The world is on the cusp of a brilliant new age of innovative human transportation – cars, trucks, trains and planes.
January’s Consumer Electronics Show in Las Vegas (where CDs, DVDs and 3D printers were first launched) might just be the touch-paper that ignites the electric vehicle (EV) firework.
Las Vegas is the venue for Herbert Diess, CEO of VW Passenger Cars revealing VW’s next all-electric concept vehicle. VW has been a bit sniffy about EVs in the past, but it needs to regain its car-manufacturing mojo and do something about its reputation after the recent emissions scandal.
VW has always been known for innovative technology, precision engineering, quality and an enviable global sales and distribution network. And with cash reserves of $32 billion its pockets are deep (even allowing for the €6.5 billion it has set aside to clear up the emissions mess). The emissions scandal should prove to be yesterday’s fish-n-chip paper as I think a lot of car manufacturers were cheating. Yes – even a few in the USA probably bent the rules a tad.
So I predict a big noise from VW in the EV market. And I also offer VW some advice – now is the time to get serious with a technical collaborator, a Google, Apple, or Tesla.
They need to talk to each other. Now. Seal the room with non-disclosure agreements and bring all the threads together. Because if Europe has fallen out of love with fossil fuels to the extent Paris has banned diesel, even with a low oil price, the direction of travel is clear; EV’s are the future, with or without a driver.
I’m no car manufacturer, but I know an opportunity when I see one. And there’s a massive one to be grasped in 2016 for a proper integration of vehicle and technology. Look at how Google and Apple are snapping at the exhaust pipes of the big boys like Porsche and BMW. And note how Tesla do not regard themselves as car makers. Jeffrey ‘JB’ Straubel, chief technology officer and co-founder says “I see us more as an energy-innovation company”.
If you think technology can only add an evolutionary rather than revolutionary improvement to business, listen to Tesla or take a look at Amazon’s plans to deliver goods by drone and think again. Now that’s vision.
But there’s another reason why I predict a major hook-up between vehicle manufacturers and information technology companies in the very near future: America’s antitrust regulators. These guys have had Google and Apple in their sights for years now. So too the Europeans: Microsoft has been fending off anticompetition legislation (as it’s known over there) from the EU for years now.
The regulators are responding to the growth of the mega-company, now the online economy has finally delivered. Firms have been getting massive; buying up smaller fish in the same sectors so as to benefit from economies of scale and coherent operating models. In 80% of America’s big industries the top 50 companies had a higher market share in 2007 than 1997. The regulators sniff a chance to break up a few big names and lay down the law.
So teaming up with a car manufacturer by creating a sub-division to ward off the attentions of the antitrust brigade could be a smart move (it already looks like Google will make its self-driving cars unit a stand alone business under the Alphabet Inc. corporate umbrella next year). It’s just the sort of nudge innovative new industries need to get off the ground. Necessity is the mother of invention, after all.
If this seems far-fetched, just look at how regulators are already influencing how, and what, we drive. It might be a good idea for your car to be connected to the world like a smartphone so that it can call for help if you’ve had a crash and are unconscious. But the EU want this type of feature to be on all new cars now. Equally, Brazil want all cars to have trackers to cut down on thefts. All good stuff, on the face of it, but at what additional cost to the driver if done without unleashing the full potential of connecting vehicles?
Folks, I’m all for this direction of travel (no pun intended), it’s just that until a big tech firm sits alongside a big car manufacturer it’s all going to be piecemeal and nobody will benefit.
I want my next car to be hooked up so that it talks to other cars and lets me know there’s a jam up ahead or a deer in the road round the next corner. I want lights to change in front of me because they know nothing’s coming from the other direction. I want to be able to pull up next to a parking space then hop out and get on with the meeting I’ve gone for, happy that the car will then park itself. I want an app that can tell me if there’s something wrong with the systems, rather than squint at an incomprehensible warning light on the dashboard or trust the word of a wolf in mechanics clothing. And I want to know before it becomes a bigger problem. And I really want to know that a software update or engine management tweak can be done over the air.
In short, I want someone to do for my personal transportation what Apple and Google have done for my personal communication and use of data. And you know what? I reckon Apple and Google might be just the ticket here too.
Think about it: on the one hand VW, Audi, Porsche and BMW have shown how German engineering has been leading the automotive world for decades. On the other, the American tech firms have led the way in connecting the individual to data. Maybe, just maybe it’s the Googles and Apples that are already talking to VW.
After all, some pundits are speculating that Apple and Tesla (with their billion-dollar fat wallet bulging) are already discussing the future. That future may just see Apple buying Tesla outright. But VW’s world dominant footprint for manufacturing and distribution far outweighs anything Elon Musk can muster. VW produced 30% of its cars in China last year. And we all know Chinese people love Apple products.
Apple is planning something big for 2019, possibly through the mysterious company Faraday Future (there’s certainly something fishy going on at the old US Naval base outside San Francisco). So don’t think the technology giants can’t already see opportunities and are maneuvering to position themselves for the new innovation age of transport.
I’m not claiming to be a great sage here; the benefits of collaboration between personal communications and personal transportation companies should be clear for everyone to see. I just wish they’d all get a damn move on and give the public – and investors – what we want.
But is the future electric vehicles, driverless vehicles, or a bit of both? And will the West, for all the smart engineering and fancy tech be the first to that future?
The Chinese market is booming and will be number one for global sales this year for EVs. The government there has decided it’s time to clean the place up and the EV will be part of the answer. These guys aren’t hanging about. European and US carmakers need to wake up to this competition before they get swept aside. And the Chinese can make anything these days as good as the West. Hell, China is even planning on a trip to the moon.
And the Europeans? The Germans, through Porsche, are investing $1 billion to take the all electric Mission E to full production and this will probably be the first of many all electric cars for them. Meanwhile BMW has got the i3 and i8, although the last one is a hybrid. I visited the dealership in central London. They didn’t have a clue. When I asked if their strategy was to develop any more models, the dopey sales assistant said “well, there are a lot of numbers between 3 and 8”. I walked out.
Google’s top secret EV car team are investing in a future of fully-blown driverless cars and has just invested $250 million in Uber. (And if cabbies the world over whinge about Uber, they should be really worried about a hook up with Google.)
Google reckon the trick is to ignore semi-autonomous vehicles, as people will pay too little attention to the road and current safeguards, like a sensor to know if your hands are on the wheel, are easily fooled (like when this idiot taped a can of soda to the wheel).
So it’s no surprise the company said it was “gravely disappointed” by proposed rules from Californian regulators announced on December 16th that put the brakes on their vision of a driverless future. The new rules demand a licensed human driver be on board, as well as each vehicle having a steering wheel and pedals.
Not quite the leap into the future Google was hoping for. Hence the description of the legislation as a “ceiling on the potential for fully self driving cars”.
Whatever the future of transportation looks like, lithium will be right at the heart of it. Tesla is publicly driving innovation in lithium battery technology and getting a lot of stick for it. But imagine if Henry Ford had had to develop the oil industry at the same time as the Model T.
So the car manufacturers and tech innovators are all out there, looking for the next big opportunity and wary of an encroaching disruptor from the East.
It’s coming, fast. Goldman Sachs expect the ‘tipping point’ for broad commercialisation of EVs to be in 2020. That’s five years time, folks.
My new Range Rover “Supercharged” only does just over 300 miles on a tank of gasoline and Tesla and Porsche are already claiming this range. The dawn of the 500-mile range EV is just around the corner and the battery charging technology is changing at warp speed. It won’t be long before you can recharge your EV in the same time as it takes to fill up the gas-guzzler, or indeed charge it wirelessly whilst you drive along through coil loops hidden in the road.
From ski lodges in Utah, to the Nullarbor Plain in Australia, we’ll all soon be driving affordable, connected, efficient electric vehicles. Range anxiety will be a thing of the past and autonomous Google-Ubers will be scooting through our cities. It all starts with vision and a leap into the bold unknown. Perhaps it’s going to start in Las Vegas in January with a much humbler VW finally putting the consumer back where we belong: in the driving seat.