It’s Aye, Robot, as Driverless Cars Eventually Steer Near Showrooms
Race To Build Self-Driving Cars Accelerates
Car electronics supplier Delphi Automotive Plc went coast-to-coast in two thousand fifteen in a self-driving Audi Q5 sport-utility vehicle to prove the autonomous automobile had arrived.
Now, Delphi is shifting from stunts to selling. In Las Vegas this week at CES, formerly known as the Consumer Electronics Showcase, the company will give test rails to hundreds of potential customers in driverless Audis over a course of rugged terrain and tunnels. The objective: to walk away from this critical conclave with a handful of hot prospects for its self-driving system.
Tesla Model S tooled with Autopilot
“The last two years at CES have been more about just showcasing the technology and telling, ‘Look what it can do,'” said Glen De Vos, Delphi’s vice president of advanced engineering. “This year, the discussion is all about the path to production.”
Self-driving cars are eventually making the leap from the lab to the showroom. Tesla Motors Inc., BMW, Ford Motor Co. and Volvo Cars have all promised to have fully autonomous cars on the road within five years. Alphabet Inc. just spun off its Google Self-Driving Car Project, renaming it Waymo, and then promptly unveiled its driverless Chrysler Pacifica minivan and said it’s in discussions to put its technology into Honda Motor Co. models. When CES officially opens Jan. Five, the talk won’t be about proving technology — it will be about selling to automakers, ride-hailing companies, transit services and, ultimately, consumers.
“We’re close to bringing this to a lot of people,” John Krafcik, the former auto executive now running Waymo, said at its formation. “We’re kind of at an inflection point.”
At a display once known for mobile phones and movie games, vehicle technology will cover an exhibit space the size of four football fields, some twenty one percent more than last year. Some one hundred thirty eight auto-tech exhibitors will all be seeking a lump of the autonomy business that Boston Consulting Group says will increase to $42 billion by two thousand twenty five and account for a quarter of global sales by 2035. And since it takes about four years to bring a car to market, now is the time to cut deals with suppliers and tech playmates to garment models with self-driving systems that will debut early next decade.
Chrysler Pacifica Hybrid minivan tooled with Waymo technology
“CES two thousand seventeen marks the beginning of a fresh era,” said Luca Mentuccia, senior managing director and head of the automotive practice for consultant Accenture. “Autonomous driving has become the next major battlefield.”
Prius Problem
One reason for the thrust to get robot rails on the road is fear of the so-called Prius problem, according to Mark Wakefield, managing director and head of the automotive practice for consultant AlixPartners. The Prius became synonymous with hybrids after Toyota Motor Corp. pioneered the technology almost twenty years ago. Today, the Prius still predominates the market for gas-electric cars.
“Nobody indeed wants to be the competitor to the Prius, where you let one company effectively framework the practice in the buyer’s mind,” Wakefield said. “Then when you come out with one, it’s like, ‘Oh, you make one, too?”’
Google’s self-driving car project has garnered the most attention as it clocked more than two million miles of road testing over the last seven years. Waymo hasn’t yet exposed its business model, but it can draw from the success of the Android model its parent company employs in the smartphone market. Unlike traditional automakers, Alphabet’s businesses tend to concentrate on recurring revenue rivulets, such as search ads.
Google’s Project
Android, which powers four of every five smartphones sold globally, funnels money to Google services. Similarly, Waymo could build underlying software for autonomous vehicles, license it to carmakers and cash in on services and data.
“Google’s playbook here is well-tested,” said Jonathan Matus, chief executive officer of Zendrive, a transportation data startup, who formerly worked on Android. “They understand how to use the platform to create dominance.”
Consumers will most likely get their very first taste of automated driving in the backseat of a robo-taxi. Uber Technologies Inc. is testing a fleet of autonomous Volvo XC90 sport-utility vehicles in Pittsburgh and Arizona. Ford, which said last week its test-fleet will triple to ninety cars this year, says its very first autonomous vehicles will go to ride-hailing and ride-sharing services in 2021. General Motors Co. plans to test self-driving Chevy Bolts in Lyft ride-hailing fleets in Arizona.
Acclimating Consumers
The idea is to get consumers so convenient with the technology that they buy it for their own car. Volvo has said it will suggest its self-driving system as a $Ten,000 option on the XC90 in five years. GM is developing a semi-autonomous system known as Super Cruise that will permit for hands-free driving on highways.
“Chevy Bolts in a Lyft fleet will give people exposure,” Wakefield said. “As they build up confidence and think, ‘Wow, Chevy does some pretty neat stuff,’ GM is hoping that caresses off and convinces them to buy a Bolt with Super Cruise.”
It also makes business sense to put the very first autonomous cars into a shared-use situation. Because the sensors that give a driverless car a 360-degree view of its surroundings are still pricey, spreading the cost over all the riders in a robot taxi will help to defray the expense.
“The high cost isn’t solved yet,” Wakefield said. “There’s not an assumption of making tons of money on this very first generation or two.”
Safety Improvements
The dramatic improvements in safety that should come from semi-autonomous features such as automatic emergency braking will accelerate consumer request for autonomy, according to Adam Jonas, an analyst with Morgan Stanley.
“It took air bags fifteen years to get high invasion in cars,” Jonas said.
Palo Alto, California-based Tesla — which doesn’t exhibit at shows such as CES — may be the thickest accelerant for autonomy. Tesla is now outfitting all its cars with the hardware required to enable the robot to take the wheel. Chief Executive Officer Elon Musk says Tesla will soon be ready to roll the switch on the technology, which puts pressure on other companies to keep up. Just last week he tweeted a link to the dashboard movie of a Model X whose warning chimed a moment or two before two other cars crashed ahead of it on a European highway.
“Tesla is being a disrupter,” Wakefield said. “Instead of going slow and being methodical like other automakers, they put it out there and the others have to come up with a contesting product.”
Regulatory Switches
Autonomy also is getting a boost from U.S. regulators, who in December proposed fresh rules that cars be embedded with chips to communicate with each other to help avoid accidents. Vehicle-to-vehicle communications, known as V2V, could arrive within five years and make driverless cars smarter and safer.
“Every government agency we work with has been waiting for this rule,” said Jim Barbaresso, national practice leader for intelligent transportation systems for consultant HNTB Corp. Now “you’re going to see more momentum in connected vehicles and more activity among automakers.”
For Delphi and its playmates Mobileye NV and Intel Corp., the very first application of their self-driving system could be an airport tram or a rental-lot bus. By eliminating the human driver, autonomy could cut the operating costs of such systems by seventy percent, De Vos said.
“The economics are truly compelling,” said De Vos, who will be providing tram operators test rails in Delphi’s driverless car in Las Vegas. “After CES, we expect to truly be getting serious with three or four customers.”
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