The production of electric and computer-operated passenger vehicles will likely kick into high gear over the next decade. Consumers have seen small forays into the market, with a few brands like Tesla and Prius making inroads into the gas-guzzling auto industry. But as innovation accelerates, options for both autos and business models will increase.
It is often true that analysts’ predictions for the quick coming of the next great trend can be overstated. This has been true in the case of self-driving and electric cars. During the past decade, Morgan Stanley, noted that the large gains autonomously driven cars could provide in both savings and productivity would propel the industry forward. General Motors was gearing up to launch a fleet of self-driving cars by 2021. BMW and Ford were on track for their own lines as well.
Toyota recently invested $462 million in Chinese driverless taxi startup Pony.ai. The two companies have been working together since August. Pony.ai has offered test programs of its autonomous rideshare service in Guangzhou, China, and in Irvine, California, with its BotRide pilot service.
England’s Five has decided to forgo the vehicles themselves, to simply create and then license the autonomous driving technology. Initial plans had been to design tech and integrate it with cars, then run a transit service. But the new concept has already gained Five $41 million in funding in a Series B round, this after the initial $35 million Series A investment.
Building a fleet of autonomous cars has been the goal in many ways because a driverless car would have a hefty price tag in the consumer market, but could be rolled out as taxis with much less direct cost for individuals. That’s why so many of the companies that drive into this space are working on creating a cohesive product, that combines vehicles, AI, mapping, and a ride-sharing business model.
Dividing up the necessary components allows start-ups in each area to enter the autonomous driving space, as well as for the manufacturers to focus on what they’re best at: making cool cars. This is the kind of thinking that could lead to an increase in this market over the coming years. As risk and financing are spread out, more innovation and collaboration will be possible.