Column: Covid-19 and the future of autonomous vehicles

The effects of coronavirus are being felt right around the world, and its impact on the automotive industry is still revealing itself. But how will it affect self-driving cars?

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Tom Phillips

It’s no great stretch to say that the impact of Covid-19 will be felt for years to come. Although it appears that some countries are emerging from virus-led lockdown procedures – New Zealand declaring itself virus free, for example – other countries, particularly in South America, still remain in corona’s grip for the foreseeable future.

The impact of shuttering the world’s businesses for an as-yet undetermined time span is not yet known either. We still don’t have a clue what a post-lockdown world will look like. Will consumers spend big as a reward for toughing out social isolation? Or will the impact of furlough or short working schemes, plus a sketchy outlook, knock confidence?

The automotive industry's 2020 so far...

As a truly global industry, both in terms of where vehicles are designed, developed and built, and where they are sold, automotive was has been particularly exposed to the impact of coronavirus.

The car industry had already been rocked by the dieselgate scandal that began in September 2015, and spread from the VW Group to include FCA and Daimler amongst others. In Europe, OEMs are obliged meet stringent emissions legislation, which meant ramping up EV development significantly, along with the associated changes to supply chains, factories and consumer sales models – all of which comes at astronomical cost.

When corona hit, initial concerns turned to China, not just as the source of the outbreak, but for the associated disruption to vehicle and parts manufacture. But then lockdown spread around the world, reducing car sales to a trickle.

Data from industry monitor JATO Dynamics reveals that in March, global vehicle sales totalled 5.55 million units. This represented a year-on-year (YoY) drop of 39 per cent, and the largest YoY monthly decrease since 1980, when JATO Dynamics started to collect data. The figure also beats the downturn caused by the global financial crisis in November 2008, which caused a 25 per cent decline in sales.

Europe was hit particularly hard, recording a 52 per cent drop in sales in March, and the lowest number in 38 years. In the US, sales were down by 38 per cent year on year, as Covid-19 took its time to reach and impact North America. There was some positive from China, turning a 79 per cent drop in sales in February into a 427 per cent growth in March as showrooms returned to business.

Green shoots in the data, but short-term pain comes first

The data effectively tells us what we’d been suspecting – unable to leave home, and amid such global uncertainty, buying a new car isn’t high on people’s to-do list right now.

However, if China sets the example, sales will return – albeit with new models, including a far greater – and long overdue – emphasis on online sales, and test drives done by delivering the car to you, rather than you having to go to a showroom to get behind the wheel.

There’s a long road ahead to get there however, including whether a post-corona global recession happens. And as a result, it’s no surprise that carmakers across the board have been trimming accordingly, in terms of both headcount and less successful model lines.

Even before the effects of corona fully took hold, manufacturers were making changes. Audi announced in late 2019 that it would restructure to remove 9,500 jobs by 2025, with Volvo cutting 1,300 staff in Sweden. Ford announced sweeping measures last year, too, with the reduction of 7,000 staff globally – a drop of 10 per cent of its workforce.

The premium carmakers have needed to streamline operations due to Covid-19 too. For example, Bentley has laid off 1,000 staff in the UK, which is a quarter of its workforce, while McLaren is cutting 1,200 posts across its carmaking, racing and technology businesses.

Renault has already announced that it will discontinue the Espace and Scenic model lines, as buyers opt for crossovers rather than minivans, while BMW has stopped making the 3 Series GT as its customers opt for one of its X-badged SUVs instead.

Investments curtailed too

The cuts in response to the generally challenging conditions of selling cars right now, and the effects of Covid-19, will also be financial. R&D spending likely to be highly effected, as noted by this Deloitte study. During our recent Autonomous Vehicles Online event, we asked our audience for their opinion on what will be the biggest impact of Covid-19 on autonomous vehicles?

  Number of Votes Percentage
Deployment of Level 3 and upwards will be delayed 261 31.5
Global financial instability will cause AV plans to be shelved 217 26.2
Consumer acceptance of AVs will improve 103 12.4
Investment in AV tech will increase once lockdown is eased 74 8.9
Timelines for AV arrival will shorten 60 7.2
AV testing will increase its reliance on software solutions 57 6.9
More AVs will hit the road to increase real-world data 39 4.7
Increased surveillance will reduce demand for AVs 18 2.2
  Total 829 Total 100


The results show a clear concern that the deployment of full AVs – those above SAE Level 3 – will be delayed as a result of that decreased development spend. Almost 32 per cent of respondents chose this option as most important, with just 7.2 per cent seeing timelines that are likely to speed up.

Perhaps unsurprisingly, our audience also concurred that potential global financial instability is likely to make carmakers even more cautious, with 26.2 per cent of the vote, although some – 8.9 per cent – saw that Covid-19 may actually catalyse greater AV spending, in order to lure in buyers with new and exciting features.

Consumer acceptance on the horizon

One interesting positive note is that the audience strongly believes that consumers are ready for autonomous driving solutions, with 12.3 per cent of the vote. This is helped in no small part by the popularity of systems like Tesla’s Autopilot and GM’s Super Cruise. The audience also did not think that increased surveillance would put buyers off, taking just 2.2 per cent and the fewest number of votes.

We also asked what our audience thought of the split between software-based and real-world testing. Our viewers were split with 6.9 per cent seeing a likely increase in computer-based testing, while 4.7 per cent expected the number of AV test cars to increase on actual roads.

We will continue to explore the opinions of our ever-growing audience in our live events. Make sure you have your say during Automotive Safety and Security Online – details below:

Coronavirus and its impact on the car industry

So what does the data tell us? From the sales side, not much, and certainly nothing we hadn’t expected. When buyers aren’t allowed out of their homes, and job security evaporates, a new-car purchase quickly slips off the table.

We can also see the immediate toll that corona is taking on the carmakers as they cut staff, model lines and investments in order to weather the storm that the virus has brought.

However, we can also see from those on the ground that while those investments are likely to be curtailed, plans to continue developing the autonomy of vehicles remain a priority. In a feature-focused consumer environment, the ability for a vehicle to drive itself out of the way of hazards could be just what the industry needs to help it survive.


Company information according to § 5 Telemediengesetz
IQPC Gesellschaft für Management Konferenzen mbH
Address: Friedrichstrasse 94, 10117 Berlin
Tel: 49 (0) 30 20 913 -274
Fax: 49 (0) 30 20 913 240
Registered at: Amtsgericht Charlottenburg, HRB 76720
VAT-Number: DE210454451
Management: Silke Klaudat, Richard A. Worden, Michael R. Worden

Firmeninformationen entsprechend § 5 Telemediengesetz
IQPC Gesellschaft für Management Konferenzen mbH
Adresse: Friedrichstrasse 94, 10117 Berlin
Telefonnummer: 030 20913 -274
Fax: 49 (0) 30 20 913 240
Email Adresse:
Registereintragungen: Amtsgericht Charlottenburg HRB 76720
Umsatzsteuer- Indentifikationsnummer DE210454451
Geschäftsführung: Silke Klaudat, Richard A. Worden, Michael R. Worden