Self-driving car market

Driving through the complicated lanes of self-driving car market

Self-driving car market

Futuristic technologies are part of the drill when it comes to the technological realm. The main challenge when it comes to these is the immense costs that come with the level of innovation. Self-driving cars are a well-echoed name in this domain, and it seems like, despite the major shifts and changes, the self-driving car market is gaining momentum and strength, with well-off companies taking over the steering wheel of the same.

Recent news concerning the same which created quite a ripple was the acquisition of Lyft’s Level 5, the self-driving unit by Woven Planet, a subsidiary of Toyota. The acquisition was for a whopping amount of $550 million. Post-acquisition, Toyota will hold the steering wheel, completely controlling Lyft’s technology and its team consisting of 300 people. Lyft will continue to remain in the picture, adding to the self-driving efforts of Toyota, helping the company to commercialize the technology, if and when it touches reality.

This particular acquisition is of considerable significance since it comes in the context of major changes in the self-driving car industry. It is an indication that the major control of the self-driving market will rest in the hands of a few wealthy companies that are capable of withstanding the huge and challenging costs, while also shouldering the related challenges that come with the same.

The Challenging Cost of Innovation

One of the major challenges faced by self-driving car projects is the monumental cost of technology. The high costs can send a chill down the spine of companies that want to invest in the self-driving car industry, particularly because of the added risk of late and to an extend, uncertain, return on investment.

Self driving car market

Deep reinforcement learning, the core software used carries the label of being the most expensive and challenging branch of artificial intelligence. The compute resources required for training these models require humongous costs. Hardware resources alone for these projects drink up a lot of money.

Added to this challenge is the timeframe of these projects, which span over years and years before shaping up into a desirable form. And since reinforcement learning models require training based on real-world data, the continuously changing environment of the same also poses a serious challenge.

To cope with this, some companies develop their own virtual environments to facilitate the training. However, they entail costs and expenses of their own, and wouldn’t completely be equal to real-world training.

These costs and challenges strain the profitability of the companies, draining them of their resources and putting them in line with a certain risk factor. If the reports are to be believed, the sale of Level 5 will tone down the operating costs of Lyft by $100 million. These costs were the same reason why Uber sold off its driverless car unit.

A self-driving car program that is profitable is still a fantasy and might take time till it touches the line of reality.

The Uncertainty

The uncertainty surrounding the self-driving car industry is the major reason why companies with rather small pockets are moving and blending in with those that can shoulder these huge costs, without falling off their pedestal. Toyota’s acquisition of Lyft is only one among the long list of companies that are on the way to joining companies with big pockets.

With the veil falling off, and fantasies being converted into clear reality, more startups will merge with a few companies, leading to the consolidation of the self-driving car markets, with a few major players holding the wheel of control.