| 12:03 PM EST

Stops and Starts on the Road to Autonomy

COVID-19 is having an impact, but long-term effect is unclear.
#BMW #Fiat #covid-19


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During the early stages of the coronavirus pandemic, one of the likely automotive casualties appeared to be autonomous vehicles. Interest in fully self-driving passenger cars has been waning for the last few years as the industry focused more on Level 2/3 systems and niche applications such as geo-fenced robo-taxis, delivery pods and commercial vehicles.

The ensuing lockdowns, social distancing and the economic fallout of COVID-19 made the technology an even tougher sell. Studies showed rapidly declining interest in ride-hailing, shared cars and public transportation, with people wanting to play it safe and keep away from others until a vaccine is found. At the same time, carmakers and suppliers indicated they were shifting resources to programs with greater chances for near-term success.

J.D. Power’s Mobility Confidence Index in March offered a blunt assessment. The report’s authors declared that automakers were “pushing forward with technology (autonomous, electric and shared vehicles) that consumers had little interest in. Nor are they making strides to change people’s minds.” And societal changes from COVID-19 could change behaviors for the foreseeable future, they warned, noting that industry experts responding to the survey pushed the timeframe for the introduction of self-driving vehicles for consumer purchase to 2038—five years later than they previously predicted.

Delays, Cancellations and Bankruptcies

There already has been some fallout, including:

  • BMW and Daimler suspended plans to co-develop a shared platform for advanced robotic car systems.
  • GM’s Cruise unit cut 8% of its staff and has indefinitely delayed plans to launch a robo-taxi service, which originally was due in late 2019.
  • Starsky Robotics, a San Francisco startup that was developing autonomous truck systems, went out of business due to a lack of funding.

Ford also has pushed back its plans to launch commercial applications of driverless cars by at least a year to 2022 as it tries to get a better handle on how COVID-19 will impact consumer behavior. But the automaker sees opportunities too. “We believe this pandemic could affect our customers’ lives and work for many years to come, with zero touch as an integral part of their lives going forward,” COO Jim Farley notes. He suggests that such concerns could even hasten the adoption of autonomous vehicles for delivery services and micro-mobility.

“Investing in and creating the right customer experience is even more important now as the COVID-19 virus has impacted everything—from the way we work to how we shop,” John Lawler, who heads Ford’s Autonomous Vehicles unit, added in a June blog post in conjunction with Volkswagen Group finalizing its $2.6 billion investment into Ford’s autonomous vehicle affiliate Argo AI.

Partnering and Consolidation

The VW investment underscores the continued commitment to autonomous vehicles—and that it’s going to take a lot more money and collaborations to get the job done. This likely will accelerate consolidation as the market aims to transition from start-up mode to commercial projects, with more separation between potential winners and losers.

A good indication of the former is the amount of investments that a company is making and/or attracting. China ride-hailing giant Didi Chuxing, for example, recently received an additional $500 million in funding as the company moves forward with plans to mass produce autonomous cars by 2025.

Meanwhile, Amazon agreed to buy Zoox, a 6-year-old California startup, for $1.2 billion (which was considered a huge discount). The deal will help Zoox deploy electric robo-taxi, while advancing Amazon’s quest for self-driving delivery trucks. Toyota also invested about $500 million to acquire Silicon Valley startup Pony.ai.

But Waymo continues to lead the pack—both in applications and funding. The Google-offshoot, which has conducted more than 20 million miles of testing on public roads (and 10 billion miles in simulated miles), landed $3 billion this spring from external investors and inked a deal to provide Level 4 autonomous vehicle systems to Volvo. The tech company already is working with Fiat Chrysler and Jaguar.

Believing that ongoing concerns about social distancing could accelerate consumer interest in robo-taxi services, Waymo plans to use the new funding to further invest in its people, technology and operations. It’s easy to be optimistic with $3 billion in reserve. But for others, there likely will be a lot of stops and starts on the road to autonomy.