DISRUPTIVE INNOVATIONS IN THE AUTO INDUSTRY RESHAPING THE ECONOMY AND OUR CITIES

1. Disruptive Innovations in the Auto Industry
Reshaping the Economy and our Cities

2. Innovations changing the way we move
5G
Wireless
Artificial
Intelligence
Internet
of Things
Driverless
Technology
Electric
Cars
Car
Telematics
Geolocation
Smart
Phones
Mobility Solutions More:
Customer centric
Flexible
Convenient
On demand
Environmentally friendly
Safe

3. Some changes already here
Car Sharing
Smart Parking Car pooling 2.0
Ride Hailing
P

4. But the prospect of autonomous vehicles (AVs)
has sparked an unprecedented race
Tech
Disruptors
Startups
Academia
OEMs
Suppliers
Chipset
Manufac-
turers
Stakeholders competing and partnering for a piece of the pie
Source: Crunchbase; CBInsights; TU-Automotive

5. Attracting a lot of attention
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
News Pieces on Autonomous Vehicles
At August
2017
Extrapolated
at year end
Source: Factiva

6. And millions of dollars
$109 $685 $407
$1,109 $1,102 $1,307
$2,126
21
44 47
72
100
49
129
2012 2013 2014 2015 2016 2017
Auto Tech Annual Global Financing
Disclosed Funding ($M) # of Deals
Source: CBInsights
At May
2017
Extrapolated
at year end

7. Why so much interest?

8. Apart from fulfilling a long-cherished dream…
In the 50’s we already
dreamed of driverless
cars!
Source: Postwar Vision Of The Future, Artist & Date Unknown

9. Social benefits
…There are other powerful reasons
It’s a difficult
problem to solve
Perfect setting for
commercialization
Potentially a
“game changer”

10. “Clearly one purpose of
autonomous systems is self-driving
cars. There are others. We sort of
see it as the mother of all Artificial
Intelligence projects.”
Tim Cook
Most complex artificial intelligence problem
500K 3-4 M
100 M
Space Shutle Boeing 777 Mercedes S
Class
Lines of Code
Source: press news; StrategyAnalytics

11. Social benefits
Accidents Accessibility Quality of Life
Global road fatalities: >1M
US Crashes per year: 5.5 M
Source: Insurance Institute for Highway Safety (IIHS),Citi Research; McKinsey
Human
error:
97%
Other
3%
Alcohol
31%
Speeding
30%
Other
human
error
21% Distraction
21%
Estimated daily time
freed up for
commuters globally:
1B h
Potential additional
global digital-media
revenue:
$5B /y
Potential reduction
in parking space
needs in the US:
$5.7B m2
CO2 Emissions
• People with disabilities
• Elderly
Net impact ?

12. Perfect setting for commercialization
Source: press news; ABIResearch

13. Potentially a “game changer” affecting multiple
industries apart from car makers
Source: CBInsights
Insurance Auto
Repairs
Trucking Hotels
Parking Fast Food Energy &
Petroleum
Real Estate
Oil and
Wash Shops
Healthcare Driving
Schools
Urban
Planning
Airlines Auto Parts Mobility
Providers
Public
Transit
Media Deliveries B&M Retail Auto
Dealers
Internet
Providers
Traffic
Enforcement
Cyber-
security
Car Interior
Designers

14. What is the key technology involved?
Source: McKinsey

15. But mass
adoption not
expected until
2025-2035
depending on
timely launch of
technology and
favorable
regulation
And when is it going to be ready?
Source: McKinsey, Navigant & press releases
PLAYERS
2016 17 18 19 2020 21 22 23 24 25 2030
Shared shuttle
service L4
Singapore
taxi pilot
Boston
taxi pilot
Pilot in Pittsburgh Driverless fleet
ProAI self-driving system
(NVIDIA platform) ProAI in production vehicles
Autopilot 2 and LA-NYC
driverless test
L4
Improved suite of self-
driving features L4
L4
L4Drive Me” public
test program
L4
L4Munich public test
L4
Semi-autonomous truck
ProPILOT (L3) L4
Super Cruise (L3)
L4
L4
L4
Audi A8 (L3)
Launch in
Singapore
Service expected
in 10 cities
L3: Driver does not have
to supervise system at all
times but must be in a
position to resume control
L4: Human driver is not
required for defined use
case

16. The road ahead is not free of challenges
Adverse Perception Regulatory Uncertainty
Infrastructure
Readiness
• Fear of safety
• Concern with jobs impact
• Cybersecurity
• Privacy
• Need for a standard
• Huge amount of testing
required
• Need for AV technology to be
able to function in all
environments

17. But we can start to imaging what the customer
experience will be…
Uses mobility app that:
• Integrates different modes
of transportation
• Allows to select optimal
route according to customer
preferences (time / cost
/privacy / exercise / etc.)
User decides to:
• Unlock a bike with phone and ride to the train station
• App sends an electronic signal enabling him to access the
platform and board the train seamlessly
• Shops for a few groceries while in route that are waiting at a
locker upon his arrival to the station
Start
User leaves
office late in
the evening
• Toting shopping bags, user
walks toward the rideshare
pickup area outside the
station
• The ride on the autonomous
pod, that charged itself
wirelessly, is short but user
has the time to watch an
episode of its favorite show on
the car screen
• Payment and insurance all
take place seamlessly in the
background.
End
User arrives
home
1
2
3
4
5
Source: Deloitte

18. Thank you