Blogs

Mapping race to autonomous vehicles

  • Autonomous Vehicle (AV) industry and the growth story
  • Relevance of HD maps with respect to AVs; challenges and potential payoff
  • Varied business models being practised in the industry domain
  • Possible challenges posed for the industry

 

The autonomous vehicle revolution is set to disrupt all technologies known to man till date. In this rather exciting time for humans, the reel life sci-fi films have made their way to the real life. An autonomous vehicle (AV) or a driverless car is one that is being self-driven from a starting point to predestined destination and functions on an autopilot mode. In order to enable this, various technologies, as well as sensors, are placed including the likes of active steering, cruise control, GPS navigation system and anti-lock braking system. Besides offering a comfort of hassle-free driving, KPMG expects AVs to result in a reduction of accidents by approx. 80%, which are primarily caused by human negligence.

While partially automated technology has been in existence for the last couple of years, fully-driverless cars are currently in advanced testing phase. In addition to AVs, their electric versions are the perfect recipe to overhaul the automobile sector as a whole. BCG expects more than 12 million plus fully autonomous vehicles and 18 million plus partially autonomous vehicles to be sold each year by 2035. Further, up to the middle of 2017, a total investment of approximately $77 billion has been done in the industry, while, the cumulative mainstream investments accounted for $75 billion and the cumulative start-up investment accounted for the remainder $2 billion.

In contrast to the traditional automotive industry, the AV industry has undergone a massive transformation with the traditional ecosystem being challenged by evolving business models and technological developments. Moreover, several start-ups and established industry players have entered the industry to reap profits by being the building blocks of the industry. These include traditional car manufacturers (OEMs), mobile phone manufacturers, silicon chip designers, digital cartographers (mapping companies), graphics card manufacturers and internet giants among several others.

While numerous aspects contribute to the success of the AV industry, maps form the base for the development and its take off. In order to enable flawless crash-free driving, AVs require updated maps for each and every conceivable route possible. Further, for a robot-driven vehicle, one of the key components of the drive is not only what it sees, but more importantly, what it knows beforehand about the area it is travelling through. In short, a car must understand the road environment beyond the range of its onboard sensors. This requirement has essentially led to a full-blown mapping war. Furthermore, several companies have jumped on to this bandwagon and are spending billions to cash in on a staggering payout that could still be a few years away. The Goldman Sachs expects the mapping market for AVs to grow in value to a whopping $24.5 billion (2050) from $2.2 billion (2020) as seen in the below chart.

Among the majors, one of the prominent names that come up is that of Google, which aced the traditional digital maps years ago with a superior software expertise and its streetcars blanketing the globe. The company boasts of more than 1 billion users of its smartphone app every month after beating all other navigation companies, automakers and even the smartphone giant Apple Inc. Google’s prevailing dominance in digital maps gives it a head start in HD maps, which will be primarily accruable to Waymo, its AV spin-off. The company has established partnerships with Avis, Lyft and Fiat-Chrysler. Further, apart from Google’s very own real-time mapping data, Waymo will offer its customers sensors and software which, in essence, form the heart and brain of a robot car. The competition, this time around, is again fierce and companies are trying different business models to race ahead of each other. A few OEMs (Original Equipment Manufacturers), for instance, are choosing to collaborate with technology companies. In spite of being competitors, German automakers BMW, Audi and Daimler are sharing their sensor data via a cloud-based service provided by HERE. On the other hand, Volkswagen and GM have opted to lean more on third-party services in order to have their maps off the ground. For example, Mobileye, a self-driving car start-up has already inked agreements with BMW, Volkswagen and Nissan for a mapping product. The aim as per Dan Galves, Mobileye's Chief Communications Officer, ‘is to pool together mapping data from car manufacturers to generate as much scale as possible’. AV enthusiast, Tesla has taken on a different approach. The company has been using Autopilot: a driver-assistance software, which relies on sensors and cameras on its fleet. Tesla has leaned on Mapbox Inc. (backed by Softbank) to help it assemble its maps and paid $5 million for a two-year licensing deal.

Additionally, there are several small start-ups that are operating and are hawking specialised software or gadgets to develop these maps for OEMs/automakers that are lagging in the AV race. Start-ups such as Lvl5, DeepMap and Civil Maps have attracted mapping engineers from Tesla, Apple and Google and these have raised around $40 million in funding. While start-ups such as DeepMap are focusing solely on maps that are meant for fully driverless cars, companies such as TomTom and HERE are focusing on HD maps for advanced driver assistance technologies, which will be helpful prior to the mass adoption of AVs.

Unlike the traditional digital navigation maps, the HD maps need to be updated as regularly as daily in certain regions. For instance, a busy road that goes via pedestrian areas and/or construction site might need a more frequent update on data vis-à-vis a long and uninterrupted freeway. This can possibly translate into a subscription model that could eventually draw in billions for mapping companies. However, the cost involved in creating HD maps is still a big obstacle, as it entails sending a huge volume of data over the cellular network. In addition, there is another challenge that exists in the form of lack of common standard or approach for these HD 3D maps, nor is there any type of sharing of these critical proprietary data. This creates the need for companies to generate new maps for each city that they want to enter. This may delay the process of deployment in certain areas. The complication is further exacerbated by the existence of different driving rules implemented in each city which would entail tweaking the software and therefore translates into redoing the software for each new geography.

On a broader perspective, Televisory believes, the role of mapping will vary based on the level of technological advancement in the AV industry. In the short term, the mapping is going to be crucial for the development of AVs (whether driver assisted or fully autonomous). The process of building these maps to the point of precision, however, is quite tedious and cumbersome and nobody knows who will be the first one to get this right. Further, with the market flooded with several players, this sector is bound to witness a consolidation in the future as companies currently operate with very high fixed costs. Addedly, there is a possibility of a regulatory backlash as there were recent testing crashes associated with Uber and Google’s Waymo during the 1st half of the year (2018). The privacy issues might also come to the fore, making it pertinent for companies to tweak their software amid associated concerns, thereby necessitating government-industry engagements. A couple of years down the line, AVs are likely to depend more on LIDAR sensors or light detection and ranging sensors rather than maps alone. In fact, maps would then play a secondary role in ensuring safety with LIDAR sensors being used for navigation. In the long run, experts expect AVs to be as smart as humans, thereby making them capable enough to handle all existential problems on a daily basis on their own. That, however, will possibly be achieved in several years from now.

Your Rating

Tire manufacturing industry, analysing the cost and margin trends

The global market for tire manufacturing stands at $180 billion. Michelin anticipates the long-term demand to rise at the rate of 5 to 10% a year in developing markets and 1 to 2% a year in mature...

Failure of Amazon in China, an analysis

E-commerce market in China Online consumer product retailers in China Performance of Amazon in China   Amazon is a global e-commerce player selling a wide...

An analysis of Malaysian rubber glove industry

How big is the international rubber gloves market? Reasons behind the healthy and steady growth Malaysia’s role in the industry Why are companies struggling for stable...

Rapidly growing Indian online food delivery industry and its unrealised profits

Evolution of online food delivery industry in India Geographical penetration and scope for expansion Key players and their zeal to balance revenue and costs   Online...

Can lithium-ion anode demand for needle coke reduce availability for electrode players?

What is needle coke? Uses of needle coke Lithium-ion battery manufacturers demand needle coke   Needle coke? Needle coke is a specialised form of petroleum coke...

Is the radio broadcasting industry in the U.S. dying? An analysis

Radio, the most powerful medium of reach in the U.S. Why the industry is moving at a slow pace? Radio’s health is still sound, will it continue in the long-term?   ...

Sri Lankan economic and political crisis

Sri Lanka’s latest political crisis, who governs the nation? Poor economic indicators adding to the nation’s woes   Sri Lanka is currently embroiled in a political crisis,...

Carbon black industry, strong potential for supernormal profitability?

What is carbon black? Its uses Impact of the environmental curbs in China   What is carbon black? Carbon black is a fine carbon powder and it is a disorderly...

Blockchain, an emerging concept, a disruptive technology (Part 1)

What is blockchain? How is blockchain revolutionary? Cryptocurrency, the new money ICOs, the new way of raising money Summary Blockchain is a software architecture...

Housing finance market in India. Is affordable housing driving the growth?

Overview of the housing finance sector in India Key players dominating the segment and their dynamics Factors driving aggressive demand for housing   The housing...

Rice industry outlook 2018

Major rice producers and consumers Global rice trade Factors dominating the trade   Rice is the 3 rd largest produced agricultural commodity in the world, after...

Indian wood panel industry, growth drivers and present trends

Current market scenario in the Indian plywood industry Growth in the housing sector and rapid urbanisation to provide the boost GST rationalization to reduce price difference...

Rise of Ant Financial, will the success story continue?

What is Ant Financial? Journey to become king of unicorn Will regulatory curbs hinder its success journey?    Ant Financial, an affiliate and integral part...

Baidu’s Apollo, the underdog of autonomous driving platform

Overview of the autonomous vehicle sector in the global automobile industry Search giant Baidu’s entry into the autonomous driving space Baidu’s approach in becoming a front-runner...

Malaysian rubber glove industry, an update

Rising global demand for gloves Impact of USP 800’s implementation and the US-China trade war on Malaysia’s rubber gloves industry Key challenges for the Malaysian rubber...

Unnoticed growth of the media and entertainment industry in India

Overall industry brief Growth of the M&E industry and its segments Major supporting elements of this growth   Media and Entertainment (M&E) is a very wide industry...

Battle for the textile and apparel industry in Southeast Asia

The reasons for China’s decreasing presence in the industry Initiatives by the governments in Southeast Asia to boost the textile trade Vietnam and Bangladesh’s quest to conquer...

OYO Rooms, an Indian start-up to enter Japan

Growth story of OYO Rooms in India Business model of OYO Rooms Analysis of strategy to enter Japan   OYO Rooms, the Indian start-up has decided to venture in Japan...

What’s in store for India’s first commercial REIT as it hit the market with Blackstone teaming up with Embassy Group

Overview of the partnership and assets of Embassy Office Parks Comparison of the Indian commercial office market space with other developed markets Road ahead for India’s...

German economy, will the slide continue?

Weakening global industrial demand weighs on Germany’s manufacturing sector Inflation and business climate take a hit with broader signs continuing to be subdued Future...