Dec 6, 2019

Axios Navigate

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  • 🚨 “You guys got it all wrong.” In “Axios on HBO’s” first-ever special, Joe Biden accuses the media of misjudging how liberal the Democratic Party really is and dismisses the idea that Rep. Alexandria Ocasio-Cortez is the new party. Catch a sneak peek (here) and watch the full interview this Sunday at 6:30pm ET.
  • 🎉 Congrats to my colleagues Sara Fischer and Alexi McCammond, who are on this year’s Forbes 30 Under 30 media list! 
  • Smart Brevity count: 1,301 (about 5 minutes).
1 big thing: Your car as a supercomputer

Illustration: Sarah Grillo/Axios

With more than 100 million lines of code in the modern car, advanced software features are testing the limits of the computer hardware under the hood. And it will only get worse: Electric, connected and automated cars will devour even more computing power in the future.

Why it matters: Automakers face an urgent need to redesign their vehicles' electronic architecture — essentially their brain and central nervous system — to handle the onslaught of advanced features that will one day allow cars to talk to each other and drive themselves.

The big picture: The software-driven shift will likely have massive implications for both the automotive and semiconductor industries.

  • The market for automotive computer chips is expected to grow from about $40 billion today, per IHS Markit, to as much as $200 billion by 2040, according to KPMG.
  • Semiconductor companies are salivating over the growth opportunity, but it will require automakers and their suppliers to collaborate with chipmakers to seamlessly integrate hardware and software.

The state of play: Today's cars typically have as many as 100 electronic control units (ECUs), each dedicated to a separate function — the engine, the window actuators or the lane-keeping system, for example.

  • As cars have gotten more sophisticated, all those ECUs, along with the wiring and power supply they require, have turned into an unwieldy and expensive mess that's inefficient and overly complex.
  • “The growth of software content and associated [computer] processing ... is really breaking the current vehicle architecture,” said Glen De Vos, chief technology officer at Aptiv, a major auto tech supplier.
  • Worth noting: Tesla, which began in 2009 with a clean sheet, doesn't face the same constraint. Its cars were designed as rolling computers from the get-go, and they receive frequent over-the-air software updates. Earlier this year, Tesla introduced its own computer chip.

What's happening: Carmakers are replacing all those ECUs with centralized computing platforms linked to the cloud. But a challenge is keeping infotainment systems separate from those that control the car.

  • Aptiv will unveil a new open-platform smart vehicle architecture at CES in January. Multiple automakers are in conversations regarding the solution, including Hyundai, its new joint venture partner for automated vehicle technology.
  • Elektrobit is developing centralized infrastructure for three carmakers, including Volkswagen, whose electric VW ID, which goes on sale in 2020, will be capable of over-the-air updates.
  • Ford's upcoming Mustang Mach-E will be based on a new updatable EV architecture.

What to watch: If the automobile evolves in the way cellphones, PCs and data centers did, there could be a lopsided contest to grab revenue, with a handful of winners and many losers, warns KPMG in a new report.

  • Chip manufacturer Intel was the winner in PCs, beating out the hardware manufacturers, for example.
  • "With 'Intel Inside,' you see the power of silicon differentiating a commoditized environment," KPMG semiconductor expert Scott Jones tells Axios.
  • The same thing is likely to happen in autos, he says, as software features — and not horsepower or vehicle styling — begin to define the driving experience.

The bottom line: In the future, cars will be valued not by what's under the hood, but by the software-enabled safety, convenience, infotainment and self-driving features they provide to consumers.

2. “Electrified armageddon”

GM plans 20 new EVs by 2023, including many Cadillac models. Photo: GM

While General Motors was announcing plans Thursday for a huge $2.3 billion battery factory to boost production of electric vehicles, a Toyota executive warned of a looming industry disaster, calling it "electrified armageddon."

Why it matters: Somebody is wrong. Either GM's heavy spending on battery-electric vehicles will be wasted, or Toyota will be caught flat-footed when the rest of the market goes electric.

What's happening: GM and Korea's LG Chem are forming a $2.3 billion joint venture to build one of the world's largest battery cell factories in Ohio, creating 1,100 new jobs.

  • The plant's massive scale, along with the partners' ongoing chemistry research, will help lower the cost of batteries and finally make EVs affordable, GM says.
  • But Toyota thinks there's still not enough demand for EVs, and it remains primarily focused on hybrids like its hot-selling Rav4 hybrid.

What they're saying:

  • GM CEO Mary Barra: "GM believes in the science of global warming. We believe in an all-electric future. It’s not a question of if, but when."
  • Toyota EVP Bob Carter: "Somebody's got to buy these things. I've been saying we're going to see electrified armageddon. Because of the cost premium, supply is going to get ahead of true customer demand."
3. May Mobility gets a lift from Toyota

May Mobility's Little Roady shuttle in Providence, Rhode Island. Photo: David L. Ryan/The Boston Globe via Getty Images

May Mobility, a self-driving electric shuttle company based in Ann Arbor, Michigan, just raised $50 million in a Series B financing round led by Toyota.

Why it matters: The vote of confidence is more than financial. Toyota has also selected May Mobility as one of its partners to develop autonomous transportation-as-a-service for future mobility platforms.

  • Details of that collaboration haven't been disclosed, but one possibility is that Toyota will incorporate May Mobility's self-driving technology in its e-Palette shuttle platform, first unveiled at CES in 2017.

Background: May Mobility operates AV shuttles (still with trained backup drivers) in Detroit and Grand Rapids in Michigan, and Providence, Rhode Island.

  • Rather than sell its shuttles to customers, May Mobility contracts with cities, transit agencies and corporations to provide short trips on fixed routes in dense urban areas.
  • To date, its fleet of 25 electric shuttles has provided more than 170,000 revenue-generating rides.

The bottom line: May Mobility has raised $83.6 million since its founding in January 2017.

4. Driving the conversation

Failure: "It appeared that we had time": How the FAA missed a chance to save Jennifer Riordan (Michael Laris — The Washington Post)

  • Why it matters: The nightmarish death of the 43-year-old Southwest Airlines passenger in 2018 might have been avoided if the FAA had taken stronger action after a previous incident, the Post reports in a gripping story that adds to concerns about whether the agency is providing proper oversight. Worthy of your time.

Scary rides: Uber says 3,045 sexual assaults were reported in U.S. rides last year (Kate Conger — New York Times)

  • Between the lines: Both Lyft and Uber have come under fire over allegations of drivers harming their passengers. With 20 women suing Lyft this week over assaults they endured, Uber is going for transparency by issuing its first safety report.
  • What they're saying: “The numbers are jarring and hard to digest,” Tony West, Uber’s chief legal officer, told the NYT. “What it says is that Uber is a reflection of the society it serves.”

Empty pockets: Why Elon Musk is cash poor (for a billionaire) (Noah Kirsch and Alex Knapp — Forbes)

  • Why it matters: Currently on trial for defamation after calling an unknown British man "pedo guy," Musk told the court he is worth more than $20 billion, but most of his wealth is tied up in Tesla stock.
  • What to watch: If the jury levels a large judgment against him, Musk might have to sell part of his stake in Tesla or SpaceX. He could also borrow more money, but he's already pledged almost half his stake in Tesla as collateral for $500 million in existing debt, according to Forbes.
5. What I'm driving

2020 Acura MDX A-Spec. Photo courtesy of Acura

Over the Thanksgiving holiday, the family took a road trip from Detroit to Toronto in the 2020 Acura MDX.

The big picture: The MDX is the best-selling three-row luxury SUV in America and it's easy to see why. Starting at $45,395, it's comfortable and has a premium feel, without being ostentatious or over-engineered.

  • Our all-wheel-drive MDX with the A-spec sport package and premium "Apex Blue Pearl" paint job cost $56,295, but still felt worthy of the price.
  • It's also available as a fully loaded hybrid model for $60,645.

My thought bubble: It would have been cramped with seven passengers, but with the third row folded down, we had plenty of room for four passengers, four suitcases and assorted other stuff.

  • After the obligatory stop at Canada's own Tim Horton's donut shop, we nestled a box of Timbits into the surprisingly deep storage bin in the car's center console. (When the donuts were gone, it was a great place to stow my purse.)

After a couple of hours, I handed the wheel to my 23-year-old daughter, who is a great driver but was unnerved initially by the car's assisted-driving features like adaptive cruise control and lane-keeping technology, which nudges the car back to the center of the lane when it drifts too close to the lane markings.

  • It was interesting to watch her learn to trust the system. There is a learning curve to assisted-driving features, but as with most technologies, the more you use them, the more comfortable you become.

Editor's note: The top story was corrected to show Aptiv will unveil an open-platform smart vehicle architecture and is currently in discussions with various automakers on it.