What Are the Economic Impacts of Developments in Connected and Autonomous Vehicles and How Can These Be Measured
Patrick Baldwin, KPMG
This paper addresses technological changes in the automotive sector, providing a framework to capture their impacts, measure the benefits to the wider economy through changes in the way we travel, create new markets and drastically improving safety.
Intelligent mobility is the next major development in personal transportation. It has the potential to be both an opportunity for market expansion and economic growth as well as having disruptive effects for traditional industries and wider society. Emerging smart technologies such as connected and autonomous vehicles, could change the relationship that users have with their vehicles in many ways including how they are owned, operated, maintained and insured. Leading to improvements in performance, driver experience, safety and fuel efficiency as well as providing wider impacts through creating new markets, telematic insurance and reducing impacts on the environment. There could also be disruptive effects in industries such as the taxi and logistics sector.
With any new technology there is a desire to understand the impact it will have so that policy makers, industry, investors and potential new entrants can plan and formulate strategies for the future. KPMG undertook research for the Society of Motor Manufactures and Traders to understand and measure these economic impacts.
The first aspect of the paper will define what is meant by intelligent mobility, outlining the key technologies and providing a road map of their adoption. This will include defining the differences between autonomous and connectivity features. The paper will present an economic framework to understand connected vehicles and describe how the industry will develop in the short and medium term.
The main body of the paper will discuss how it is possible to evaluate the impacts of smarter mobility based on the work that KPMG has undertaken. The paper attempts to align these impacts with traditional transport appraisal methods based on changes in journey times, value of time, fuel use etc. There are some aspects of the analysis that requires a different approach and the reasons and assumptions behind this will be explained in the paper. Lessons from other industries including insurance and telecoms sector will be used to explain the benefits of connectivity and telematics. The aspects that will be covered in the paper include the impact of intelligent mobility on;
The value of time
The final aspect of the paper will explain any challenges that remain to achieving these economic impacts. This will include political, technological, economic and regulatory issues which may prevent the realisation of benefits.
In summary this paper aims to explain what is meant by intelligent mobility, explain how analysts can understand and measure the impacts and highlight the barriers to achieving the benefits.
Association for European Transport