Driverless car manufacturers enter a brave new world

Consumer demand for autonomous vehicles is on the rise, and will only continue to grow. If traditional carmakers want to keep up with Silicon Valley upstarts, they’re going to need to start thinking outside the box

 
A Google self-driving car on the road 

Over the past century, the global automotive industry has more or less been operating on cruise control. Despite the highly competitive nature of its business, innovation within the establishment has always seemed to crawl at a snail’s pace – until about 10 years ago. Now, Detroit auto giants are bending over backwards to introduce newer and flashier features on all models.

Japanese and European carmakers are hiring IT experts at break-neck speed, investing heavily in top-secret testing facilities and pumping billions into research and development. Their goal is one in the same: to rollout the globe’s first commercially successful autonomous vehicle – before those pesky newcomers from Silicon Valley put them all out of business.

If just 10 percent of all vehicles on American roads were autonomous, the lack of human error would mean 21,000 fewer crashes each year

It’s always difficult to determine where any given market is heading; however, every expert under the sun seems to agree that the automotive industry will inevitably shift towards full autonomy. According to one survey by Boston Consulting Group, 44 percent of North American consumers say they’ll be likely to purchase a fully automated car by 2025.

Meanwhile, 55 percent of respondents say they are already likely to consider buying a partially automated vehicle. Buyers are completely fascinated by the quasi-futuristic notion of a ‘self-driving’ car, and so researchers are consequently predicting the market for driverless features could hit $45bn within the next eight years. By 2035, Boston Consulting Group is forecasting global sales of up to 12 million fully autonomous vehicles per year.

Companies everywhere are already working to meet that impending demand. Yet until recently, established conglomerates like General Motors and Toyota didn’t seem to have the time or resources to quench that thirst for innovation – that is, until two of the globe’s biggest tech names decided to step in and offer up some friendly competition.

Meeting supply and demand
Apple is notoriously talented when it comes to upsetting the status quo. In the past two decades, the company has rocked the music industry, sent PC makers scrambling for cover and unleashed the undisputed gold standard in mobile handheld technology. So, when Apple began to lure seasoned auto engineers away from Detroit last year, established carmakers were right to fear the company’s motives.

Fig. 1

At the globe’s most secure racetrack, former auto executives are labouring day and night to develop what Apple coyly refers to as ‘Project Titan’. Despite whirling rumours, the company is already in the late stages of developing a self-driving car – executives have spent the past year or so flaunting a more public electric car project that’s expected to hit streets in 2019.

Yet Tim Cook had better encourage his team to make tracks – because researchers at Google have already taken driverless technology further in the last few months than many consumers imagined possible (see Fig. 1). Just seven years after launching its not-so-secret Self-Driving Car Project, Google has now deployed 23 fully automated Lexus SUVs onto public streets, and unleashed 25 prototype models across California and Texas.

Those electric vehicles, which boast a top speed of 25mph and resemble a cute, ‘quintessentially Google’ cross between a Smart car and a Nissan Micra, have clocked over a million miles in ‘autonomous’ mode across Google’s sprawling campus in Mountain View.

Employees are able to summon the automated prototypes at the swipe of a finger using a special app, and are then ferried about without any user interaction whatsoever. After further testing, Google plans to manufacture around 100 of these prototypes through a yet-to-be-appointed Detroit carmaker, and department head Chris Urmson has stated he hopes to make the vehicles available for general purchase in the next four years.

Whether that deadline can truly be met remains to be seen; however, in the meantime, there are already plans to utilise the vehicles as automated taxis for public use at the upcoming Olympic Games in Rio de Jeneiro next year.

At this point, it appears safe to assume that Google’s self-driving venture is no gimmick. Too much time and effort has been invested to toss the project aside, and industry experts reckon Google has stumbled upon the auto industry’s inescapable future. That’s why traditional carmakers are working overtime to try and catch up with cash-rich Silicon Valley firms.

Some, including iconic racing designer Ken Okuyama, think it may be too late to save the industry as it currently stands. In October, the Japanese heavyweight behind the famous Ferrari F60 Enzo and Porsche Boxster told reporters that carmakers are running the very real risk of devolving into mere suppliers to more innovative driverless newcomers like Apple, Google and Uber.

Consequently, Okuyama reckons the consumer market will end up segmenting into two camps: automated vehicles that simply fulfil transportation needs, and luxury cars accessible only to the super-rich. Car ownership will inevitably decline, decreasing demand for affordable, traditional cars. In turn, automated vehicles will occupy global roads almost entirely within the next 20 to 30 years.

Weighing up the options
Automotive purists would no doubt shudder at the thought; however, according to experts at The Eno Centre for Transportation, roads dominated by driverless cars wouldn’t necessarily be bad. Researchers estimate over 40 percent of all fatal crashes stem from the use of drugs, alcohol or tiredness.

A further 18 percent of wrecks are caused by distractions like mobile phones, eating or texting. Bearing that in mind, if just 10 percent of all vehicles on American roads were autonomous, the lack of human error would mean 211,000 fewer crashes each year – saving an estimated 1,100 lives. The economic benefits of those reduced casualties could be worth up to $25bn.

As car crashes are responsible for a quarter of all traffic congestion, America’s Federal Highway Administration also says that such a broad reduction in the number of accidents taking place could drastically lower the nation’s overall fuel consumption – reducing greenhouse gas emissions and slowing climate change.

Traditional carmakers are working overtime to try and catch up with Silicon Valley firms

It’s not just American authorities preparing for an uptake in autonomous vehicles. In November, Australia witnessed its first demonstration of the technology after Senators agreed driverless cars would ultimately prove a major boost to the nation’s stagnating economy. An expert panel was told that even a low uptake in automated vehicles could save emergency services around $27bn per year.

Meanwhile, by reducing congestion, driverless technology would add $30bn to the economy in reclaimed productivity. The UK Government is singing the same tune. In Chancellor George Osborne’s spring budget, it was announced Westminster would bet £100m on the research and development of automated cars, which is expected to be match-funded by the industry in the months to come.

Local firms are already answering the call. In September, a Coventry-based engineering firm got the go ahead to give unsuspecting Milton Keynes commuters a spin in a set of futuristic, self-steering travel pods.

US Transportation Secretary Anthony Foxx (L) and Google Chairman Eric Schmidt inspect a Google self-driving car at the Google headquarters in California
US Transportation Secretary Anthony Foxx (L) and Google Chairman Eric Schmidt inspect a Google self-driving car at the Google headquarters in California

Weighing in all of the potential safety and economic benefits, it’s plain to see why governments are bending over backwards to accommodate driverless technology. Yet it remains to be seen whether Silicon Valley giants like Google will actually be the ones to streamline that technology on a global scale. After all, the world’s well-managed automotive giants still appear to have a couple of tricks up their sleeves.

Google is one of the globe’s most recognised brand names, and its imagination-driven culture and enviable cash flow have enabled engineers to take on a seemingly never-ending rota of fun and exciting projects. Likewise, Apple is one of history’s most profitable companies – and has proven experience upending traditional retail markets. If either of those companies were to place time and resources towards developing an automobile, it would be ridiculously foolish for more established carmakers to ignore said projects.

Behind the scenes
It seems traditional carmakers aren’t so foolish, after all. They’re actually working to meet this new competition head-on. In November, Volkswagen convinced self-driving expert Johann Jungwirth to leave Apple for greasier pastures. Volvo, Toyota and Honda are all planning to unveil their own fully-driverless models by 2020, and Nissan has reportedly teamed up with engineers at NASA with a view to start rolling out autonomous creations of its own.

It’s difficult to tell whether these flagship projects will truly ignite the imaginations of consumers in the way analysts have predicted. In the meantime, however, those same old carmakers are making far more realistic efforts than the likes of Google to meet increasing demand for autonomous functionality.

According to one new survey by the University of Michigan Transportation Research Institute, not every driver is gung-ho to place their lives in the hands of a fully automated vehicle. As a result, just 15 percent of those surveyed by Michigan said they would ‘definitely’ be keen on purchasing a driverless vehicle in the near future.

By contrast, 40.6 percent of drivers surveyed said they would rather purchase a partially automated vehicle. A similar piece of research conducted by media giant AutoTrader found that most drivers who say they’re frightened to hand over full automotive control to a computer would be more than willing to pay for multiple, semi-autonomous upgrades.

While conventional wisdom might dictate that manufacturers can only install so many semi-autonomous features before vehicles eventually become driverless, Google executives maintain the two markets will always be fundamentally different. Traditional carmakers are certainly hoping they’re right.

Although much of this technology has been unleashed in a reactionary capacity, carmakers have actually been working to roll out cutting-edge, semi-autonomous vehicles since before Google’s rise to power. From as early as 2003, Toyota had introduced a radar safety system designed to apply pressure to a car’s brakes in the likelihood of a collision. Volvo improved on that technology by unveiling its own autonomous emergency breaking system in 2009.

In Europe, Ford sells cars that do not allow drivers to breach speed limits – and Volvo has already released an SUV, the XC90, which automatically stops at red lights, accelerates when it sees a green light and matches the steering of cars ahead.

Elsewhere, Cadillac’s ‘Super Cruise’ technology promises to make long journeys virtually effortless by the time it hits motorways in 2017. Speed, steering and lane changes will all be taken care of automatically, with drivers free to step in and retake control at any point. Elon Musk has already introduced a similar autopilot feature on Tesla’s new Model S.

Putting safety first
As new, cutting-edge autonomous features are added to traditional vehicles, older and less extreme self-driving add-ons are being made more affordable than ever. Lexus now offers an upgrade that stops one’s vehicle in case of a potential crash, or sounds an alarm if the vehicle veers out of its lane, for a mere $500. Boston Consulting Group reports that semi-autonomous upgrade packages that were selling for $4,000 in 2012 are now being given away for less than half that amount.

In many cases, mid-level luxury brands are utilising these tech upgrades as a sort of loss leader. By giving away multiple pieces of the driverless puzzle, they hope car owners will be appeased into avoiding emerging prototypes from the likes of Google. So long as the price is right, that strategy will most likely pay off for more established manufacturers in the mid-term.

It cannot be denied the global automotive industry has so far responded extraordinarily well to the post-recession demands of tech-savvy consumers. Competition from the likes of Apple and Google would frighten any self-respecting business leader – but traditional carmakers simply aren’t backing down.

Table

These more established firms are working overtime to rollout their own driverless vehicles and offset demand for the inevitable release of self-driving Google cars. Yet more important still, manufacturers are also keeping better tabs on genuine consumer needs and responding in kind.

For now, it appears as though most individuals are keen to retain at least some control over their vehicles. Consumers are still unsure about driverless technology, and so established manufacturers are giving them the best of both worlds by introducing cutting-edge, semi-autonomous features.

At the end of the day, it appears as though the models of century-old titans will continue to dominate city streets for the foreseeable future – but only so long as these firms are willing to match the dedication and investment of whimsical Silicon Valley tech wizards.

If executives in Tokyo or Detroit should happen to drop the ball, Google can and will pick it back up. The industry can’t afford to lag behind, even for a second. Yet so long as companies stay on their current trajectory, evidence suggests they won’t.

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