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Title: Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

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Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

1/27/16, 4:55 PM

http://onforb.es/1TlUELL

Neil Winton Contributor

I cover Europe’s car manufacturers, their business, tech, products
Opinions expressed by Forbes Contributors are their own.

AUTOS

1/26/2016 @ 1:32PM

1,051 views

Autonomous Cars Need To Perfect
Technology Before Claiming Victory
Nobody doubts that autonomous cars are
coming and will change the world, but trying
to pin down when this might happen shows
the case for computer controlled cars is still a
bit ambiguous.
Some say a complacent automotive business is
about to take a fatal torpedo, while others are
a bit more sanguine, see much wishful
thinking and wonder where the beef is.
Those in the first category say the first
autonomous cars – vehicles driven solely by
computers without any human help – will
start to hit our roads by 2020. Sanguinistas
say they won’t be ubiquitous until maybe
2035.
Reports from consultants like Juniper
Research not only reckon the first autonomous
cars will appear by 2021, but say there will be
20 million of them on the road globally by
2025. Hampshire, England-based Juniper
thinks it can even rate how well possible
contenders are doing, and says technology
giant Google is in first place, followed by
China-owned and Swedish based car maker

http://www.forbes.com/sites/neilwinton/2016/01/26/autonomous-cars-need-to-perfect-technology-before-claiming-victory/print/

Page 1 of 6

Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

1/27/16, 4:55 PM

Volvo, Daimler, which owns German luxury
manufacturer Mercedes, then electric car
maker Tesla Motors, with Apple in 5th place.

Google’s self-driving prototype car (AP Photo/Tony Avelar, File)

Investment banker Barclays says the advent of
autonomous cars will be very disruptive,
reckoning that in markets like the U.S., vehicle
ownership will decline by 50 per cent and
annual sales by 20 per cent.
“Shared vehicles could replace at least nine
times the number of “traditional” vehicles. In
the post-modern era of full autonomy, we see
four types of vehicles emerging – 1) traditional
vehicles 2) family autonomous vehicles 3)
shared autonomous vehicles and 4) pooled
shared autonomous vehicles,” Barclays said in
a report.
This spells disaster for the likes of GM, Ford,
Volkswagen, and Toyota.

A driverless car from Mercedes-Benz AFP PHOTO CHINA OUT (Photo
credit should read STR/AFP/Getty Images)

http://www.forbes.com/sites/neilwinton/2016/01/26/autonomous-cars-need-to-perfect-technology-before-claiming-victory/print/

Page 2 of 6

Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

1/27/16, 4:55 PM

“We estimate mass market (manufacturers)
will shrink dramatically to survive the threat of
families downgrading the number of cars they
need and switching (to autonomous),”
Barclays said.
And naturally the rich will get richer, with the
upmarket manufacturers thriving.
“Premium manufacturers may become
(autonomous) share leaders given their
upscale image,” Barclays said, estimating that
mass market sales in the U.S. might fall 27 per
cent, while premium makers’ gain nine per
cent.
There are massive hurdles to be jumped over
first. It is true that technology has made
massive strides and various manufacturers
have shown the remarkable ability of their cars
to drive safely without human interference
most of the time. The key though is “most of
the time”. A computerised system that works
only “most of the time” undermines the whole
project.

The Volvo Concept 26 car interior for self driving cars (AP Photo/John
Locher)

Recent reports show that mundane things like
tumbleweed drifting across highways fatally
confuses auto computers, as do policemen
giving hand signals, or birds flying towards
cars or across them. Snow spooks them too.
The well honed judgement of an experience
driver waiting for a space to appear at a busy
highway entrance is too much for computers.
http://www.forbes.com/sites/neilwinton/2016/01/26/autonomous-cars-need-to-perfect-technology-before-claiming-victory/print/

Page 3 of 6

Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

1/27/16, 4:55 PM

Computers refuse to allow vehicles, however
briefly, to stray illegally over double white (or
yellow depending on your country) lines which
might allow traffic to pass a cyclist.
It’s not clear whether this reveals the need for
a bit of tweaking, or if there is a fundamental
problem.
Elmar Degenhart, chairman of German
supplier Continental Ag, says some
autonomous boosters are getting ahead of
themselves.
“In the next 10 or 15 years, we won’t see any
robot taxis in New York with no steering
wheels or pedals. This is science fiction – its
fantasy. The traffic scenarios over there would
be much too complex and unpredictable for
this,” said Degenhart, in an interview with
German news agency DPA last year.
Max Warburton, analyst with Bernstein
Research agrees that there too many over
excited zealots around.
“(Autonomous vehicle) technology remains at
the nascent stage, and we think it is simply too
early to claim to be able to foresee what the
full consequences will be . Talk of
dramatically reduced vehicle fleets, zerodifferentiation between brands, and the end of
individual vehicle ownership is probably at
best premature, at worst just fanciful,”
Warburton said in a report entitled “The End
Of An Era”, in which he expects the current
period of high profits for the global auto
industry to run itself out.
Warburton said he is certain of one thing, the
move to autonomous cars will cost
manufacturers a lot of money, help safety and
wreck some balance sheets.
Warburton said Mercedes, Volvo, VW’s Audi
and Nissan have been most vocal about their
technology, and it’s not clear if any have a
http://www.forbes.com/sites/neilwinton/2016/01/26/autonomous-cars-need-to-perfect-technology-before-claiming-victory/print/

Page 4 of 6

Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

1/27/16, 4:55 PM

clear lead.
“Newcomers such as Google probably don’t
plan to become automakers and instead are
more likely to license their technology to
existing (manufacturers),” Warburton said.
“In the long term, autonomous cars may
change the economics and balance of power in
the industry. But we believe that in the time
frame that most investors in the Autos sector
care about – which we presume is less than
five years – autonomous vehicle technology
will simply be a cost headwind, and a
conversation topic rather than a driver of
changes in competitive advantage or share
prices,” he said.
But Morgan Stanley analyst Adam Jonas sees
a real, imminent and accelerating threat to the
traditional industry.
In a report headlined
“Share+Autonomous=Deflation”, Jonas said
new entrants are eager to combined the socalled share economy with autonomous
driving to take advantage of the fact most cars
are used for only four per cent of their lives.
Jonas says this might carry a big risk to auto
stocks in 2016 with some big shocks.
“Despite perhaps a generation or more to
complete the potential transformation of autos
from privately held, human driven machines
to a network of shared autonomous vehicles,
the peripheral entrance of very large and
extremely well capitalized tech hardware and
software firms is focussing investor attention
on the size of the addressable market and the
scope of industry disruption,” Jonas said.

http://www.forbes.com/sites/neilwinton/2016/01/26/autonomous-cars-need-to-perfect-technology-before-claiming-victory/print/

Page 5 of 6

Autonomous Cars Need To Perfect Technology Before Claiming Victory - Forbes

1/27/16, 4:55 PM

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This article is available online at: http://onforb.es/1TlUELL

2016 Forbes.com LLC™ All Rights Reserved

http://www.forbes.com/sites/neilwinton/2016/01/26/autonomous-cars-need-to-perfect-technology-before-claiming-victory/print/

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