Self-driving cars - SWOT analysis

Self-driving cars - SWOT analysis

The article is based on Self-driving cars - SWOT analysis, which can be found in the Library, in CayenneApps SWOT application.

Imagine that it is Monday morning, and you are preparing yourself to drive to work. Just before leaving, you receive a notification that your car has arrived, and is waiting for you in the driveway to take you safely to the office. When you are closing the front door, you smile and look for a moment at the beautiful flowers that are growing in the place where your garage once was.

You sit comfortably in the car; the engine starts, and you begin to read a new book that you bought yesterday. There is no one else in the car, and you like this. You recall the unpleasant times when this talkative taxi driver always forced you to engage in small-talk; you remember the price of the taxi which was so high because it included the profit the driver was making.

Your trip to the office is shorter than in the past. The traffic flows more easily, and your car optimizes your route accordingly to the traffic flow. You see a truck carrying off old road signs, and you notice that it is a year now since the speed limits were abolished because of the radical drop in the number of accidents. All of this thanks to direct communication between cars which has eliminated the factor of human error — a cause of 94% of accidents.

After 20 minutes you are at your destination, and once again you thank God that you do not have to waste so much time finding a free parking place. You walk into the office, and the self-driving car leaves to get another passenger just around the corner. You still cannot believe that commuting can be that easy — you feel relaxed and ready to start your work day. You are grateful that you no longer need to worry about insurance, paying the loan installments your car or changing the oil and washing your vehicle. Finally, you can focus on the things you really like.

Does this sound like science fiction? Maybe today, but many innovators say that stories like the one above and as self-driving cars themselves may be closer to becoming reality than most people think. One might argue whether it is a matter of years or decades but, undeniably, the sunrise of self-driving cars will be a revolution not just for drivers and traffic, but also for the transportation industry as a whole.

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The expected benefits could make you dizzy. Imagine a lower number of accidents, and therefore smaller costs of health care; fewer people injured or killed in car accidents; lower costs of social services (the U.S. Department of Transportation estimates that each human life costs $9.2 million). Imagine lowering the cost of operating a shared autonomous vehicle fleet to $.35 per mile, less than 10% as much as the cost of using traditional taxis and about half of owning a car. Think about a vision of driver which would be able to make engage in other activities in their car while riding. No wonder that companies such as Google, Uber and Apple, chip maker Nvidia, as well as BMW, Audi, Ford, General Motors and Mercedes-Benz are among more than a dozen automotive companies working on this technology.

Self-driving cars have quickly become not only a hot topic but also a driver (pun intended!) for real change in the business. Take, for example, a startup called Otto, which was founded by several former Google, Tesla and Apple engineers that decided to quit their prestigious jobs, to sell automation kits for the massive semi-trailers that crowd America’s highways. Or General Motors and Lyft, which has teamed up to create a national network of self-driving cars; or the cooperation between Uber and Toyota that together has accelerated independent research on the mass production of on-demand self-driving cars that Uber would need.

However, does this mean that “the Winter for traditional cars is coming”? We’ve decided to check. We wanted to know whether the current level of technology already allows us to take advantage of opportunities mentioned above, or do we need to wait a little longer for meaningful developments if they will occur at all. The results of our SWOT analysis suggest that there is still a negative advantage of weaknesses over strengths.

Self-driving car - SWOT analysis - Strengths impact vs. Weakness Impact

When we dig deeper, we can observe that the weaknesses not only strongly limit the use of opportunities but also intensify the possibility of seeing threats in reality. Even though the relationship between strengths and opportunities looks more than promising, the positive relationship between strengths and threats is very low.

The charts show what the impact is of strengths and weaknesses separately on opportunities and threats

When we consider the strong impact of weaknesses on threats and the weak positive influence of strengths on them, we might worry that the realization of threats will be more likely to be seen than the realization of opportunities. In such a scenario, the companies which invest in self-driving cars should focus more of their efforts on eliminating significant weaknesses strongly connected with threats. At the same time, they have to concentrate on creating new strengths or building up existing ones to limit the negative impact of possible risks.

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But, let’s move on from generalities to review the weaknesses with the biggest negative impact on the future of self-driving cars.

Top Weaknesses and Threats

“Unreliability. The technology is not yet thoroughly tested. Lack of knowledge about the potential points of failure.”

The self-driving vehicles use their sensors and software to look 360 degrees around them and identify objects such as pedestrians, cyclists, vehicles, and more. On Google models, for example, a complex overhead laser guidance system combines the sensor data with real-time satellite data to expertly and safely guide the car under any condition. At least that’s the theory.

The reality is that the biggest fear and anxiety of potential buyers of self-driving cars is that the software might have bugs in it. What if the vehicle loses its connection with the satellite? What if the algorithms are not sophisticated enough to handle all possible situations on the road?

All of these questions could boil down to distrust of unknown novelty but, in fact, they do have legitimate bases. For example, during driving tests in Austin a self-driving car had to stop because the software failed to properly recognize taller bushes growing by the road. Heavy rain can also do severe damage to the laser sensor mounted on the car’s roof, calling into question what role the driver might have to play in the event of technological failure.

These examples show that there is still room for improvement, but at the same time, the results of Google’s tests from the last six years seem promising. During the trial period, autonomous and semi-autonomous cars with drivers behind the wheel traveled over 1.7 million miles, and only 11 times was the self-driving car involved in minor accidents (light damage, no injuries) - all of the accidents were the fault of the drivers of the vehicles that collided with the self-driving cars.

Such positive statistics might inspire lobbyist that would like to protect the traditional auto industry (such as insurance companies or car producers) and drivers’ unions. The threat of strikes that might be a side effect of the need to eliminate a large number of workers in the transportation sector might negatively influence the length of the legislation process, which will be needed to begin the sale of self-driving cars.

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Last but not least, similar to the aircraft manufacturing industry, even small incidents or accidents involving self-driving cars will be, at least at first, on the front pages of the newspapers.

When we take into account a limited amount of trust in new technology, high prices, the reluctance of governments to create new legislation and related social upheaval we can predict that these factors might prevent people from buying these new cars and cause the market to stay a niche.

The chart presents calculated negative influence of self-driving car’s weaknesses on its opportunities. The bigger, the worse!

Not revolution but evolution

On the market, we’ve already seen companies that struggle to bring innovation (such as Tesla) and have witnessed that their road to great success if ever achieved, will be long and demanding. For self-driving cars, the remedy for all these problems might be proceeding with growth and innovation within the traditional auto sector and slowly earning the trust of customers. Solutions developed for self-driving cars can also be used in traditional vehicles (like autonomous braking, self-parking, or sensors). Popularizing semi-autonomous cars will improve safety and open up a path for the future use of fully-autonomous vehicles.

Semi-autonomous cars will work similar to planes that can be put on autopilot mode. Thanks to technological advances, driverless cars will be able to take control of steering, acceleration, braking, cruise control, anti-lane drift, and self-parking for most of and sometimes all of a trip. However, when human intervention will be needed, the car will have at least steering wheels and brakes for the driver’s piece of mind.

Will this all be enough? We don’t know, but maybe in the near future our garages will disappear, and we will witness a revolution similar to when automobiles were invented by Henry Ford at the beginning of 20th century. Personally, I strong support this vision of the future and looking forward to being a part of it. How about you?

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