• McKinsey says that one-tenth of all potential use cases under exploration could benefit the automotive industry, with a high impact noticeable by about 2025.
• McKinsey estimates the overall market value of quantum computing services at $32b to $52b in 2035.

Dubai: Automotive players are exploring the potential of quantum computing as it comes closer to reality.

Much of the excitement relates to recent scientific leaps in the field as well as the development of the first industrial use cases, including those in the automotive and transportation sectors.

Instead of using traditional bits as information-processing units, quantum computing depends on quantum bits or “qubits”. A qubit can either be zero, one or both at the same time to perform amazing feats like slicing through encryption in seconds rather than millions of years.

However, experts at consultancy firm McKinsey & Company pointed out that OEMs and other stakeholders in the automotive sector could face some obstacles amid quantum computing translating into billions of dollars in value.

“The novelty of this technology combined with the relatively small market that has emerged thus far has prevented many automotive players from developing a clear strategy,” Ondrej Burkacky, partner at McKinsey, said.

Currently, he said that one-tenth of all potential use cases under exploration could benefit the automotive industry, with a high impact noticeable by about 2025.

“We also expect a significant economic impact of related technologies for the automotive industry, estimated at $2 billion to $3 billion, by 2030. Most of the early value-added will come from solving complex optimisation problems, including processing vast amounts of data to accelerate learning in autonomous-vehicle-navigation algorithms,” he said.

In the long term, quantum computing has the potential to have a positive effect on many areas such as vehicle routing and route optimisation, material and process research, and the security of connected driving, apart from accelerating research and development of novel technologies such as electric vehicle transition (between 2020 and 2025).

HPC is here to stay

Even though quantum computing is on its way, Lorenzo Pautasso, Consultant at McKinsey, said that the adoption at scale will not occur until five to ten years from now.

The first pilots on quantum advantage, such as Volkswagen’s traffic optimisation, are emerging today. “Complex problem solving that requires many qubits working together will become feasible in 2035 or later. Even over the long term, quantum computing will not likely replace existing high-performance computing (HPC), nor will the first attempts at value creation rely on at-scale devices that solve full problems,” Pautasso said.

McKinsey believes that successful use cases will rely heavily on hybrid schemes (using HPC for the bulk of the work and quantum computing used for analysing a subset of data) over the next decade.

Over the long-term, from 2030 onward, Pautasso said that quantum-computing applications will build on at-scale access to universal quantum computers.

Furthermore, he said the focus will likely move toward digital security and risk mitigation as players try to prevent the quantum hacking of communications in autonomous vehicles, on-board electronics, and the Industrial Internet of Things.

“The cloud-hosted navigation systems of shared-mobility fleets will improve their coverage algorithms through regular training enabled by quantum computing,” he said.

McKinsey estimates the overall market value of quantum computing services at $32 billion to $52 billion in 2035, with about 10 per cent of the value will come from spending by advanced-industry players, including automotive companies, which want to capture the benefits.

Niko Mohr, Partner at McKinsey, said that it is still unclear which companies will emerge as the top players at each step of the quantum computing value chain.

100 companies in the fray

Currently, there are about 100 companies in the space, including D-Wave, IBM, Microsoft, and Rigetti Computing, building hardware. Around 80 per cent of companies are start-ups that aim to bridge the gap in the value chain between hardware manufacturers and end-users by translating conventional problems into quantum logic and by building hybrid architectures.

Many stakeholders will shape the QC market, including hardware and software players and their enablers, Mohr said.

He added that one-third of QC companies focus on hardware development while about half of the participants developing software and one-fifth providing enabling solutions.

BMW, Daimler and Volkswagen are all investigating quantum simulation for material sciences, aiming to improve the efficiency, safety, and durability of batteries and fuel cells while Bosch focusing its research on solving partial differential problems.

Already, Mohr said that OEMs have demonstrated successful pilots in some areas, such as vehicle routing.

“With the hardware industry making rapid progress, it seems unlikely that even the world’s largest automakers will have their physical systems, at least initially. Instead, they will probably develop their algorithms and run them on the cloud-based systems of their partners,” he said.

Given the uncertain pathway forward, Burkacky said that companies must understand their full range of options regarding the technology over different time horizons.

While quantum computing will not be commercially viable at most businesses for at least ten years, he said that automotive players should still look for opportunities over the short term (the next one to two years) to scout for a position in the value chain, build research partnerships and intellectual property, assemble a small team, and establish routines.

In the short, medium, and long term, he said that companies should also scout for potential opportunities for investment or joint ventures, keeping in mind that the market has many investors focused on only a few targets and that the stakes are high.

Over the medium-term (five to ten years from now), he said that players should prioritise application development and build focused capabilities.

In the longer term, over ten years from now, he said that businesses should gain a technological edge, build a competitive advantage in focus fields and begin to expand their core capabilities.