Self-driving into the future

John Leech, KPMG
John Leech, KPMG

KPMG's John Leech discusses the firm's white paper on Connected Cars, pondering the challenges, benefits and whether the concept is a fanciful dream from a science fiction novel.

Imagine if you will, a world where self-driving cars are the norm. A world where connected cars work rather like lifts in a building, except horizontally, taking people from A to B efficiently. The majority of journeys will be on an individual basis, but with more sharing than today; energy consumption and pollution will be halved, congestion will be eliminated and hundreds of thousands of lives will be saved every year.

It will create more time in our lives – some people will regain up to a quarter of their day back, and plummeting travel costs will boost the global economy and engender social equality. A new industry will be created – the Journey industry, where companies will arrange our door-to-door annual integrated travel needs, and other industries, such as motor insurance, will be transformed. Our cities will change forever, space will be created and energy will be shared between vehicles, workplaces and homes.

Does that sound fanciful to you? I actually believe that there’s a good chance that all of this will be achieved in the next 20-30 years.

New premium cars are already being fitted with automatic features such as adaptive cruise control, emergency braking assistance, automatic valet parking and steering assistance, allowing for a “hands-off, feet-off” driving experience in slow, stop-start traffic. It is forecast that most new cars sold in the UK will be internet connected by 2017. Fully self-driving cars are expected to become available by 2020 according to several car manufacturers including Nissan. Google has already announced, with much attendant publicity, that it will launch its self-driving vehicle before 2020.

There are all sorts of benefits to be gained. Safety will be improved with Vehicle-to-Vehicle and Vehicle-to-Infrastructure communication allowing cars to avoid collisions and congestion, saving hundreds of thousands of lives worldwide each every year.

Pollution will be reduced, due to the greater ability to avoid traffic jams, avoid excessive acceleration/braking and integrate with other forms of transport. Vehicle CO2 emissions are forecast to be cut by 20-25%.

And it will also aid economic development due to improved journey times, giving workers more of their day back to become more productive. Estimates of a one-off GDP boost range anywhere from 0.8% to 7.2%.

Of course, there are many challenges that need to be overcome. In-vehicle, decision-making technology is already advanced, but needs a lot more refinement. The alignment of technology between vehicle makers must be sufficient to allow infrastructure to communicate with every vehicle. Mobile and infrared communications technology must also become more consistent, allowing always-on connectivity in a wide range of environments, and Manufacturers will have to support products with over-the-air firmware updates for potentially 15 years for a vehicle.

There will be a cyber-threat too, and privacy considerations around how personal and locational data can be shared without breaching privacy laws. Self-drive cars will become a target for hackers and improvements will be needed to ensure that vehicle data networks are secure.

Self-drive cars will also have a huge impact on the insurance industry. Self-driving cars may see manufacturers rather than drivers accepting liability and there is already growing demand for ‘pay-as-you-drive’ insurance models. New products will be developed covering manufacturers for

business interruption and cyber threat; while there will be better identification of insurance fraud and the cause of accidents as data from crashes is preserved in greater detail. This big data and analytics capacity will help insurers design better, more tailored, policies.

There will be many infrastructure update requirements in order to communicate road and traffic condition data directly to approaching vehicles. Centralised traffic management could guide cars away from road works and congestion, and to allow emergency services to pass unhindered. The telecoms and technology companies will need to keep pace as there will be increased pressure for a global SIM, and harmonisation of regulation regarding data storage and transfer will be key.

Of course, underpinning all of this change will be the need for electric charging points in urban areas, and a smart grid, to allow car batteries to store electricity for non-automotive use at peak times.

There is plenty to be done by lots of different stakeholders, but the societal benefits are so huge that I really believe that within the next 20-30 years we will see these wide-ranging changes. KPMG’s white paper suggests that the car is no longer just a way to get from point A to point B. In fact, it’s not just a car: It’s the control centre for your mobile life.

Strap yourself in for the ride.