If global investors know anything about where money is to be made, the winners in the automotive industry will be those that embrace and master the three megatrends disrupting the market:
- The proliferation of advanced driver assistance system (ADAS) technologies, with the prospect that eventually autonomous vehicles (AVs) will be licensed for operation on public roads
- Mobility-as-a-service, which is challenging the traditional concept of individual car ownership
The importance of these trends is reflected in a comparison of the market capitalizations of Tesla, which makes fewer than 400,000 vehicles a year, and Ford. Tesla bases its strategy on a series of innovations in battery-powered traction, autonomous driving, and robotaxi capabilities to support Tesla-branded ridesharing services.
Ford makes much of its money from traditional American pickup trucks that feature high powered internal combustion engines. Ford, with a 2017 production volume of more than six million units, had a market capitalization of just $37 billion in late 2019, while Tesla, tiny by comparison, was worth $44 billion.
Adoption of mobility-as-a-service has been driven by business model and software innovation pioneered by the likes of Uber, and increasing electrification depends on production innovations such as Tesla’s battery Gigafactory. However, the focus of innovation in driver assistance is on hardware and software technology—a combination of sophisticated sensor systems and artificial intelligence.
All assisted driving systems rely in part on multiple forms of perception technology: in fully autonomous vehicles, optical technologies such as LIDAR (light detection and ranging) and visual cameras will work alongside electromagnetic motion sensors (accelerometers, gyroscopes, and magnetometers) and RF/microwave systems (radar and satellite positioning).
It might seem surprising that radar, a technology that first caught the public’s attention as long ago as the second World War, should today be playing a part in the most exciting developments in automotive technology. In fact, many 24 GHz radar sensors are mounted in the bumpers of vehicles on the road today— Analog Devices alone has, to date, supplied some 300 million units to automotive manufacturers for use in applications such as blind-spot detection, automated lane changing, and autonomous emergency braking (AEB).