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Welcome back! This week, we explore how the pandemic is changing consumer behavior and how that could affect self-driving car development.

  • I love your questions and feedback so drop me a line at joann.muller@axios.com. (Last week, a reader asked for an update on Amtrak's operations; read on!)
  • During these challenging times, Axios is encouraging employees to take an occasional mental health day, so next Friday I'll be social distancing on my sailboat.
  • Navigate will be back in your inbox on May 22.

Today's Smart Brevity count: 1,517 words, a 6-minute read.

1 big thing: Coronavirus could be a catalyst for self-driving cars

Illustration: Eniola Odetunde/Axios

Self-driving cars are the kind of speculative, cash-gobbling experiment that typically gets axed at a time like this. But if anything, this pandemic has shown the demand for driverless vehicles could be larger than expected.

What's happening: Despite economic woes, most autonomous vehicle developers say now is not the time to cut back. AV road tests are suspended, but simulated driving continues.

  • "The fundamentals are not changing," says Amnon Shashua, CEO of Mobileye, whose parent, Intel, just acquired the urban mobility app Moovit. "You need to lean in, rather than pull back."
  • "Our commitment is unwavering," General Motors CEO Mary Barra said of its investment in Cruise's robotaxi service.
  • Even Ford, which pushed back the launch of its AV service by a year, to 2022, says the delay is only to make sure it gets consumer preferences right. The automaker is still on track to spend more than $4 billion on AVs by 2023.

The big picture: Auto and tech companies are focusing on a handful of factors that will influence the movement of people and goods in the future, even as consumer behavior changes.

1. People might shun public transportation, but they still need to get around.

  • More than 20% of respondents who regularly use buses, subways and trains said they would stop doing so, and 28% said they would use them less often, according to an IBM study of consumer behavior.
  • Not everyone has that option. People who don't own a car or can't walk to a grocery store "are taking some personal risk getting on a bus or a subway," says Waymo CEO John Krafcik.
  • Waymo's self-driving minivans, which will resume testing Monday in Phoenix, could offer an alternative, he says.

2. Widespread use of personal cars isn't practical in cities.

  • 17% of people surveyed said they plan to use ride-sharing less often, and one in four said they plan to use their personal vehicle exclusively from now on, IBM's study found.
  • "Mobility cannot be satisfied with owning a car, especially in urban areas," says Mobileye's Shashua.
  • For city dwellers, that means shared AV fleets will likely be part of the solution.

3. Building trust in shared AVs requires a new dimension in safety: hygiene.

  • Consumers want to know their self-driving car won't crash, or give them a potentially deadly virus.
  • Look for companies to employ innovations like UV lights to regularly disinfect vehicles and to promote cleanliness as a way to help passengers feel safe, writes Reilly Brennan, a partner at Trucks Venture Capital, in a recent blog post.

4. Autonomous delivery is ready to take off.

  • A 30% surge in e-commerce since early March, plus the growing popularity of "contactless" delivery for everything from groceries and pizza to new vehicles underscores the potential for robot delivery services.
  • Some companies are already dabbling in autonomous delivery during the pandemic. In San Francisco, some Cruise test vehicles are making deliveries for food pantries; In Las Vegas, Aptiv's test vehicles are delivering meals for Lyft.

The bottom line: Creating a self-driving service involves more than building a safe vehicle. It has to deliver value to consumers. The pandemic might be a catalyst for adoption.

2. Virus could also speed consolidation

Illustration: Rebecca Zisser/Axios

The global pandemic may be reinforcing the logic for self-driving cars, but the economic fallout is likely to accelerate the consolidation trend that was already underway.

What it matters: Self-driving technology is a difficult — and expensive — challenge, and many companies have decided they are better off pooling resources. Only a handful of well-capitalized players will likely make it across the finish line.

What's happening: Aptiv closed its $4 billion joint venture deal with Hyundai on March 26, in the midst of the crisis.

  • The new company, yet to be named, will be based in Boston, and led by Aptiv's Karl Iagnemma.

What's they're saying: "A couple of years ago, people thought this was a software activity," Iagnemma told Axios. "What the industry has come to realize is that having a deep strategic relationship with an automotive (company) is essential."

  • It's capital-intensive, too: $1 billion is the price of entry for credible AV players, says Iagnemma.

Yes, but: Well-funded independent players can succeed without worrying about being dependent on a single automaker's fortunes, says Sterling Anderson, co-founder of Aurora Innovation, whose A-list backers include Sequoia Capital, Amazon and T. Rowe Price.

  • "These are make or break moments," said Anderson, whose company is focused on automation for commercial vehicles.

What's next: Volkswagen and Argo AI are nearing completion of a $2.6 billion investment deal that will make Ford and VW equal minority shareholders in the automated driving tech company.

What to watch: Fiat Chrysler says it is still committed to a planned merger with PSA Groupe, but both sides are scrambling to preserve cash in light of the crisis, and there's talk that the companies could try to renegotiate terms of the deal.

3. Taking drivers out of the loop

Illustration: Sarah Grillo/Axios

Volvo Cars is preparing to launch its first fully self-driving technology for highways using lidar and perception technology provided by Luminar, an ambitious tech startup.

Why it matters: The partnership is a major milestone for both companies.

  • Unlike other hands-off highway driving systems, Volvo's technology would allow drivers to truly relax — taking their eyes off the road — while the car assumes full responsibility for driving.
  • The deal is Luminar's first production contract and a huge vote of confidence in its lidar system, which works with radar and camera sensors to help self-driving cars understand their environment.

Details: The system will debut as an option on Volvo's next-generation vehicles, starting in 2022, likely with the XC90 crossover.

  • The cars will be "hardware-ready" for autonomous drive, with the Luminar lidar seamlessly integrated into the roof — a huge design leap over the spinning contraptions mounted on today's self-driving test vehicles.
  • Using over-the-air software updates, the optional Highway Pilot feature will be activated once it is verified to be safe for specific locations and road conditions.
  • The companies are also exploring the use of lidar to improve future advanced driver assistance systems (ADAS).

How it works: There will be no ambiguity about when the driver needs to pay attention, says Patrik Björler, director of autonomous drive and mobility strategy at Volvo Cars.

  • "Either you are responsible for driving the car, or we are in autonomous mode," he tells Axios.
  • When the autonomous mode is activated, Volvo is fully liable for driving and the human driver can take their eyes off the road.

What's next: The companies said they'll deepen their collaboration to jointly ensure Luminar can manufacture and validate its lidar system for series production.

  • Volvo Cars also has an option to increase its minority stake in Luminar, which has raised $250 million to date.
4. Driving the conversation

Rail warriors: On Amtrak trains, there are still passengers (Devi Lockwood — The New York Times)

  • What's new: Most of Amtrak's trains are still running during the pandemic. The railroad is deemed an essential service, crossing states with different rules to contain the spread of the virus, but starting Monday, all passengers must wear masks.

Backlash: Frontier Airlines ditches $39 empty seats sale after heavy criticism (Joe Rubino — The Denver Post)

  • Why it matters: The budget airline's “more room” offer was criticized as a cash grab playing on people’s fears of the coronavirus. "This was never our intent. We simply wanted to provide our customers with an option for more space,” Frontier CEO Barry Biffle wrote in a letter to Congress.

Sci-fi trucks: New breed of pickups mixes horsepower and battery power (Lawrence Ulrich — The New York Times)

  • Why it matters: Beefy trucks and SUVs powered by electrons, not gasoline, could finally mark the the arrival of the electric vehicle era in the U.S.

Worthy: China automotive expert Michael Dunne, CEO of San Diego-based consultancy ZoZoGo, has a new podcast, "Winning in Asia."

  • What we're watching: The recovery in China is "still bumpy and uncertain," he said this week during a virtual meeting of the Automotive Press Association.
5. What I'm driving

2020 Mini Cooper SE. Photo: Mini

This week I'm driving the 2020 Mini Cooper SE, a cute little electric hatchback that provided a few surprises.

The big picture: Mini, owned by BMW, was actually a pioneer in electrification a decade ago, before Tesla burst on the scene, notes CNET. But the 2009 Mini-E was mostly built for demonstration fleets and never offered for sale. Now the first electric Mini is finally available.

First, the disappointing surprise: The 2020 Cooper SE has an estimated driving range of just 110 miles, much less than its contemporaries like the Chevrolet Bolt (259 miles) or the Nissan Leaf (150 to 226 miles, depending on which battery it has).

  • But the Mini makes up for the short range with its unique styling and fun electric driving characteristics.

To maximize battery range, it features two regenerative-braking modes:

  • One allows the car to coast like a normal non-EV when you lift off the accelerator.
  • A more aggressive mode slows the car immediately, without touching the brake pedal. (It takes some getting used to.)
  • The electric motor converts the kinetic energy lost during deceleration into stored energy for the battery.
  • Charging to 80% capacity takes 35 minutes at a DC fast-charger, or four hours using a home AC charger.

One fun surprise: The Mini's taillights reflect the Union Jack, making its funky design even cooler.

I saved the best surprise for last: the price.

  • The Mini Cooper SE is available in three trim levels, starting at $29,900. With a $7,500 federal tax credit and available state tax incentives, you could knock the price below $20,000.
  • The top-of-the-line Iconic trim layers on the premium features, but still costs just $36,900.