Driverless Cars in India - No Driver Behind the Wheel?

Globally along with early-stage startups, VCs, and other investors, large corporations are also angling to get a slice of the self-driving pie. India would need enormous infrastructure transformation, conducive legislation and incentives for development or import of said technology.
  • Poor infrastructure and Legal challenges are the biggest hurdles for India.
  • India could emerge as a global exporter of Driverless Vehicle functionalities due to a robust entrepreneurial ecosystem.
  • The sector, however, to remain dormant in India for the next half-decade or so.
Self-driving cars are one of the most significant engineering challenges of our generation. The potential to save millions of lives, reshape our cities, give people more time, and restore freedom of movement for many. Big money is being pumped globally to develop Driverless cars as nations poise themselves to adopt the much-awaited innovation.

Driverless Cars have an economic impact too. Traffic and congestion disappear, and people can get to where they want more efficiently. Fuel consumption drops. Lesser accidents and a change in the way car insurance companies work will lead to yet more savings. Ridesharing services like Uber have the car driver as the initial cost. Removal of this layer would lead to much cheaper personal mobility transportation. It might even lead to people preferring not to own vehicles altogether, so expect it to hit the existing automobile industry itself, which focuses on private care sales.

Not everything is rosy, in any case. The human drivers will mostly be rendered obsolete, and unemployment would rise in logistics and travel sectors. These low skilled blue-collar workers may have trouble finding employment in this technologically driven economy. KPMG publishes a yearly report called the Autonomous Vehicle Readiness Index which assesses 25 big countries on factors such as Technology and Innovation, Policy and Legislation, Infrastructure & Consumer Acceptance.

India ranks 24th out of those 25 countries, quite poorly, and the reasons are very close to evident. Where Policy and Legislation is concerned, Indian transport minister Shri Nitin Gadkari has banned the implementation of Driverless Cars in India citing that he would not adopt any technology that would create unemployment. He also said 40lac drivers stand to lose employment if India passes the law for driverless vehicles. Technology and innovation aren't India's most robust, too, whereas driverless cars are concerned. There are hardly any existing patents or large scale investments by Indian automobile manufacturers. Also, infrastructure wise India is extremely poor and not AV friendly. Indian roads are too crowded, unplanned and marred with potholes and poor quality roads which make it nearly impossible for large scale adoption of Autonomous Vehicles. It is not uncommon to see people paying no heed to traffic rules. And with this poor road civic sense, driverless cars become unviable. However, Indians gave positive reactions to the survey conducted by KPMG for consumer opinion. More than 50% expressed willingness to own, lease or use driverless cars. It means that sentimentally India stands ready, Netherlands, Singapore, Norway & USA top this chart, as observed that these countries' governments are putting in significant work to be autonomous vehicle-friendly.

Startups like Flux Auto, Fisheyebox, ATI Motors and Swaayatt Motors are working towards creating driverless vehicle with AI software, however, given the current infrastructure, not only is it difficult to make any cutting edge progress, but also considering the legal status of Driverless Vehicles, it isn't getting as much attention from Venture Capital Funds and Seed Funds from India.

Wipro and the Indian Institute of Science (IISc) are jointly working on a driverless car project. A research group of 30 from Indian Institute of Technology in Kharagpur launched an ambitious startup called AURO to start India's first driverless car. Tata Elxsi is developing their own Autonomous Vehicle AI software, Autonomai. Teams at the Indian Institute of Technology (IIT) in Kharagpur, Kanpur and Bombay are working on driverless technology, a project that has evoked interest from Indian automotive companies.

Despite the small presence of some players in the driverless car tech field, the bigger picture is that India as a whole is not ready for Driverless Cars and won't be for quite a while. Driverless cars would have to be especially smarter for Indian roads. There is already a shortage of regular car servicing centres in rural India. Driverless vehicles would face a similar issue, so quite a lot of investment has to be made in service infrastructure. India could take at least 15-20 years until driverless cars can get implemented.

India can, however, project itself as a manufacturer and exporter of Autonomous Vehicle functionalities. It does have the requisite infrastructure as well as a suitable entrepreneurial ecosystem to head down this trajectory.

Future Outlook

In the future, autonomous vehicles are sure to disrupt the automobile industry, and companies that are slow to adapt will take a beating to their bottom lines. India adopting fully driverless car tech, however, is a distant dream. It is going to be slow, but there will be a time when it will seem imminent, and that's when big money from Venture Funds will start pouring in but for the next 5 -7 years it is expected to remain dormant. The autonomous vehicle vertical raked in $10.3 billion worldwide in VC financing across 146 deals in 2018, per PitchBook data. Momentum has slowed slightly, with investors having funnelled $3.2 billion into 64 deals so far this year.

At 100X.VC we are actively looking to invest in Indian startups working on the following types of software

  1. AI software companies which can think like a robot, perceive as a human.
  2. Software that helps the automobile companies to detect faults in the vehicle software and proactively autocorrects itself without vehicle downtime.
  3. Use interactive software and data-driven maps to view parking boundaries on the roadside, lane driving regulations in the zone by collecting data from different sources to share this data with logistics and mobility companies.

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- 100X.VC Team

Published on: September 20, 2019