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The Self-Driving Shakeout: autonomous vehicles after Covid-19

The Covid-19 pandemic has had catastrophic consequences for many industries – not least the fledgling autonomous vehicle sector, where we’re seeing large automotive companies mothbaling their self-driving technology projects, while investment in new startups has constricted dramatically. But despite the adversity, there’s still lively activity in the self-driving sector, with many corporations and startups pivoting to adapt to the challenges of Covid and its fallout. 

This Thursday (17th June 2020), we hosted a webinar on The Self-Driving Shakeout, exploring the future of the autonomous vehicle industry in a post-pandemic worldThe panel, chaired by our very own Shane O’Donoghue, featured Daniel Ruiz, CEOZenzic; Kathryn Snorrason, Director, PlanetM; Tarek Elassawi, Principal, Plug and Play Ventures; and Paul Newman, founder, Oxbotica. You can view the entire recording here, or check out some of our highlights below.

Shifting investment 

The coronavirus has both strengthened and shaken the use case for autonomous vehicles. On the one hand, there’s never been a better time for to pitch use cases of groceries and medicines delivered by algorithm; but the economic fallout from the pandemic makes it a challenging time for many mobility startups.  

The crisis has seen a lot of consolidation in investment. We’re seeing less investment coming in from venture capitalists, but more coming in from private equity investors, as well as government. 

Tarek Elassawi: 

It’s no secret that a lot of the hype around autonomy subsided over the past two years, so we weren’t at the peak of that hype going into Covid. So right now, it’s exacerbated the movement we’ve already seen, where additional funding is going towards the strongest and the best players. Theres a consolidation among the biggest incumbents partnering up to build their own solutions… In 2015-16 we saw hundreds of deals, but over the last two years we’ve seen most of that pace slow down. Government initiatives like with Michigan’s PlanetM, and Zenzic in the UK, are super important in making sure these projects get funded – not just the companies themselves but the projects as well. Increasingly we’re going to see more and more support coming from that space. 

Testing in the time of Covid 

Social distancing will have huge impacts on manufacturing and testing in a post-pandemic world. But businesses are already finding ways to adapt. Oxbotica have been running tests for several weeks now, using a protective bubble around test drivers to enable social distancing. They’re also looking at remote examinations for tests, with video streaming. This allows examiners to even test vehicles from overseas, eliminating the need to travel.  

There are also some completely unexpected effects. Reduced traffic on the roads makes tests less vigorous, with less challenges for autonomous vehicles to react to – in effect slowing the AI training process. In other areas, working remotely has produced greater efficiencies, including accelerated development cycles.  

Paul Newman: 

There’s very little positive to say about the pandemic, let me be clear about that, but our coproduction has gone through the roof. We had fewer meetings, fewer introductions, so we could get into the big ticket items You can now book a vehicle just for seven minutes to test something out, in a way that previously wasn’t so easy to do..It’s really made us shuffle our timeline a little bit differently for when we were going to do some of the things for scaling It’s meant that we went through 14 releases from shutdown to when we first put a car down on the road. Normally we’d be doing testing through each of those phases… My challenge is, what do we take forward from that? There must be something to be learnt from this. 

New use cases for the new normal 

As well as changing the development and testing process, the pandemic has also impacted demand for end productsFor example, use cases that rely on multiple users in a vehicle at one time, such as robotaxis, will be much more difficult to manage in a socially distanced environment. Safety will be paramount in this new world of self-driving vehicles. But safety has always been one of the main testing grounds of this sector. Many new startups are focusing on interior hygeine solutions for vehicles, such as anti-microbial materials for internal furnishings and UV lighting cleaning solutions, all of which will be important in a post-pandemic world. 

Kathryn Snorrason 

The last round of our pilot grant was focused on solutions for Covid-19 challenges There were a lot of applications focused on this, some high-tech, some low-tech. Two examples that we ended up funding include Penske and RCO Engineering are both working with the City of Detroit to install partitions to provide that physical separation between the driver and the passenger for City of Detroit transit vehicles. That will be implemented soon for greater safety. A more high-tech solution is with GHSP, a company working out of West Michigan. They have a mobile UVC disinfection product that will disinfect the air and surfaces in both autonomous shuttles and responder vehicles to create a safe space. 

Hauliage / Hands Free Logistics 

Covid-19 has dramatically changed markets across the board, making some use cases for autonomous vehicles more relevant, and others much less valuable. In particular, there’s been a larger pivot away from consumer use cases towards hauliage and delivery, where autonomy has a myriad second-order benefits, enabling better distancing and lower human involvement, that will be crucial in the post-pandemic world. For example, being able to move goods across a factory without the need for human touch is suddenly a huge advantage for manufacturing and distributing products like PPE. 

Tarek Elassawi: 

Prior to Covid, there was an understanding that the robotaxi model might be a longer-term play, so a lot of VC dollars went towards the freight use case, as well as last-mile delivery. Since Covid I’ve never seen a faster movement towards that, especially that last mile logistic use case. Every single company I know that was working in even the general space of robotics is at least trying to dabble in that market, just because there’s such a large problem right now and such a big opportunity. 

Daniel Ruiz 

It’s not just about vehicles, in a traditional sense, as the mobile sections of each journey. Just considerinng freight alone, the fact that things move from a ship, to a truck, to a van, to a trolley, the transition between each of them is complex. So we need to be thinking increasingly not just about automotive vehicles, but the robotics that will assist in transfer… One of the things we’re pushing at the moment is end-to-end freight: hands-free freight, or zero-touch logistics. What is the challenge that we can pose to ourselves as a nation, or a globe, to prove the business case and accelerate us towards viable deployment of connected, automated vehicles and robotics?  

This is perhaps one of the biggest developments in the autonomous vehicle sector in recent years, and especially in light of the Covid-19 pandemic: a transition from discussions of large-scale, all-in-one solutions such as individual automated cars, to a more integrated and collaborative approach. Adapting to the new normal will require an ecosystem of many specific solutions, from technology that removes the need for human contact across the many stages of the supply chain, to tools that facilitate increased hygiene and better social distancing within vehicles. In a post-pandemic world, the future of not only autonomous vehicles, but transit itself, is likely to require collaboration on an unprecedented level. For more reading, check out Zenzic’s Connected and Automated Mobility Roadmap. With a single vision of interdependencies, the roadmap addresses developments needed to achieve connected and automated mobility (CAM) at scale by 2030.