current frontrunners and the ‘dark horses’ of the field, along with some useful background research on each of the developers. 

 

Personal comments

The Bloomberg article provides a good overview of where the development of self-driving vehicles stand today, and notes some of the immediate impacts of the corona pandemic on the industry (further adding to a deceleration already experienced over the last two years) whilst positing what the implications may be for the longer term view. 

I agree with the analysis overall that the pandemic will only slow, but not stop, developments. Many of the serious players with deep (and patient) pockets to match like Waymo and Cruise have already been acknowledging even before the corona crisis that the full self-driving future was going to be further away than previously thought. So while the pandemic may have not been anticipated, delays and setbacks in a more general sense certainly were. Underscoring this is that Waymo’s most recent fund-raising rounds – its first from investors outside its parent company Alphabet – in March and May 2020 raised US $3 billion. [6] This goes to show there are plenty of investors who agree with the Bloomberg assessment that the corona-virus setback is just that, a setback rather than a game-changer. 

However, what I find interesting to speculate on is the extent to which the narrowing of the field of self-driving developers could help accelerate developments. Could the concentration of investment in fewer self-driving companies as a result of the pandemic actually work out to be a better outcome for the industry? I think so. Such is the nature of moon-shot projects. Yes, they require competition, but they also need a massive amount of coordination, collaboration and concentration of resources. And according to Cruise’ CEO, Dan Ammann, autonomy will be this generation’s moon landing. 

 

Written by Bobby Chen, RISE.

 

Sources

1. 2020-05-15. The State of the Self-Driving Car Race 2020.

2. 2020-03-18. Coronavirus shows there’s still no such thing as a totally human-free self-driving car.

3. 2020-05-19. Monthly car sales in Europe through April 2020.

4. 2020-04-07. Demand For These Autonomous Delivery Robots Is Skyrocketing During This Pandemic.

5. 2020-06-04. Uber signals recovery in rides as coronavirus lockdown restrictions ease.

6. 2020-05-12. Waymo expands first external investment round to $3 billion.