How soon will self-driving cars impact how you get to work and your home from a night on the town? Automakers, ride-sharing firms and tech startups are forging loose alliances in an effort to advance self-driving technology and claim a piece of what is expected to be a multi-billion-dollar business. General Motors (GM) plans to have its self-driving cars ready for a ride-share service within two years as the automaker looks beyond traditional car ownership for new tech-driven sources of revenue.

After spending more than a year putting the pieces in place to launch a robotaxi business, GM recently shared it expects to have a fleet of self-driving cars in operation in 2019. The automaker or a partner could run the sharing service. Ride-sharing services on the roads now, including those offered by Uber Technologies Inc. and Lyft Inc., cost consumers about two dollars to three dollars a mile. GM estimates these companies pay their drivers the equivalent of about three quarters of revenue. Take away driver costs and the rates could drop to below one dollar a mile, according to Kyle Vogt, chief executive officer of Cruise Automation that develops the software for GM’s self-driving cars.

GM President Dan Ammann told analysts and investors last month that GM’s plan to get self-driving cars to market in large numbers could drop the costs of ride-sharing under one dollar a mile by 2025. Once that happens, he said, 75 percent of the miles people drive could be through sharing or hailing services. That’s a $1.6 trillion market, which is 300 times larger than today.

GM’s challenge will be getting its share of the revenue, explained Morningstar Inc. analyst David Whiston in a Bloomberg interview. Picking a partner likely would mean having to split earnings. If the automaker runs its own business, it’ll have to deal directly with consumers and beat out competitors who will have been in the market for years.

To get there, GM is lowering the costs of self-driving cars both by building out its manufacturing capabilities and supply base and finding better technology. Lidar systems that use laser technology to give vehicles a view of the road now cost about $20,000, Vogt said. GM is switching to lidar units developed by Strobe, a company the automaker acquired this year, which will cost $300 apiece.

Uber, Lyft and Waymo

The outlook for when GM thinks it’ll have a self-driving service ready roughly coincides with an Uber milestone. Uber plans to buy up to 24,000 self-driving cars from Volvo, marking the transition of the U.S. firm from an app used to summon a taxi to the owner and operator of a fleet of cars. Volvo said in a November statement it would provide Uber with its flagship XC90 SUVs equipped with autonomous technology as part of a non-exclusive deal from 2019 to 2021. Should Uber buy all 24,000 cars, it would be Volvo’s largest order by far and the biggest sale in the autonomous vehicle industry, giving Uber, which is losing more than $600 million a quarter, its first commercial fleet of cars.

Waymo, the autonomous car unit of Google parent Alphabet Inc., last month said it’s about to start chauffeuring people in Fiat Chrysler minivans without safety drivers manning the steering wheel. Not to be outdone, Uber’s rival Lyft struck a research partnership with Waymo. Lyft also secured deals with Ford Motor Company and startups Nutonomy and Drive.ai to incorporate self-driving cars into its fleet.

GM’s new focus, Volvo’s agreement with Uber, Lyft’s with Ford and Waymo show the pressure on automakers to avoid becoming obsolete in a world of increased automation. It also shows ride-services companies feel compelled to start automating to cut driver costs and turn profits. Hopefully, this pressure also increases the quality of riding experiences and safety for passengers.

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Ryan Lahti is the founder and managing principal of OrgLeader. Stay up to date on Ryan’s STEM organization tweets here: @ryanlahti

(Photo: Uber Testing Self-Driving Car, Flickr)

Is the momentum of electric vehicles (EV) increasing or leveling off in the automotive world? The following events should provide an indication.

• Jaguar introduced its first all-electric vehicle. Jaguar said its new concept, the I-PACE, is expected to deliver 516lb-ft of instant torque, 400 HP and 0‑60 mph in around 4 seconds.
• Tesla entered into an agreement to acquire Grohmann Engineering as a way to increase total production output to 500,000 units per year by 2018. Grohmann Engineering will serve as the preliminary base for Tesla Advanced Automation Germany headquarters, with other locations to follow.
• In the racing world, McLaren will double the electric range of Formula E race cars for the 2018 season, as the company begins to supply the race series with new battery technology.

According to Automotive Engineer, Continental says that combustion engine technology will peak by 2027 before electrified powertrains begin to erode its market share. More specifically, the tier one supplier predicts that by 2030, 69 percent of vehicles in mature markets (e.g., China and the U.S.) will be electrified as companies look to reduce emissions levels and legislation becomes increasingly strict.

Given all this information, what markets have the greatest potential for EV sales? An Accenture study identified nine domestic markets, in addition to the U.S. and China, that have the potential to generate significant EV growth in the next four years. These markets were analyzed to pinpoint the crucial distinctions that shape EV attractiveness, including Canada, France, Germany, Japan, the Netherlands, Norway, South Korea, Sweden and the UK. The criteria for determining their growth potential includes researching the status of government regulations and subsidies, charging infrastructure, vehicle range and charging times.

The study divided the markets into four distinct categories based on the potential of the markets to drive EV growth: best in class, high potentials, hesitators and pensioners. The U.S. and China rank as best-in-class markets, because they show both high EV market size and growth. Furthermore, they have already reached attractive volumes.

Additional markets that are poised to join the U.S. and China in generating greater EV sales are defined as high potentials. France, for example, is receiving support from the French government in the form of EV purchase credits of up to $6,300, free charging station use and free EV parking. The French government aims to establish 2.7 million charging stations by 2020.

The study classifies Brazil, India and Russia as hesitators because of their small market size and expected low EV growth. As Automation World points out in its discussion of the study, the key takeaway is that multiple markets are gearing up for more EVs, driven by technological, economic and political factors. Automakers, particularly those heavily invested in EVs, should consider these factors and be prepared for such growth, including extending their manufacturing footprint.

Related posts:

Volkswagen Joining Tesla in Electric Vehicle Market

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

(Photo: Jaguar I-Pace, Flickr)

In order to help recover from its diesel emissions difficulties and focus more on faster-growing market segments, Volkswagen is shifting its focus to include electric vehicles and autonomous driving. Volkswagen’s forecasts suggest that electric vehicle sales will be between two and three million units in 2025, equivalent to between 20 percent and 25 percent of the total unit sales expected at that time.

According to Automotive Engineer, Volkswagen said: “Special emphasis will be placed on e-mobility. The group is planning a broad-based initiative in this area: it intends to launch more than 30 purely battery-powered electric vehicles over the next ten years. The company estimates that such vehicles could then account for around a quarter of the global passenger car market.” To help build the line-up of new vehicles, Volkswagen will increase its knowledge of battery technology and bring a lot of the development work inside its company walls.

“A further lever for transforming the core automotive business is to develop new competencies. The group therefore intends to independently provide the resources necessary to address the future topic of autonomous driving and artificial intelligence. The aim is to license a competitive self-driving system developed in-house by the end of the decade,” explained Volkswagen.

As Volkswagen is looking to become a player in the electric vehicle market, Tesla is expanding the share it already has. CEO, Elon Musk, confirmed that the OEM’s current lineup of a premium sedan and SUV will be joined by a compact SUV, a pickup truck and the forthcoming mass-produced Model 3 sedan. In parallel to this, Tesla will continue to develop its autonomous technology with the aim of providing self-driving capability that is ten times safer than that of manual vehicles.

“As the technology matures, all Tesla vehicles will have the hardware necessary to be fully self-driving with fail-operational capability, meaning that any given system in the car could break and your car will still drive itself safely. It is important to emphasize that refinement and validation of the software will take much longer than putting in place the cameras, radar, sonar and computing hardware,” added Musk.

Tesla doesn’t plan to stop there. Once full autonomy has been approved by regulators, Tesla plans to introduce a car sharing system whereby owners can hire out their vehicle on occasions when it would otherwise not be in use.

As the electric vehicle market continues to grow along with self-driving capability, automotive manufacturers seek to obtain a larger foothold. Tesla already has a presence in these areas. Volkswagen is redirecting resources to obtain its share. The next decade is going to be interesting for the automotive industry.

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

(Photo: Volkswagen logo, Flickr)

While they are known for producing cars, automakers are realizing that continuing to focus on vehicles in the traditional sense is not a strategy for success in the future. As a result, automotive companies are adjusting their approach to business. According to NBC News, Ford plans to put more emphasis on what can be called “mobility solutions.” It will still sell you an F-150 pickup, but it’s also getting into businesses like car- and ride-sharing along with putting more emphasis on high-tech services like SYNC.

Ford CEO Mark Fields explained, “Our plan is to quickly become part of the growing transportation services market, which already accounts for $5.4 trillion in annual revenue.” This is nearly twice as much as the global auto industry brings in each year. Consequently, Fields announced the creation of the new Ford Smart Mobility LLC to enable the company to become a player in the transportation services market.

Since the beginning of the year, Ford has announced a variety of new ventures outside its traditional lines of business. It’s even launched a partnership with Amazon that will give motorists in-car access to the high-tech company’s voice assistant, Alexa. This will let a motorist remotely control their home’s thermostat and lights or open the garage door.

Ford’s Detroit neighbor, General Motors (GM), is also thinking along the same lines. Over the last few months, GM has launched the Maven car-sharing service and acquired the bankrupt Sidecar ride-sharing service. It’s also invested $500 million into Lyft, second only to Uber in the fast-growing world of ride-sharing.

The auto industry, GM CEO Mary Barra said during the Consumer Electronics Show in January, “will change more in the next five to 10 years than it has in the last 50.” This led GM to announce another major acquisition, the purchase of Cruise Automation, a California-based start-up focusing on the development of autonomous vehicles.

European carmakers are doing the same thing as their American counterparts. BMW announced it will focus on electric vehicles and automated driving and develop its software and technology services as part of a new strategy according to Reuters.

The emergence of rivals including Uber and technology group Alphabet which has developed its own self-driving car, has prompted BMW to rethink its traditional strategy of selling large powerful luxury cars. BMW said it would focus on developing the businesses of high-definition digital maps, sensor technology, cloud technology, and artificial intelligence. BMW will also push services including providing wall mounted electric car charging boxes and software programs to help drivers find a parking space with its ParkNow and ChargeNow services.

By the beginning of the coming decade, the first fully autonomous vehicles are expected to hit the road. The National Highway Traffic Safety Administration recently said it would relax rules to permit faster development of a technology that it believes will yield a sharp reduction in highway fatalities, while also squeezing more vehicles efficiently onto existing roads.

Several studies released over the past month conflict over the long-term impact of autonomous vehicles and other alternative mobility services. A study by AAA found the majority of Americans remain skeptical about autonomous vehicles. A different study by the Boston Consulting Group (BCG) suggested that such concerns will fade as time passes. The BCG study predicted that ride-sharing, for example, will see a five-fold growth in the number of people using such services over just the next five years.

It’s far from clear how autonomous vehicles and ride-sharing will affect traditional automakers — and that’s why they’re rushing to enter non-traditional businesses. Ford Chairman Bill Ford summed up the auto industry shift well when he said, “Ensuring the freedom of mobility requires us to continually look beyond the needs of today and interpret what mobility will mean to future generations.”

Related news briefs:

The Leaders in Autonomous Vehicles

BMW and Audi Challenge Tesla Electric SUV

Is Vehicle Technology Just Hype?

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

(Photo: Ford, Flickr)

You may have seen countless online videos of self-driving cars or the recent 60 Minutes episode showing one being tested on a highway near Silicon Valley. This is because autonomous driving has been a goal for the automotive industry for decades. As the online videos and 60 Minutes episode show, autonomous driving is close to becoming a realistic objective that can be achieved. With the autonomous vehicle market quickly evolving, who are the leaders? Navigant Research provides the answer to this question.

Although fully-automated vehicles that do not require a human driver are expected to be about 10 years away from production, the incremental systems that are necessary as foundations for self-driving cars should make their way into production in a much shorter time frame. The desire to reduce injuries and deaths resulting from traffic accidents and the potential to reduce overall energy use represent the biggest factors behind vehicle automation. However, reliability and security, as well as liability issues, pose major barriers to the adoption of autonomous driving. Over the past decade, though, advanced driver assistance systems (ADAS) have begun to rapidly spread from high-end luxury cars to more affordable, high-volume models. By 2020, manufacturers are expected to offer enhanced self-driving capability that includes the ability to change lanes and follow simple directions from a navigation system. Drivers will still need to monitor progress and be prepared to take over when the traffic situation gets too complex. Truly driverless cars are expected by 2025, but this date will depend on legislative changes as well as consistent improvements in technology.

In order to determine the leaders, Navigant Research examined the strategy and execution of 18 global vehicle manufacturers that are involved in the emerging autonomous vehicle market (other companies such as Google were not included in the study). These manufacturers were rated on 12 criteria: vision, go-to-market strategy, partnerships, production strategy, technology, geographic reach, sales, marketing and distribution, product capability, product quality and reliability, product portfolio, pricing and company commitment.

Based on Navigant’s analysis, here are the top 10 manufacturers:

1. Daimler
2. Audi
3. BMW
4. General Motors
5. Volvo
6. Ford
7. Toyota
8. Honda
9. Volkswagen
10. Nissan

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

(Photo: Dollar Photo Club)

BMW is reportedly developing an all-electric crossover aimed squarely at the upcoming Tesla Model X. According to Automotive News, the unnamed SUV has yet to be approved by BMW’s board of directors. The report, originally appearing in a German business magazine, was dismissed as “speculation” by a BMW spokesperson. That being said, BMW CEO Harald Krueger is believed to be eager to add an electric SUV to the lineup.

If the SUV is green-lit, it would be manufactured in Spartanburg, South Carolina – the same facility where BMW assembles the X3, X4, X5 and X6. The electric SUV will also be sold under BMW’s i lineup alongside the i3 electric hatchback and i8 plug-in hybrid sports car. Arndt Ellinghorst, head of global automotive research at Evercore ISI, said, “In our view an iSUV makes perfect sense for BMW. SUVs are in demand and given the market’s reaction to Tesla’s Model X so far, it seems to be a good fit for families and suburban commuters.”

As for the Model X, CEO Elon Musk shared at Tesla’s 2015 annual shareholder meeting that deliveries of the all-electric SUV will start late in the third quarter of 2015. As reported on Autoblog.com, Musk said he’s looking at the various builds of the X every week and believes that the X will be a better SUV than the S is a sedan. He said that Tesla engineers have been working to get the falcon-wing doors, the rear seats and “a few other things that people aren’t aware of” just right before building the production models.

Not to be outdone, Audi is also getting into the mix. Audi chief executive Rupert Stadler said in a speech prepared for the carmaker’s annual shareholders meeting that Audi is going to offer a sport electric SUV in 2018. The electric SUV is aimed at bolstering the Ingolstadt-based manufacturer’s appeal in markets such as the U.S. and China as it closes the gap on BMW. Audi is also seeking to keep ahead of fast-growing Mercedes-Benz.

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

(Photo: Tesla Model X Front View, Flickr)

Vehicle infotainment (VI) is a marketing buzzword. An electric vehicle that is directly competitive in price to a combustion engine vehicle is an aspiration for the distant future. An optical, head-mounted display (think Google Glass) is a novelty for a pedestrian with discretionary funds. These statements may sound valid, but they are not as accurate as you might think.

As technology and engineering evolve, they are becoming more integrated into the automotive industry. Not surprisingly, the expectations that coincide with this integration are often set at pretty high levels. For instance, the cycle time for the ongoing development of systems that deliver information and entertainment content in your car (aka VI) is frequently compared to the rapid, six-month development cycle time of smartphones. If this is the base for comparison, consumers who may be able to easily upgrade their smartphones could be disappointed when they find themselves owners of dated VI systems that are more difficult to replace.

Although VI systems may not be as easy to change as a smartphone, vehicle manufacturers continue to provide what they believe to be newer and better options for their cars and trucks. For example, Jaguar is introducing Ethernet infotainment architecture to provide greater bandwidth for the next iteration of its XF sedan. This enhancement will enable a 10.2-inch touchscreen along with dual view technology that lets the driver see a variety of information (e.g., navigation) while the front seat passenger watches TV or a DVD. This VI system can also send the estimated time of arrival to a friend and automatically keep this friend updated with progress reports via SMS or short-message service should traffic conditions change.

If this isn’t enough technology for you, take a look (literally) at what Mini and Qualcomm are doing. They are partnering to create Mini Augmented Vision eyewear. The prototype eyeglasses provide head-up display functions to the driver such as driving speed, speed limits, text message notification and parking assistance with camera images projected into the driver’s line of sight.

Once you pull yourself away from the VI and Mini-Qualcomm eyewear to consider what propels this four-wheel gadgetry down the highway, you would find that the cost of battery technology has fallen below estimates made by many analysts in the past decade. According to The Washington Post and research from the Stockholm Environment Institute, battery technology could hit a price point of $150-175 per kilowatt-hour within the next five years making electric vehicles directly competitive with combustion engine vehicles. Given the preceding information regarding vehicle technology, it appears that there is some substance behind the hype.

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

(Photo: Mini Bokeh, Flickr)

The gigafactory would reduce battery costs by more than 30% per kilowatt hour. Currently, the lithium-ion battery used in Tesla vehicles accounts for approximately 25% of all costs. Decreasing the cost of batteries is required to make it possible for Tesla to produce an electric vehicle that would sell in the mid-$30,000 range in addition to its current model S and an upcoming model X (a sport utility vehicle).

The gigafactory is expected to house all aspects of battery production within one large structure that could cover 10 million square feet. Tesla indicated it would like to build the facility in the western or southwestern part of the U.S. to be near its auto assembly plant in Fremont, California or at least near a transportation hub that makes logistical sense. Since this facility is estimated to bring 6,500 jobs with it, states in these regions have been vying to offer it a home. The states that were originally under consideration included Arizona, Nevada, New Mexico and Texas.

California was originally left off the short list due to cumbersome regulatory obstacles that would make it difficult for Tesla to hit its 2017 time frame for battery production. In order to at least put California into contention, Governor Jerry Brown has been trying to get a regulatory package through the California legislature that would speed up the environmental review process. According to Greencarreports.com, California could also offer Tesla tax breaks of up to $500 million (this is roughly 10 percent of the gigafactory’s anticipated price tag).

While the states continue to come up with packages to lure Tesla, Musk has mentioned on more than one occasion that he may begin site development work in two or three states to ensure crucial time will not be lost once the final decision is made. According to site selection experts, starting work at two sites is not unusual, but doing so at three sites definitely is not the norm. Since Musk is an innovator who operates outside the norm, this should not be a surprise.

For more information see, Automotive Engineer, Forbes.com or Greencarreports.com.

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Ryan Lahti is the founder and managing principal of OrgLeader, LLC. Stay up to date on Ryan’s STEM-based organization tweets here: @ryanlahti

While the use of aluminum in the automotive industry is not a new concept, the amount of aluminum used throughout a top-selling vehicle like the F-150 will likely lead to more manufacturers following suit as GM has done. Incidentally, GM had played around with moving to aluminum trucks in 2008, but it decided against this change because of the potential costs involved in doing so in a tough economy. Unfortunately, this decision by GM gave Ford four-year head start since GM’s aluminum-bodied trucks are not expected to be available until 2018.

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