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Car on the Cloud

Car on the Cloud. Let's get started! Team 3 Last Updated: January 28, 2012. Screens. Screens. The average American spends 200 hours* commuting. Aligns with technology (Maps, Search, Places, Wallet, Traffic Analytics) First mover advantage Represents the future of automotive

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Car on the Cloud

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  1. Car on the Cloud Let's get started! Team 3 Last Updated: January 28, 2012

  2. Screens

  3. Screens The average American spends 200 hours* commuting • Aligns with technology (Maps, Search, Places, Wallet, Traffic Analytics) • First mover advantage • Represents the future of automotive • Safer and more efficient • $8B in potential revenue in “DaaS” * (50 minutes per day x 240 days) / 60 minutes per hour *R.A. How long are American commutes? The Economist. Oct 16. 2011

  4. Conclusion 10-year Outlook 5-year Outlook Industry Today

  5. Automotive Telematics Today 3G (Limited) Connectivity SelfParking Adaptive CruiseControl Proprietary internally developed software Limited Navigation

  6. Today Facebook, Pandora, Yelp, Park Droid, Gas Buddy, etc. 3rd Party Apps UI (Skinnable GUI + NUI) GPS & Google Maps Systems Control e.g. headrests, climate control Android OBDII Interface Car OS ECUs, Airbags, ABS, Engine Control & Monitoring Subsystems

  7. Tomorrow Facebook, Pandora, Yelp, Park Droid, Gas Buddy, etc. 3rd Party Apps Driverless Systems UI (Skinnable GUI + NUI) GPS & Google Maps Systems Control e.g. climate control Android Tightly integrated gCar platform OBDII Interface Predictive Analytics Battery Optimization Google Car OS ECUs, Airbags, ABS, Engine Control & Monitoring Subsystems

  8. How will Google Crack the Market? By leveraging unique existing capabilities to add value to the existing market. Predictive systems to optimize battery efficiency Additional functionality to drivers via the Android UI Improved driving analytics and behavioral data, stored on the Google cloud System-level phone integration, remote start & other systems controls Free OS lowers system design and future maintenance costs No infrastructure overhead for auto makers

  9. Car Manufacturer Consumers gCar Platform Network Effects for Android Telematics Short term: Mimic smart-phone strategy through free, open-OS, designed to create customer lock-in • Phone integration • Apps • Car Efficiency • Subsidized Software • Predictive Modeling • Driving behavior analytics • Differentiator (Customizable GUI, customizable Android Market Place for each manufacturer) • Market penetration • Ad Revenue • Data on Driver Behavior

  10. The Cloud is Key • What is a Car on the Cloud? • Cloud Computing gives consumers access to: • Optimized car settings • Software updates (maps) • Computationally intensive tasks (voice commands) • Offloads expensive computer elements • Big Data analytics on driving data for researchers, policy makers, insurance companies and city planners • …..Most importantly, it represents a path to driverless cars.

  11. Introducing Driverless Cars, powered by Google™ • Legislation already in place in Nevada to allow driverless cars • Marketing and PR blitz to introduce driverless cars into the US • “Vegas, powered by Google” -- Free cab service between casinos How do we get there?

  12. Necessary Strategic Partnerships

  13. Unique Value Proposition Driverless as a Service (DaaS) for $50/month • 40% revenue sharing agreement with auto manufacturers • Remaining will be split between cellular data providers, and Google • Driverless Cars, powered by Google rolled out nationally as legislation allows • Platform for future capabilities: mesh networked cars (motes), data collection for insurance companies (monetization potential), OnStar like systems, etc. Ancillary data services revenue and advertising revenues kept solely by Google

  14. Competitive Challenges • Microsoft Sync, represents a potential threat and could leverage into a driverless solutions • Apple has more than enough cash to enter this market • Car manufacturers may want to develop own system internally to retain control • Existing subsystem and controls companies have relationships with auto manufacturers that may be difficult to challenge • Reliant on communication standards being set between OS and ECUs

  15. Additional Risks • Policy:State legislation for driverless cars • Consumer Privacy: Assurance and controls to protect consumers’ anonymity, unless opted-in • Security:Encrypted data connection to servers to transmit sensitive data • Safety and Liability: Legal liability will need to be established in case of accident • Suppliers: Potential for supplier backlash as Google moves down the stack

  16. Forecast NPV = $14.7B

  17. Adjacent Vertical - V2G (Vehicle to Grid) What is V2G? V2G or Vehicle to Grid is a method of storing and supplying electricity from electric vehicles (EVs) directly to the grid/utility. How does it work? “Dr. JasnaTomic of CALSTART reports that utilities will pay $15 to $55 per MWh for electricity supplied for frequency regulation, but the utility does not want to deal with 100,000 car drivers. The utility wants one aggregator in the middle to provide the power.”

  18. V2G (cont) • Why Should Google Enter the V2G market? • Charging analytics will work seamlessly with Android enabled electric vehicles and cloud computing infrastructure • Expands and strengthens Google as a Platform in automotive • Fits strategically with Google smart grid initiatives • Has FERC approval to buy and sell electricity in wholesale markets • Positive five year NPV of $2.5B • How Should Google Enter the V2G market? • Partner with Charging Station manufacturers and infrastructure providers.

  19. Conclusions • Unique opportunity to capture value in $85B US Auto market • In the short term, Google needs to replicate the success of the mobile market to become the core OS of every vehicle. This will allow it to capture short term revenues from advertising and data analytics, but more importantly will provide a framework for future driverless car enhancements. • In the long term, Google’s success depends on the adoption of driverless vehicles. In addition to earlier revenue models, Google will capture additional value by creating a Driverless as a Service (DaaS) subscription model. This will allow Google to capture revenue’s in excess of $8B per year after ten years for an NPV of $14B. • Additionally, market entry into the automotive market will allow Google to enter new markets such as EV charging and demand response with yearly revenues in excess of $1B. • Additional data monetization strategies are plentiful once Google’s core Car OS is widespread.

  20. Thank You!

  21. Appendix - V2G NPV Calculation http://cet.berkeley.edu/dl/CET_Technical%20Brief_EconomicModel2030_f.pdf

  22. Appendix - V2G NPV Calculation

  23. Driverless as a Service (DaaS) Monthly Fee of $50 Allows car to be driverless Allows car to get on Driverless lanes Covers content distribution

  24. Timeline Ten Years Driverless Car Introduced $8B+ per year revenue $35B NPV

  25. Financials

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