The Crisis Reshuffles the Deck in the AV Space

The ongoing crisis is expected to be have a severe impact on the automotive industry. The significant drop in sales in recent months and a lengthy projected economic recovery has accelerated pre-crisis trends in the mobility space. The shift towards autonomous driving will be significantly impacted, whereas the electrification trend may slow down marginally overall — and actually be accelerated in some countries.

Eighteen to twenty-four months ago, the industry at large recognized that autonomous vehicles (AV) would not be deployed across multiple use cases in the early 2020s as previously anticipated. The tech was simply not maturing fast enough. Projects were massively scaled down or postponed indefinitely, e.g. Waymo’s commercial autonomous ride hailing service in Phoenix and Cruise’s in San Francisco, or even cancelled, e.g. Audi’s A8 Level 3.

Startups began having difficulties raising more funds, some opting to pivot away from Level 4 applications to favor other use cases for their tech. This trend was apparent for companies across the whole spectrum of the AV landscape, whether hardware or software. Incumbent players have been increasingly engaged in cooperations among peers or with tech companies in order to access technology with reduced risk exposure, e.g. Hyundai-Aptiv, or Ford-Argo-Volkswagen.