In the previous section, we explored the impact of L3 AVs. Now, we will explore the impact of L4 and L5 AVs.
“Mind-off”-level vehicles will be designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip. However, it is important to note that this is limited to the “operational design domain (ODD)” of the vehicle, i.e. such a vehicle will support “driverless” operation in specific scenario and use cases. Considering this aspect, the impact due to “mind-off” vehicles would (as it is expected to support “driverless” operations in specific scenarios) be very similar to the “driverless” automation level. Here, is an outcome of our attempt to identify the impact on OEMs, component suppliers, and dealers due to launch of such vehicles.
||Opportunities for IT service providers
|Automotive component/parts suppliers
- Will face new competitors with advantages in software, electronics, and cost of capital
- Change in skills mix – shift from mechanical to electronics and software components
- May struggle to attract and retain the best talent
- Will be expected to provide superior technology (hardware, software, integrated experiential design)
- Suppliers who could scale for key features (fuel efficiency, safety, lightweight materials, etc.) will be well-positioned for long-term growth.
- IT service provider will have potential to become a key software supplier for OEMs
- Support service on vehicle software system, continuous improvement of algorithms
- May emerge as entertainment providers and/or important players in the vehicle-production process.
|Automotive original equipment manufacturers
- Software loaded into the vehicle will be the new competitive advantage
- OEMs will continue to design and manufacture the body, power train, interior, lighting, and other basic components; manufacturing and assembly processes will not change much
- Market expansion for vehicle production will come from increase in vehicle miles travelled (VMT)
- Change in business model, i.e. from selling cars to mobility-as-a-service as private ownership of automobiles will fall dramatically.
- Opportunity to assume key role in the vehicle production and testing process given capabilities in artificial intelligence (AI)
- Support services will include vehicle software patch updates, issue resolution
- Incident management from vehicles – as vehicle will detects bugs and automatically raise incidents
- Vehicle analytics.
- May see significant reduction in vehicle sales due to fully autonomous vehicles
- May change their business models from selling cars to selling car-as-a-service or W
- Will maintain fleets of autonomous vehicles to hop in and out of, whether made available by car companies or through ride-hailing companies.
- Software development to track vehicles in real time
- Customer analytics to support customer-driven rentals
Read the subsequent parts of this series, wherein we will explore the impact of L4 and L5 AVs on ancillary parties within the ecosystem.
This blog is co-authored by Neeraj Mathur, he is an Automotive and Manufacturing domain expert and works on delivering business solutions to Automotive & Manufacturing customers of Capgemini through innovations and business process assessments. You can reach him at email@example.com
Satishchandra Nayak is an Business Process expert who works on delivering practical Innovation to Automotive and Manufacturing customers of Capgemini. You can contact him at firstname.lastname@example.org.
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