Driverless Cars: Disruptive Innovation Or Dead Duck?

by | Apr 26, 2016

By Jeffrey Tobias-

Driverless cars. Do we need them? Do we want them? Not really, you say? If so, they potentially fit Clayton Christensen’s model of disruptive innovation, carving out a new market that we don’t appreciate today, but which over the long term will kill off the conventional car industry. Impossible? Not at all. Think of the mobile phone camera killing off the point-and-shoot camera market.

Or will driverless cars be a fantasy that just dies? Interesting to see Uber’s long-term goal to run a fleet of driverless cars. Great long-term vision, with a near-term implementation model as we know it. Though it’s a shame if Uber drivers feel they are on the way out in the mind of Uber executives. Not to mention the cars that they currently drive. The drivers are in a disruptive business that itself is about to be disrupted!

There is currently a huge amount of press around driverless cars – with Google at the forefront – and it is interesting to note the groundswell driving towards that vision. CBInsights recently maintained that in the wake of General Motor’s $1B acquisition of self-driving car startup Cruise Automation, there has been a flurry of venture activity in self-driving tech startups. Comma.ai, nuTonomy, and Nauto are just some of the VC-backed companies in the auto-tech sector that have received funding or announced major milestones in recent weeks.

As interest builds in self-driving cars, major corporations are not sitting idly by on the sidelines. Using investment, acquisition, and partnership data, CB Insights identified 30 corporate groups involved in the driverless car space. They are a diverse group of players, ranging from automotive industry stalwarts to leading technology brands.

Some of the organisations include:

Apple: Rumors of an autonomous Apple electric vehicle continue to circulate, though the company has yet to make any public announcements.

Audi: Audi has revealed a number of autonomous vehicle prototypes derived from their A7- and RS7 models, including consumer-oriented test vehicles.

BMW: BMW has also been active thus far in 2016, showing off an autonomous i8 concept and announcing an aggressive strategy to promote electrification and automation in its vehicles under the banner BMW iNEXT.

Bosch: Bosch, one of the world’s largest automotive suppliers, has responded to an increase in demand by dedicating more than 2,000 engineers to driver-assistance systems.

Daimler: Daimler has also been testing its own autonomous trucks in Nevada since May 2015.

Ford: As part of its 10-year autonomous vehicle plan, Ford announced that it would triple its test fleet to 30 total vehicles in January. It has pioneered the testing of self-driving cars in less friendly environments, such as snowy Michigan, as well as in complete darkness.

General Motors: General Motors has made waves in 2016 with a series of aggressive moves within the tech sphere. In January, the company bought up Sidecar‘s assets and invested $500M into Lyft, announcing plans to develop an on-demand network of self-driving cars.

Google: Google X (now X, under the Alphabet holding company) has led one of the most high-profile autonomous vehicle programs, with its own website and a highly visible testing fleet of quirky prototypes. The company expects to have a finished product by 2020.

Honda: Honda has received approval from California to test autonomous vehicles on public streets (with restrictions on the number of vehicles and the testing methods).

Hyundai: The Korean motor group seems to be intensifying its efforts to compete in 2016, ramping up investments in artificial intelligence and setting up a new business unit to develop “hyper-connected” and self-driving cars in the near future.

Microsoft: Though late to the game compared to other tech giants, Microsoft has begun to dip its toes into self-driving car research. Its initial strategy appears to focus on collaborations, such as a November 2015 deal with Volvo that will see the companies collaborating in autonomous vehicle R&D and leveraging Microsoft’s HoloLens technology. In March 2016, Microsoft and Toyota also announced the expansion of their five-year-old partnership to develop new vehicle connectivity and telematics services.

Nissan: At the 2016 New York Auto Show, Chairman and CEO of Nissan and Renault Carlos Ghosn promised that the group would have 10 vehicles on sale by 2020 with “significant autonomous functionality”.

Tesla: Electric car manufacturer Tesla has been a very public champion of self-driving vehicle technology. CEO Elon Musk is particularly bullish on the field, believing the technology behind fully autonomous vehicles is only “two to three years away,” with another “one to five years” needed for regulatory approvals.

Driverless cars. Disruptive innovation or dead duck. What’s your view?

Jeffrey Tobias

About Jeffrey Tobias

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well-known startups.

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Managing Director, The Strategy Group

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.

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