Automakers are currently fighting on two major battlefronts: autonomous connected vehicles and a fundamental business model transformation - from building cars to selling travel time well spent. Autonomous connected vehicles are designed to deliver new experiences to owners and drivers (or passengers) and will propel the convergence of personal and public transportation. With the latter having traditionally been an archenemy of automakers, the industry will need to make a leap of faith and fundamentally transform their value chain.

A New Breed of Personal Mobility

The value proposition of this new breed of personal mobility business will evolve around five major innovation layers that have little to do with manufacturing vehicles:

  1. Vehicles need to be upgraded to make full use of their ability to connect to the outside world and to make it part of our everyday life. The starting point is a new operating and infotainment system with a personalized user interface that is highly intuitive and allows operation with minimal distraction. Vehicle and user analytics will become key value creators for the "experience designers" and feed the artificial intelligence engine that delivers contextual personalized experiences to drivers and vehicle owners. The integration with home security and automation systems and wearable health devices that monitor driver fitness will complete the first innovation layer.
  2. Innovation layer two integrates the vehicle with our virtual life, with the primary commercial goal of finding and getting people to virtual businesses. This includes the integration with social media, Internet search and electronic shopping and payment. The highest value for the business lies in big data analytics and the marketplace, where vehicle and user data is traded for value.
  3. The next innovation layer perfects the capabilities of vehicles to easily find and efficiently direct people to real places. Intuitive destination and point of interest search, highly accurate maps and location, real-time navigation with traffic, weather and road risk, contextual location based services and electronic payment and guidance as to how to drive safer and more economically add value to this innovation layer.
  4. Innovations on layer four physically get people to real places, by integrating the vehicle into the multi-modal world of transportation with a multi-modal travel planner, including car- and ride-sharing options and mobility on demand (e.g. MyTaxi, Uber). Ultimately, autonomous vehicles will accelerate the convergence between personal and shared or public transportation and make it a viable alternative to vehicle ownership, especially for people who live in or close by large cities. The ability of businesses to pay for your trip to their branches are likely to make the lures of mobility on demand over vehicle ownership even more compelling.
  5. The last layer of innovation integrates the value proposition with the infrastructure the vehicle uses. Pervasive network access with Wi-Fi along roads will be a differentiator in a world where all things connected congest our airwaves even more than our roads. Making it easy for people to find connected parking spaces is becoming a must-have in new vehicles. Vehicles that connect to traffic lights will benefit from "eternal green light zones" and drivers will have perfect visibility at night when light intensity is calibrated between vehicle beams and smart streetlights. "Hiring" a vehicle together with a dedicated lane or road in highly congested cities will be an attractive value proposition. With inductive charging maturing in the future, the ability to recharge electric vehicles while driving on dedicated lanes would add more value, and also allow a reduction in the size and cost of vehicle batteries.
Manufacturers vs. Tech Companies?

The race to win the future mobility services business has begun. It is wide open on how automakers will fare vs. technology companies. Will automakers be crossing the finish line first? Or will they be delayed or get stranded in the pits of the past, tuning to technologies and business models that have been working well for them for a century but are only marginally suited to strive in a future driven by autonomous vehicles and connected transportation value chains?

Or will technology companies like Uber win this race by adopting new and successful business models and transforming fast paced innovations from the virtual into the physical business of getting people to where they want faster and at lower cost?

As in a real race, it is less a question of building the fastest and sleekest car or the coolest connected device to capture virtual value than who will put together the winning team across industries to deliver the superior experiences that become possible when cars connect to the Internet of Everything (IoE).

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