Autonomous Mobility

Connected and Autonomous Vehicles (CAVs) – Demand and Cost Benefits

By Eva Sharma - Apr 06 2018
CAVs technology is much hyped recently by media and marketing agencies to pre-set the market demand. However, the direction of demand flow is still insignificant for most of the companies. CAVs offer high level comfort and best driving experience and hence will be treated as a luxury item until a complete shift of industry towards automation. Software platforms and other electronic components play crucial role in achieving the level of extravagance. Unlike human driven vehicles, software platforms will take over the major part in driving vehicle along with entertaining drivers and passengers. In CAVs, software is estimated to account for 40% of the vehicle value compared to 10% in human operated vehicle. This dramatic shift has forced automobile companies to adopt eccentric strategies such as mergers & acquisitions with software companies, stack sharing, and outsourcing to position themselves in order to thrive in this changing dynamics of automotive industry. 

Giant with high revenue and huge resource availability are likely to go with backward integration strategy by developing their own software platforms or merging up with suppliers. Smaller companies are expected to outsource the software development to maintain future sustainability.

VP Product Marketing, Leading Technology Supplier

Owing to the large dependency on software and electronic component in CAVs, the technology providers, software developers and even the car makers have ample opportunities to grow their business both horizontally and vertically.

The advent of Artificial Intelligence (AI) technology has also created opportunities for technology providers in the field of safety, entertainment and comfort. Companies operating with AI technology are gaining high competitive advantage in the production of CAVs. Funding and investments in AI platform providing companies has recorded a histrionic rise from past 2 years. Post the technology giants such as Apple, Google, and Intel invested in AI based start-ups, collaboration, mergers, acquisitions and partnerships with AI technology providers has become a trend in this industry. This strategic transition in automotive industry is expected to be large profiting initiatives to the technology companies. Moreover, the expected rise in the software prices are said to further fuel the growth of software companies and indirectly benefiting the tech firms. To conclude, the high dependency of future automobile industry on software integration and embedded electronics is expected to create high revenue opportunities for tech suppliers and software providers.

CAV


Share this article


Related Posts

AUTONOMOUS MOBILITY

M&A and Investment Analysis in Autonomous Driving Industry- Last Quarter 2020

The year 2020 was not so favorable for the automotive industry, as the demand and manufacturing deeply slacked since the first half of the year. Howe...

By Eva Sharma - Jan 04 2021

AUTONOMOUS MOBILITY

Artificial Intelligence in Autonomous Vehicle Development and Testing

Autonomous vehicles need not only to understand their passengers and drivers but to be able to navigate a complex world. Artificial Intelligence or A...

By Swapnil Nanir - Dec 08 2020

AUTONOMOUS MOBILITY

Investments and M&As in Autonomous Vehicles Industry - Q3-2020

Regardless of the economic slowdown due to Covid-19 pandemic and the decline in the global venture funding, the autonomous vehicle technology compani...

By Felix Yochman - Nov 10 2020

AUTONOMOUS MOBILITY

Investments in LiDAR technology for ADAS and Autonomous Vehicles

Helsinki-Bangalore, Alex Tillander, ACES-M14 Intelligence - The year 2020 will be considered revolutionary for the ADAS and autonomous vehicles ind...

By Alex Tillander - Nov 02 2020