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Two Distinct Strategies Emerge as Google, Automakers Solidify their Approach

Google and various automakers have increased their activity and investments toward the goal of self-driving vehicles, while Google has shifted from its previous strategy to now focus on fully driverless vehicles for the future. If successful, it will have significant implications for the auto industry, according to IHS Automotive, based on findings from a new report, Autonomous Driving: Question is When, Not If, which is an update to a previous report issued early in 2014.

OEMs remain geared toward augmenting the driver and adding incremental autonomous functions as autonomous driving technology improves. These findings further support the IHS Automotive global forecast for nearly 12 million in annual sales of self-driving cars in 2035, and also outline longer-term opportunities, as nearly all autos in use are likely to become self-driving cars or self-driving commercial vehicles on some level sometime after 2050.

To help with development, many testing areas for self-driving cars were established in 2014. Google and Mercedes-Benz began renting space on former military bases, which have existing road infrastructures useful for testing, and other test facilities are emerging at the University of Michigan, Milton Keynes and three other locations in the UK and at a Volkswagen site in Germany. Vehicle manufacturers are working with industry organizations, suppliers and university research conglomerates on these efforts.

Google’s Approach: Level 5 Autonomy, Fully Self-driving Cars

In 2014, Google adjusted its approach to focus on fully autonomous vehicles – those that have the ability to operate without a driver at all (also referred to as level 5, or L5). This approach, if successful, will vastly expand the market for vehicles, offering Car-as-a-Service (CaaS) opportunities for business and individuals alike.

“Google’s path goes through low-speed testing of self-driving cars in restricted areas beginning in 2015 and lasting three to five years,” said Egil Juliussen, the report’s co-author anddirector, research, infotainment and advanced driver assistance systems at IHS Automotive, now part of IHS (NYSE: IHS). “The next stage is small-scale deployment of low speed L5 self-driving vehicles in campus-like environments and cities beginning in about 2020.”

Depending on their success, IHS Automotive anticipates low-speed L5 self-driving vehicles could enter volume deployment in 2025 with full deployment of L5 self-driving vehicles at any speed five years later.

OEM Efforts Geared Toward Driver Augmentation

Traditional vehicle manufacturers are taking a slightly different tack in their development processes, working independently and with leading suppliers to develop and begin implementation of technologies that help to augment driver behavior. OEMs are doing this by adding incremental autonomous functions as autonomous driving technology improves over time, and IHS expects this to continue. Autonomous functions including adaptive cruise control, lane keeping assist, advanced braking functionality are already available, and traffic jam assist is next with autopilot features for highway driving and parking in the near future.

“Automotive manufacturers continue to add to their current advanced driver assistance systems (ADAS) and are likely to begin small-scale deployment of Level 4 (L4) self-driving vehicles with driver controls in the 2020 timeframe,” said Jeremy Carlson, senior analyst, ADAS at IHS Automotive and report co-author with Juliussen. “OEM sales of self-driving cars will start slowly with small-scale availability around 2020, and continuing for the following five years.”

Volume deployment by the OEMs will begin in earnest in 2025 and will grow rapidly after that, according to IHS forecasts. A summary of the growth is as follows:

Self-Driving Car Deployment Growth In Millions     2020-2024     2025     2030     2035 Global Sales     0.15     0.25     3.79     11.8 Share of Sales (%)     0.03%     0.23%     3.19%     9.44% Cumulative Sales     0.15     0.4     10.5     51.4 Share of light vehicles in operation (%)     0.001%     0.026%     0.60%     2.68%                

Source: IHS Automotive sales forecast, December 2014; volumes represented in millions.

“There is no question that autonomous driving technology and self-driving vehicles will have tremendous long-term impact on the auto industry,”Juliussen said. “It also will likely have a positive influence on auto sales and vehicles in operation after 2035, presumably adding another 50 years of growth to the sector,” he said. “Without these advancements, it is possible that the auto industry could stagnate in 10 to15 years.”

About IHS Automotive (www.ihs.com/automotive)

IHS Automotive, part of IHS Inc. (NYSE: IHS), offers clients the most comprehensive content and deepest expertise and insight on the automotive industry available anywhere in the world today. With last year’s addition of Polk, IHS Automotive now provides expertise and predictive insight across the entire automotive value chain from product inception—across design and production—to the sales and marketing efforts used to maximize potential in the marketplace. No other source provides a more complete picture of the global automotive industry. IHS is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 people in 32 countries around the world.

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