Page 7 - September 2018 Disruption Report Flip Book

DISRUPTION OF TRANSPORTATION SEJAPNTEUMARBYER20210818
Below the surface, a major restructuring of the auto industry is underway where self-driving car companies are emerging as the pivotal element in the strategies for future mobility. Over the past years, different approaches to integrating self-driving car technology into auto and mobility companies have been tried, ranging from various types of acquisitions (GM-Cruise, Ford-ArgoAI, Aptiv (prior: Delphi), Nutonomy, and Intel-MobilEye) to partnerships (Bosch/Daimler, Daimler/BMW, and Baidu/Apollo) and go-it alone strategies (Waymo, Zoox, Uber and many others).
Leaving aside [Google’s] Waymo, GM may have found a winning formula, which is increasingly copied by its competitors: When it acquired Cruise Automation in 2016, it allowed the new subsidiary to continue to operate in a highly autonomous mode, its growth and speed largely unencumbered by the rest of GM. Successful collaboration with GM around the electric Chevy Bolt brightened the prospects of both companies and initially
led to a significant increase in in GM’s stock price (which since then has fizzled out). In 2018 Cruise attracted a 2.25 billion USD investment from Softbank’s Vision fund. Being able to attract outside investment (as well as employees through stock options in Cruise), while having close connections to the resources of the parent company should be an ideal position for Cruise to quickly shift from start-up/development mode to commercialization. At the same time Cruise is insulated from all concerns related to building legacy cars and from the headwinds that classical car companies will have to face from the revolutionary changes in the auto industry.
Other automakers seem to be copying GM’s strategy. Ford has created a self-driving division (which includes ArgoAI) and will also be open for outside investment. Volkswagen seems to have been in talks to buy Aurora, but was rebuffed. Daimler who was an early leader in self-driving technology is relying on a partnership with Bosch but is also splitting the company into three separate parts (cars, trucks, mobility (which includes self-driving technology). This has the effect of insulating the less vulnerable parts of the business (trucks and mobility) from potentially dramatic changes in the auto industry. Only Toyota, which has always been late to the self-driving race has chosen a different path by investing 500 billion USD in Uber, which minimizes its ability to leverage the opportunities associated self-driving car technology.
The last 6 months have shown that the auto (and mobility) industry is now finding ways to channel billions of dollars into the commercialization of self-driving car technology. Given the extent of changes, the capital associated with these changes and the increased ability of translating advances in the technology into actual products and services (which don’t have to be full fledged drive-autonomously-anywhere solutions but can be very targeted) it won’t take several years until we see the first real impact on the streets...
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