09
#
September 2016
Finalised at 22 August 2016
8 Car technology – From assisted driving
to driverless vehicles
FRÉDÉRIC labia, Equity Analysis
The benefits of autonomous driving are numerous, and the technology
is almost here.
The facts speak for themselves: driving kills. It is estimated that road accidents
cause over 1.2 million deaths a year, and are responsible for more than 50
million injuries. Over 90% of these accidents are the result of human error,
mainly alcohol consumption (31%), driving too fast (30%) and distracted driving
(21%) (source: WHO Global status report on road safety 2015). Unfortunately,
given the ageing of the global population and the increasing distraction caused
by a hyper-connected world, it is hard to be optimistic. Besides the dramatic
human cost, the societal and economic costs are also high. In the United
States, the economic cost of road accidents is estimated to be $300 billion, or
2% of GDP. This includes the cost of property damage, productivity losses and
medical and legal expenses. It would therefore seem logical—urgent, even—to
employ driver assistance systems where human capabilities fail.
Number of people killed in road accidents (thousands)
80
52
112
665
The essential
Road accidents cause 1.2 million
deaths a year. 90% of these accidents
are the result of human error. It would
therefore seem logical—urgent, even—
to employ driver assistance systems
where human capabilities fail.
The first driver assistance systems emerged
in the 1980s and were an almost immediate
success. Recent technological developments
(ultrasonic sensors, radar and cameras) have
led to further progress in accident prevention.
Now, by combining these detection systems
with navigation data and a genuine electronic
brain,
fully
autonomous,
automated
driving which causes no accidents is a
realistic prospect. The potential benefits for
individuals, the economy and society are,
of course, huge. This market represents a
considerable opportunity for automobile
manufacturers on the cutting edge of this
field.
Europe
North America
213
Middle
East
94
Asia/Pacific
South America
Africa
Source : WHO
The origins of automated driving technology
The first driver assistance system emerged in 1980, when Bosch launched the
Antiblockiersystem (ABS), or anti-lock braking system, which prevents wheels
from locking up during hard braking. When a driver suddenly sees an obstacle,
the automatic reaction is to slam on the brakes. This makes the wheels lock up,
causing the driver to lose steering ability—and control of the vehicle. ABS works
counter-intuitively, relieving pressure on the brakes and helping maintain steering
control. This is a concrete example of a machine compensating for the actions of
a human. In the mid-1990s, ABS evolved into electronic stability control (ESC),
a computerised system with independent wheel braking that helps prevent
skidding during sharp turns (oversteering). ESC became massively successful.
By 2007, the technology was installed in over 30% of vehicles, and was available
in more than one in two cars in 2013 (100% in North America, 78% in Europe,
39% in Asia). It is anticipated that two-thirds of the world's cars will be equipped
with the technology by 2018.
More than 90% of road
accidents are caused
by human error
There are several reasons for the success of these technologies. Thanks to their
proven effectiveness, demand for them rose quickly among consumers hoping
to make their vehicles safer. They also became major selling points for car
manufacturers. Over time, these “active safety features” began to supplement
older, “passive” features like seat belts and airbags, and were integrated into the
performance assessment programmes of independent international bodies like
Euro NCAP (European New Car Assessment Programme), which evaluates the
safety of vehicles on a five-star rating system. Manufacturers quickly learned that
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
43
09
#
September 2016
French version
they needed to obtain
stars to remain
relevant
competitive.
In a virtuous
% defive
disponibilité
ESC par
type de and
véhicule
aux
Etats-Unis
circle, the Euro NCAP tests became
increasingly demanding year aftern°1
year,
resulting in massive improvements to vehicle safety over the past two decades.
100%
Finally, the use of these technologies intensified under regulatory pressure.
90%
Indeed, regulators quickly seized the opportunity to reduce the number—and
80%
cost—of accidents,
and made the installation of driver assistance technology
70% European legislation ordered manufacturers to install
mandatory. In 2004,
60% vehicles sold on the European market. The mandatory
ABS on all production
installation of ESC50%
began being phased in starting January 2012. It is interesting
to note that car manufacturers
have always acted ahead of regulations in this
40%
area, while the same
30%cannot be said of emissions and pollution control systems,
which are much more
difficult, if not impossible, to monetise.
20%
Recent technological
10% developments have led to further progress in accident
prevention. With the0%
proliferation of ultrasonic sensors, radar and LIDAR systems
and cameras, vehicles are able to anticipate danger on the road through
technologies like lane departure warning systems, blind spot monitoring,
distance control and cruise
control.
Soon, automatic
emergency braking and
standard
optionnel
indisponible
collision avoidance systems will become standardised. This process will be
Source : IIHS, Recherche Amundi
accelerated by the falling cost of component parts. These essentially electronic
devices are becoming cheaper at a rate of 3% to 5% per year.
Advanced driver assistance systems
Opportunité de marché (milliards $)
200
100 Braking
Emergency
Adaptive
Pedestrian Detection
Cruise Control Collision Avoidance
0
2015
Long-Range Radar
Park
Assist
Park
Assist
Park Assist
Surround View
Rear
Collision
Warning
Alert
2025
80%
70%
60%
50%
40%
30%
20%
10%
0%
standard
optional
not available
Source: IIHS, Amundi Research
Market opportunity ($bn)
Recent technological
developments have led
100
to further progress
in
accident prevention
50
0
2015
2030
Surround View
Mapping
HMI (Interface Homme-Machine)
V2X (Systèmes de connectivité du véhicule à son environnement)
E&EA
(Architecture
électrique etShort-/Medium
électronique)Range Radar
LIDAR
Camera
Ultrason
Système d'exploitation embarqué
LIDAR
Radar
Caméras
Source: TI E2E
From assisted driving to driverless vehicles
Source
:Goldmanstand
Sachs, in
Recherche
Amundi
If technology can
effectively
for human
action and save lives, could it go
beyond driver assistance systems and lead to fully autonomous or automatic driving?
For this vision to become a reality, the detection systems described above would
need to be wired into a sort of electronic brain. Advances in artificial intelligence
Arial 8 Bold
(1 or 2 lines
maxi)
n°3
prove that this is a realisticTitle
prospect.
By combining
the
data captured by sensors—
which can digitally recreate the outside environment—with map data, nearly nothing
now stands in the way of a car moving independently from point A to point B.
The US National Highway Traffic Safety Administration (NHTSA) has identified
four “levels” of vehicle automation leading to fully automated vehicles. The first
two levels involve conventional driver assistance functions. The driver maintains
overall control of the vehicle but may cede limited authority to automated systems
like cruise control. The driver is responsible for monitoring the roadway and must
be able to assume control of the vehicle at any time. At level 3, the driver has the
option of ceding full control of the vehicle under certain traffic conditions, but
in other circumstances must be available to assume control with a reasonable
transition time. At this stage, the vehicle is designed for autonomous driving and
can determine if the system is no longer capable of adapting to its environment
(when approaching a construction area, for example). Finally, at level 4, the
vehicle is fully self-driving. The driver simply provides the navigation input and
is not expected to take control of the vehicle at any time. Such vehicles are
capable of travelling in any situation. Google's self-driving cars, which have no
steering wheel, pedals or gear lever, are already capable of transporting people
44
90%
150
Lane
Departure
Warning
2020
100%
200
Blind
Spot
Detection
Cross
Traffic
Alert
% ESC
% ESC availability
byavailability
vehicle type in the US
by vehicle type in the US
1
n°2
Surround View
Traffic
Sign
Recognition
English version
Graph n°
2020
2025
2030
Mapping
HMI (Human-Machine Interface)
V2X (Vehicle Connectivity Systems to its environment)
E&EA (Electric and Electronic Architecture)
Embedded controls
LIDAR
Radar
Cameras
Source:Goldman Sachs, Amundi Research
Title Arial 8 Bold (1 or 2 lines maxi)
Fully autonomous,
automated driving is
now a realistic prospect
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Title Arial 8 Bold (1 or 2 lines maxi)
Title Arial 8 Bold (1 or 2 lines maxi)
09
#
September 2016
according to a set itinerary. It is estimated that this degree of automation (level
3/4) will be available sometime between 2020 and 2025.
Components of Autonomous Systems
Artificial
intelligence
• Multi-agent interaction
• Probabilistic prediction
• Path planning
Sensor
• Self-learning
• Environmental awareness
• 360° view
• Redundancy
Maps
• Accurate localization
Real-time data
• Redundancy
• Path planning
Source: Amundi
Adaptive
In the meantime,
improvements can and will be made to the existing model.
Cruise Control
Engineers from Google are conducting tests in real-world conditions, travelling
LIDARon board
Camera autonomous
Short-/Medium Range
Radar
thousands
of kilometres
vehicles
inUltrason
order to refine their
Long-Range
Radar
mathematical models and equip the cars with human-like reflexes. For example,
if a sensor detects a ball on the road, the vehicle will avoid it and immediately
continue along its route, whereas a human driver would naturally slow down in
case a child was running after the ball. For cases like these, the “robot” driver
must be trained by humans. Naturally, this raises important questions. For
example, would the car “voluntarily” cause an accident in order to avoid hitting
a pedestrian? In the coming years, machine learning and artificial intelligence
will also refine the vehicle's abilities. Furthermore, the increasing connectivity
of vehicles will undoubtedly improve driving capabilities. For instance, a broken
down car could send an alert to prevent other vehicles from approaching too
quickly and suggest alternative routes to reduce further risk (for example, when
a turn obscures the visibility of an accident).
The “robot” driver must
be trained by humans
Considerable benefits for society
As already noted, the economic cost of road accidents is extremely high. The
NHTSA estimates the economic cost of an accident to be between $14,000 and
$18,000, depending on the region of the world. Combining the statistical data
on road accidents from around the world, the total cost amounts to a colossal
$1.2 trillion. Meanwhile, it is estimated that driverless vehicles could reduce the
number of accidents—and therefore their cost—by 90%.
Driverless vehicles
could reduce the number
of accidents by 90%!
There would also be considerable indirect benefits. For example, automation—
and the resulting optimisation of routes—could reduce fuel costs. One study
suggests savings of €50 billion from fewer accidents, less gridlock, improved
traffic flow and optimised route capacity.
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
45
09
#
September 2016
French version
English version
Graph n°
To this we could add the benefits of higher productivity. By their very nature,
% detheir
disponibilité
ESCto
par
type de
aux
driverless vehicles allow
occupants
attend
tovéhicule
other activities.
Muchn°1
value
Etats-Unis
could also be created by re-allocating
hours spent driving to other activities,
work-related or otherwise. For example, taking the average cost of an hour
100%the average commuting time per employee (limiting the
worked and applying
90% who are realistically able to work in a vehicle), a very
analysis to employees
significant figure of 80%
€900 billion emerges.
% ESC availability by vehicle type in the US
100%
90%
80%
70%
70%
Finally, there is the financial opportunity associated with expanded mobility for
60%
new groups of people.
Indeed, driverless vehicles could assist millions of people
50%currently lack mobility due to age or disability.
around the world who
60%
The
cost of the additional
50%
features
needed for a
40%
30%
partially-autonomous
car
20%
is
estimated at $1,000.
10%
0% fully-autonomous cars,
For
the figure is $4,000
40%
Opportunities for
some automotive suppliers
30%
20%
A recent study by McKinsey
estimated that by 2030, up to 50% of new cars sold
10%
around the world will
be partially autonomous and 15% will be fully autonomous.
0%
The cost of the additional features needed for a partially-autonomous car is
estimated at $1,000. For fully-autonomous cars, the figure is $4,000. As for
the remaining 35% of cars, about $300 of more conventional driver assistance
standard
optionnel by 2030—may
indisponible be needed. Adopting
functions—which will certainly
be mandatory
Source
: IIHS,
Recherche Amundi
the numbers used
in the
McKinsey
study and assuming a global car market of
around 100 million vehicles, the market for additional features should amount to
€120 billion (a study by Goldman Sachs even points to a $180 billion number).
This enormous market will be shared by a number of automotive suppliers,
Opportunité
marché (milliards
$)
n°2 of
including manufacturers of
sensors, de
mapping
system providers,
developers
connectivity systems (and by extension, telecom operators), human-computer
200
interaction human-machine
interface specialists and, of course, software
providers. The trend toward automation could also accelerate the spread of
electric cars. Indeed, the more efficient use of vehicles resulting from driverless
technology (fewer cars on the road, but used more frequently) will help offset the
high cost of some of
100the components used in electric cars, particularly batteries.
Thus, the wider adoption of automation technology will indirectly benefit the
suppliers involved in the expanding electric car market.
Naturally, there will also be losers. For example, what is the use of rear-view
0 equipped with multiple cameras and sensors? And with
mirrors when cars are
2015
2025passive security
2030
accident rates almost
certain to2020
plunge, some
features like
Mapping
airbags could become
And what will happen to steering wheels when
HMIobsolete.
(Interface Homme-Machine)
V2X (Systèmes de connectivité du véhicule à son environnement)
vehicles can drive themselves,
as demonstrated by Google? Meanwhile, other
E&EA (Architecture électrique et électronique)
d'exploitation
embarqué to the disruption. Although currently
automotive suppliersSystème
will remain
immune
LIDAR
seen as suppliers ofRadar
low value-added products, they could eventually win the
CamérasFor example, we will almost certainly need seats and
favour of some investors.
tyres, even in the Source
cars of
tomorrow!
:Goldman
Sachs, Recherche Amundi
Title Arial 8 Bold (1 or 2 lines maxi)
46
n°3
standard
optional
not available
Source: IIHS, Amundi Research
Market
opportunity
Market
opportunity
($bn)
($bn)
2
200
150
100
50
0
2015
2020
2025
2030
Mapping
HMI (Human-Machine Interface)
V2X (Vehicle Connectivity Systems to its environment)
E&EA (Electric and Electronic Architecture)
Embedded controls
LIDAR
Radar
Cameras
Source:Goldman Sachs, Amundi Research
Title Arial 8 Bold (1 or 2 lines maxi)
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
September 2016 #
09
Recent publications
Amundi Research
Center
Top-down
Asset Allocation
Bottom-up
Corporate Bonds
Fixed Income
Working Papers
T he Reactive Covariance Model and its implications in asset allocation
Eduardo Abi Jaber — Quantitative Analyst – ENSAE ParisTech, Dave Benichou — Portfolio
Manager, Hassan Malongo, Quantitative Research
O n the stationarity of dynamic conditional correlation models
Jean-David Fermanian — Professor of Finance & Statistics, CREST/ENSAE,
Hassan Malongo — Quantitative Research
A sset Allocation under (one’s own) Sovereign Default Risk
Didier Maillard, Professor — Cnam, Senior Advisor – Amundi
D esigning a corporate bond index on solvency criteria
LAUREN STAGNOL — Quantitative Research
Discussion Papers Series
I ORP2: A New Regulatory Framework for Pensions
OK
conferen
a video, a
an article,
Search for
ce…
Ling-Ni BOON, Marie BRIÈRE — Research, Strategy and Analysis
er
arch Cent
Amundi Rese
ow/negative interest rate environment, secular stagnation…
L
implications for asset management
HEADLINES
exchan ge
modifie s its
this have?
e centra l bank
The Chines What effects will
l
rate policy…
nt structura
impleme has major
needs to
that Chinacapital account. This to…
its
appears
been aware
first step
liberalise
We have long
policy. A
wants to
TS
economi c
reforms, and
MY DOCUMEN
ADD TO
nces for its
conseque
MORE
u READ
THOUGHT
Talk
4 - Expert
mics,
Japan – Abeno
by unexp ected
challe nged
was filled
pheno mena
in Japan
the
4 - Thought
talk
4 - Expert
in
: What' s next
Real Estatean marke ts?
in 2H13…
the Europe
improving the end
11.03.201
of the Day
March,
On the 6thnomic projection s.
macroeco
of
11, ever ywherefor the victims three
On March
sympathy e and tsunami
with renewed
who offered
ented earthquak
unpreced Prime Minister Abe,centre of Tokyo,
years ago. their souls at the unbearab le
output…
prayers for uncomfor table with
industrial
might feel weakness . While
economic
MY DOCUMEN
ADD TO
Philippe ITHURBIDE — Global Head of Research, Strategy and Analysis
%
n projec tions
ECB inflatio the ECB published its new
11.03.201
14.03.201
D
MOST REA
OF THE DAY
1.5
EXPERT TALK
onomic indicators
news since
Macro-ec
tion of good widespre ad
The accumula
2013 confirms
onomic climate.
of summerent in the macro-ec
improvem
MY DOCUMEN
ADD TO
MY DOCUMEN
ADD TO
TS
TS
u ALL ARTICLES
TS
Forex markets: the nuts and bolts of the carry factor
Lezmi Edmond — Quantitative Research
he financial markets today:
T
how to cope with low/negative interest rates
Philippe ITHURBIDE — Global Head of Research, Strategy and Analysis
Foreign Exchange
Money Markets
Equities
Find out more about
Amundi research team
research-center.amundi.com
Monetary Policies
Forecasts
Investment Strategies
Quant
Emerging Markets
Sovereign Bonds
Private Equity
Real Estate High Yield
Special Focus
Is the ECB running out of leeway?
Some thoughts before the March 10 governing council
valentine ainouz, Bastien DRUT — Strategy and Economic Research
S outh Africa:
is the political climate responsible for the growth decline?
KARINE HERVÉ, gwendoline ibre — Strategy and Economic Research
N egative rates:
a potentially counter – productive and stress inducing measure
Philippe ITHURBIDE — Global Head of Research, Strategy and Analysis
Contributors
Editor
–P
hilippe Ithurbide
Head of Research, Strategy and Analysis – Paris
Deputy-Editors
– idier Borowski – Paris, Richard Butler – Paris, Éric Mijot – Paris,
MO
D JI – Hong Kong, Stéphane Taillepied – Paris
Support
–P
ia Berger
Research, Strategy and Analysis – Paris
– Benoit Poncet
Research, Strategy and Analysis – Paris
DISCLAIMER
Chief editor: Pascal Blanqué
Editor: Philippe Ithurbide
In the European Union, this document is only for the attention of “Professional” investors as defined in Directive 2004/39/EC dated 21 April 2004 on markets in financial
instruments (“MIFID”), to investment services providers and any other professional of the financial industry, and as the case may be in each local regulations and, as far as
the offering in Switzerland is concerned, a “Qualified Investor” within the meaning of the provisions of the Swiss Collective Investment Schemes Act of 23 June 2006 (CISA),
the Swiss Collective Investment Schemes Ordinance of 22 November 2006 (CISO) and the FINMA’s Circular 08/8 on Public Advertising under the Collective Investment
Schemes legislation of 20 November 2008. In no event may this material be distributed in the European Union to non “Professional” investors as defined in the MIFID or
in each local regulation, or in Switzerland to investors who do not comply with the definition of “qualified investors” as defined in the applicable legislation and regulation.
This document is not intended for citizens or residents of the United States of America or to any «U.S. Person» , as this term is defined in SEC Regulation S under the U.S.
Securities Act of 1933.
This document neither constitutes an offer to buy nor a solicitation to sell a product, and shall not be considered as an unlawful solicitation or an investment advice.
Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held
responsible for any decision or investment made on the basis of information contained in this material. The information contained in this document is disclosed to you on
a confidential basis and shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi, to any third person or entity in
any country or jurisdiction which would subject Amundi or any of “the Funds”, to any registration requirements within these jurisdictions or where it might be considered
as unlawful. Accordingly, this material is for distribution solely in jurisdictions where permitted and to persons who may receive it without breaching applicable legal or
regulatory requirements.
The information contained in this document is deemed accurate as at the date of publication set out on the first page of this document. Data, opinions and estimates may
be changed without notice.
You have the right to receive information about the personal information we hold on you. You can obtain a copy of the information we hold on you by sending an email to
[email protected]. If you are concerned that any of the information we hold on you is incorrect, please contact us at [email protected]
Document issued by Amundi, a société anonyme with a share capital of €596,262,615 - Portfolio manager regulated by the AMF under number GP04000036 – Head office:
90 boulevard Pasteur – 75015 Paris – France – 437 574 452 RCS Paris www.amundi.com
Photo credit: iStock by Getty Images — posteriori
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry