Where the billions spent on autonomous vehicles by U.S. and Chinese giants is heading

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Baidu driverless car Beijing, China

For years, Alphabet’s Waymo and others leaders have promised autonomous vehicles are just around the bend. But that future has not arrived yet. Why not?

“In one word, it’s complexity,” said James Peng, CEO and co-founder of Pony.ai, an autonomous vehicle company. “Every time there is a technical breakthrough, there are challenges. We have the AI, the fast computer chips, the sensors. It’s all solvable by fitting all the pieces together smoothly. 99.9% is not good enough to perfect the technology.”

Despite promises of life-saving, climate-change fighting, and cost-efficient driving, the reality is that “the autonomous vehicle nirvana is 10 years out,” said Michael Dunne, CEO of autotech consultancy ZoZoGo. “While it’s not impossible to get there, even the most advanced technologies are not there yet and used mainly in confined areas where things are predictable. We are far, far away from universal acceptance.”

Not only that, but “the business model is a bigger challenge than the technology,” he said.

Self-driving vehicles without steering wheels or brake pedals have been slow to scale and are viewed by many as a novelty. Additional road tests are needed to work out tech glitches. Regulations to permit driverless vehicles are still evolving by city, state, and country. High price tags hovering above $100,000 for an AV-equipped auto are a drawback to individual purchases for most buyers. Commercialization is still underway. Safety concerns remain, particularly after a fatal crash in March 2018 involving one of Uber’s vehicles in Tempe, Arizona and multiple incidents involving Teslas being operated in self-driving mode.

Still, market leaders are betting big on smarter transit technology and are testing its viability, logging thousands of road miles to train self-driving algorithms and AI sensors to drive better than humans in all kinds of weather and unpredictable circumstances. Tech giants, automakers, and start-ups including GM’s Cruise, Waymo, Baidu, and others have invested billions of dollars and years of R&D in this emerging market poised to reach 12% of new car registrations globally by 2030. Meanwhile, Tesla continues its work on its semi-autonomous autopilot and self-driving systems.

Promising future for robotaxis, robo-deliverys

Now after a decade and some bumpy starts, it’s robotaxis, robot-driven deliveries, and autonomous trucks that are emerging as the most promising money-makers in the market.

“Ride-hailing is a lousy business model with unhappy human drivers and urban mobility problems. The next great thing could be fleets of robotaxis,” said Erik Gordon, a professor at the University of Michigan where he focuses on entrepreneurship and technology. He envisions urban streets without accidents, honking, traffic jams, and dedicated lanes for self-driving vehicles.

In this next phase of passengers and road testing, the technical complexities are growing with unpredictable traffic patterns and weather factors such as fog and rain, plus lingering social awareness and acceptance issues.

“It will still require a significant amount of time for autonomous driving to be commercialized on a large scale,” said Dong Wei, vice president and chief safety operation officer of Baidu Intelligent Driving Business Group in Beijing.

Paid passenger fares in fully driverless robotaxis could be the next step toward the commercial development of this transformative market.

[“source=cnbc”]