According to a study on the rise of the autonomous age, a seismic shift that will upend the auto industry will be set off as it is expected that a quarter of all miles driven in the U.S. could be in shared, self-driving electric cars by the end of the next decade.
the Boston Consulting Group said in a study released Monday that the shift would be driven by a convergence of three trends — ride sharing, autonomous driving and vehicle electrification.
In cities with more than 1 million people, consumers will find it more economically advantageous to exit their personal vehicles and start hailing robot taxis and hence the change will be most profound in such cities, the report estimates.
“The automotive industry is on the brink of a major transformation, and it’ll be here faster than people realize,” Justin Rose, a BCG partner leading its digital efforts for industrial companies, said in a statement. “For millions of Americans living in large cities, the next vehicle they purchase may be the last car they ever own.”
The consulting company said that as more than 5 million conventional cars are replaced by an estimated 4.7 million autonomous electric vehicles by 2030, there will be wrenching changes that auto companies will have to face.
BCG said that by ditching a personal car in favor a shared autonomous electric vehicle, a typical Chicago consumer could cut his commuting cost by $7,000 a year. The reserahc and consulting group said that “hundreds of billions of dollars worth of industry assets” would be turned into liabilities and car dealers would be made “less relevant” by that trend.
The number kilometers that would be travelled in shared, self-driving electric cars will be as much as 925 billion miles (1.5 trillion kilometers) in the U.S. in 2030, the consulting firm has projected. The shift could happen even faster if innovations in technology and breakthroughs in pricing accelerate even though it is expected to gradually begin in the early 2020s.
“Automakers and parts suppliers would face the most profound challenge to their business models in a century,” BCG said in a statement. “This shift undermines the current industry business model.”
And anticipating this trend, racing to put robot cars on the road are automakers and tech companies. As they work to overhaul their business models, promises to produce fully autonomous cars within five years, have been made by auto companies such as Tesla Inc., BMW, Daimler AG, General Motors Co., Ford Motor Co. and Volvo Cars.
Alphabet Inc.’s self-driving car unit, Waymo, is in talks to put its technology into Honda Motor Co. models and is working with Fiat Chrysler Automobiles NV on driverless Chrysler Pacifica minivans.
But to keep up with the rapid pace of change that is coming, companies aren’t moving fast enough BCG contends.
“Few players are taking the bold steps needed to position themselves to thrive in this not-too-distant future,” said Brian Collie, an author of the study who heads BCG’s automotive practice. “The time to act is now.”
(Adapted from CNBC)