Cars of tomorrow

Tesla Model 3BMW was 100 years old last month. Despite such a momentous birthday from one of the world’s largest brands, the only car news story in town is Tesla’s new Model 3 launch.

This California-cool car company isn’t a household name just yet, but looks set to become the next Google or Apple in its ubiquity with the world’s up and coming tech users. Tesla’s new model which has smashed sales forecasts on its preorder volumes speaks to the change that is coming to a rather staid manufacturing industry and its incumbents. In a world now full of Apps that would have previously only been fit for the mind of Willy Wonka, things really are getting exciting.

I see this falling into several constituent parts that look set to align spectacularly:

  • electric motors
  • autonomous self drive
  • car sharing
  • on demand
  • ownership

We’re all very aware that electric cars will eventually be commonplace. It will likely mirror the popularity of diesel engines which were thought of as farmer’s vehicles 20 years ago when unleaded petrol was still pretty new on the scene. Electric sales are currently around 1% of all registrations in the UK but as high as 22% in Norway which runs huge tax incentives.

Toyota’s Prius has long been the standard bearer for earnest Hollywood liberal wannabes, but Tesla is the electric specialist and the Model 3 will be its first mass-market model, having previously launched the Roadster and the Model S, both aimed at the premium user. The current cabal of manufacturers wont easily yield their dominance and are hedging their bets by launching their own electric programs both full and hybrid. Current plug-in recharging is also likely to get more innovation as ingenious road charging is evolving and will surely become widespread.

Certainly not just for the Jetsons, self driving cars are already here. Google and others are proving the technology works. Today.

Heavy commercial use should largely come first and prove efficiency and safety gains. Trucks on motorways are a far simpler puzzle to solve – no contending with kids and their footballs or dogs running in your path. It decreases the driver time on the odometer (he could drive the in-town, trickier bits at either end) and could be more efficient over long haul.

Needless to say, urban self-driving invites a tonne of questions around safety. There’s the obvious doubt about the machine’s ability and logic in accident situations – if there’s a child in the road, do I veer left and hit the grandmother or right to hit the wall and kill the car’s occupants? Hacking and malware are also likely to be future concerns.

It implies of a step change in the efficiency of our roads. Improved traffic flows, less parking as your car (if you actually own it) drives itself away from the city centre to park cheaply (think of park & ride type facilities). Or, while you’re shopping, eating or at the movies, perhaps you switch your car from personal to sharing use and it drives around earning you money rather than being parked.

And what of pedestrian and cycle safety if we no longer crash cars? What of the in-town spaces currently used for car parking? Drunk driving could become a thing of the past and driving licences themselves could be optional with ownership – think of the elderly or infirm still getting around under their own steam.

Maps are a key battleground in the self-drive war. If you want to transport humans to various locations your software needs to know where they might wish to go and exactly how to get there. Some thought Apple were mad when they launched their own map product in 2012, not least as Google had the monopoly position, plus the complexity of the challenge is pretty extreme. Both companies have been playing the long, vastly expensive and difficult game of wanting to map the world and transportation is one of the primary reasons, not those fun views of looking at your own house on street view. Google’s also operate Waze that adds machine learning over maps which gives them a powerful view of realtime traffic flows.

Nokia developed the massively well regarded map software, Here. There was a bidding war for Here in 2015 with Audi, BMW and Daimler forming a consortium to spend 2.5bn Euros. That was the cost of being late to the party. Building cars that drive themselves demands maps to self educate. My car with your licensed map software means you’re holding the brain of my self-transporting machine. That’s a risk these Goliath’s don’t like.

Car sharing provides the obvious context about placing more people into fewer cars, thus reducing congestion and at least slowing, if not reducing, urban pollution. Sharing or carpooling also compliments public transport, taking folks to places outside the usual bus and train routes.

Of course, smartphones now make this eminently viable for strangers to achieve, not just work colleagues who share the same route. DriveNow is just one example on show in North London, which is a partnership between BMW and Sixt.

Uber invented a sector that is now white hot as on demand is perhaps the largest catalyst for change. If I can tap my phone and book a car to be my own personal taxi then car ownership is massively threatened (or more likely, the app will know where I need to be because it’s read my calendar app).

Uber’s growth has been thanks to the colossal funding it ploughs into the model and the fact it benefits both sides of the aisle. The driver is running her own micro-business and the passenger gains extreme convenience, avoiding a taxi firm’s receptionist or standing with a roadside arm outstretched. Uber are the third party who earn their share, plus hoover up data for their global machine learning experience in its Advanced Technologies Centre in Pittsburgh. Data is key in the transport business.

No, on demand doesn’t work so well in a remote village in the Lake District, but it certainly does in the cities across the developed world.

Obviously, this is the scary bit for auto manufacturers as it’s long been said that car ownership is grossly inefficient given we use them just ~5% of the time. Ignoring population increases for a moment, one can imagine fewer cars will be needed on our roads. It’s not hard to see that if I can book a car almost instantly, then I don’t need to actually buy one. In a world where everyone uses the library, book stores cannot profit. Will the car become an extension of your phone in the same way email and music are: just tap the App and you have it?

And so come the winds of change. If private ownership drops so does a host of supporting industries. Private insurance becomes a thing of the past. Autonomous means fewer people will take their driving test, thus shrinking the learning industry. Electric cars threaten car tax under current levels that are easily changed but the hole that will be left in the public coffers from the fall in fuel duty isn’t so easily solved. And what of the repair and maintenance industry in an electric world that doesn’t require so much resource?

There’s a counter argument that says we don’t use anything 24/7 – apart from our bodily parts – and despite our new shared economy we don’t share that much (I love Airbnb but it’s still more of a fringe case). I don’t use my computer, my cooker or my bicycle 24/7 either but folks aren’t clambering over themselves to rent them off me. Will cars be the same? Or are cars simply too personal, too much of an extension of ourselves? Massively popular programs and magazines bow to the religion of the car. We watch them race for sport. We operate them for fun. What happens to those cars purchased purely for driving pleasure? Will the Porsche that leaves the garage a few times a year die off or become even more tribal (and expensive)? Or will millennials, used to renting homes rather than buying, think of renting a car as the done thing. Individual motivations and use cases will vary massively.

Like most others, VW have been laggards but we should expect them to hit the turbo on electric cars whilst making amends for their foul behaviour over emissions. They need to be at the vanguard of something exciting, clean and innovative to be their act of corporate contrition. That said, you can imagine the American auto manufacturers lobbying hard to impinge the Germans’ progress on US soil.

Don’t forget the Apple car, Titan is coming too. Given software and data will play a massive part, you wouldn’t want to bet against them giving the Fords and GMs of the world a run for their money.

It’s when the above cross into each others’ verticals that the real fun happens and new paradigms emerge. The apparent sweet spot is electric cars (cheap and plentiful energy) being on demand (don’t own, just request at will) driven autonomously (no driver’s salary, no breaks, no space taken in the car). Given this all involves massive change to the world’s energy and transportation systems along with huge personal preferences it’s likely to morph into something not easily prescribed but I can imagine several ownership models in this:

  • full private ownership for those want the latest tech but don’t wish to share with the great unwashed;
  • solo sharers that lease back to the transport system once your own primary journeys are dealt with (as you do with surplus electricity produced by solar panels on a roof);
  • shared ownership with manufacturers greatly subsidising your purchase in order to reclaim the vehicle and earn from autonomous rides, once your primary journeys are dealt with;
  • large corporate fleets where anyone with the budget could put to work scores of cars that operate 24/7 (except for charging). Surely Uber are in a race to achieve this and prevent themselves becoming superfluous. And manufacturers are also obvious candidates to ensure continuing revenue streams. Is this to be the new micro-journey, mass-rental model of the future?

Disruption is coming to your in-car experience and it’ll be more recognisable to something from iRobot than today’s Fords or BMWs. Oh, and yes, folks will indeed buy online when they’re purchasing.

Lastly, given our already insatiable appetite for consumer electronics plus the inevitable electric cars, one cant help but think we’ll soon need electricity as much as we do oxygen. Not to mention the lithium that most of these batteries will demand is limited, in pretty much the same way as oil – it needs mining too. There’s an ecological flip side to every decision.

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