Key takeaways

  • Innovation related to connected cars is accelerating, reveals Strategy& study.
  • Driverless technology the largest sector of growth.
  • Fully autonomous vehicles expected to be on the road by 2025.

If you thought that driverless cars were still a way off, this week has seen a wave of evidence to suggest that they’ll be on our roads much sooner than expected.

This week, Google stepped up its commitment to turning autonomous cars into a serious business unit with the hire of John Krafcik, the former president and CEO of Hyundai and president of online car-shopping company TrueCar. Krafcik has been brought on as CEO of Google’s self-driving car division.

“We’re investing in building out a team that can help us bring this technology to its full potential in the coming years,” said a Google spokesperson.

At the same time, Mercedes announced its ambitions to manufacture a driverless car that catered to the on-demand luxury transport market.

Accelerated innovation

Google may be on the money by setting its sights on a tangible product being rolled out to market soon. A new report claims that autonomous driving is the fastest-growing feature of connected cars – and that we can expect to see fully autonomous vehicles, capable of driving at highway speeds, on the road by 2025.

Connected Car Study 2015, the annual survey by PwC’s strategy consulting team Strategy&, has found that innovation surrounding connected cars has accelerated.

Connected cars are vehicles that can access the internet and therefore share information with any other device that is part of the internet of things. This enables them to do everything from featuring in-car apps on a wifi-enabled dashboard display, to providing feedback to manufacturers on the car’s performance and maintenance, communicating with home devices or road and other ‘smart city’ technology, and so on. Both luxury and volume car manufacturers are racing to add connectivity functions to their vehicles.

Demand for mobility

The report predicts annual sales of connected car technologies will triple to 112.6 billion euros ($177 billion) by 2021, disrupting the entire industry as auto makers explore new identities (beyond manufacturing) as providers of mobility services, while technology companies such as Apple and, of course, Google continue to carve their own space in the market.

Drivers of growth include the increased availability of high-speed wireless networks and cloud-based data services, while demand will be helped by a growing awareness of digital safety and entertainment features, says the report.

Strong demand in China is seen as a major driver for autonomous driving technology, which is predicted to grow annually by 33% to reach 39.6 billion euros ($62 billion) in 2021. By 2030, fully autonomous vehicles may be on the market that don’t even feature a steering wheel.

Auto manufacturers are certainly investing in innovations to drive the capabilities of the connected car. However, as vehicles are seen less as ‘owned’ objects and more as a bundle of services, the incentive is rising for technology companies and other industries to find a way to plug into the new digital revenue streams on offer.

 

Contributor

Tan Allaway

Tan Allaway is the editor-in-chief of PwC’s Digital Pulse.

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