Welcome to the latest episode of “The Future of Automotive” on CBT News. This episode puts recent automotive and mobility news into the context of broader themes impacting the industry.
I’m Steve Greenfield from Automotive Ventures. We would appreciate it if you could join us.
This week’s lead story is about how self-driving cars could dramatically disrupt personal auto insurance.
Self-driving cars could make personal auto insurance nearly obsolete within 20 years, according to a new Morningstar report. A more likely moderate scenario predicts that personal insurance could remain necessary for several more decades until 2060.
The company’s new report, “Ensuring Autonomy: An Analysis of the Impact of Self-Driving Vehicles on the Auto Insurance Industry,” finds that under the most aggressive deployment scenario, by 2044 most cars on the road will be at a point where they will be liable. It turns out that it has the potential to be automated. From drivers to car manufacturers. Morningstar said the widespread adoption of self-driving cars is likely to mean that auto insurance will be replaced by product liability insurance, and that if Level 4 or 5 autonomy is achieved, the We believe that the manufacturer will be responsible for paying the insurance premium.
Morningstar said the most important factors influencing the adoption rate of autonomous vehicles are the timeline for technology development, the pace of adoption of AV technology, and the rate of retirement of existing vehicle fleets. The company then created three scenarios for each of these factors. Very Aggressive (the worst case scenario for a personal auto insurer), Aggressive and Moderate (the most likely scenario).
Morningstar noted that most vehicles on the market today are capable of levels 2 to 3 of automation, including driver assistance and navigation through autopilot systems like Tesla’s FSD Supervised. These systems can autonomously brake, accelerate, stop, maneuver, overtake, and change lanes in complex urban and highway environments, but still require continuous input from a human driver. .
There are some Level 4 solutions from companies like Waymo and Cruise that offer robotaxis that can be driven without a human at the wheel, but rides are currently limited to specific geographic locations and software is Extensively trained with location-specific parameters.
Using previous technologies as a guide, Morningstar finds that Level 4 or 5 AV technologies will reach 80% adoption in just 7 years (or 14 years in an aggressive scenario and 18 years in a moderate scenario) I calculate that it is possible.
Using these calculations, Morningstar estimates that under the very aggressive, aggressive, and moderate scenarios, 60% of cars on the road would be in 2044, 2053, and 2060, respectively. We predict that there will be Level 4 or higher self-driving cars by the end of the year.
Morningstar assumes that personal auto insurance will not be significantly impacted until Level 4 or higher autonomous driving is achieved at scale and responsibility is transferred from the driver to the automaker or company that provided the vehicle with autonomous driving capabilities. I am doing it. This is because even with Level 3 autonomy, humans still need to be in control in many situations and can be held responsible in the event of an accident.
AVs are expected to start having a significant impact on auto insurance once penetration reaches 10% (2035 in a very aggressive scenario). Business will decline at an accelerating rate as penetration increases from 10% to 60% (2043), at which point they will no longer be able to create value and some auto insurance companies may be forced out of business. they predict.
Now let’s move on to “companies to watch.”
Every week, we highlight interesting companies to watch in the automotive technology space. If you read my weekly Intel Report, I highlight companies that are worth watching, and each week I take the opportunity in this corner to share them with you.
A new company to watch today is RueData.
RueData provides tire management software for transportation vehicles.
From a vehicle perspective, tires are the second most important item after fuel, but there is a general lack of technological tools to support tire management.
RueData reduces tire consumption and maximizes profitability of fleet operating costs.
RueData’s software has helped trucking companies save more than $3 million and established itself as the #1 tire management software in Latin America.
Fleets using RueData products are seeing great results, including:
Reduce the purchase of new tires and save up to 30% as a result. Identify and reduce machine breakdowns and tire theft. Save up to 70% in tire inspection time. Get an optimized and automated maintenance plan within seconds. You can also benefit from technology that learns about tire performance and extends the life of your tires.
Ruedata has helped trucking companies save more than $1 million through technology-based tire management software and data analytics.
If you would like to learn more about RueData, you can check it out at www.ruedata.com.
That concludes this week’s Automotive Future segment.
If you’re an AutoTech entrepreneur working on solutions to help auto dealers, we’d love to hear from you. We actively invest from dealer funds.
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Be sure to check out my book, The Future of Automotive Retail, available on Amazon.com. And keep an eye out for my new book, “The Future of Mobility,” which will be completed soon.
Thank you (as always) for your continued support and for tuning in to CBT News in this week’s Automotive Future segment. See you next week!
