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

The Covid-19 pandemic has had catastrophic consequences for many industries, including the fledgeling autonomous vehicle sector. In this space, we are seeing large automotive companies mothballing their self-driving technology projects. Moreover, investment in new start-ups has constricted dramatically. But despite the adversity, there’s still activity in the self-driving sector. Many corporations and startups are pivoting to adapt to the challenge. 

This Thursday (17th June 2020) we hosted a webinar on The Self-Driving Shakeout. This webinar explored 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 the highlights below.

Shifting investment 

Covid-19 has both strengthened and shaken the use case for autonomous vehicles. On the one hand, there’s never been a better time to pitch use cases of groceries and medicines delivered by algorithm. However, the economic fallout from the pandemic makes it a challenging time for mobility startups.  The crisis has seen a lot of consolidation in investment. We’re seeing less investment coming in from venture capitalists. But there is more coming in from private equity investors and the 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. This situation has exacerbated the existing trend of additional funding going to the strongest players. There’s a consolidation among the biggest incumbents. They are partnering up to build their own solutions… In 2015-16 we saw hundreds of deals. However, the last two years has seen the pace slow. 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 support coming from that space. 

Testing in the time of Covid 

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

There are also some completely unexpected effects. Reduced traffic on the roads makes tests less vigorous, with fewer challenges for autonomous vehicles to react to. This means the AI training process is much slower. 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. However, our coproduction has gone through the roof. We had fewer meetings and introductions. This has allowed us to get into the big-ticket items You can now book a vehicle just for seven minutes to test something out. Previously, this wasn’t easy to do… It’s made us shuffle our timeline a little bit differently in terms of 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 hygiene 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. 

Haulage / 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 haulage 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:

“Before 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 working in the general robotics space is dabbling in this market. There is a large problem right now, but it’s also a big opportunity.”

Daniel Ruiz:

It’s not just about vehicles, in a traditional sense, as the mobile sections of each journey. Just considering 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 recent developments in autonomous vehicles; 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 in 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 unprecedented collaboration. 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.