Sep 25, 2019

Axios Navigate

Joann Muller

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Today's Smart Brevity count: 1,255 words, <5 minutes.

1 big thing: Ford AVs roll into Texas

Illustration: Aïda Amer/Axios

Ford is bringing self-driving cars to Austin, Texas — its third launch city — but says it'll take at least 2 years to figure out how they'll be used and how to make money from them.

The big picture: Ford and its technology partner, Argo AI, are taking a different tack from most other AV companies, which tend to focus on a single launch market.

Ford, on the other hand, is fanning out across 6 cities with test vehicles, and says it will launch commercial service in 3 — Miami, Washington, D.C., and now Austin — beginning in 2021.

  • Unlike competitors, it has not adjusted its deployment timeline, which had been seen as conservative in 2017 when hype over self-driving cars reached its peak.
  • More time is needed, Ford says, to digitally map each city, learn its unique driving characteristics and — most important — work with city leaders to identify how AVs should be used to improve transportation problems.
  • "We're all in to drive the integration of the technology and work on the business model because technology for the sake of technology won't work," Sherif Marakby, CEO of Ford Autonomous Vehicles, told reporters.

Yes, but: deploying automated vehicles in a single city is a costly slog, notes Brian Collie, head of Boston Consulting Group's automotive and mobility practice.

  • You can't drop a fleet of AVs in a city overnight like a scooter company can.
  • Creating precise digital maps of an urban area, and then validating the technology there, costs between $300 million and $400 million per city, Collie estimates.
  • That's why BCG predicts there will be different AV winners in each city.
  • In choosing launch markets, AV companies weigh everything from city layout to weather, critical business decisions that will determine which populations are first exposed to AVs and how they'll develop, Rob Toews writes for Axios Expert Voices.

Ford argues its multi-city approach will give it an edge by allowing it to scale up faster.

  • "If we have a launch in 3 cities, in a variety of environments, we'll be able to scale fast ... and we think scale is key," Marakby says.

What to watch: Ford test vehicles will begin mapping Austin streets in November, following a similar pattern as in Miami and Washington.

Go deeper: How AV companies are picking their U.S. launch markets

2. AV tech consolidation continues

Euisun Chung, executive vice chairman of Hyundai Motor Group and Kevin Clark, president and CEO of Aptiv. Photo: Courtesy of Hyundai

Hyundai Motor Group and Aptiv are forming a $4 billion joint venture to produce self-driving technology, the latest in a string of alliances between automakers and AV tech companies.

The big picture: Developing self-driving cars is more difficult than many companies expected. Faced with a slowing global economy and mounting regulatory pressures, many players are teaming up to share the technology and financial burdens of AVs.

What's happening: Aptiv and Hyundai Group (which includes Hyundai, Kia and the Hyundai Mobis auto parts-making unit) will each own 50% of the joint venture.

  • Hyundai will invest $1.6 billion in cash and contribute $400 million in R&D resources.
  • Aptiv will transfer its autonomous driving technology, intellectual property, and about 700 engineers to the new company.
  • Karl Iagnemma, president of Aptiv autonomous mobility, will lead the joint venture, which will be based in Boston.
  • They plan to begin testing fully driverless systems in 2020 and have a self-driving platform available for robotaxi providers, fleet operators and automakers in 2022, senior executives told Reuters.

The intrigue: Hyundai's $2 billion tie-up with Aptiv raises questions about its commitment to Aurora Innovation, another AV tech firm in which it owns a stake.

  • Aurora recently ended a multi-year partnership with Volkswagen, which instead invested in Argo AI.
  • A Hyundai spokesperson emails that the company will continue to work with various partners on AV technology, including Aurora.
  • An Aurora spokeswoman confirmed that its partnerships with Hyundai and Fiat Chrysler Automobiles, among others, are not exclusive.
3. Something new: Canoo

Canoo, an electric vehicle prototype that will be available by subscription starting in 2021. Photo: Courtesy of Canoo

Electric vehicles, which don't have an engine, transmission or other space-eating components, allow automotive designers the freedom to rethink what a car should be. One example: Canoo, which debuted Tuesday night in Los Angeles.

Why it matters: Canoo reimagines everything about the automobile, including the business model. Instead of buying a Canoo, consumers will only be able to get one via monthly subscription.

  • “We promised a truly different approach for EVs, and our canoo proves that we can deliver on that vision," according to a statement by Ulrich Kranz, whose title, "In Charge" at Canoo, has its own unique flair.

Details: The urban loft on wheels is about the size of a compact car, with a spacious, lounge-like interior and room for 7.

  • Passengers "bring their own device" to control non-driving features such as navigation, music or climate.
  • The electric "skateboard" platform can support different vehicle designs and the 250-mile range battery can be recharged to 80% in about 30 minutes.

Canoo, founded less than 2 years ago, plans to market a 4-model range that will include personal commuter and "lifestyle" vehicles, as well as commercial vehicles for ride and delivery services, according to Reuters.

  • Manufacturing will be handled by a contract manufacturer.
  • The company was founded by former BMW executives Kranz and Richard Kim, along with former Deutsche Bank exec Stefan Krause. All 3 previously worked at another California-based EV startup, Faraday Future.
4. Driving the conversation

Escalation: Trump officials threaten to withhold highway funding from California for its 'chronic air quality problems' (Juliet Eilperin and Dino Grandoni — The Washington Post)

  • Quick take: The Trump administration is punishing California for setting tougher auto emissions standards yet threatening to withhold funds because of its "chronic air quality problems." That makes no sense, except in politics.

Penalties: Cabinet paves way for self-driving vehicles on Japan's roads next year with new rules (Japan Times)

  • Details: The Japanese government will impose fines of up to $110 on drivers who fail to switch to manual operations when present conditions for Level 3 autonomy (road type, driving speed, weather, time of day, for example) no longer apply.
  • My thought bubble: If you leave it up to human drivers to know when to let the car drive itself, you're in big trouble.

Big haul: Self-driving startup Embark raises $70 million, opens freight transfer hubs for robot big rigs (Alan Ohnsman — Forbes)

  • The big picture: San Francisco-based Embark is among companies such as Waymo, TuSimple, Starsky Robotics, Kodiak and Ike working on automated long-haul trucks. The founders, still in their 20s, have raised $117 million so far.
5. 1 police thing

An antique Dodge Monaco California Highway Patrol Police car on display in Washington, D.C. Photo: Eric Baradat/AFP/Getty Images

Even cops get range anxiety sometimes: a Fremont, Calif., police officer radioed his dispatcher that he might have to give up a high-speed chase because his Tesla Model S patrol car was about to run out of juice.

Details: "I am down to 6 miles of battery," Officer Jesse Hartman radioed, asking if another patrol car could take over the chase, which hit speeds of 120 miles per hour on Interstate 680, according to the Mercury News.

For the record: Police abandoned the 8-minute case for safety reasons shortly after Hartman's radio call when the suspect began driving on the shoulder to avoid thickening traffic.

  • His fellow officers headed back to the station, but Hartman needed to make a pit stop, the Merc reported.
  • "I've got to try to find a charging station for the Tesla so I can make it back to the city," Hartman radioed.

Background: The Fremont police department is evaluating the 2014 Tesla to determine whether electric vehicles are suitable for wider police use.

The bottom line: Electric vehicles have amazing performance, but only if you remember to recharge them.

Joann Muller