States Seek Slice of $7 Trillion Autonomous Vehicle Industry

Xconomy Seattle — 

As U.S. states and cites vie to capture some of the trillions of dollars of economic activity expected to flow from a shift to autonomous vehicles in the coming decades, Washington on Wednesday joined about two dozen states that have paved the way for testing driverless cars.

Washington Gov. Jay Inslee directed relevant state agencies to “support the safe testing and operation of autonomous vehicles on Washington’s public roads.” To that end, Inslee’s executive order authorized pilot programs, and established an interagency work group with a mandate that includes not just passenger cars, but also “freight, aviation, transit, passenger rail, marine vessels and ferries, as well as points of convergence with connected, shared, and electric vehicles.”

Meanwhile, Intel (NASDAQ: INTC) released a report (PDF) last week on the economic impact of autonomous transportation. Autonomous driving technology could generate $7 trillion in new economic activity by 2050, according to the report, prepared for Intel by Strategy Analytics. That $7 trillion total accounts for direct economic activity expected as “mobility-as-a-service” replaces vehicle ownership for consumers and businesses, as well as new transportation applications in entertainment, tourism, hospitality, healthcare, and other services.

The report also estimates that from 2035 to 2045, when autonomous vehicles are expected to gain significant market traction, they could save 585,000 lives and 250 million hours of time spent stuck in traffic each year.

Inslee cited benefits including improved highway safety and economic development in signing the executive order, which should raise the state’s prominence as a testing ground for autonomous vehicle technologies.

Washington is not exactly a pioneer, however. The first autonomous vehicles legislation passed in Nevada in 2011, and California, Michigan, New York, Utah, and Arkansas have followed suit. Washington joins 13 states with executive orders that express interest or reduce regulatory barriers to autonomous vehicle testing, according to research by the Eno Center for Transportation. Florida, Georgia, Tennessee, and the District of Columbia have passed laws that explicitly allow fully autonomous vehicles on the road, according to the Eno Center.

A patchwork of approaches to autonomous vehicle regulations, as of June 1, 2017. Graphic by the Eno Center for Transportation, used with permission.

Washington already has a cluster of companies developing technology for autonomous vehicles, such as Echodyne, the Bellevue-based metamaterials radar maker where Inslee signed the executive order Wednesday (pictured at top). The company, a spinout from Intellectual Ventures that is making a lighter, less expensive radar with potential applications in autonomous vehicles and drones, recently raised $29 million in fresh funding.

Echodyne CEO Eben Frankenberg says the industry is watching which locations have been friendly to this technology. “I think it’s important that Washington step up on that front,” he says. “We have a lot of companies here who are already involved in the space, but I think there’s an opportunity for there to be more.”

Other tech companies are making moves to be closer to the traditional automotive manufacturing hub. Also on Wednesday, Mighty AI announced a new location in Detroit. The Seattle-based startup has recently honed its focus on providing training data for autonomous vehicles. “We’re going where the action is,” writes CEO Matt Bencke in a blog post. Earlier this year, the company raised a $14 million funding round from Intel Capital and Accenture Ventures.

While states are promulgating their own regulations for autonomous vehicle development and testing, there is concern that as the industry matures, this approach could inhibit adoption. The National Highway Traffic Safety Administration, under the Obama administration, put forth a “Model State Policy” designed to “create a consistent, unified national framework for regulation of motor vehicles with all levels of automated technology” and “avoid a patchwork of inconsistent laws and regulations among the 50 States and other U.S. jurisdictions, which could delay the widespread deployment of these potentially lifesaving technologies.”

[Photo credit: Washington Gov. Jay Inslee speaks at Echodyne, in Bellevue, where he signed an executive order on autonomous vehicles. Photo by John Hoffman, courtesy of Echodyne.]