The Internet of Everything is set to create $ 700 Billion benefits in personal transportation globally and will transform industries along the transportation value chain. The race to win the future mobility business has begun. Will automakers win this race by digitizing their business with a new value chain ecosystem, or will “The Valley” win this race by transporting their virtual business models into the physical business of getting people to where they want, faster and at lower cost? This presentation will provide perspectives on some of the critical success factors and who controls them, at least for now…

1. September 23, 2015
Digitization of the Automotive Industry:
Connecting The New Mobility Value Chain
Andreas Mai, Director Smart Connected Vehicles

2. Cisco Confidential 2© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Internet of Cars: $700 Billion Benefits per Year
250
210
160
80
Worldwide Benefits
$700 Billion
Note: Core Regions NA, EU, AP, Excl. 22% RoW, @ $1,400/ vehicle & 67% penetration of vehicle population
Society
§ Less Congestion Cost
§ V2V Addressing 80% of Crashes
§ Lower Traffic/ Road/ Toll
Operation Costs
Vehicle User
§ Lower Operation &
Insurance Cost
§ Less Time Stuck in Traffic
Internet of Cars Service Providers
§ Chip-to-Cloud Cyber Security
§ B2B2C Service Platform
§ “Context at point of decision”: Parking,
UBI, Navi, Traffic, LBS, Modes, etc.
Automotive Industry
§ Remote Diagnostics
§ Secure OTA-Update
§ Connected CRM/ VRM
Source: Cisco IBSG Automotive and Economics Practices, 2011
Worldwide Benefits from Connecting Road Vehicles Per Year [$ Billion]

3. Cisco Confidential 3© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Five Drivers and Control Points of Future Mobility
Source: Cisco Smart Connected Vehicle, 2015
ClosingtheInnovationGap
Autonomous
2
Price
Value
Chain
From Building Cars to Selling Personal Travel Time Well Spent
1
Technology Cost Customer Data
Value Creation Market Access
Requires New Innovation & Business Models
Control
Share
From Owning to Sharing
3
Multi-ModalMobility
4
5

4. Cisco Confidential 4© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Autonomous Life Saver: Low Residual Liability Risk
150
100
50
0
59
Driver
behavior
118
Natural
disas-
ter
1
Mfg
Defect
12
Total
claims
131
Automobile insurance claims in
the U.S.A. (USD Billion)
Environ.
process.
20
Driving
style
39
50%
Auto-
pilot
59
50%
Human
Exclude mistakes autopilot
would never commit
§ Ignoring right of way (19%)
§ Speeding (18%)
§ Tailgating (17%)
§ Wrong behavior towards
pedestrians (6%)
§ Drunk driving (5%)
Crash causes
Source: Warranty Week; Conning; WardsAuto; Alliance of Automobile Manufacturers; Federal Statistics Office Germany; expert interview; World Economic Forum; BCG analysis
Producer
already
liable
Frequency in which autopilot
makes same mistake as a
human driver?
Potential liability cost
per car sold (USD)
0.01% 0.50%
$ 2 $ 112
Rough Estimate WEF
Taskforce/ BCG, 2014
~ $400-$1,300 warranty
accruals per vehicle 2013

5. Cisco Confidential 5© 2015-2016 Cisco and/or its affiliates. All rights reserved.
‘Sharing’ Will Make Mobility More Affordable for Billions
Passenger Vehicle Stock
(Millions)
Reduce Cost to
World Average of 24%
Source: EIU Data, Cisco IBSG Automotive 2010
Transportation & Communication Cost
(Percent of Personal Income)
58%
54%
50%
43%
42%
Brazil
India
Thailand
China
Mexico
17%
15%
15%
15%
14%
12%
United Kingdom
Germany
France
Italy
Japan
United States
Mature Markets
Emerging Markets
Today Eco-Mobility
13%
750
1,750
59%

6. Cisco Confidential 6© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Data Fuels the Future Mobility Business
– Example Vehicle Insurance
Regular Same Higher Very High
ADAS Lower Lower Higher
Autonomous Very Low Very Low Very Low
Regular ADAS Autonomous
Nearby Vehicles
Vehicle Health
Driver Behavior
Road Risk
Traffic
Weather
360° Real Time Risk
Driver mainly drives …
Vehicle is…
Insurance Risk
Rental Car, Car Sharing: Risky combinations…
Source: Cisco Smart Connected Vehicle, 2015

7. Cisco Confidential 7© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Expanded
Data Scope
Enriched
Output
Trusted
Relationship
Wave 1
Wave 2
Wave 3
Data
Plane
Control
Plane
Customer
Plane
Ecosystem
Sensing/ AI
Market Maker
Siloed
Reporting
Data Keeper
Intra-company
Action
Conditional Use
Big Data Industry Evolution: Path Towards “Infomediary”
Increasing Challenges
Source: Cisco Systems, 2013

8. Cisco Confidential 8© 2015-2016 Cisco and/or its affiliates. All rights reserved.
More Congestion in Network than on Road: Infrastructure Is
Key to Deliver Future Mobility Services
City Operator Applications
Lighting
Control
4
Energy
Reports
Parking
Enforcement
City Safety/
Security
Incident
Detection
Citizen Services
Public
Wi-Fi
Parking
Availability
Traffic Light
Alerts
Incident
Detection
!
City Air/Noise/
Pollution Maps
192 Exabytes
= 192 x 1018 Bytes
= 65 Trillion images
= 6 Trillion video clips
By
2019:
Mobile
Data
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2014–2019
CIM
Cloud
Power
Wi-Fi
Mesh
FOG
Analytics3
1
2 DSRC
Wi-Fi Mesh

9. Cisco Confidential 9© 2015-2016 Cisco and/or its affiliates. All rights reserved.
THE “Finance-Application” for the Future Mobility
Infrastructure?
Smart Road Pricing
CongestionOccupancy
Road Condition
Time of Day
Weight
Speed
CO2
EmissionsFuel Economy
Source: Cisco IBSG Automotive 2011

10. Cisco Confidential 10© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Food for Thought: From Roadblock to Market Driver
City/ State/
Federal
Infrastructure
Operators
Outsource
Infrastructure
REITS
Public Assets
(Partial) Cash-out
ITS Service
Operators
Users
Big Data
To Optimize
ITS ServicesInvest
Invest in
My Roads
Fuel Tax
Smart
Road
Fee
=ROI
Source: Cisco Smart Connected Vehicle, 2014

11. Cisco Confidential 11© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Things
Data
People
Processes
Internet of Cars: Four Digitization Phases
Value
Home
LBS ITS
Health
Value Added Ecosystem
Service
Energy
UBI
Modes
Value ChainEnterpriseProduct
Hyper-Connectivity
Source: Cisco Smart Connected Vehicle, 2015

12. Cisco Confidential 12© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Cisco
Digital
Business &
Application
Enablement
Business Continuity & Optimization
Connected
Analytics
Collaboration
Connected
Processes
Contact
Center
IoT Cloud
Connect
Connected
Experiences
FogCisco Infra Data Center WAN Access Mobility
Key Enabler: Scalable Modular Digitization Platform
Cisco ONE Network Automation Cloud Orchestration Policy/Intent (ACI)
E-2-E
Security
Management
B2B
-
Cloud
-
Vehicle
+ ConMan DiMo SecurityCisco Client
FactoryUtilityVehicle Retail Health
Cisco +
Partner
Solutions DealerHome InsuranceTransportCity
Source: Cisco Smart Connected Vehicle, 2015

13. Cisco Confidential 13© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Evolution of a Revolutionary Business Model
“If you don’t pay, you are the product”
“Big Brother” “Big Mother”
“Don’t be evil”
Getting People What & Where They Want 4 Free
B2B Fee 4 Getting People To Websites & Stores
Web Road
Source: Cisco Smart Connected Vehicle, 2014 Note: is a proxy for “The Valley”

14. Cisco Confidential 14© 2015-2016 Cisco and/or its affiliates. All rights reserved.
Revolution for an Evolutionary Business Model?
Web Road
Source: Cisco Smart Connected Vehicle, 2014
Beat Them? Join Them?
Note: is a proxy for “The Valley”

15. Thank you.