“The autonomous driving revolution is turning the automotive supply chain upside down as all Tier 1 suppliers scramble for a sustainable long-term position in this rapidly developing marketplace” – Scott Upham, founder & CEO, Valient Automotive Market Research
A seismic shift is being felt throughout the global automotive industry as autonomous driving technologies continue to gain real-world traction.
Over the past century, the automotive industry has traditionally lagged behind other industries by a decade or more. In the past, the automotive industry adopted various technologies from the aerospace & defense industry including navigation, telematics and airbags.
Today, the convergence of the high-tech world and the ultra-conservative automotive industry is nearly complete as Apple, Google, Microsoft and Tesla are now forcing this laggard industry to adapt cutting edge technologies and modernize its thinking about mobility, efficiency and public safety.
Just one decade ago, the world’s largest automakers were reticent to include USB ports, iPod connectors and audio-connected navigation systems in new production vehicles. Today, most of the world’s largest consumer electronics and search engine/software firms have made major efforts to penetrate the high-barrier-to-entry automotive industry and bring modern operating systems and automated control technologies to the industry.
With nearly 100 million new vehicles being manufactured globally each year, the automotive industry represents a huge potential market for these emerging technologies and offers considerable savings in terms of fuel consumption (and correspondingly lower levels of emissions), fewer traffic fatalities and less congested roadways.
Most of the world’s automakers have autonomous driving development programs well underway – some more advanced than others. Mercedes-Benz, Volkswagen, Ford, General Motors, Toyota, Tesla, BMW, Volvo and several others routinely announce advancements in autonomous driving technologies but the real “musical chairs” game is taking place at the Tier 1 supplier level.
The majority of the current global OEM supply chain is constituted of traditional “old school” automotive suppliers that have modest research & development budgets, limited electronic systems aggregation know-how and technologies that are far from cutting-edge. Some of the current supplier leaders in autonomous driving technologies including Robert Bosch, ZF (including newly acquired TRW Automotive), Continental, Delphi, Autoliv and a host of electronic components suppliers – are well positioned for survival over the next twenty years.
For the remaining large Tier 1 suppliers, the next 20 years could see them relegated to Tier 2 status, swallowed up by the new major Tier 1 suppliers or simply – put out of business entirely. With technological advances in autonomous driving, less emphasis will be necessary on antiquated vehicle systems and more emphasis on in-vehicle entertainment, real world navigation, environmentally friendly materials & systems, automated comfort & convenience systems and energy conservation & regenerative power technologies.
By 2040, vehicle components like steering wheels, airbags, fossil fuel-based powertain systems, shifters/controls, emergency brakes, hydraulic-powered steering, and even satellite radio may be things of the past.