rethink sustainability
How automation will allow us to move around more easily
The move to a Circular, Lean, Inclusive and Clean [CLIC] sustainable transport system will have digital developments at its core.
Technology has allowed vehicles to become increasingly connected through sensors and infotainment systems, through the cloud and remote over-the air (OTA) systems. And soon we can expect vehicles to communicate with each other, with the surrounding infrastructure and over time with virtually everything else, including the power grid.
Growing quickly
The modern car has developed rapidly in recent years - today's vehicles have approximately 100 million lines of code running through them and the value of electronics accounts for about 40% of the car's worth.
And this is set to develop further. By 2030, estimates show this could rise to 300 million lines of software code, with electronic components comprising at least 50% of the value of a car. For perspective, a modern fighter jet has about 25 million lines of code and a standard PC operating system just 40 million.
As a result, the connected vehicle is improving efficiency and increasing the sustainability of transport. But there are also risks in the form of cybersecurity and data privacy.
Solutions and problems
Automation is also enabling greater efficiencies in the production of vehicles. The Internet of Things has allowed manufacturing processes to improve operating efficiency, increase factory automation and quality, personalise products, utilise advanced materials and reduce emissions.
This is further helped by the fact that e-mobility vehicles are less complex compared to a combustion engine car.
However, as today's cars incorporate an increasing number of technology systems to allow for features such as advanced driver assistance systems and semi-autonomous capabilities, manufacturing processes are having to shift from an engineering focus to more of a software bent.
As the data in the car becomes more powerful, it also opens up the vehicle to greater risk of security breaches. Vehicle manufacturers are still grappling with which components can and should be updated remotely, and which are too critical and must be protected at all costs.
Knock-on benefits
As automation levels increase in a vehicle, transport can become more efficient and more inclusive. Gradually removing the human element from vehicle operation can optimise performance, reduce emissions, improve safety, decrease congestion and enable more flexibility in the transport system. This in turn can allow shifts to greener transport modes and increased occupancy rates.
Behaviours can be changed through greater connectivity and logistics optimised via real-time traffic data, dynamic navigation tools and even the reduced time looking for parking spaces.
Greater connectivity can also enable highly efficient regional, long-distance passenger and freight transport. Fully automated vehicles still have many regulatory hurdles as well as issues surrounding public acceptance, liability, cyber security and privacy - however technological advances are progressing fast.
We see automation providing opportunities to improve road transport on highways, with advantages in reduced fuel consumption, increased goods efficiency and lower logistics costs. Fully unmanned vehicles reduce the energy consumption related with personnel on board and provide more space for cargo, as well as reducing human error.
Rapid advancements
While robo-taxis may be some way away from fully autonomous driving, advancements towards vehicles with autonomous movement for the majority of journeys are progressing fast.
Greater automation can enable higher vehicle occupancy rates and reduce mobility costs. Currently the average car costs £0.58/mile but a shared, electric autonomous vehicle could cost just £0.24 and a pooled SAV as little as £0.01.
Even basic levels of vehicle automation can support the greater uptake of mobility as a service – routes can be optimised based on individual multi-criteria choices and personal preferences. Vehicles can be used more efficiently as they will not sit idle for the majority of the day and night, contributing heavily to transport decarbonisation.
Over time, another key benefit of greater vehicle automation will come in the greater resilience of the transport system to unforeseen extreme events, such as weather or cyberattacks. The best-connected transport infrastructure and ecosystem can be remotely repaired, withstand attacks and be easily replaced or upgraded. If vehicles are able to communicate with the power grid, electric vehicles can also provide resilience and back up storage to the energy network.
At Lombard Odier, we believe the transition to a digitally-enabled, CLIC transport system will provide significant investment opportunities across the transport ecosystem – from mobility-as-a-service, to chip-manufacturers, software providers and cyber-security experts.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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