How much Human do we Need in a Car?

How m uch hum an do we need in a car? The evolution of artificial intelligence and the acceptance of autonomous vehicles

The evolution of artificial intelligence and the acceptance o f a u t o n o m o u s v e h i c le s Contents Market indicators 01Balance of human-machine intervention >90% in autonomous vehicles 1 Car accidents caused by human error 02The need for an intuitive and 85 million intelligent vehicle Autonomous-capable vehicles expected 2 03Industry measures required to gain to be sold annually by 2035 consumer acceptance Up to 15% 04EY’s collaboration with Rinspeed Reduction in car crashes among cars that have forward collision warning 3 05 systems and automatic braking features How EY can help 1. “National Safety Council Estimates Traffic Deaths Down Three Percent in 2013”, National Safety Council website, NewsDocuments/2014-Press-Release-Archive/2-12-2014-Traffic-Fatality- Report.pdf, accessed 26 February 2016. 2. “Advanced Driver Assistance Systems and the Evolution of Self-Driving Functionality: Global Market Analysis and Forecasts”, Navigant Research, October 2015, © 2016 Navigant Consulting, Inc. 3. “Autonomous cars likely to increase congestion”, RenewEconomy website, congestion-28009, accessed 26 February 2016. 1. National Highway Traffic Safety Administration (NHTSA); 2. Navigant Research; 3. Insurance Institute for Highway Safety “ To provide more comfortable and safer urban mobility, vehicles with more connectivity and self- driving functionality will be required on our roads. Digital technologies will support the provision of customizable mobility packages. As they move Randall J. Miller closer to reality, autonomous vehicles will not only play an integral role in the urban mobility Global Automotive & ecosystem but will also support a number of new Transportation Sector Leader, business models. However, as these vehicles EY evolve through different deployment scenarios, a sophisticated — adaptive and intuitive — human- machine interface (HMI) will be imperative. This means that software and software development will become more important for the automotive supply chain than ever before.”

T h e k e y t o s u c c e s s f u l a p p l ic a t i o n o f a u t o n o m o u s t e c h n o lo g y w i l l b e a s e a m le s s t r a n s i t i o n o f c o n t r o l b e t w e e n t h e v e h ic le a n d t h e d r i v e r Market indicators Technology improvements with systems and components, such as computer vision, radars, lidars and GPS, have supported more automated driving >40% technologies to help address rising safety concerns, increased demand for fuel efficiencq and traffic gridlocc Zq creating more efficient transportation Drivers who can imagine letting an 4 solutions. Technology advancement and proliferation are accelerating at an autopilot steer their car unprecedented rate — and this is expected to continue. Autonomous vehicles 66% and the possibilities that they bring have caught consumers’ attention and are Drivers who are willing to let an autopilot also gradually gaining their acceptance. steer their car if given an option of taking over the wheel in an emergency5 Trust oill Ze Zuilt Zq defining the boundaries of human and vehicle control How can autonomous Trust of the new automated functionality is a key component of how vehicles learn from the quickly these technologies become available. As customers use the new systems and get comfortable with how they function and their autopilot in aviation? dependability, they will be ready for more functionality. Another key component to proliferation of automated functionality is the legal S t a rt in g p oin t and regulatory element. A major step toward getting autonomous vehicles on the road was the February 2016 announcement from • Transition from propeller-driven the National Highway Traffic Safety Administration (NHTSA) (US) aircraft to jet aircraft defined the shift that stated that Google’s artificial intelligence system is deemed to of balance in control between humans 6 be considered a driver. and machines The transition from “automated” to “fully autonomous” driving must be well-managed T ra n s it ion The new division of labor between humans and fully automated • Regulations — insurance, operating vehicles — including a logical, safe and seamless transition of control procedure between the two — will be the essence of successful operation and • Rise in sophistication of technology application of autonomous vehicles. To facilitate this, a framework • Need for paradigm shift in training that defines the delegation of authority and balance of control under different circumstances is needed. With this evolution, we O b st a c les also need to address the emotional aspect of human driving since it • Costs — R&D, training will not only be difficult to give up control but many people simply enjoy driving. • Automation confusion — ambiguity in transfer of control between pilot and machine, more accidents during transition phase 75% 0.003 • Pilot acceptance Plane crashes caused Fatality rate per billion L e a rn in g s 7 by pilot error km traveled by plane • Incremental approach to introduction of technology (0.27 by rail, 2.57 8 by car) • Standardized operating procedures defined for numerous scenarios 4. “Who’s in the driving seat?”, EY, May 2015, © 2015 EYGM Limited • Collaborative effort of regulators, manufacturers and 5. Ibid. service providers toward application 6. “In boost to self-driving cars, U.S. tells Google computers can qualify as drivers”, • Educating pilots through exhaustive training and Reuters website, simulation exercises exclusive-idUSKCN0VJ00H, accessed 26 February 2016 7. “Do The Right Thing: Decision Making for Pilots”, AOPA Air Safety Foundation, October 2006, © 2006, AOPA Air Safety Foundation 8. “Safer skies”, Allianz Aviation Insurance, July 2015, © Allianz Global Corporate & Specialty, 2015 The evolution of artificial intelligence and the acceptance of autonomous vehicles | 1

Intuitive HMI and sophistication of artificial intelligence w i l l s u p p o r t t h e e v o l u t i o n o f a u t o n o m o u s v e h i c l e s s o t h a t t h e y e v e n t u a l l y p e r f o r m b e t t e r t h a n h u m a n d r i v e r s More sophisticated, Vehicle intelligence needs to be self-learning and adaptive customizable and intuitive interfaces are needed “ The processing systems used for With the deployment of autonomous autonomous vehicles are expected to vehicles envisioned through the rely on advances in ‘machine learning’ to evolving shared mobility ecosystem, better mimic the human brain’s ability to deal with unique situations. The software automakers and technology companies of a fully autonomous vehicle will need to will need to allow customized HMI for be adaptive, intuitive and self-learning, Peter Fuss multiple users sharing a car. This can be like a chess super computer that learns Senior Advisory Partner Automotive done through seamless integration of from its opponents’ moves as well. The GSA, EY various “brought-in” personal devices, requirement of artificial intelligence in personalized interior options, etc. As the car will push software development beyond its current limits. It will open up autonomous technology is not yet entirely new opportunities for IT and technology companies to add significant ready to handle all driving conditions, a value to the cars of the future and also capture future mobility customers.” sophisticated — adaptive and intuitive — HMI is crucial, considering factors such as distraction and complacency. Vehicle design needs to evolve to achieve new opportunities “ As vehicles become fully autonomous, dramatic opportunities for changes to the interior and exterior of the vehicle are possible. Completely new interfaces are supported as the steering wheel, shifter, brake and pedals are no longer required. Interior space opens up and I envision reconfigurable seating and interiors that easily adjust to meet the varying needs of passengers — especially in this emerging realm of car sharing and ride sharing. Data will validate that fully autonomous vehicles are safer than human drivers; safety regulations can Kristin M. Schondorf change to allow much lighter and more efficient vehicles. A broader use of technology and other activities within the vehicle are possible as there is no human driver necessary. This Global Automotive & Transportation opens up a whole new world and a new way of thinking about transportation.” Mobility Leader, EY 2 | H o w m u c h h u m a n d o w e n e e d i n a c a r ?

Consumer acceptance of autonomous vehicles will be facilitated by improvements in technology Consumers will learn to fully trust autonomous technologies over time, but the fundamental question will be whether autonomous vehicles should be allowed to share the road with vehicles driven by people and other road users. How will the society grow to accept autonomous vehicles? Incremental improvement in automation Taking cues from the aviation industry The industry has been introducing driving assistance features over the Consumers have grown to trust past few years. This bodes well for commercial airplanes, even in autonomous technologies. A step-by- autopilot mode. Learning from step approach will help gain consumer the aviation industry will help win trust, assuming they do not have a consumers’ trust. poor experience. 3 1 Humanizing driving Educating and incentivizing Vehicles must be designed to customers mimic aspects of human driving and adapt to personal style. Not Dealers and automakers need everyone drives the same way. to educate and incentivize Mimicking needs to gradually move prospective customers on beyond average driver behavior autonomous features and toward varied driver profiles. technology. 2 4 Heathrow’s personal rapid transit system A step toward an urban mobility network, with autonomous vehicles on the road Concept Regulatory challenges Enablers Advantages • A 3.8km route that links • Stringent regulations • Collaboration among • Reduced emissions — Heathrow Terminal 5 with around design and multiple takeholders — meet Kyoto Protocol a car park; 18 driverless, safety codes airport operators, pod 2050 projections battery-powered pods designers, etc. — to ensure • Reduced wait time for that operate on the route, seamless operation passengers carrying four passengers (and luggage) each Following the success of these driverless pods, they are now being 50% 80% repurposed and brought onto Greenwich’s streets. They will be allowed to navigate the streets independently, and will be used to Reduction in per- Passengers who have record exactly how the public reacts to self-driving vehicles. passenger carbon no wait time (wait time 10 emissions vs. diesel reduced to 10 seconds) 9. “Hands off with Heathrow’s autonomous pod cars”, The BBC, November 2014, buses9 © 2016 BBC 10. Ibid. The evolution of artificial intelligence and the acceptance of autonomous vehicles | 3

E Y c o l l a b o r a t e s w i t h S w i s s a u t o m o t i v e t h i n k t a n k a n d m o b i l i t y l a b R i n s p e e d t o d e m o n s t r a t e E Y ’ s c o m m i t m e n t t o i n n o v a t i o n a n d s h a p i n g t h e f u t u r e o f m o b i l i t y At EY, we are committed to actively shaping the future of mobility. We have the potential to inspire innovative thinking — not just in the automotive industry, but also in IT, internet companies and all other stakeholders, who are involved in future mobility propositions. An example of this endeavor is our collaboration with the Swiss think tank Rinspeed, an automobile manufacturer that specializes in building prototypes and concept cars. While the research centers of the automotive industry are still working on the technical solutions, the Swiss idea factory Rinspeed is already giving concrete thought to how automated private transport will transform the car and the human-machine system. Swiss automotive visionary Frank M. Rinderknecht (CEO, Rinspeed AG) approaches the topic of “self-driving cars” primarily from the perspective of the driver and the occupants — the human component. In doing so, the automotive thinker and EY expressly put one question on the agenda: how much of a human component should, must or may there be in a machine? Leveraging EY’s trusted consulting services and the support of other partners across the mobility value chain, Rinspeed created its latest hybrid sports car, the Éƺtos$Ê using the sceleton of a :EO i0& The technical highlight in the interior of the ÉƺtosÊ is no doubt the folding and retracting steering wheel. This creates lots of space in front of the driver, who can work or read a book in the old-fashioned way. The ÉƺtosÊ drasticallq reduces the numZer of distracting manual entries È despite significantlq expanded functions. Should it nonetheless be necessarq to enter a command$ the ÉƺtosÊ responds promptly to voice commands, gestures, touch input, controller or the push of a button. Heads up: Σtos has an extremely high addiction and envy factor — future, here I come! 4 | H o w m u c h h u m a n d o w e n e e d i n a c a r ?

E Y ’s M o b il i t y I n n o v a t i o n G r o u p — h o w E Y c a n h e l p EY’s Automotive & Transportation Sector works toward delivering the future of urban mobility — improving the movement of people and goods around the world. We bring “consulting in action” to our clients, enabling learning and development of new business models, products and technologies, while balancing their investment and attention to their traditional business. Automakers are operating in an unfamiliar environment, requiring more speed and innovation. EY is collaZorating oith disruptor firms$ suppliers$ automacers$ moZilitq service providers$ cities and research centers to design recommendations and path-to-market for our key clients’ most relevant issues. Let us help you on your journey. Id e a t io n Some examples of the S c a le u p F is h bo w ls tools and methodology S ca lin g a p p ro a ch Facilitating the generation, we’ve used to help Quickly extending and filtering and development clients design and industrializing proven of new business concepts experiment with concepts in the market through a transparent, to enhance value and iterative process mobility offerings first-mover advantage D e s ig n s h o ps C ity se le ct ion a n d Intense collaboration to co llab o ra tio n understand the art of the E x p e rim en ta t ion S ta r t u p Identifying and collaborating possible — what can you E x p er im e n t d e sig n a nd V a lu e s tr ea m m ap p in g with cities for mobility achieve with the constraints ex e c u tio n products and services taken away? Understanding where Running live in-market the value lies in your new R O II T h re e -b o x s tr at eg y experiments that provide propositions and how best to d e ve lo p m e n t actual business results and monetize them Measuring the return on organizational learning, fast innovation investment Balancing between managing S ta r t-u p c ha lle ng e s the present while creating H a c ka t ho n s the future Tools and techniques to allow Bringing together developers, mature organizations to T h in k ta nk designers and external innovate specialists to collaborate Harnessing the power of your intensively and make rapid internal and external online progress in a short time P a rt n er ec o sy s te m s communities to generate and Building an ecosystem of develop new business ideas O p e n inn o va t ion business partners to support new product and service Helping you to collaborate innovation across an extended innovation ecosystem to enhance the value of your new propositions The evolution of artificial intelligence and the acceptance of autonomous vehicles | 5

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