Autonomous Vehicle Implementation Strategy

by 2035
Ojas Patel
Candace Lee
Shriya Didwania
Daniel Tsypkin
Los Angeles,
October 2014

Targets:
Co-Branding with Car Makers
with focus on Hardware and
Software Production
Two Parallel Researches: Full
ADAS and Half ADAS

TEAM ADIDAS CASE

Strategy: Co-branding with largest car manufacturers

2015
Full ADAS* market:
Market of Commercial Vehicles: Taxi and
Trucks
Es?mated Size: 1%/2015 to 30%/2025
Price of Unit: from $120,000
Regions: North America, Europe, Asia-
Pacic
Problems with adop?on: Taxi and Trucks
Unions

Focus on Hardware and Software

Production

2025

Improved Full ADAS Cars:

Market of Commercial Vehicles: Taxi,
Trucks, and Shipping
Market of Private Vehicles: Luxury Cars
Price of unit: from $55,000
Es?mated Size: 30%/2025 to 100%/2035
Regions: North America, Europe, Asia-
Pacic

2035
Cheap Improved Full ADAS market:
Market of Commercial Vehicles: Taxi,
Trucks, and Shipping
Market of Private Vehicles: All Cars
Price of Unit: from $5,000
Es?mated Size: 30%/2035
Regions: North America, Europe, Asia-
Pacic

Conserva?ve Poli?cal
Groups

Half ADAS** market:

Market of Private Vehicles: Luxury/Sports/
SUV Cars (Cars with cost over $40,000 in
the US market)
Price of Unit: from $55,000
Es?mated Size: 30%/2015 to 100%/2025
Regions: North America, Europe, Asia-
Pacic
Problems with adop?on: None

*Full ADAS fully driverless car

**Half ADAS car with substan?al driving help

Cheap Half ADAS market:

Market of Private Vehicles: Mid-Cost
Cars(up to $40,000 in the US market)
Price of Unit: from $15,000
Es?mated Size: 30%/2025 to 100%/2035
Regions: North America, South America,
Europe, Asia

TEAM ADIDAS CASE

Autonomous Vehicles Increase Safety and Decrease Trac in CiHes

Safety

Annual crashes: 5.5mn

Fatal: 2.2mn (~40%)

Driver error responsible for >90% of all crashes

Economic costs of car crashes: $300bn annually
Reduce conges?on: ecient route choices
Travel behavior impacts: Children, elderly, disabled, driving in dierent
condi?ons, altered passenger behavior
Freight transporta?on: labor implica?ons?
Expanded to other industries: mining, agriculture, military
Note: Realiza?on of benets (atleast 10% AVs on the road)

Data from Eno Center for Transporta?ons Preparing a Na?on for Autonomous Vehicles
report (October 2013)

Risks

Customer acclima?za?on
Uncertainty of safety
Beher accepted when there is either
Implicit trust in another human being who has the control (trains,
airplanes) or
Chance to save ourselves (the wheel)
Safety/security concerns
Hacking: controlling cars for sinister purposes
Murder-for-hire, terrorist acts
Subsequently, legal liabili?es come into play
Who is to blame in the case of an accident?
Design company, manufacturer, car owner plus passengers
Weather condi?ons disrup?ng sensors
Opposi?on from labor unions in case of commercial use i.e. as taxis and trucks
And of course, cost
Average vehicle price range would be $100k+

Half ADAS vehicles will occupy 30% of

market of luxury cars. This equals to
sales of 2,070,000 cars yearly.

Our projected sales for market of

commercial vehicles is 59,300 in 2015 with
increase Vin
sales y(Taxi+Trucks)
early
Market of 50%
Commercial
ehicles

30% of Luxury Cars

Market of Private Vehicles with Half ADAS(Luxury Cars)

Region

Sales (cars per

people a year)

North America
(excluding
Mexico)

Europe

1/1000

1/1000

Population
(millions)

350

The Biggest
Markets

USA >90%

Total per region

350,000

740

Germany >
20%

740,000

Japan

Asia-Pacific

1/1000

1/2500

130

2,000

Japan 100%

130,000

China >75%

800,000

1% of Current Market in First Year

Region

North
America

Europe

Japan

Asia-Pacific

Mexico

3 Biggest
Countries (by
population)

USA
Canada

Russia
Germany
Turkey

Japan

China
Indonesia
Philippines

Mexico

Population
(millions)

350

740

130

2,000

120

Sales (cars
per people a
year)

1/100000

1/100000

1/100000

1/250000

1/250000

Total per
region

3,500

7,400

1,300

8,000

480

Mexico

1/2500

120

Mexico
100%

48,000
Total

Total

2,070,000

Projected Sales

Market Distribu?on = 30% (cars with cost over $70,000)

World Sales of Luxury Cars = 6,900,000
Total=2,070,000

60
40
20
0

20,700

Why $70,000?
Half ADAS Cost = $30,000
Vehicle > $40,000
Total Cost = $70,000

Projected Sales of Trucks (1% of

current market), 2015

Europe (3000)
North America
(6000)
Asia-Pacic
(30000)

ADAS in Commercial Sector

Global produc?on for

commercial market use by
2025 22 million
30% of the Commercial Market
will use ADAS

Projected Electric Car ProducHon

in selected countries - 2016
15%
10%
5%
0%

Japan

France

Great Germany
Britain

USA

South
Korea

ADAS in Private Sector

In billion euros

Global Market for Luxury Cars

350
300
250
200
150
100
50
0
2010

2011

2012

2013

In 1000s

1800
1600
1400
1200
1000
800
600
400
200
0

Global Luxury cars Sales

Financial Accounts for 2015

2015

Revenue Variable
Full ADAS Costs Full
ADAS

Gross
Prot Full
ADAS

Revenue
Variable
Half ADAS Costs Half

ADAS

Gross
Prot Half
ADAS

Quan?ty

59,300

59,300

59,300

2,070,000

2,070,000

2,070,000

Price($)

100,000

70,000

30,000

30,000

18,000

12,000

Total(mil $)

1,779

24,840

2015 (Fixed Costs)

Research Full
ADAS

Research Full ADAS

Total of Both
Researches

Building ($)

250,000

250,000

500,000

Materials($)

120,000

120,000

240,000

Salaries*($; of 100
employees)

11,900,000

11,900,000

23,800,000

Marke?ng

50,000,000

50,000,000

100,000,000

Total($)

124,540,000

Net Prot = (24,840,000,000+1,779,000,000)

124,540,000 = $26,494 million