The Car of the Future Remains Undefined

Despite the fact that the car of the future is not yet universally defined, both Silicon Valley start-ups and many automakers are showing increasingly greater interest in self-driving cars, with some car companies claiming that they can have a self-driving car on the road as early as between 2016 and 2020. There are big implications for both hardware and software manufacturers, whose involvement may be necessary sooner than previously thought by many.

The Automotive Industry Turned Upside Down

The automotive industry is about to undergo a sea change, and it will be bigger and farther reaching than the introduction of hybrid vehicles. Google’s Chris Urmson, who heads the company’s autonomous vehicle project, spoke at an automotive industry conference in Detroit in January. His presence there indicates that Google’s project is beyond concept and planning stages, and they are ready to forge relationships with the traditional automakers who have suppliers and many other necessary factors for creating a successful automatic car industry.

Look Where The Money Is

Additionally, investors for the automotive industry, and investors in general, are favoring the technology upstart sector of the automotive industry. In fact, valuations for some of these technology companies have risen above the traditional car companies. The research firm IHS Automotive estimates that self-driving car technology will increase Google revenue by $31 billion by the year 2040.

And investments in peripheral companies—those who stand to benefit from automation in the car sector, and the new kinds of digital connectivity necessary to make the new infrastructure a reality—are up as well. Even the ride share company Uber has seen increased investments, indicating that the time is ripe for a new industry that aims to essentially blow up traditional car ownership.

No Clear Way Forward

Despite the enthusiasm and significant investment, there is no clear model for what an automated car will look like, or how it will function. For example, Google’s model is much like a pod-like appliance, while Ford envisions autonomous cars for the masses that focus on connecting cars and their drivers as part of the IoT. Others are betting that companies that can extend the self-driving concept to smaller, “green” cars, hold the key to the market, while Mercedes has its own luxury version. Whatever the end result, hardware and software companies who will provide the underlying technology are lining up to get in on early contracts.

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