How Intel (INTC) Is Becoming A Leader In The Driverless Car Space

The driverless vehicle race is being run on computing power instead of horse power. This shift has created opportunities for companies other than OEM (original equipment manufacturers) to be a part of the increasingly software-driven automotive world. Intel (INTC) is one name which is on its way to become a dominant force in this space. Here’s a look at some developments made by Intel in 2018.

Intel announced its restructuring in 2016 from a PC company to one that powers the cloud and billions of smart, connected computing devices. Intel’s foray into the autonomous driving segment soon followed. BMW Group, Intel and Mobileye joined hands to create a safe and advanced platform fully automated driving.

A few months later, Intel announced an investment of $250 million for autonomous driving which was followed by setting up of a new business unit called the Automated Driving Group (ADG), dedicated to the next generation of advanced driver assist systems and autonomous driving solutions.

The acquisition of Mobileye in 2017 for $15.3 billion was Intel's big step in its self-driving journey.

In January 2018, Mobileye and NavInfo collaborated to build and distribute Mobileye’s Road Experience Management (REM) product in China. Mobileye’s Road Experience Management (REM) program enables the creation of precision maps at scale and low cost by leveraging the proliferation of camera-based safety systems on cars. An innovative, low cost and efficient solution to enable autonomous vehicles to localize themselves (precision localization) is a critical sensory input for the safe and affordable adoption of autonomous vehicles, right from Level 2+ (partial automation) systems to Level 5 (full automation).

In addition to NavInfo, China’s SAIC entered a new collaboration with Mobileye develop Level3/Level4/Level5 autonomous vehicles as well as bring REM mapping to China. China has ambitious plans for self-driving technology. China expects smart cars with partially or fully autonomous functions to account for 50% of new vehicles sold in the country by 2020.

In mid-2018, Baidu and Mobileye decided to work together towards safer autonomous vehicles. While great progress has been made by Baidu with more than a hundred global partners for Apollo, a number of challenges remain. To deliver safer self-driving technology, Baidu and Intel are collaborating to integrate and commercially deploy Mobileye’s Responsibility Sensitive Safety (RSS) model in both the open source Project Apollo and commercial Apollo Pilot programs.

“RSS formalizes human notions of safe driving into a verifiable model with logically provable rules, defines appropriate responses, and ensures that only safe decisions are made by the automated vehicle.”

Intel is collaborating with companies such as Volkswagen and Champion Motors to push mobility-as-a-service (MaaS). Volkswagen Group, Intel’s Mobileye and Champion Motors partnered to commercialize mobility as-a-service with autonomous vehicles in Israel. The three companies will work on different aspects of the project which is being dubbed as “New Mobility in Israel” has been accepted by the government which be furnishing legal and regulatory support, sharing the required infrastructure and traffic data, and providing access to infrastructure as needed.

The deployment will begin in 2019 and it will be rolled out in phases reaching full commercialization in 2022. A report by Strategy Analytics estimates that autonomous driving technology will enable a new passenger economy worth $7 trillion in 2050, out of which consumer use of a range of mobility-as-a-service offerings will account for $3.7 trillion, more than 50% of all revenues.

Driverless cars present a number of social and economic benefits along with the promise of safety, efficiency and convenience as well as mobility. NHSTA says, “The continuing evolution of automotive technology aims to deliver even greater safety benefits and—one day—deliver Automated Driving Systems (ADS) that can handle the whole task of driving when we don’t want to or can’t do it ourselves.”

It is estimated that 94% of serious crashes are due to human error. This means that driver assistance technologies in today’s motor vehicles are already helping to save lives and prevent injuries. The technology won’t just help reduce accidents and injuries but even the economic and social costs due to such incidents. These vehicles would enable smoother flow of traffic thereby reducing congestion and fuel consumption. The technology will be a boon for people with limited options of mobility.

The advanced driver assistance system (ADAS) market is projected to reach $91.83 billion by 2025, from $24.24 billion in 2018 at a CAGR of 20.96%. While the global autonomous driving market is expected to grow up to $173.15 billion by 2030. Intel estimates the vehicle systems, data and services market opportunity to be up to $70 billion by 2030.

Overall, the fast-growing market for highly and fully autonomous vehicles presents a great opportunity for technology provider which are becoming an integral part of the automotive ecosystem.

The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prableen Bajpai

Prableen Bajpai is the founder of FinFix Research and Analytics which is an all women financial research and wealth management firm. She holds a bachelor (honours) and master’s degree in economics with a major in econometrics and macroeconomics. Prableen is a Chartered Financial Analyst (CFA, ICFAI) and a CFP®.

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