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Today Expert Voices contributor Sudha Jamthe examines the technologies automakers are using to keep AV customers close.
1 big thing: AVs are already a commodity
Rivals BMW and Daimler are the latest automakers to start pooling resources in order to stay competitive while they push toward full autonomy.
The big picture: Once there was a race among auto and tech companies to develop self-driving cars, but now there's a shared belief that it's frustratingly hard and incredibly expensive to do so at scale.
- For some, partnering on a step-by-step progression through the various levels of autonomy seems the most expedient way to try to bring the technology to market.
What's happening: BMW and Daimler, Mercedes Benz' parent, are teaming up on automated driving, joining a growing list of AV research couples: Toyota and Uber, GM and Honda, and Ford and Volkswagen.
- BMW and Daimler will focus on next-generation technologies for driver-assistance systems, highly automated highway driving and self-parking features — which are all considered Level 3 or 4 autonomy.
- They aim to make those technologies available in the mid-2020s for global markets while separate research continues on longer-term projects.
- For example, Mercedes and Bosch will start testing Level 4 and 5 robotaxis in San Jose, California, this summer.
BMW and Mercedes are usually bitter rivals, but the shifting transportation landscape has a way of turning enemies into friends.
- The German luxury carmakers are also pooling their resources on mobility services, investing $1 billion in a joint venture that spans ride-hailing, multi-modal transportation and related services.
What we're hearing: Industry experts predict even more collaboration on automated driving technology in the near future.
- The likelihood of a recession or cyclical downturn means big R&D expenditures are riskier, says Sam Abuelsamid, principal analyst at Navigant Research.
- AV development becomes more complex as the level of autonomy increases, Michael Hafner, head of driving technologies and automated driving at Mercedes-Benz Cars, explains in a blog post.
- Shouldering the technological and financial burdens together makes sense, even though BMW and Mercedes will always be competitors, Hafner writes.
What's next: AVs aren't here yet, but already they're becoming a commodity. What will differentiate auto companies in the future won't be whose AV technology is safer — airlines don't compete on safety, after all — but which one delivers a better customer experience.
"Once they’re driving the speed limit in the middle of the lane and keeping you from dying, that’s not a differentiated experience."— Mike Ramsey, research director, Gartner
2. The $35K Tesla Model 3 has finally arrived
Tesla is finally launching that long-promised $35,000 Model 3, but to meet its target price, the company is closing its 378 stores worldwide and shifting all sales online, CEO Elon Musk announced yesterday.
Why it matters: That $35,000 price tag enables Musk to deliver a mass-market electric vehicle he pledged to create 13 years ago, but he told reporters Thursday "there's no other way" to produce it than by closing all its stores and eliminating jobs. Even so, he says the company won't be profitable this quarter.
What's happening: Shifting all of its sales online — plus cutting other costs — means Tesla can lower the price of its vehicles, including Models S and X, by about 6% and achieve the $35,000 Model 3 price point earlier than expected.
Details: Tesla is offering two new budget-priced Model 3s — a standard $35,000 model and a slightly upgraded $37,000 version — but they'll have smaller battery packs and won't travel as far as currently available versions of Model 3.
The catch: Tesla also changed the pricing on its Autopilot packages, shifting some features around, which will make automated driving features more expensive.
- For $3,000 extra, drivers can get Autopilot — which provides steering assistance and adaptive cruise control at highway speeds — similar to what comes standard on a Honda Accord or Toyota Camry.
- For another $5,000, drivers can get "Full Self Driving Capability," which adds Navigate on Autopilot — the ability to change lanes, pass slower cars and take interchanges. Plus it will include the Summon automatic parking ability and other yet-to-be detailed features.
Between the lines: "Full Self Driving Capability" doesn't mean the car can drive itself. Tesla continues to confuse consumers by giving its assisted-driving features names that overstate its capabilities.
- Drivers who want to use Autopilot and Full Self Driving features have to supervise the technology at all times.
3. Automakers are betting on fleet services
Automakers are increasingly creating proprietary software that can manage car-sharing and ride-sharing fleets, the customer services involved, and customer payment, Sudha Jamthe, CEO of IoTDisruptions, writes for Axios.
Why it matters: Automakers want to ensure they maintain control of their relationships with consumers — and more important, the data and revenue streams that can come from it — rather than relinquishing them to Uber, Lyft and other mobility-related startups with their own transportation apps.
What's happening: This week, Volkswagen's Seat division announced a concept car called The Minimó with 5G-compatible mobility technology embedded in the vehicle, which would allow it to connect wirelessly to other vehicles and city infrastructure in order to share information and advance its autonomous capabilities.
- Daimler offers car sharing, taxi hailing, and on-demand service for trucks and buses through several projects: Car2Go, Bus Rapid Transit, myTaxi, and Moovel.
- Here Mobility, co-owned by BMW, Daimler and Audi, connects users by app with taxis, boats, helicopters, and any other local transport.
- Volvo recently launched an app-based car-sharing service, M, building on its service available in Sweden.
Meanwhile, other automakers are exploring mobility offerings via partnerships with tech companies.
- Toyota and Microsoft are working together to build out software for fleet management, vehicle connectivity, and data analytics.
- Ridecell and Vinli are startups that offer mobility technology. Ridecell's is currently being tested by BMW, Group Renault and VW.
Between the lines: This kind of mobility technology could prove crucial for automakers to implement AVs in ride-sharing and car-sharing, and for them to capitalize on those services and the data they will generate, while reaching their customers directly.
Go deeper: Read the post.
Jamthe is CEO of IoTDisruptions and teaches AV Business at Stanford Continuing Studies.
4. Driving the conversation
New horizons: GM global manufacturing chief will reportedly join Amazon (Lora Kolodny — CNBC)
- My thought bubble: Alicia Boler Davis, 49, was a rising star and trusted lieutenant of GM CEO Mary Barra, not to mention the auto industry's highest-ranking African-American woman. Amazon isn't commenting, but if I had to guess, Davis will lead Amazon's AV efforts.
Vehicle cap: This is what peak car looks like (Keith Naughton and David Welch —Bloomberg Businessweek)
- The big picture: Analysts say we're at a tipping point where demographic trends, shared mobility services and self-driving cars combine to make traditional forms of car ownership unnecessary.
Lessons to be learned: What the Lion Air crash teaches us about autonomous cars (David Mindell — Forbes)
- Why it matters: Last October's plane crash in Indonesia points to a failure of communication between the plane's autopilot system and its human overseers, a problem that could easily occur with self-driving cars. It's a reminder why their development shouldn't be rushed and humans should never be cut out of the picture.
AV timetable: The Moore’s Law for Self-Driving Vehicles (Edwin Olson — Medium)
- May Mobility’s CEO writes that self-driving cars today are only 0.01% as good as humans.
- Even with an optimistic view of the data, it'll take 16 years to match human driving skills, he writes.
- That means you're looking at 2035 before fully autonomous vehicles are ready.
5. What I'm driving
This week I’m driving a handsome station wagon, the Buick Regal TourX, which, if I had to guess, probably won’t be around for long. And that’s too bad, because it’s a very nice car.
The big picture: Sedans don’t sell any more in the U.S., and station wagons haven’t for decades — not since the Buick Roadmaster, popular in the 1940s and 50s. They’ve all been displaced by SUVs and crossovers.
Maybe that’s why I like the TourX so much. It’s different.
- Long and sleek, its proportions are much different from the generic crossovers you see everywhere today.
- Deep down, it's a European wagon, sold overseas as the Opel Insignia Sports Tourer.
- Still, Buick has positioned it as a sports crossover, competing with models like the Audi A4 allroad, Volvo V60 Cross Country and BMW 3 Series Sports Wagon (which will no longer be offered in the U.S.).
The TourX is well-equipped on safety. It's the first Buick to offer a pedestrian safety system that's smart enough to react and soften the blow if someone lands on the hood of your car.
- It senses the imminent impact of a pedestrian between 16–30 mph and — like an airbag — uses a pyrotechnic actuator to lift the back of the hood up about 4 inches to lessen the impact and potentially reduce injury.
- It also has the usual array of active safety features that help you do things like stay in your lane, keep a safe distance from the car ahead, and alert you to crossing traffic when backing up.
What I'm watching: The TourX is a rebadged Opel but GM sold Opel in 2017 to France's PSA Groupe, which agreed to keep building the cars for the time being. But the TourX isn't selling well in the U.S., partly due to GM's lack of marketing support, so it may not be long for the U.S. market.
The bottom line: The TourX could become the next wagon to meet the ax — and that would be a shame.