Although automated cars are still in development, they’re already raising questions of liability and insurance that haven’t seen before.
These vehicles could dramatically reshape the competitive landscape, human interaction with vehicles and the future design of cities and roads.
A new report by KPMG LLP and the Center for Automotive Research examines these issues. “Self-Driving Car: The Next Revolution,” is based on interviews with leading technologists, automotive industry leaders, academicians, and regulators – as well as research and analysis of industry trends.
The study examines the forces of change, the current and emerging technologies, the path to bring these innovations to market, the likelihood that they will achieve wide adoption from consumers and their potential impact on the automotive ecosystem.
The findings are outlined in four sections:
Market Dynamics: examines the market dynamics and the social, economic and environmental forces that are making change inevitable.
Convergence: discusses the ongoing convergence of the key enabling technologies.
Adoption: focuses on the path to widespread adoption of advanced automated driving solutions, which we believe will take place in stages, leading over time, to reliance on increasingly autonomous or “self-driving” vehicles.
Implications for Investment: addresses the social, political and economic implications of self-driven automobiles and their impact on the entire automotive ecosystem.
“For the past 100 years, the automotive industry has been a force for innovation and economic growth,” Gary Silberg, national automotive industry leader for KPMG LLP and co-author of the report, said in a statement. “Now the pace of innovation is speeding up and the industry is on the brink of a new technological revolution with “self-driving” vehicles. If they become a mainstream reality, it would be profoundly disruptive to the automotive ecosystem and may have far-reaching implications for the traditional automotive value chain and beyond.”
The report presents the hypotheses on how self-driving vehicle technology could unfold and its potential impacts, with an emphasis on the convergence of sensor-based and communication-based vehicle technologies.
It points out that this new technology could provide solutions to some of our most intractable social problems–the high cost of traffic crashes and transportation infrastructure, the millions of hours wasted in traffic jams and the wasted urban space given over to parking lots, just to name a few.
The report indicates that a legal framework will be necessary to deal with the potentially complex liability issues that may come with self-driving cars, such as what happens if a drivers is intentionally not in control of a vehicle and it crashes. The “driver” could well be treated as an innocent bystander or might at least bear lesser liability than drivers do today.
Insurance underwriting will be another thorny issue. The report says interviews with insurance risk firms indicated the entire underwriting process will need to be revamped and a greater portion of the liability could transfer to manufacturers and infrastructure providers (federal and state).
These legal concerns, and the question of who “owns” the risk, will need to be addressed for convergence solutions to gain mass-market adoption. Litigation-related issues that come with widespread use of autonomous vehicles will be a challenge.
“For those who embrace innovation and opt to lead rather than follow, a new frontier is opening in the realm of mobility services,” Richard Wallace, director, Transportation Systems Analysis at CAR and co-author of the report, said in a statement. “Some may ask if it is still just science fiction or if the market will accept them and pay for them. We think the answer is a resounding yes – the marketplace will not merely accept self-driving vehicles, it will be the engine pulling the auto industry forward.”
According to the KPMG/CAR report, the convergence of sensor-based and connected vehicle technologies will happen and will have a positive effect on the adoption of both systems. They think drivers will take the leap. Convergence will bring enhanced mobility and safety and reduced environmental impacts. It may also have far-reaching implications for the traditional automotive value chain and beyond.
Automotive and technology companies are already investing in connected and autonomous technologies and applications. While there is no clear leader, companies are trying to figure out how to compete and collaborate at the same time. Over the longer term, the evolution of these advancements will cause a rebalancing of the automotive value chain, with nontraditional firms playing a more significant role.
“Like many of the industry leaders, academics, and policy makers interviewed, we believe the age of the self-driving vehicle is coming. But getting there will require that many pieces of a large puzzle fit together. When and how that will happen remain open questions,” Silberg said.
