AUTOMOTIVE Future of Autonomy and Mobilitycdn.ihs.com/www/pdf/Automotive-2016-Fall-Conference-Frankfurt-Hayfield.pdfNew business models: CAAS Apple strength Apple strength Apple opportunity

© 2016 IHS Markit. All Rights Reserved.© 2016 IHS Markit. All Rights Reserved.

Future of Autonomy and MobilityAUTOMOTIVE

Alastair Hayfield, Senior Manager, +44 (0) 1933 40 22 55, [email protected]

27 September 2016 | Frankfurt

© 2016 IHS Markit

Three megatrends

Automotive Conference – Frankfurt | 27 September 2016

2

Shared economy

Aut

onom

y

Shared, fully autonomous, EV

Owned, driven, ICECompliance, pollution

Cost, utilization, expansion

Safety, convenience, efficiency

© 2016 IHS Markit

Some recent questions from the industry…


3

“Can you measure the user experience of mobility services?” - OEM

“Can you forecast the development of L3, L4, and L5?” - OEM

“What will be the impact of shared mobility on our long term business?” – Materials supplier

“How will autonomous vehicles impact the products we make in the future?” –Transmissions supplier

“How do you see city/interstate infrastructure and building design changing as a result of autonomy?” – Tier 1

© 2016 IHS Markit

Mobility investment


4

Mobility investment

GM invests USD500 million in

Lyft

VW invests USD300 million in

Gett

Apple invests USD1

billion in DidiVolvo and

Uber investing USD300 million in autonomy

Uber has USD11.5 billion in

investmentToyota invests in Uber

Grab secures USD750 million

Go-jek nets

USD550 million

© 2016 IHS Markit

Market factors

Old industry dynamics and the new mobility market / September 2016

5

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Regulation

Guidance will shape the future of automotive technology,regulatory decisions will affect how the sharing economy evolves

Regulatory activity is already influential, but it becomes one of the most important market forces for ADAS

NCAP

US NCAP adding 7+ new ADAS in 2018

Euro NCAP continues to move forward on new AEB features

Little-to-no activity from other countries

Voluntary agreements

US commitment for standard AEB by 2022

Will effectively make AEB standard

everywhere in a few years, with rare local

model exceptions

What is next?

Standards and guidance

ISO 26262 + ASIL

New automated vehicle guidelines

expected in US

Steady progress on cybersecurity and driver distraction

guidance in US

Sharing economy

Open question everywhere today

Even China allowed ride-hailing services

in legal grey zone

Regulation likely to be defined by the current market


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Automakers

Deployment of automated driving tech is one of the most strategic decisions an OEM faces, with regulation and evolving mobility also major factors

OEMs racing to deploy new tech via myriad strategies, as gap between luxury and mass market narrows and startups challenge perennial luxury leaders

Luxury leaders

Volvo XC90/S90BMW 7 SeriesTesla Model S

2017 Mercedes-Benz E-Class

2017 Audi A8

Tesla

Autopilot 2.0 coming

Standard hardware?Trifocal camera1 x front radar

4 x corner radar+ OTA update

Taking algorithms further in-house

Mass market

Still mostly packages of ADAS options but

moving forward

Nissan Piloted Drive roadmap to 2020

Startups

Atieva

Faraday Future

NextEV

LeEco

Karma


© 2016 IHS Markit

Automation evolving

Based on NHTSA levels of automationNHTSA Level 4 comprises IHS levels 4+5

L4

L2

L3

L1

L0

L5

No automation

Single function control

Multiple function control

Limited autonomy

Full autonomySelf-driving car

Driverless autonomy onlyDriverless car New entrants

Automotive Industry

IHS

defined

Incr

easi

ng

eff

icie

ncy

via

au

tom

atio

n

Strongest operational efficiency incentive for EVs

SOURCE: IHS Automotive Autonomous Driving Service


© 2016 IHS Markit

Autonomous vehicle forecast—June 2016Autonomous vehicle sales forecast—world

© 2015 IHSSource: IHS

2005 2015 2025 2035

L4

L2L3

L1L0

Single function automation

Combined function automation

Limited self-driving automation

Autonomous mode with driver controls

L5 No driver controls

No automationNH

TSA

+ I

HS

L4

/5



© 2016 IHS Markit

Autonomy scenario: Industry impact visualized

Autonomous vehicle sales impact scenario

© 2016 IHS MarkitSource: IHS Markit

17.6 million

As autonomous vehicles arrive, the market impact

is split between:

1. Replacing or updating current forecast volumes

2. Adding incremental volume beyond current forecast

Autonomous vehicles can broadly correlate to

mobility service models:

L4 – Car sharing

L5 – Ride hailing



© 2016 IHS Markit

Driverless cars

Car ownershipAugmentationReplacement

Fewer cars per household

Driverless car impact

Mass transitLast-mile serviceBus augmentationBus replacementNew mass transit

Others?

Ride hailingUber, Didi, Lyft, etc.

Taxis, rentalsAuto OEMs

Goods deliveryPackagesGroceries

Courier serviceRestaurants

* Driverless cars mostly BEV


© 2016 IHS Markit

Mobility


12

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Mobility

OEMs and suppliers are investing heavily to understand the market, seize opportunities, and capture early market share that can be adapted later

New mobility services are evolving quickly and challenging traditional tech development, market deployment, and consumer exposure

Uber

Determined and acting quickly

Acquire and deployplus shed losses

Uber and VolvoUber and Toyota

Uber and Otto

Ride-hailing

Didi wins in China

Daimler merging MyTaxi and Hailo

VW and Gett

GM and Lyft

Delphi in Singapore

Car sharing

Smaller fleets but consistent users and

often profitable

Rental car companies adding new tier of service

OEMs starting their own services

Automakers

Ford _____

BMW iNext

Uber XC90

Chevrolet Bolt


© 2016 IHS Markit

Car-sharing brands

14

Maven (GM)ReachNow (BMW)

car2go (Daimler)


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Mobility changing what it means to be a brand

• OEMs have sharing brands (GM-Maven, Daimler-car2go, BMW-DriveNow/ReachNow)

• Distinct operations, service-based business models

• Act as a test bed for new business model, sales channel, and new vehicles

• Aim to be a lifestyle brand that connects home, work, devices, personal transport

• In 20 years, is the service/experience of a mobility solution what defines the brand, not the vehicle?

• Availability, cost/flexibility, ease-of-use, integration with “digital life”

15


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Car-based urban mobility is reshaping transportation

Taxi

Owner/ driver

Taxi

Owner/ driver

Ride-hailing

Car sharing

Autonomous on-demand

mobility network

Owner/ driver

Past Present Future

RentalRental


© 2016 IHS Markit

Where we are going: Scenario

1,100 1,400 1,600

16 30 50

2015 2025 2035

Vehicle parc (millions)Owned Shared

Owned parc 1.1B 1.4B 1.6B

Averagetrips/day 3 3± 3±

Total trips/day 3.3B 4.2B 4.8B

3,300 4,200 4,800

160 420 1,100

2015 2025 2035

Total daily trips (millions)Owned Shared

Shared parc 16M 30M 50M

Averagetrips/day 10 14+ 22+

Total trips/day 160M 420M 1,100M

Driverless car mobility scales extremely well compared with current carsSmaller fleets operate efficiently and make mobility available to more people



© 2016 IHS Markit

Mergers and acquisitions

Changes in the supply chain and in consumer-facing markets will continue to force the industry to rethink and reposition within a changing landscape

Supply chain and ecosystem consolidation plus mobility services are fueling partnerships and M&A activity—new players are coming

Didi and Uber China

Most significant consolidation in mobility to date

Good for Didi/Uber

Negative for drivers and users because of reduced competition and fewer subsidies

Suppliers

Uber/Otto

ZF/TRW/Ibeo

Delphi/Ottomatika

Freescale/Cognivue

Lear/Arada

Automakers

Ford colead investor in Velodyne

Tesla/Solar City

GM/CruiseGM interest in Lyft?

German OEMs investing in mobility

Tech companies

Baidu colead investor in Velodyne

Intel/ItseezIntel/Nervana

Samsung interest in Magneti Marelli?


© 2016 IHS Markit

A note about Apple…


19

© 2016 IHS Markit

Why is Apple looking at the auto industry?

20

Key information Other information

Law of large numbers

2015 revenue: USD234 billion; +28% First-quarter 2016 revenue: USD76 billion; +2%

10% growth is USD23 billion* Net income of USD18.4 billion

Slowing growth iPhone growth slowing Limited current product growth

68% of revenue in December quarter Apple Watch has potential

Need new markets

Few high-tech opportunities Apple needs big opportunities

For Apple leadership To grow—even 10% per year

Auto industry Auto sales: USD3,000 billion-plus Auto content value: USD20 billion-plus Transportation: USD5,000 billion-plus

Growing slowly and erratically Growing very fast! New growth opportunities

Auto changes Becoming software-centric Becoming connection-centric BEV lowers entry barriers New business models: CAAS

Apple strength Apple strength Apple opportunity Disruptive opportunity

*2015 Fortune 500: Only 128 companies had revenue over USD23 billion


© 2016 IHS Markit

What is Apple good at?

21

Key information

User interface

Apple has set the HMI standard many times Macintosh: PC graphical user interface (GUI) iPhone: Smartphone user interface

Software ecosystem Macintosh: Open APIs for writing Macintosh apps iPhone: Open APIs and tools for writing iPhone apps

New business model iPhone app store: Distribution channel and platform for software publishing with low share to Apple

iPod: Vast music library for download fee that lowered music industry piracy

Apple brand building High-end products with luxury brand image Positioned to build a loyal and repeat customer base

System design Proprietary hardware using system on a chip (SOC) Proprietary software with open APIs for third-party apps

Supply chain management

Contract manufacturing for hardware and SOCs System software suppliers and 1 million-plus apps in app store


© 2016 IHS Markit

Apple Product Scenarios?

22

Scenarios Key Information Comments

BEV Strategy-2020

Luxury SDC connected and leveraging Apple’s i-products

Solves the SDC to HDC HMI Apple HW & SW designed

Only low volume needed for significant revenue

HMI is core Apple strength Contract manufacturing

BEV & SDC Strategy-2025

Luxury DLC connected and leveraging Apple’s i-products

To consume Apple content-apps Apple HW & SW designed

Luxury CaaP for wealthy CaaS for luxury usage Aspirational growth Contract manufacturing

BEV & DLC Strategy-2025

Luxury DLC connected and leveraging Apple’s i-products

Apple HW & SW designed Revenue from CaaS operation

CaaS for high-end and luxury usage Contract manufacturing 20% profit margin feasible

Far Out Strategy-2035

Local mfg. Partly 3D printing Apple HW & SW designed Supply chain management

When is tech ready? New mfg. technologies Apple core strength


© 2016 IHS Markit

Summary

Vehicle technology evolves quickly, but complexity and deep learning change the way systems are designed.

Crowd-sourced map and OEM-owned driving data will further increase the value of connectivity and updatable hardware.

Technology deployment happens more quickly than ever.Planning becomes even more important.

Mobility services will change how automakers approach the market, plan products, and position their brand.

Strategic investments and acquisitions help secure valuable opportunities in a rapidly evolving transportation industry.


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Documents

AUTOMOTIVE Future of Autonomy and Mobilitycdn.ihs.com/www/pdf/Automotive-2016-Fall-Conference-Frankfurt-Hayfield.pdfNew business models: CAAS Apple strength Apple strength Apple opportunity