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Automotive

With artificial intelligence, auto industry must get in the driver’s seat

Carol Fox  Global Head of Automotive Practice Group

Carol Fox  Global Head of Automotive Practice Group

Artificial intelligence will reshape not only the automotive industry, but the way society thinks about and treats cars, too. It's time to prepare for a radical change.

You know big transformations are afoot in an industry when Malcolm Gladwell shows up. The best-selling author recently lent his critical eye to Car and Driver magazine, where he has edited a 30-page special section on autonomous cars.

“These cars are dependent and, as such, require a larger conversation about what the rules and expectations of dependency should look like,” he wrote. “Once a car belongs to a network, you have to worry about whether the network is safe. Once an algorithm is in command, you have to worry about how the algorithm thinks.”

In his trademark no-nonsense style, Gladwell has captured the enormity of the autonomous vehicle challenge, expanding our thinking beyond the excitement of being able to watch movies while our cars drive us to work and introducing some of the social, technological, regulatory, and business issues that accompany this innovation.

Take, for example, the simple issue of liability, which has been a cornerstone of the driving experience since 1898, when Travelers Insurance Co. sold its first-ever auto policy. Fast-forward 120 years, and property casualty insurers, regulators, government agencies, and auto manufacturers are wrestling with liability in a case where a Tesla Model X operating in Autopilot mode crashed into the back of a police motorcycle.

The event raises plenty of questions:

  • If a self-driving car is speeding, should the owner of the car or the software developer get the ticket?
  • Can a passenger in a self-driving car be charged with a DUI?
  • Will “drivers” still need licenses?

These are just the beginning. Once artificial intelligence was introduced to hunks of steel that hurtle down the highway at 70 miles per hour (or more), everything got a lot more complicated for the humans who must sort out the details of how the technology will be implemented and governed.

Consider, for example, the intellectual supply chain challenges this innovation presents for automakers. Not only must automakers source new technologies and form new supplier partnerships with technology companies that have not traditionally been a part of the auto supply chain, but they must also hire the technologists, data scientists, and programmers who can leverage this technology in their vehicles.

That’s why Ford announced earlier this year that it was investing US$1 billion over five years into an artificial intelligence start-up called Argo AI, which will develop the brains of the manufacturer’s self-driving cars. General Motors invested US$500 million to form a partnership with ride-sharing service Lyft to create a national network of self-driving cars. Meanwhile, tech companies such as Google, Apple, and Intel are also engaged in high-profile autonomous driving projects.

As autonomous vehicle technology grows increasingly complex, the one thing that will separate winners and losers will be a strong intellectual supply chain. Businesses of every type will need to weigh everything from legalities and regulations to choosing the right strategic partnerships to catalyze new growth. And, they’ll need to do it while the wheels are rolling and the final destination is still many miles away.

This post was adapted from the 2018 AI Predictions report.


Learn more

Thomson Reuters automotive solutions are here to guide you through uncertain times in managing risk and reducing cost in the supply chain.

Our report Uncertainty and risk in the automotive industry is available for complimentary download.

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