Autonomous Mobility

Top automakers with highest ADAS and autonomous vehicles R&D spending

By Felix Yochman - Oct 27 2020
Marseille-Bangalore, October 27' 2020, Felix Yochman - R&D investment is surging in the ADAS safety and autonomous vehicles technologies even though the automotive industry is suffering revenue crisis. Automakers and tech companies are increasing investments in innovations and disruptive technologies which would lead them to sustainable future. R&D activities depicts company’s pioneering assets and its future capabilities. 

Amongst the carmakers, Audi, VW, Tesla, BMW, Daimler, Honda, and GM, are the top R&D spenders, according to the annual fillings FY 2019-20. 

Volkswagen was the highest R&D spender in terms of value, closely followed by Daimler and Toyota. Whereas Audi accounted for highest R&D investment as percentage of net sales followed by Volkswagen and BMW. FCA and Volvo has significantly increased their spending on research and development in FY 2019-20 as that of previous year.

R&D Expense by Top OEMs globally, FY2019-20

Further, to focus on the research and development in the field of ADAS and autonomous vehicles, OEM giants have formed subsidiaries and joint venture companies as a part of their strategic planning. Toyota has formed a joint venture firm in 2018 called Toyota Research Institute - Advanced Development, Inc. (TRI-AD) along with partners Aisin, Denso that develops software for autonomous vehicles. The company is aiming to develop a complete autonomous software stack for enabling level 4 automation. The planned R&D for this project is estimated at $2 billion and team of 100 to 200 dedicated employees working on it.

under General Motors focusing on testing and developing level 4 autonomous solution. Albeit of few months delay, the company has finally demonstrated its pedal less and steering wheel-less autonomous vehicle called Origin on the road of San Francisco in January 2020. 

Volvo has created a new business area called Volvo Autonomous Solutions in late 2019 that intents to accelerate the development, commercialization, and sales of autonomous transport solution. The company has constituted Volvo Autonomous Solutions a new business area from January 1, 2020 and going to report its financial results as a part of Truck Segment from FY 2020. 

Audi AG’s wholly own subsidiary AID is a centre of excellence for urban autonomous driving. The company with 50 engineers is developing its own stack for enabling level 3 and above autonomy. In Dec 2018, the AID has teamed with Luminar Technologies for forward-facing high fidelity and long-range LiDAR technology and accelerate its plans towards first fully autonomous deployments in 2021.

The foray of these big giants and their huge spending in research & development of autonomous vehicle technology is going to be a game changer for the automotive industry. 

Audi was leading in the R&D spending ratio FY2018-19 and FY2019-20; the company has spent about 8% of its net sales in research and development of innovative technologies such as electric vehicles, renewable battery technology, semi-autonomous and high level safety featured vehicles, and fully autonomous vehicles. However, the industry has witnessed a considerable fall in the R&D investments with respect to past few years.

Ford has recorded a decline in the R&D expense of 9.8% compared to 2018, GM with 12.8% decline, Tesla by 8% and BMW by approx. 7% decline. The fall in the investment is majorly attributed to the decline in the vehicle sales of the companies and impact from Chinese market. The situation is expected to further witness a pessimistic growth due to current effects of Covid-19 pandemic and associated decrease in vehicle production. However, FCA and Volvo has increased their investment in R&D by 18.4% and 16.6% respectively. FCA has invested more than $30 million in Chelsea Proving Grounds in southeast Michigan to develop and test autonomous vehicle and advanced safety technologies. Volvo has hired 1,000 more employees to work in research and development segment of the company with an aim to strengthen its capabilities in areas of software development, artificial intelligence, and battery technology.

The upheaval in the automotive industry due to increasing pace of innovation and technological changes has accelerated the investments of automakers in research and development. The above figure unveils the investments in research & development as a percentage of net sales by the leading OEMs in the automotive industry. Most of this investment is dedicated for the development of autonomous driving, connected technology and electrification. Driverless technology is entering rapidly in the automotive ecosystem; and to remain competitive in this scenario, OEMs are improving efficiency and productivity of their R&D departments.

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