The global auto industry is getting aggressive and we are going to see more of that in 2018. The technology-driven trends have reshaped the industry. Consequently, it has transformed how industry players respond to these changes. The introduction of cut-throat technology, increasing automation, and new business models have revolutionized every other industry, and automotive will be no exception.
As a result, these forces have given rise to some new automotive trends: Autonomous cars, electrification of vehicles, connectivity and new revenue models to takeover car lease.
While 2017 was a year of ride-sharing apps and fast driven cars, here are the trends that will accelerate the auto sector in the year 2018.
Self-driving cars will expand in 2018. In technical terms, the autonomous vehicles are based on a scale of Level 1 to Level 5, established by SAE international. The Level-5 is the extreme autonomy level with top feature as control-free pods. The Level-1 is basic and includes adaptive cruise control features.
Most of the people think that the autonomy starts with Level-4, which includes automatically handling the complete driving features without needing a human driver. But it will take some time before a car completely takes over a human driver. After all, a car at the highway may need a human to take over at the exit points. It is expected that Level-4 autonomous vehicles will hit the roads by 2020. Though the technology will be expensive for the private owner and available only for fleet use.
But the trend will surge in the year 2018. Waymo — formerly the Google self-driving car project — will start its self-driving service in Arizona and GM Self Driving Chevy Bolt is expected to expand its driverless car trials in San Francisco. Tesla will also introduce its Autopilot system in Model 3 cars, providing a semi-autonomous ride for drivers.
Sales of electric cars will surge in 2018. Tesla’s Model 3 will be available in the first quarter of 2018. A few years back electric vehicles were just concept cars in their earlier phases. But some years ago after the first OPEC oil crisis, automakers started shifting to more efficient cars.
The fuel-economy standards introduced by many governments proved severe enough for the automakers and they shifted their focus more on electrification of vehicles. There are some other factors that played their role in the propagation of this concept. Stricter emission regulations, lower battery costs, increasing consumer acceptance, and a widely available charging infrastructure all played their part in creating a strong momentum for penetration of electrified vehicles. Today, users can choose from the hybrid, plug-in, battery electric, and fully electric models.
In the year 2018, electrified vehicles are expected to gain more and more market share from conventional vehicles. The federal tax credit on using an electric vehicle is up to $7500. These incentives along with a decrease in the cost of the battery from $150 to 200$ per kilowatt-hour over the next few years will behave as a significant catalyst for electric vehicles to achieve cost competitiveness with conventional vehicles.
Which revenue model will prevail? Leasing or subscription?
Will having a car be as easy as upgrading a cell phone in the year 2018? Car makers have implemented new revenue models for the consumers to increase car sales. Subscription and leasing are two such methods. More automakers are shifting to the subscription model. Hyundai is selling its Ioniq Electric car like a subscription in California. Though the deal is technically a lease. Many other car manufacturers are offering their models in subscription packages. Porsche, Cadillac, and Volvo have all introduced such deals to the drivers. Automakers usually do this to retain their customers. Subscription services usually appeal to those who want to buy new vehicles. But if you takeover car lease on a website like Quitalease.com, you will be paying less than a car subscription.
So which is a better option? Leasing or Subscription? If we consider the present facts then leasing is largely prevalent in the US with more than one-third of the vehicles leased. Which makes leasing far superior to subscription. This leasing majority is due to the presence of online market platforms such as Quitalease.com. You can takeover car lease through these platforms by paying less for a better model. These websites serve as an open market for lease buyers and sellers making it not only flexible but convenient to find the right car with the limited money. So leasing will still be a better trend in the year 2018. But the automotive revenue model will significantly diversify in the years to come.
The year 2018 will see increasing car connectivity. This technology will allow the car to become a platform for drivers and passengers. People will be able to use their time in transit to consume novel forms of media and services or dedicate their leisure time to other personal activities.
The innovation in the software-based systems will require cars to be upgradable. Shared mobility solutions with shorter life cycles will prevail and consumers will be aware of technological advances. More and more cars will be have Android operating systems.
You will witness the beginning of vehicle-to-vehicle, or V2V, communication. It will be like Wi-Fi technology that will eventually be standard on every new car. Connected cars will be able to share various information about driving conditions like weather, speed, sudden braking, accidents, and location.
Smart IoT is the technology behind major connected cars functionalities, like self-parking and adaptive cruise control. It will be seen in almost every new car this year.