Autonomous Vehicles: Where VCs Are Investing

Autonomous cars will reshape the world in many ways, including fewer road accidents, reduced car ownership, automating logistics operations, reducing carbon footprint, and reducing parking or traffic tickets.¹ By 2035, UBS predicts that 80% of people will use robotaxis and car ownership in urban areas will fall by 70%.

1. Joshi, Naveen. “5 Ways Autonomous Cars Will Reshape Our World.” Forbes, 22 Jul. 2022.

The steering wheel of the future isn’t in our hands; it’s in the algorithms as AI takes the driver’s seat.

ANATOMY OF SELF-DRIVING CARS

What Are Self-Driving Cars / Autonomous Vehicles?

A self-driving car, also known as an autonomous or driverless car, is a vehicle equipped with a combination of sensors, cameras, radar, and artificial intelligence (AI) that allows it to travel between destinations without any human intervention. For a vehicle to be recognized as fully autonomous, it should be capable of navigating without human interaction over roads that haven’t been specifically adapted for its use.²

How Do They Work?

The success and functionality of self-driving cars hinge on sophisticated AI technologies. These vehicles process immense data from image recognition systems, augmented by machine learning and neural networks, enabling them to navigate autonomously. Neural networks pinpoint patterns in the data, primarily derived from onboard cameras, helping the car recognize elements such as traffic lights, pedestrians, and street signs.

The journey to craft a Level 5 (see more on levels below) fully autonomous vehicle necessitates a blend of key technologies. This includes vehicle-to-everything (V2X) communications, cutting-edge sensors like lidar, intricate machine learning algorithms, high-resolution mapping, and robust control mechanisms. By harmonizing these components, the vehicle can accurately interpret its surroundings, decide its course, and ensure a safe journey.

A case in point is Google’s Waymo initiative. It harnesses an array of sensors, lidar (a technology akin to radar), and cameras to meticulously identify and predict the movements of nearby objects. With continuous data influx, these systems refine their decision-making prowess over time.³

2., 3. Lutkevich, Ben. “Self-driving Car (Autonomous Car or Driverless Car).” TechTarget, 1 Jan. 2023.

LEVELS OF AUTONOMY IN SELF-DRIVING CARS

Level 1 (Driver Assistance): At this level, the human driver is in full control but receives assistance from a single advanced driver assistance system (ADAS) for specific tasks like acceleration or braking, but not simultaneously.⁴

Level 2 (Partial Driving Automation): At this stage, an ADAS can handle both steering and either braking or accelerating simultaneously, but the human driver needs to be fully attentive and act as the main driver.⁵

Level 3 (Conditional Driving Automation): An automated driving system (ADS) can handle all driving tasks in specific conditions, like parking. However, the human driver must be prepared to take control when required.⁶

Level 4 (High Driving Automation): Vehicles at this level can intervene autonomously in case of system failures or adverse situations. They can operate in self-driving mode within confined areas, like urban environments, with top speeds around 30 mph. This is known as geofencing. Most Level 4 vehicles currently are designed for ridesharing.⁷

Level 5 (Full Driving Automation): At this ultimate level, vehicles don’t require any human attention. The tasks of driving are entirely eliminated. Such cars won’t even have steering wheels or pedals. They can go anywhere and do anything an experienced human driver can do.⁸

4., 5., 6. Lutkevich, Ben. “Self-driving Car (Autonomous Car or Driverless Car).” TechTarget, 1 Jan. 2023.

7., 8. Lutkevich, Ben. “The 6 Levels of Vehicle Autonomy Explained.” Synopsys.

HOW WILL AUTONOMOUS VEHICLES RESHAPE OUR WORLD?

From the shape of urban landscapes to energy consumption, car ownership, road safety, and even parking tickets, autonomous vehicles might have a huge ripple impact on our economy and society.

Fewer Road Accidents

Road accidents have long been a grim reality, with around 1.3 million lives lost annually worldwide. A majority of these tragedies stem from human errors, lapses in judgment, or impaired driving. In the US, for instance, alcohol-related driving incidents result in approximately 32 deaths every day.

Enter autonomous vehicles. These aren’t just cars; they’re intricate networks of advanced sensors, cameras, algorithms, and processors that work in unison to predict and safely navigate countless road situations. Unlike their human counterparts, these vehicles don’t get distracted, tired, or impaired. They don’t text while driving, they don’t lose focus, and they certainly don’t drive under the influence. This eradication of human frailties from the driving equation has the potential to revolutionize road safety.

One example of an innovator in the sector: Waymo is at the forefront of this automotive evolution. Their fifth-generation technology is a testament to the advancements in the domain. With a combination of lidar — which uses light in the form of a pulsed laser to measure distances — 360-degree visual cameras and radar systems, Waymo’s vehicles have an unparalleled view of their surroundings. This not only allows them to detect obstacles, pedestrians, and other vehicles but also to anticipate their movements and respond in real-time.

Furthermore, the continuous data feed and learning algorithms mean that these cars get ‘smarter’ with each drive. Every challenge or unique scenario faced by one autonomous vehicle can be shared and learned by every other, ensuring that collective learning benefits all.

Considering these technological strides, experts have projected a hopeful future. If — or rather when — autonomous vehicles become the norm on our roads, we could witness a dramatic reduction in road fatalities. Estimates suggest that the widespread adoption of self-driving cars could curtail road accident deaths by up to a staggering 94%. This not only represents millions of lives saved but also signals a transformative shift in how we perceive transportation, underscoring the potential of technology to address enduring societal challenges.⁹

9. “Self-Driving Car Statistics: Are They the Future of Driving?” SeedScientific, 3 Nov. 2021.

Reduced Car Ownership

Owning a car has traditionally been seen as a symbol of freedom and independence. However, the reality presents a different picture. For the most part, cars remain parked and unused for approximately 95% of their lifespan. This underutilization makes car ownership economically inefficient for many individuals.

As we approach an era where autonomous vehicles are becoming increasingly viable, the dynamics of car ownership are set to undergo a transformative shift. Here’s why:

1. Fleet Ownership Model: With the mainstreaming of self-driving cars, large fleet operators like Hertz, Enterprise, or even tech companies like Uber and Lyft are poised to be the primary owners of these vehicles. They, unlike individual owners, can operate these cars round the clock, ensuring maximum utilization.

2. On-Demand Accessibility: Why buy a car when you can summon one at your convenience? Autonomous vehicles can operate on on-demand. Whether it’s a trip to the grocery store, a doctor’s appointment, or a night out on the town, a self-driving car can be just a few taps away, reducing the need for personal ownership.

3. Economic Considerations: Beyond the initial purchase price, the costs associated with car ownership include insurance, maintenance, parking, and fuel. When individuals switch to using fleet-operated autonomous vehicles, many of these expenses diminish or disappear entirely, leading to significant savings.

4. Urban Infrastructure Benefits: Reduced personal car ownership might translate to fewer cars on the road, alleviating traffic congestion and freeing up space for other uses besides dedicated parking space. Caveat: See our comments in the Reduced Carbon Footprint section below.

5. Efficient Household Management: In many households, owning multiple vehicles has been a necessity — one for each working member, another for family outings, and so on. With the reliability and versatility of an autonomous vehicle, a single car can be programmed to drop a family member at work, return home, take the kids to school, and more, optimizing its use throughout the day.

In sum, the advent of self-driving cars might not just revolutionize how we travel but can also profoundly impact our economic decisions, urban landscapes, and daily routines. As these vehicles become ubiquitous, we might find the concept of personal car ownership grow obsolete.¹⁰

10. Rivard, Guillaume R. “Study: Most Cars Are Left Unused 95 Percent of the Year.” The Car Guide, 19 Jan. 2022.

Automated Logistics and Industrial Technology

Beyond the realm of personal transportation, autonomous vehicles can revolutionize industries, especially logistics, construction, and agriculture.

Logistics

1. Efficiency in Delivery: Autonomous vehicles equipped with advanced navigation systems can optimize delivery routes in real-time based on traffic conditions, ensuring timely delivery of goods.

2. 24/7 Operations: Autonomous delivery vehicles can operate round-the-clock, increasing the efficiency and throughput of logistics operations.

3. Safety and Security: Secure compartments in delivery vehicles to ensure that packages are safe. Moreover, the systematic and rule-abiding nature of autonomous vehicles reduces the risk of accidents during transit.

Construction

1. Precision and Consistency: Autonomous construction machinery, from bulldozers to cranes, can execute tasks with pinpoint accuracy, ensuring consistency in construction quality.

2. Hazardous Operations: Autonomous machinery can operate in hazardous construction environments, reducing the risk to human operators.

3. Cost Efficiency: The ability to operate machinery continuously without breaks can accelerate project timelines, leading to cost savings.

Agriculture

1. Precision Farming: Autonomous tractors and drones equipped with sensors can monitor soil health, moisture levels, and pest activity. This allows for precision farming, ensuring that crops receive the exact care they need.

2. Efficient Resource Use: By analyzing data in real-time, autonomous farming equipment can optimize the use of water, fertilizers, and pesticides, leading to sustainable and efficient farming practices.

3. Labor Challenges: The agriculture sector often faces labor shortages during peak seasons. Autonomous machinery can bridge this gap, ensuring that farming operations continue seamlessly.

The integration of AI systems in vehicles is anticipated to drastically reduce operational costs. By 2050, predictions suggest a decrease of up to 40% in urban vehicle operational costs, a savings that can be passed down the chain, benefiting consumers and boosting economic growth.

In essence, the advance of autonomous vehicles signifies more than just a change in how we commute; it represents a paradigm shift in how industries operate. By integrating AI-driven vehicles and machinery into the core of industrial and agricultural processes, we’re looking at a future of enhanced efficiency, safety, and sustainability.¹¹

11. “Three Revolutions in Urban Transportation.” ITDP, 3 May 2017.

Reduced Carbon Footprint

Autonomous vehicles present both opportunities and challenges when it comes to carbon emissions. A new report suggests that autonomous and connected car technologies could potentially reduce vehicular pollution.¹² However, the effect on carbon emissions is influenced by various factors, including total vehicle miles traveled.¹³ The energy consumed by the computers powering these vehicles can be significant. MIT researchers found that if 1 billion autonomous vehicles, each operating for an hour per day, consumed 840 watts via their onboard computers, their energy usage would approximate current data center emissions.¹⁴

Moreover, autonomous vehicles could lead to increased road activity. This increase is partly due to a wider range of users, such as the elderly and disabled, and the convenience they offer over other transport modes. On the positive side, strategies like eco-driving and platooning can substantially reduce GHG emissions, with some studies suggesting a reduction by as much as 35%.¹⁵

In summary, while autonomous vehicles offer potential benefits in terms of reduced emissions and pollution, widespread adoption will need careful management to ensure benefits are realized and negative consequences avoided.

12., 14.  Zewe, Adam. “Computers That Power Self-driving Cars Could Be a Huge Driver of Global Carbon Emissions.” MIT News, 13 Jan. 2023.

13. Alexander-Kearns, Myriam, et al. “The Impact of Vehicle Automation on Carbon Emissions.” The Center for American Progress, 18 Nov. 2016.

15. Onat, N. C., Mandouri, J., Kucukvar, M., Sen, B., Abbasi, S. A., Alhajyaseen, W., Kutty, A. A., Jabbar, R., Contestabile, M., & Hamouda, A. M. (2023). Rebound effects undermine carbon footprint reduction potential of autonomous electric vehicles. Nature Communications, 14(1), 1-13. https://doi.org/10.1038/s41467-023-41992-2

Reduced Parking and Traffic Tickets

The proliferation of autonomous vehicles also might significantly reduce parking-related issues and traffic violations. Here’s how:

1. Precise Navigation and Compliance: At the heart of self-driving cars are advanced sensors and sophisticated algorithms that ensure strict adherence to traffic rules. Unlike human drivers, who might sometimes overlook a speed limit sign or misjudge a stop signal, autonomous vehicles are programmed for compliance. This inherent precision virtually eradicates the possibility of traffic violations, ensuring a drastic reduction in traffic tickets.

2. Smart Parking Solutions: Autonomous vehicles equipped with cutting-edge sensors can detect parking spaces with unparalleled accuracy. They can adeptly maneuver into tight spots without the risk of bumping into adjacent vehicles or infringing on no-parking zones. This reduces the chances of parking tickets and also eliminates the need for human drivers to circle blocks searching for parking, which in turn reduces traffic congestion.

3. Integration with Digital Infrastructure: As urban areas become smarter, parking areas and zones could be equipped with digital markers or beacons that communicate directly with autonomous vehicles. Such integrations would guide the car to available spots, ensuring efficient parking and minimizing the chances of parking in restricted zones.

4. Dynamic Traffic Management: In the future, we could see a network where autonomous vehicles communicate with each other and with traffic management systems. This real-time communication can help in dynamically rerouting vehicles based on traffic conditions, reducing congestion and the chances of traffic rule violations.

5. Evolution of Parking Spaces: As self-driving cars become more prevalent and the need for individual car ownership decreases, we might see a reduction in the demand for parking spaces. Cars could simply drop passengers off and be summoned as desired without occupying long-term parking in crowded urban centers.

In conclusion, autonomous vehicles have the potential to transform urban landscapes, reduce traffic violations, and optimize parking. The integration of existing parking solutions with the capabilities of self-driving cars might introduce more seamless urban mobility, with fewer parking mishaps and traffic violations.