The era of the human-driven automobile, its repair facilities, its dealerships, the media surrounding it — all will be gone in 20 years.
A highly recommended article by Bob Lutz, former Vice Chairman of GM.
Tesla stock dropped more than 5% after hours as Musk explained what had gone wrong in the making of the new Model 3, the company’s first affordably priced electric car. Investors had sensed something was awry a month earlier, when Tesla said it had only made 260 of the Model 3 last quarter, well below the nearly 2,000 it had forecasted; some reports said the bottleneck was due to the carmaker assembling the vehicle by hand.
“Nine levels of production hell” are not unusual when you launch a new product. Especially if it is a product of such a scale never produced by the company before.
Interesting interview with Ford CEO Mark Fields on looking into new business models and making the company ready for the future. Ford has recently spun-off their next generation mobility services into a new company. More and more leading car OEs and suppliers are trying to leverage the environment in the Silicon Valley in order to embrace change and explore new business fields. Disruption of an existing industry happens in most cases due to new entrants from the outside, and the classic players in the Automotive industry have to get ready.
Our approach is to first, disrupt ourselves. That’s why you see us creating things like Ford Smart Mobility, the LLC, creating FordPass, really thinking differently about this from a consumer-end standpoint. Thinking about experiences, and then how does technology, hardware, and software deliver that, as opposed to the other way around. I think we’re really disrupting ourselves.
Meet the new Ford, a Silicon Valley software company
A while ago I wrote about Tesla’s different approach to sales and distribution of their cars, employing online direct sales for a customer experience from build to customer service. For their new S90 flagship model, Volvo has gotten some inspiration from this direct-to-customer approach.
Volvo has a new system in place for the launch of its flagship S90 sedan that kind of mimics that experience: you can spec out the exact car you want online, then submit it to a “Volvo Concierge” who will finalize the order for you within a day or two.
The Verge – Ordering Volvo’s new flagship sedan is a little like ordering a Tesla
The order process looks indeed similar, however you still are not buying your Volvo directly from Volvo. A Volvo dealer is handling the fulfillment and delivering the car to you. The full Tesla sales and distribution process (and thus cutting out the dealer) is very difficult to imitate for a “classic” OE such as Volvo, as they have legacy structure of existing dealerships and service locations to maintain.
Fascinating Bloomberg article about former-iPhone-hacker George Hotz who has outfitted his Acura with cameras, lidar, and computing power to go for autonomous driving. His plan is to prove that he is able to build better technology and algorithms than companies like Tesla or other car manufacturers.
The technology he’s building represents an end run on much more expensive systems being designed by Google, Uber, the major automakers, and, if persistent rumors and numerous news reports are true, Apple. More short term, he thinks he can challenge Mobileye, the Israeli company that supplies Tesla Motors, BMW, Ford Motor, General Motors, and others with their current driver-assist technology. “It’s absurd,” Hotz says of Mobileye. “They’re a company that’s behind the times, and they have not caught up.”
In fact, Hotz has turned down an offer from Elon Musk to work for Tesla.
Hotz, though, broke off the talks when he felt that Musk kept changing the terms. “Frankly, I think you should just work at Tesla,” Musk wrote to Hotz in an e-mail. “I’m happy to work out a multimillion-dollar bonus with a longer time horizon that pays out as soon as we discontinue Mobileye.” “I appreciate the offer,” Hotz replied, “but like I’ve said, I’m not looking for a job. I’ll ping you when I crush Mobileye.” Musk simply answered, “OK.”
Hotz plans to get more data and experience with his prototype and then demonstrate it by “filming a video of the Acura outperforming a Tesla across the bridge, and then follow that up by passing the final test on I-405 in Los Angeles where Musk lives.”
Tesla remains skeptic on the success of Hotz, releasing a statement on their website accordingly:
We think it is extremely unlikely that a single person or even a small company that lacks extensive engineering validation capability will be able to produce an autonomous driving system that can be deployed to production vehicles. It may work as a limited demo on a known stretch of road — Tesla had such a system two years ago — but then requires enormous resources to debug over millions of miles of widely differing roads.
There was some media buzz during last weeks regarding a mysterious new billion-dollar EV company, operating out of a former Nissan site in California. The company called “Faraday Future” (FF) has assembled a strong leadership team consisting of former Tesla and BMW guys plus a couple of hundred other employees, and seems to be planning to launch a new EV vehicle around 2017.
First reports have indicated the possibility of Faraday Future being a dummy company for Apple’s EV project, given the lack of an known CEO and the seemingly extremely fast and high funding of the new company. A closer look at the incorporating documents has revealed, though, that FF’s chief executive is a partner of Jia Yuenting, founder of LeTV. Thus, Faraday Future is more likely to be the potential future home of LeTV’s SSE (Super Electric Eco-System) car project. This project is not just about the “old-economy” style “moving a car out to the dealer” type of business, but will try to treat the car more like a smart phone. Subscriptions, apps, car-sharing and other service revenue streams seem to be an integral part of the envisioned LeTV EV car project.
Uber is usually not afraid to go on the offensive with regulators all over the world in order to facilitate its rapid growth and expansion. Be it by filing complaints against several governments in Europe at the beginning of 2015, or using it’s large venture cash pool to hand out aggressive cash incentives to drivers in India in order to go against opposing “old-economy” taxi monopolies.
In Uber’s most important growth market China, however, Uber’s management is much more cautious and obedient, knowing that their usual strategy of disrupting the market could possible come to a dead stop at anytime at will of the strong central government. Additionally, Uber is still only the minor player in China, competing with the extremely strong local competitor Didi Kuiadi that has around 80% of the market and gets significant invest from sources close to the Chinese government.
Uber therefore seems to go now for a strict compliance strategy in China. After China’s Ministry of Transport has published a draft of a new rule set for private e-hailing services, bringing in far-reaching regulatory demands on licenses, drivers and IT infrastructure, Uber is happy to comply with any new rule. Unlike Uber’s usual way of ‘acting first and (maybe) asking for permission later’, Uber has already announced that “the company is in close communication with Chinese regulators and would follow all new rules”.
Additionally, Uber will fully separate its China business from its other business by setting up an own Uber China company, and is trying to work more closely with local partners in order to get a better standing in the Chinese market. It is a “comply or die” situation, and Uber is likely to go for the survival option.
Uber said that to localize its Chinese business, Uber China has officially registered in Shanghai as a separate entity called Shanghai Wubo Information Technology, run by Chinese managers. It has obtained the requisite licenses and qualifications as an Internet company and placed its servers in China, the company added.
China Tightens Oversight of Private Car-Hailing Services
Porsche’s 911 sport cars are incredible driving machines. And the automaker’s upcoming 2017 model is no exception. High-end sports car like this one usually not only offer great driving performance, but also spoil its owners with latest connectivity and entertainment technology.
Interestingly, according to a Motor Trend Article, Porsche decided to not integrate Google’s Android Auto into its latest car, and only offers Apple’s Car Play in their head unit instead. There is not really a technological reason behind this decision, but Porsche decided based on privacy and data protection concerns.
As part of the agreement an automaker would have to enter with Google, Porsche said certain pieces of data must be collected and transmitted back to Mountain View, California. Stuff like vehicle speed, throttle position, coolant and oil temp, engine revs—basically Google wants a complete OBD2 dump whenever someone activates Android Auto. Not kosher, says Porsche.
13 Cool Facts About the 2017 Porsche 911
Although Google disputes this statement, it did not provide a full list of collected data to further clarify the situation. It might be that Porsche made its decision to a time “when Google initially approached automakers concerning Android Auto, it requested a deeper data set than what is currently required”.
Nonetheless, Apple might be on the right track here in regards to privacy and data protection. Ultimately, Apple earns the majority of its revenues and profits with products and not with your data, providing a fundamental difference to the Google strategy.
Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t “monetize” the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.
Tim Cook – CEO Apple
The race towards the fully automated car has only just begun. Car makers and their new potential competitors from the Tech industry have different views on the best approach for a driverless future.
While car OEMs like BMW or Daimler (and even newcomers like Tesla) are adding more and more driver assistance features such as lane-departure warning, brake assist, traffic jam assist, or parking pilot, in order to increase automation step by step over the next years, Tech industry companies like Google think of “leap-frogging” to as much automation as possible.
There are good reasons for both approaches. The classic step-by-step approach is very much in line with technology development and refinement, and with the slow moving other stakeholders such as governments and insurances. Ultimately a fully autonomous car would challenge the existing regulations and insurance schemes intensively, bringing up many unsolved issues of liability. What happens, for example, if a malfunctioning autonomous car hits a pedestrian? Driver or car maker liability?
The fully autonomous car, though, has the potential to be much safer than a car steered by a human, so naturally there is some incentive to go to as many automated functions as fast as possible. Especially as there are some indications that drivers in a only partly-automated car might be too slow to take over control in a situation that the partial automation cannot handle. As Chris Urmson, Head of Google’s Self Driving Car program, said in a recent article: “The better the technology gets, the less reliable the driver is going to get.”
Depending on the level of automation and intensity of alert, some drivers took an average of 17 seconds to respond to a takeover request and regain control of the vehicle, in a study just released by the National Highway Traffic Safety Administration and supported by Google and several leading automakers and suppliers. In that time, a car traveling at 60 miles per hour would travel more than a quarter of a mile.
Automakers, Google take different roads to automated cars
Tech Industry players, such as Apple, Google, Samsung, Baidu, or Alibaba, are increasingly looking for potential future growth opportunities in the automotive industry. The activities are manifold, ranging from providing data services to even building .
Forbes magazine had a close look on the innovation / patent side of this development. Interestingly, if looking at the number of new patents in the automotive area that are filed by tech companies, we can observe two things. Firstly, the number of new patents did not really take off until 2013. Secondly, the overall number is still low compared to the thousands of patents from car manufacturers and suppliers which are filed every year. The increase in patents since 2013 shows quite well the increasing interest in the automotive market, though.
The biggest contributors to the increasing number of patents were Samsung and Google, followed by Microsoft and Apple.
But in terms of who has the biggest war chest in patents so far, Samsung far exceeds all its competitors. For automobile-related patents filed in the past 10 years, Samsung leads with 510, Google GOOGL -1.70% with 308,Microsoft MSFT -0.98% with 222, and finally Apple AAPL -0.47% with 83, according to patent numbers pulled by SmartUp Legal.
Samsung Amasses Largest Patent War Chest Among Tech Giants For Cars Of The Future – forbes.com
Samsung obviously contributes with a lot of patents from its batteries division, however we can see as well patents for HMI components such as a transparent Head-Up-Display, which would make Samsung compete with Tier-1 suppliers such as Continental. On Google’s and Apple’s side Forbes notes down the main interest in digital data processing and navigation, as well as autonomous driving (Google) and User Interface / Interaction (Apple).