Connected Vehicles

Friday, April 7, 2017
Tech Companies Going All In on Self-Driving Vehicles

Brian Kobus

Technology is playing a growing role in many aspects of our lives. How we shop, how we pay for things, how we spend our leisure time, how we communicate with each other — the way in which most of us do these activities has changed significantly in just the past several years. And there’s another important part of our daily lives which you can add to that list — how we get from A to B.

Automobiles have been the primary mode of ground transportation (aka Mobility) for decades. The typical household in developed countries like Canada owns one or two vehicles, and globally there are more than one billion vehicles on the road. Each year, more than a trillion dollars are spent on new vehicles. For the most part, vehicles are user owned and operated. But we’re now seeing four significant and complementary trends unfold which are shaking up the Mobility industry:

  • Autonomous (aka Self-driving): Intense development, much of it leveraging artificial intelligence, is underway to develop self-driving technology which will be able to safely navigate any scenario without the input of a human driver;
  • Connected: Cars are increasingly becoming connected, sharing and receiving information with other vehicles, infrastructure, people and the cloud;
  • Electric: As a result of tremendous improvements in performance, reduced cost and stricter environmental regulations, electric-powered vehicles are beginning to gain share vs. vehicles with internal combustion engines;
  • Shared: New ride-hailing and ride-sharing services such as Uber have rapidly grown in popularity, reducing the need for vehicle ownership and shifting consumers towards on-demand models (aka “Mobility-as-a-service”).

These trends are often referred to using the acronym ACES (A — Autonomous, C — Connected, E — Electric, S — Shared). So why are these trends a big deal? Well, collectively they hold the promise of a greener environment, safer travel, newfound productive time in your day, more efficient use of infrastructure and improved accessibility. And those are just the benefits which are easy to foresee today. Looking further out, there will likely be entirely new industries spawned as the world embraces a new era of Mobility.

With multiple disruptive forces converging simultaneously on a trillion $+ industry, it shouldn’t surprise anyone that a flurry of investment has begun in this area. This investment is coming from several different stakeholder groups, including automotive sector incumbents (e.g. Ford, GM, Daimler), technology companies (e.g. Google, Apple, Intel), recent breakout successes in the Mobility realm (e.g. Uber, Tesla) and venture capital firms seeking to back the next game-changing startup.

Here in Canada, there are a growing number of companies seeking to get in on the action. The graphic below highlights many of the innovative private technology companies based in Canada with a focus on the Mobility industry:

connected vehicles

While the above diagram groups companies according to four overarching themes, as the number of new entrants into the market grows, sub-themes will emerge and entirely new categories will be defined.

At OMERS Ventures, we’re excited by magnitude of the opportunity up for grabs and confident that innovative entrepreneurs will build amazing companies that grow into global leaders in the Mobility industry. No doubt, there are huge challenges to overcome in a market with strong incumbents, entrenched user behavior, potentially lengthy product development and testing timelines, and stringent safety regulations. But there has never been a better time for entrepreneurs focused on the Mobility industry to be challenging conventional wisdom and pursuing bold visions.

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