D.9.10: Business Models

Connected vehicles are often referred to as ‘smartphones on wheels’1 or even a ‘sensor cluster on wheels’2 to describe how they may be used in the future as their driving function becomes more automated. Connectivity unlocks capability and unanticipated applications and features in what traditionally have been dumb devices. Connectivity and automation represent a significant disruption in transportation, resulting in opportunities for the development and application of connectivity-based products and services. This convergence of technologies also demands a recreation of the supporting sensor and communications infrastructure.

While still relatively new, the market for automotive connectivity has progressed far enough to provide an indication of the types of data and information services that have short- and long-term applications. The value of many data services in terms of both value to users and revenue from the market will be amplified as the path to automation progresses. The disruption in transportation and the need for new data services provides fertile ground for new business models and opportunities for revenue generation.

ICT4CART Task 9.5 Innovate Business Models resulted in this report: D9.10 “Business Models”. This report aims to guide the development of sustainable businesses based on connected and automated vehicle information services that may utilise the ICT4CART solution.

This guidance has been achieved through research into the markets, value chains and the current state of the fast-growing industry resulting in the development of business model blueprints. Business model blueprints describe the types of business processes required to address the existing and future needs of connected and automated vehicles and their owners, operators and passengers. The business model blueprints are templates to which context can be added to finalise complete business models that form the basis of new businesses.

Our approach analysed all potential information services and target markets based on CAV technologies' current and future implementation. The innovative business model blueprints detailed in this report provide the information to enable the four ICT4CART use cases and all 24 potential CAV services to be adapted into existing business models or used as the basis of the creation of completely new ones. Exploration of the business considerations for all foreseeable services needed to support CAVs resulted in the documentation of common business needs. The resulting service models were aggregated into logical groups to maximise customer and supplier relationships, core competencies, paths to market, general resource efficiencies and other synergies. The output is six innovative business model blueprints delivering suites of value added services to support CAVs now and in the future.

The resulting business model blueprints include:

1. Government Authority: trustworthy and policy-based CAV Services for the benefit of all road users. 2. Core Safety: CAV Services that provide a level of safety anticipated to be required in all vehicles as standards and policy progress.
3. Digital Environment: CAV Services designed to enhance the real time detail of the temporal and spatial digital world beyond the immediate vicinity of vehicles.
4. Consumer Services: encompass the content and platforms for passengers to be entertained and productive while travelling.
5. Supplementary Services: enhance the core driving function to enable fleet level coordination operations. 6. Transferrable Services: are available in other industries but have an opportunity for application in CAVs.

It was found that the application of CAV data services does not need to wait for autonomy. Most services explored have an immediate application in the marketplace that can generate data, knowledge and, most importantly, revenue for businesses in anticipation of autonomy. In many cases, there are already competitive products in the market. However, as the industry is embryonic, the opportunity remains significant for new market entrants.

Most of the resulting business model blueprints have comparable or equivalent businesses operating in the market, but they are generally early versions of what they have the potential to become. It will be no surprise that realising their potential is constrained by standards, regulation and the pace of technology development and market adoption. Technology standards enable markets (Tiedemann, 2020), and the transportation market's appetite for innovation is insatiable. Regulation is there to reduce threats but faces the ‘pacing problem’ (Thierer , 2018), and technology outpaces everything.

A PEST Analysis was conducted, and the Commercial Readiness Index was used to gauge the environmental considerations for each Business Model Blueprint. It is challenging to discern winners and losers across such a complicated range of variables, but it was apparent that the “Digital Environment” opportunity may have the most immediate and positive reception in the industry. This has likely been driven by the use of high definition maps in the development of autonomous vehicles. In contrast, “Core Safety” is still facing significant hurdles but could advance quickly with widereaching policy changes and standards ratification.

The technical development of the ICT4CART project advances the state of the infrastructure needed to support these innovative businesses. This report provides a foundation and guidance for the development of innovative new businesses to deliver information services to the fast growing connected and automated vehicle market.