Autonomous Vehicle Ecosystem Analysis & Opportunities April 2019 1 Source : DRAUP 1 AGENDA This section provides an overview of : 01 Autonomous Vehicle Overview Autonomous vehicle overview and its potential 02 Technology Spend Analysis Disruption in Autonomous Vehicles: o Tech Giants 03 Autonomous Vehicle Adoption o Partnerships & Consortiums o Acquisitions & Start-ups Impact of AV on different industries 04 Bay Area–Deep Dive Future of AV Growth Drivers of AV New Emerging business models 05 Top Companies Deep Dive 06 Partnership Opportunities 2 Overview: Autonomous Vehicles (AV) have huge potential to impact global economies, markets and industries $7 Trillion Potential savings in the areas of fuel efficiency, cost of life and productivity gains enabled through AV based business models in US by 2025 $250 Billion Estimated worth of Autonomous Vehicle Industry by 2025 3 Million Potential Job loss in US by 2025 17% Expected AV market share as percentage of total worth of Auto industry, in 2025 8 Million Estimated Level 3 and higher AV by 2025 3 Note : DRAUP- The platform tracks engineering insights in the automotive ecosystem using our proprietary machine learning algorithms along with human curation. The platform is updated in real time and analysis is updated on a quarterly basis Source : DRAUP 3 Disruption in AV: Penetration of Tech giants in AV space has created an intense competition for traditional automotive players that enables multiple disruptions in the ecosystem Disruption in AV Case Studies Tech Giants Tech giants are penetrating the AV ecosystem due to its 1 Penetration prominent potential and impact. Tech giants are in AV investing with OEMs, Tier-1 suppliers and start-ups to offer services and solutions • Google’s Waymo, self driving vehicle technology company has partnered with Tier- 1 and OEMs like Magna, FCA, and Jaguar to offer full-stack autonomous vehicles. • It is also setting up a factory in Detroit to build autonomous vehicles and is working with American Axle & Manufacturing to convert the existing factory Autonomous vehicle development has disrupted the traditional partnership trends in auto industry and has 2 Consortium & Partnerships brought in multiple industry giants together working in • Intel acquired Mobileye which develops computer vision and machine learning, consortiums data localization, localization and mapping for ADAS and autonomous driving. • BMW collaborated with Intel and Mobileye to position itself in AV ecosystem. Followed by BMW, tier 1 suppliers and other OEMs like Delphi, Valeo, Magna, Toyota, Aptiv, Continental, Jaguar, and Audi have also joined the coalition. AV based ML and Sensor startups have attracted 3 Acquisitions of phenomenal investments from the giants who are Start-ups looking to win the Autonomous vehicle race • GM acquired Cruise to use the technology and talent to accelerate the process of developing AV. GM Cruise is also partnering with other startups and companies to deploy autonomous vehicles. It has collaborated with DoorDash which offers food delivery service 4 Note : The platform tracks real time insights and developments in the Autonomous Vehicle Ecosystem such as global engineering footprint, product launch, Leadership Announcements, M&A, among other essential insights Source : DRAUP 4 Above analysis is based on the DRAUP’s proprietary engineering database and insights from industry stakeholders, updated as on April, 2019 Penetration of industries in AV: New age solution providers in the areas of Semicon giants, Telecom, Cloud, and Mobility are bolstering the evolution of vehicle autonomy • Traditional suppliers such as Automotive Ecosystem has been disrupted through digital mega innovations Ecosystem maturity trend during last 15 years Bosch and TomTom have enabled advanced vehicle navigation and Telecom: 5G Infrastructure 10 monitoring through specialised telematics equipment Insurance Providers: Usage based Insurance 9 Smart • Semiconductor giants such as Intel Mobility and Nvidia have developed Cloud Platforms: Data Management & Security 8 specialised SoCs for processing and computing large amount of New Age Suppliers: ADAS Systems & Components 7 vehicle datasets • Tech Mafia have transformed the Data Services: Connected Car 6 vehicle into a software computing system with capabilities to take Internet autonomous decisions Age Mobility Services: Alternative Ownership 5 • New age suppliers have built Tech Mafia: Car OS, HMI 4 capability into Advanced vehicle control using deep learning, sensor systems and connectivity 3 Consumer Electronics: Infotainment OS services Silicon Ecosystem Automotive in the ofplayers Number Evolution 2 • The current Autonomous Vehicle Semiconductor Giants: SoC Processors ecosystem has been rapidly growing through a rich infrastructure of 1 network, cloud & insurance Automotive 1.0 Traditional Suppliers: Telematics equipment Note: Each unit on Y-Axis represents a providers enabling new age single type of ecosystem player 0 business models 2003 2006 2009 2012 2015 2019 5 Note: The timeline above is illustrative of landmark events in the autonomous vehicle ecosystem during the last 15 years. The list above is non exhaustive DRAUP Engineering Module: The platform tracks real time insights and developments in the Autonomous Vehicle Ecosystem such as global engineering footprint, product Source : DRAUP 5 launch, Leadership Announcements, M&A, among other essential insights Future of AV: Companies are accelerating commercialization of level 3 & 4 autonomy to lead the technology race Targeted Levels of automation by 20212 Fully automated 5 Uber BMW General Motors Ford Waymo vehicle Full The league of 5 are well Automation positioned and future-ready, basis their current R&D investment or Delphi via virtue of their acquisitions and/or partnerships Highway autopilot Apple Autoliv Volvo Argo.ai Valeo Daimler Bosch Tesla Intel Including highway 4 High GM, Ford, and Waymo have Convoy Parking Automation committed to attain Level 5 PSA nuTonomy garage pilot Volkswagen automation capabilities whereas Intel, Tesla and Bosch have envisioned Level 4 automation by Highway chauffeur Nissan-Renault Nvidia Toyota Baidu 2021 Traffic jam chauffeur 3 Conditional Continental Automation Zoox Automation Nauto These players have been exploring a diverse set of GTM strategies such as partnerships Partial automated with mobility providers, fleet Parking Traffic jam 2 management and personal Partial ownership model to launch their assistance Automation first commercial Autonomous Vehicles by 2021 2021 AV Readiness Index1 6 Note : 1-2021 AV Readiness Index: Function of % R&D Talent in Autonomous Vehicle technology, External Acquisitions and Investment, patents and partnerships; 2- Function of current leadership Outlook and commitments for autonomous vehicle launch in 2021. Automation Levels as outlined by SAE updated as of 2019; Source : DRAUP 6 The above analysis is based on the DRAUP’s proprietary engineering database and insights from industry stakeholders, updated as on April 2019 AV Growth Drivers: Liberal government policies, technology advancement and ecosystem openness to co-innovate are the key enablers driving autonomous vehicle innovations 1 Technology advancement 2 Political, legal and social drivers Drivers for Decline in cost of computing and advancement State legislations related to autonomous vehicles in processing power have enabled processing Autonomous have gradually liberalised . In 2019, 29 states large volume and variety of data such as image, have introduced legislation related to autonomous voice, text, etc. vehicles in USA, allowing testing of autonomous Vehicle fleets under certain specified conditions Advances in machine learning have allowed computer vision to compute unstructured data Extensive government investment in key and distinguish objects on the road and build 3-D countries- US and UK governments plan to invest maps of the surrounding area $4Bn and £38Mn over the next 5 years, on driverless cars technology Deep learning and artificial intelligence have 3 Open Ecosystem led to better algorithms for pedestrian detection, Projected 20% overall reduction in road traffic control and other automation features. accidents- Elimination of drivers is expected to • Collaborative and open innovation- Top player Tesla reduce driving accidents caused by human error. open-sourced its patents while Baidu and Lyft have open software platforms • Competitive landscape- Entrance of technology mafias which are building a competitive environment in AV through their strong capability in software platforms • R&D partnerships between universities and automakers- Toyota partnered with University of Michigan for autonomous innovation. 7 Note: Autonomous Vehicle regulations have been verified from reports published by Department of Motor Vehicle, California and other state regulatory bodies in respective geographies The above analysis is based on the DRAUP’s proprietary engineering database and insights from industry stakeholders, updated as on Feb, 2018 Source : DRAUP 7 New Business Models: Shared service model and fleet owned taxis would be the first level of AV integration globally Service and public utilization based models to dominate while traditional ownership model to diminish Business Model Description Examples Intensity of Autonomy Privately owned vehicles provide Individual Owned Shared Service ride hailing/sharing service when Uber, Lyft Models Emerging owner is not currently using it. Models Service company operates fleet of