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Autonomous mobility risks gathering momentum

Some of the risks posed to mobility companies, including autonomous vehicles (AVs) and electric vehicles (EVs), are likely to intensify in the coming years with the mobility industry undergoing a structural shift.

Growth in the production and use of autonomous vehicles (AVs) and electric vehicles (EVs) is creating new and exciting partnerships between Silicon Valley and Detroit, but is also giving rise to several significant risks for technology companies in the mobility sector. While some of these risks are likely to intensify in the coming years, the mobility industry broadly is undergoing a structural shift, which will require companies to think differently about their risk and exposures.

The EV and AV markets are expected to continue growing at a steady pace, especially as urban populations swell and consumers’ interest in mobility-as-a-service expands. The United Nations Department of Economic and Social Affairs forecast that 68% of the planet’s population will live in urban areas by 2050, up from 55% in 2018. That population shift will accelerate sustainable development, including mobility initiatives, according to the UN.

Technology has spearheaded an evolution in nearly every part of the automobile. From lane departure warnings and electric engines to automatic braking sensors and entertainment and navigation consoles, the automobile of 2023 is hardly recognizable when compared to its 1923 predecessor.

But the design and assembly process for creating cars has remained similar to that of a Model T. A single company designs and assembles the final product today — just like Henry Ford did.

As technology companies both collaborate and compete with traditional automotive companies, that model is beginning to shift to something closer to the way technology products are manufactured. Some companies will continue to design and assemble themselves, but newer automotive companies will likely bifurcate the process.

We will likely start to see one company research and design the product before partnering with a contract manufacturer to create the final product. That outsourced assembler will likely build cars for a number of different brands — similar to the way existing contract manufacturers work within the global tech supply chain. Still, there will likely remain companies that retain design and assembly in house and others may take a more blended approach.

Autonomous and electric vehicles have a complex array of components and technologies, from advanced driver assistance systems to a variety of sensors that gather and relay information to the driver or take control of certain vehicle operations. As a result, the mobility sector faces a growing set of risks, including:

  1. Data security and privacy
  2. Supply chain
  3. Regulatory compliance
  4. Product liability
  5. Environmental liability
  6. Reputational risk

Autonomous and electric vehicles use highly sophisticated engineering and require specialized infrastructure to support their operations. As a result, they introduce complex and dynamic risks, not only on the road but also in manufacturing and maintenance. AV and EV technology is introducing a new and more complex era for risk management for manufacturers, technology suppliers, operators, drivers, and mobility regulators.

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