The traditional automotive industry is being led by the large rigid incumbents including Toyota, Ford and Daimler which are commonly characterized with large scale manufacturing, bureaucracy, and fossil fuel emissions. With global communities demanding change, ventures such as Nikola, Polestar and NIO have emerged who are utilizing agility and disruptive technologies to challenge the status quo of the traditional incumbents. Several disruptive trends carried by these ventures include autonomous driving, sharing economy and connectivity. However, a fundamental concern in the new age of the automotive industry is that the excitement created by these ventures has left their valuations surging towards unprecedented heights. For example, Nikola is valued similarly as Ford on the stock market yet consider that Nikola has not sold a single vehicle.
The excessive valuations have casted doubts whether technology automotive ventures are capable to sustain growth regardless of the hurdles. For example, ventures who are developing autonomous vehicles are facing fundamental difficulties such as:
1. Establishing a common notion of training, testing, and validating machine learning.
2. Developing reliable sensors. The current sensors deployed by autonomous vehicle are not sufficiently independent nor safe regardless of the environment (e.g. rain and dust).
3. Establishing regulation. No rules nor regulations are set for any autonomous system and so are unlikely to be determined in the near future.
These hurdles may render commercial viability in the short run. If commercialization remains futuristic, excessive valuation led by hype and expectations may wear out and steer technology automotive ventures towards failure.
Whilst claims made by the few (Elon Musk) expect autonomous driving by the end of 2020, hurdles preventing further progress may tumble valuations and limit future funding availability. Hence, should we risk tech automotive ventures becoming over-valued and collapsing from the pressure? Or relief pressure by treating them as “normal” automotive firms regardless of society’s demands for futuristic transportation?
References:
View at Medium.com
https://thenextweb.com/cars/2020/08/19/autonomous-cars-5-reasons-they-still-arent-on-our-roads-syndication/
https://thenextweb.com/shift/2020/09/08/gm-says-its-going-to-build-nikola-badger-hydrogen-ev-truck-tesla/
