Gone are the days when autonomous vehicles (AVs) were confined to the realms of science fiction. Over the past few years, driverless cars have been grabbing the headlines. While auto and tech giants have been betting big on futuristic robotic vehicles, the public has been mostly apprehensive about the same. However, the coronavirus outbreak is likely to have made people rethink about the future of AVs. Who knew that it would take a pandemic for autonomous cars to appear more effective and worthwhile? With coronavirus keeping most people housebound, driverless cars have indeed proved to be an asset.
Leveraging the Power of AVs to Fight COVID-19
While autonomous driving tests and pilots have been suspended due to lockdowns, driverless cars have provided a valuable mobility solution by delivering necessary medical supplies and meals to health-care professionals and the public in infected areas.
China significantly capitalized on AVs to deliver meals and groceries, sterilize hospitals, as well as transport medical aids amid the coronavirus outbreak. China-based Baidu BIDU — one of the leading developers of AV technology — rolled out 104 robotic cars across the country to help carry out frontline anti-pandemic work including logistics, disinfecting and transportation. Apollo — Baidu’s driverless operating platform — collaborated with Neolix, a local AV startup, to deliver meals and supplies to the Beijing Haidian Hospital. Apollo and Neolix also deployed driverless cars to disinfect all roads on Shanghai Zhangjiang Artificial Intelligence Island. Apollo also joined forces with iDriverPlus to provide AVs to16 hospitals for coronavirus treatments on a nationwide basis.Beijing-based e-commerce biggie JD.com effectively utilized robotic vehicles to deliver medical supplies to hospitals in Wuhan.
Although automakers have tapped brakes on self-driving tests in the United States, unmanned vehicles are aiding the nation’s coronavirus battle. Since mid-April, General Motors’ GM self-driving segment Cruise has flashed a “SF COVID-19 Response” sign on their cars’ windshields, while delivering food to seniors in need. The U.S. top auto giant currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Toyota Motor-backed Pony.ai got in on the delivery scene in California to transport groceries to a local emergency shelter program.In early April, Softbank-backed Nuro received a permit to operate a driverless vehicle on public roads in California. Autonomous shuttle firms like Optimus Ride and Beep also helped to lessen the burden of coronavirus by transporting necessary supplies.
Indeed, self-driving cars are cashing on the virus-driven demand.With social distancing becoming the key theme for 2020, thanks to coronavirus, the need for autonomous driving is accelerating. Suddenly, the idea of robotic vehicles seems less far-fetched. The injection of billions of dollars into autonomous driving technology is starting to appear more justifiable now.
Driverless Race Heats Up
The rapid development in the self-driving vehicle space can be attributed to breakthroughs in technology, with the integration of robust AI and ML capabilities in advanced driver-assistance systems. Per Allied Market Research reports, the driverless car market is expected to witness a CAGR of 39.5% between 2019 and 2026, and reach $556.67 billion by 2026.
Tech and auto giants have been intensifying competition in the AV space. As we know, Amazon AMZN is in advanced talks to acquire driverless vehicle startup Zoox, which is expected to provide a competitive edge to the retail behemoth against existing players such as Alphabet GOOGL, Intel INTC, Baidu, Nvidia and Yandex.
Notably, Alphabet enjoys a first-mover advantage in this space on the back of well-performing Waymo vehicles that have recently exceeded the 20-million miles mark. Waymo has $3 billion in fresh capital after expanding its first funding round from outside investors with $750 million raised in mid-May.
Intel’s $15.3-billion buyout of Mobileye helped it build chips for self-driving systems. The chip maker has been making efforts to double down on the AV business. The firm’s agreements with SAIC Motor and Daegu Metropolitan City are likely to expand Intel’s global footprint in driver-assistance systems and autonomous mobility-as-a-service. In May, Intel announced a $900-billion buyout of Moovit, which is likely to enhance Mobileye’s MaaS offering.
From automakers to research teams and startups, all depend on NVIDIA for hardware and software solutions for self-driving vehicles. The company is partnering with automotive companies to drive innovation in simulation software, automotive sensors, cameras and LiDars to facilitate driverless transport. Its partnership with Uber, Volkswagen and Baidu remains noteworthy in the autonomous driving space. Russia-based Internet corporation, Yandex is also making efforts to beef up its position in the AV space. The firm has pumped $35 million in its AV program and its cars have driven 2 million miles to date.
A couple of days back, China’s Didi Chuxing announced that it has completed a fundraising round of more than $500 million for its autonomous driving unit. China’s Pony.ai raised $462 million in Toyota-led funding in February, putting the startup's valuation at more than $3 billion.
Auto bigwigs including Tesla TSLA, General Motors, Ford F, Volkswagen and Toyota are also ramping up efforts to gain market share in the autonomous driving space. General Motors’ next gen Ultra Cruise aims to take on Tesla’s Autopilot. Argo AI, backed by investments from Ford Motor and Volkswagen, is also testing its AV capabilities.
Challenges Persist Nevertheless
COVID-19 is certainly shaping the future mobility and one can’t deny that driverless cars stood out during the pandemic. However, it seems that the whole-hearted embrace of AVs is not on the horizon and it will still take considerable time to bring them into the mainstream. One of the biggestchallenges for robotic vehicles is public perception and their fear of letting go of the wheel. Per the AAA survey findings in March 2020, only 12% of respondents would feel safe in a self-driving car. High cost of components to build AVs, software complexities, technological and engineering challenges in designing level 4/5 driverless cars, cyber security issues, along with regulatory hurdles paint a rather grim picture for the future of AVs.
Further, with the virus outbreak weighing on the economy, investment on such capital-intensive projects is likely to slow down. Many automakers including General Motors, Ford and Daimler AG have been pushing back promised timelines.The coronavirus outbreak has prompted the companies to re-assess their priorities in the light of declining bottom lines. Amid the pandemic-induced financial crisis and uncertainty, many automakers are prioritizing cash conservation, thereby temporarily pushing future technologies like driverless cars to the backburner.
Well, the pandemic has awakened the need for autonomous vehicles, which are poised to emerge stronger. As the pandemic cools down and the companies restore their financial health, they are likely to ramp up spending on autonomous driving technology. However, the firms should strive toward conquering the challenges and unexplored problems in the path of autonomous driving. Once the scale ramps up, the cost of self-driving systems is likely to decline considerably. Efforts undertaken to develop autonomous innovation today are likely to reap rewards in the future.
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