digitization of the automotive industry: connecting the new mobility value chain
TRANSCRIPT
September 23, 2015
Digitization of the Automotive Industry: Connecting The New Mobility Value Chain Andreas Mai, Director Smart Connected Vehicles
Cisco Confidential 2 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Internet of Cars: $700 Billion Benefits per Year
250
210
160
80
Worldwide Benefits
$700 Billion
Note: Core Regions NA, EU, AP, Excl. 22% RoW, @ $1,400/ vehicle & 67% penetration of vehicle population
Society § Less Congestion Cost § V2V Addressing 80% of Crashes § Lower Traffic/ Road/ Toll
Operation Costs
Vehicle User § Lower Operation &
Insurance Cost § Less Time Stuck in Traffic
Internet of Cars Service Providers § Chip-to-Cloud Cyber Security § B2B2C Service Platform § “Context at point of decision”: Parking,
UBI, Navi, Traffic, LBS, Modes, etc.
Automotive Industry § Remote Diagnostics § Secure OTA-Update § Connected CRM/ VRM
Source: Cisco IBSG Automotive and Economics Practices, 2011
Worldwide Benefits from Connecting Road Vehicles Per Year [$ Billion]
Cisco Confidential 3 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Five Drivers and Control Points of Future Mobility
Source: Cisco Smart Connected Vehicle, 2015
Clo
sing
the
Inno
vatio
n G
ap
Autonomous
2
Price Value Chain From Building Cars to Selling Personal Travel Time Well Spent
1
Technology Cost Customer Data
Value Creation Market Access
Requires New Innovation & Business Models
Control
Share
From Owning to Sharing 3
Multi-M
odal Mobility
4
5
Cisco Confidential 4 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Autonomous Life Saver: Low Residual Liability Risk
150
100
50
0
59
Driver behavior
118
Natural disas-
ter
1
Mfg Defect
12
Total claims
131
Automobile insurance claims in the U.S.A. (USD Billion)
Environ. process.
20 Driving style
39
50% Auto- pilot
59
50% Human
Exclude mistakes autopilot would never commit § Ignoring right of way (19%) § Speeding (18%) § Tailgating (17%) § Wrong behavior towards
pedestrians (6%) § Drunk driving (5%)
Crash causes
Source: Warranty Week; Conning; WardsAuto; Alliance of Automobile Manufacturers; Federal Statistics Office Germany; expert interview; World Economic Forum; BCG analysis
Producer already liable
Frequency in which autopilot makes same mistake as a human driver?
Potential liability cost per car sold (USD)
0.01% 0.50%
$ 2 $ 112
Rough Estimate WEF Taskforce/ BCG, 2014
~ $400-$1,300 warranty accruals per vehicle 2013
Cisco Confidential 5 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
‘Sharing’ Will Make Mobility More Affordable for Billions Passenger Vehicle Stock
(Millions)
Reduce Cost to World Average of 24%
Source: EIU Data, Cisco IBSG Automotive 2010
Transportation & Communication Cost (Percent of Personal Income)
58% 54%
50% 43%
42%
Brazil India
Thailand China
Mexico
17% 15% 15% 15% 14%
12%
United Kingdom Germany
France Italy
Japan United States
Mature Markets Emerging Markets
Today Eco-Mobility
13% 750
1,750
59%
Cisco Confidential 6 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Data Fuels the Future Mobility Business – Example Vehicle Insurance
Regular Same Higher Very High
ADAS Lower Lower Higher
Autonomous Very Low Very Low Very Low
Regular ADAS Autonomous
Nearby Vehicles
Vehicle Health
Driver Behavior
Road Risk
Traffic
Weather
360° Real Time Risk
Driver mainly drives …
Vehicle is…
Insurance Risk
Rental Car, Car Sharing: Risky combinations…
Source: Cisco Smart Connected Vehicle, 2015
Cisco Confidential 7 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Expanded Data Scope
Enriched Output
Trusted Relationship
Wave 1 Wave 2 Wave 3
Data Plane
Control Plane
Customer Plane
Ecosystem
Sensing/ AI
Market Maker
Siloed
Reporting
Data Keeper
Intra-company
Action
Conditional Use
Big Data Industry Evolution: Path Towards “Infomediary”
Increasing Challenges Source: Cisco Systems, 2013
Cisco Confidential 8 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
More Congestion in Network than on Road: Infrastructure Is Key to Deliver Future Mobility Services
City Operator Applications
Lighting Control
4
Energy Reports
Parking Enforcement
City Safety/ Security
Incident Detection
Citizen Services
Public Wi-Fi
Parking Availability
Traffic Light Alerts
Incident Detection
!
City Air/Noise/ Pollution Maps
192 Exabytes = 192 x 1018 Bytes = 65 Trillion images = 6 Trillion video clips
By 2019:
Mobile Data
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
CIM Cloud
Power
Wi-Fi Mesh
FOG Analytics 3
1
2 DSRC
Wi-Fi Mesh
Cisco Confidential 9 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
THE “Finance-Application” for the Future Mobility Infrastructure?
Smart Road Pricing
Congestion Occupancy
Road Condition
Time of Day
Weight
Speed
CO2
Emissions Fuel Economy
Source: Cisco IBSG Automotive 2011
Cisco Confidential 10 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Food for Thought: From Roadblock to Market Driver
City/ State/ Federal
Infrastructure Operators
Outsource
Infrastructure REITS
Public Assets (Partial) Cash-out
ITS Service Operators
Users
Big Data To Optimize
ITS Services Invest
Invest in My Roads
Fuel Tax Smart Road Fee
=ROI
Source: Cisco Smart Connected Vehicle, 2014
Cisco Confidential 11 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Things
Data
People
Processes
Internet of Cars: Four Digitization Phases
Value
Home LBS ITS
Health
Value Added Ecosystem
Service Energy UBI
Modes
Value Chain Enterprise Product
Hyper-Connectivity
Source: Cisco Smart Connected Vehicle, 2015
Cisco Confidential 12 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Cisco Digital Business & Application Enablement
Business Continuity & Optimization
Connected Analytics
Collaboration
Connected Processes
Contact Center
IoT Cloud Connect
Connected Experiences
Fog Cisco Infra Data Center WAN Access Mobility
Key Enabler: Scalable Modular Digitization Platform
Cisco ONE Network Automation Cloud Orchestration Policy/Intent (ACI)
Process Automation
E-2-E Security
Management
B2B -
Cloud -
Vehicle
+ ConMan DiMo Security Cisco Client
Factory Utility Vehicle Retail Health
Cisco + Partner Solutions Dealer Home Insurance Transport
City
Source: Cisco Smart Connected Vehicle, 2015
Cisco Confidential 13 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Evolution of a Revolutionary Business Model
“If you don’t pay, you are the product”
“Big Brother” “Big Mother” “Don’t be evil”
Getting People What & Where They Want 4 Free B2B Fee 4 Getting People To Websites & Stores
Web Road
Source: Cisco Smart Connected Vehicle, 2014 Note: is a proxy for “The Valley”
Cisco Confidential 14 © 2015-2016 Cisco and/or its affiliates. All rights reserved.
Revolution for an Evolutionary Business Model?
Web Road
Source: Cisco Smart Connected Vehicle, 2014
Beat Them? Join Them?
Note: is a proxy for “The Valley”
Thank you.