PROVEN STRATEGIC NAVIGATION

We called 14 October last year as the day that drivers became obsolete ("Autonomous Vehicles Eat Jobs!"). That was the day Tesla Motors sent a software update to tens of thousand of users cars, making them semi-autonomous.

Protesting Uber drivers and traditional taxi drivers are about to be cast aside as Uber introduces their new fleet of driverless cars to it’s Pittsburgh fleet. It’s always been the plan. With almost 1 million drivers worldwide the scale of that ambition and the lofty $66 Billion valuation starts make more sense.But is it really a zero-sum game? Will the Silicon Valley upstarts Uber and Tesla, plus giants Google and Apple, really crush the existing auto industry? It’s difficult to see what the outcome will be but the patent landscape paints a different view.

Of the Silicon Valley grouping, only Alphabet (Google) appears on the list of top 20 assignees of patents relevant to autonomous vehicles (see Table below). It’s a list dominated by the largest auto manufacturers in the world Toyota, Nissan and VW. The suppliers like Robert Bosch, Valeo and Mando Corporation also have a significant number of patents.

Triumvirate German carmakers, BMW, Daimler and VW, as well as being top patent owners, have signaled their intentions of working closer together through their joint acquisition of Nokia’s mapping division, Here, for $3 billion. Each of them is separately experimenting with investments in ride sharing businesses, respectively, ReachNow, MyTaxi and Gett.

Leading supply chain manufacturer Robert Bosch has a close working relationship with TomTom to develop the systems needed for automation.

Tesla doesn’t even figure in the patent league.

Uber’s recent acquisition of Otto; Ford acquiring Israeli-startup, Saips; General Motors $500 million investment in Uber competitor Lyft; Toyota’s investment in Uber; Volkswagen’s $300 million in Gett; Didi’s $100 million in Lyft; Apple’s $1 billion in Didi Chuxing, a Chinese competitor to Uber, all seem to signal a scramble to collaborate and stake out a future.

It’s interesting that Uber, having missed out on buying Here, are launching their Pittsburg trial with Volvo (now owned by 16^th placed Zhejiang Geely). Will national interests play a part in the future of the automotive industry?

Uber recently announced a merger of Uber China with Didi, who had previously partnered with competitors Lyft. We now have archrivals Alphabet and Apple (through it’s stake in Didi) both with stakes in Uber. Google Ventures invested $258 million in Uber in 2013.

Japan has resisted the Uber invasion. However the Toyota, Nissan, Honda and Mitsubishi group is unlikely to disappear with a whimper. The most advanced robotics market in the world will catch up quickly (robottaxi.com).

Coupling all these corporate maneuverings with technological developments and environmental considerations and ownership models that deliver better utilization of car units, we must see a changing landscape in the industry.

Do we really care what brand car we are riding in when they are all autonomously controlled?

Will we end up with four manufacturers representing Germany, Japan, China and the United States? It’s tempting to draw the conclusion that hardware manufacturers will have to merge and only a few operating systems will control our journeys. It’s hard to see how geo-politics will settle for anything less.

23 August 2016