Autonomous automobiles are looking a lot like other IoT investments - lots of players, overlapping technologies, an unknown consumer adoption curve, and commodification that will require massive scale for adequate returns. Now add a complex regulatory environment that can reshape all of those variables.
So who will make money?
The real rewards will likely come to those companies where the driver - the focus of autonomous vehicles - is a key factor to their business model:
First, services companies which can replace the cost of human workers, like trucking, delivery services, tour services, security, and shared vehicles (taxi services, mass transit).
Second, companies that will engage idle passengers, like communications networks, in-vehicle infotainment, content producers, and advertising - think contextual pop ups during your road trip.
Third, all the infrastructure companies that will enable passengers to travel cheaply and safely by rebuilding roads, installing charging stations, allowing remote parking, and so on.
"Although it is a substantial market, it may not be worth the scale of investments currently being sunk into it," said a board member at one of the German carmakers, who declined to be identified because the matter is confidential. Dozens of companies — including carmakers and tech firms like Google and Uber — are vying for a market which, according to consulting firm Frost & Sullivan, will only make up about 10 to 15 percent of vehicles in Europe by 2030. There are sure to be losers. "It's impossible for me to believe there will be 50 successful autonomous vehicle software producers," said John Hoffecker, global vice chairman of Michigan-based consulting firm AlixPartners.