Ever thought of permanently sharing a car with your neighbours? In the future, it may well be how we all live.
By 2045, everyone will be using ride-sharing services and no vehicles will be owned personally. In fact, owning a car could be illegal by then.
That was the bold prediction of Scott McCormick, president of the Connected Trade Vehicle Association, an industry think-tank backed by some of the world’s leading automobile and parts makers such as Ford, General Electric and Daimler.
McCormick’s prediction was made on the back of rapid developments in connected cars and autonomous driving technologies. This will ultimately eliminate the need for a driver and potentially the concept of private cars.
Speaking at the Global Autonomous Driving Forum in Wuhan, China, McCormick said people in the same community or workplace would share vehicles in the future because it is much more efficient in terms of resource allocation.
Today's auto industry is not efficient because every individual is estimated to occupy his own car for only 200 hours per year, implying private cars are left idle for most of the time. In the future, new cars will include features that enables higher utilisation and can be shared among multiple users.
In fact, automakers such as Toyota, Volkswagen and Chery have already developed concept cars that can be shared among multiple users, and have stressed they will focus on developing shared vehicles.
McCormick believes most carmakers will be developing shared vehicles by 2025 to 2030 because they can charge more on each car produced. Instead of mass production, they will focus on developing premium automation features in order to sell at a higher price and raise their profit margins.
As a result, automobile sales could drop drastically and prices may spike, causing even more people to share vehicles instead of owning one.
In the world of fully autonomous cars, there may be laws prohibiting private car ownership because driving a car will be seen as a danger to public safety. Every car will be designed in a way that is connected with the world through internet of things (IoT) technology, can interact with other cars and objects, as well as usable by multiple users.
Driverless tech boom
While it remains to be seen whether these predications will eventually come true, there's no doubt the automobile industry will face a revolutionary transformation that sees artificial intelligence play a big part in the development of connected and automated cars.
China, the world’s largest automaker, formalised a long-term development roadmap for connected cars in July last year and to encourage local automakers to invest in new technologies.
Lejing Wang, co-founder of Front Capital, said investment into the automated car industry has been growing expotentially because it will be a massive new sector involving consumer, manufacturing and technology.
“You will create another Google if you have merely a 0.4% share of the driveless car market in the future,” Wang said. “You can see how big the potential is out there, and why people are willing to invest and become a leader in this sector.”
Wang’s Front Capital is the world’s first dedicated private equity fund that invests solely in driverless technologies.
“In 2015 when we first started, the investment community did not pay much attention to the automated car technologies and thought it is fictional,” Wang said. “But now that [the connected and autonomous car industry] has become a strategic development for the Chinese government, you can see how many large companies are leading the investment here.”
Apart from transforming the automobile industry, Wang believes that the development of driveless technology could be beneficial to the economy as a whole because it can save a lot of human resources.
“In Shenzhen a driver can earn Rmb200,000 ($31,600) per year. It costs about the same to buy a car, but it can run for at least five years,” Wang explained. “If the driverless technology is in place, it could effectively save 80% of the cost for hiring a driver. This is the biggest benefit of developing automated cars from a financial perspective.”
