27 May 17

The self-driving car start-up gold rush

A recent study by Frost & Sullivan revealed that every week, twenty new start-ups in the automotive field see the daylight somewhere in the world. If that is not an impressive number, perhaps this is: so far, over 1,700 embryonic companies with a disruptive impact on the automotive industry have been counted by the American consultancy.

An industry that long has evolved at a steady pace, is now seeing its ecosystem change entirely under the influence of new technologies, which are both a threat and an opportunity. Artificial intelligence, electric mobility, self-driving capability, and so on, are on the verge of breaking through, and they are not the prerogative of the conventional players.

Flexibility means speed

One of the problems with the ‘old’ OEMs and suppliers is that are slow in getting new technology on the market. Testing, qualification and certification takes several years, not to mention impressive amounts of cash, while the lack of R&D flexibility leaves no or little room for out of the box thinking, says Forbes.

Therefore, start-ups are a good thing, as they accelerate innovation – at a far lower cost at that. It only makes sense, then, that OEMs hurry to create incubators and accelerators, so they can select the projects which might be useful to them and have them ripen for a budget far more modest than what they would spend internally.

More than shared and connected

Most every niche you can think of is filled by one or another start-up. E-mobility proves a popular test bed, but most seeds sprout in the areas of shared mobility and connectivity. The newest additions seem to address grey areas not covered before, such as human machine interactions, cybersecurity, IoT platforms, mapping solutions, eCommerce or freight aggregation platforms.

Another interesting fact revealed by the Frost & Sullivan’s study, is that some regions specialise in a certain development area, due to the specific local conditions and needs that requires addressing. Israel is for instance very advanced in cybersecurity, AI and alternative fuels. The latter should be seen in the context of Israel’s Fuel Choice Initiative, which focuses on reducing the country’s dependency on oil to 60 percent by 2025.

21st century gold

Ford, JRL, BMW, GM: many carmakers are investing in start-ups directly or indirectly. And not only because it makes for good PR. According to the study, start-ups in the autonomous car space are likely to give the biggest ROI. Apart from carmakers, big names in Silicon Valley are equally interested in adding self-driving specialised companies to their portfolio.

If you are wondering where the gold of the 21st century is concentrated: the report shows that the U.S. boasts the highest density of start-ups, skilled entrepreneurs, pilot projects and investors in the autonomous car space. A side remark: change happens fast, and what is true and relevant today, may be obsolete tomorrow. One seed can develop into a monster plant, even in areas considered barren today.

(Source: Forbes)

Authored by: Dieter Quartier