New Car Technologies and their Persistently Bullish Prospects

Let’s dip back a few years for a quick history lesson. It’s 2010, and various business prognosticators are confidently predicting that the number of electric cars sold in the United States in 2013 will be ~200,000 vehicles.

And in 2015, electric auto sales will reach ~280,000 units.

What really happened?

In 2013 total electric car sales in the United States were fewer than 97,000.  In 2015, the figure was higher – all of 119,000 units.

It’s worse than even these statistics show. The auto industry’s own expert predictions were off by miles.  In 2011, Nissan CEO Carlos Ghosn predicted that his company would have more than 1.5 million Renault-Nissan electric vehicles on the road.

That forecast turned out to be about 80% too high.

More recent sales forecasts for electric cars are much more realistic. As has become quite clear, many consumers aren’t particularly interested in shifting to a newer technology of automobile if they have to pay substantially more for the technology up-front – despite the promise of lower vehicle operating expenses over time.

Even more telling, a recent McKinsey survey found that of today’s electric car owners, only about half of respondents indicated that they would purchase one again. Ouch.

So, what we now have are projections that electric vehicles won’t reach 4% of the U.S. automotive market until 2023 at the earliest. That’s about a decade later than those first forecasts envisioned reaching that penetration level.

Is it all that surprising, actually? If we’re being honest, we have to acknowledge that the most lucrative markets for electric vehicles are in highly prosperous, population-dense urban areas with strict gasoline emissions standards – the very definition of a “limited market” (think San Francisco or Boston).

Thinking about the next technological advancement in this sector, the industry’s newest “bright shiny thing” is self-driving cars – also referred to as the classier-sounding “autonomous vehicle.” But it appears that this sector may be facing similar dynamics that made electric vehicles the “fizzled sizzle” they turned out to be.

Consider the challenges that autonomous vehicles face that threaten to dampen marketplace acceptance of these products – at least in the short- and medium-term:

  • The regulatory and legal ramifications of autonomous vehicles are even more daunting than those affecting electric cars. For starters, try assigning liability for car crashes.
  • Autonomous vehicles require sophisticated mapping and data analytics to operate properly. The United States is a big country. Put those two factors together and it’s easy to see what kind of a challenge it will be to get these vehicles on the road in any major way.
  • How about resistance from powerful groups that have a vested interest in the status quo? Of the ~3.5 million commercial truck drivers in the United States, I wonder how many are in favor of self-driving vehicles?

Not every new technology operates in a similar environment, and for this reason some new-fangled products don’t have such a long gestation and ramp-up period.  Take the smartphone, which took all of ten years to go from “what’s that?” to “who doesn’t own one?”

But there’s quite a difference, actually.  Smartphones were a sea change from what people typically considered a mobile phone, with oodles of added utility and capabilities that were never even part of the equation before.

By contrast, consumers know what it’s like to have a car, and even self-driving cars won’t be doing anything particularly “new.” Just doing it differently.

At this juncture, McKinsey is predicting that autonomous cars will reach ~15% of U.S. automobile sales by the year 2030.

Maybe that’s correct … maybe not. But my guess is, if McKinsey’s prediction turns out to be off, it’ll be because it was too robust.

In the drive towards self-driving cars … How do we get there from here?

car crash in semi-rural marylandA few weeks ago, I was driving to work on the main two-lane state highway here in our semi-rural corner of Maryland.  It was the Friday before Labor Day weekend, so traffic was lighter than usual.  It was also a clear day, with no wet roads or fog.

In other words, a perfect day for driving.

All of a sudden, an oncoming car drifted into our lane.  In fact, it appeared as if it was purposefully targeting the vehicle about four or five car lengths in front of me.

In the inevitable collision that occurred (thankfully not completely head-on but sickening enough at 55 mph), there were injuries and ambulances … a closed road for 90 minutes … statements to the police required of myself and others … and two wrecks to be towed.

The cause of this accident had to be a case of distracted driving – perhaps reaching for a smartphone, checking a text message or some other action that took eyes off the road just long enough to cause a serious accident.

self-driving carsIt got me to thinking about recent news reports touting “self-driving” cars of the future.

Certainly in a case like this accident, self-driving features like nudging the vehicle back into the correct lane could have easily prevented this accident from ever occurring.

Self-driving vehicles seem like a very nice idea in theory, and in practice they’re not very far off — at least if the news reports are to be believed.

Nissan, Volvo, Daimler-Benz and other leading car companies are predicting that commercial models will be a common sight on the road by about 2020 … and by about 2035, a majority of cars operating will have this technology.

But in order to get there from where we are now, we’re going to have to deal with numerous challenges.  Here are a few that seem particularly nettlesome:

  • Will operators of self-driving cars require a different kind of vehicle training?
  • How will highways accommodate vehicles with and without drivers?
  • Will self-driving cars perform equally well in different road environments – ordinary roads in addition to super-highways?
  • Insurers will need to figure out who is at fault if a self-driving car crashes – the car or the driver?
  • How will automotive manufacturers ensure that cars’ onboard computers can’t be hacked?

And here’s another technology challenge:  What sort of back-end servers will be required to process the huge amounts of vehicular data … as well as secure ways for cars to communicate in real-time with the cloud and other vehicles?  (Daimler has reported that its self-driving test vehicle produces 300 gigabytes of data every hour from its stereo camera alone.)

And lest you become really anxious, don’t think very hard about the kind of data that’s being captured, chronicled and saved on each and every self-driving car’s trip – including  “where it’s been when” and “how fast it got there.”

I also wonder about the transition period when there will be a mix of self-driving cars and traditional vehicles sharing the road.

If self-driving cars “react” to other vehicles so easily, won’t it be really tempting for driver-operated vehicles to make end-runs around self-driving cars or otherwise cut them off, knowing that those cars are programmed to move out of the way to prevent a collision?

Roy Goudy, a senior engineer at Nissan, has commented that since “autonomous” cars can react more quickly to potential hazards than can cars driven by people, it will be difficult to have both on the road at the same time.

“What are the rules in that environment, and what do we do to enforce those rules?” Goudy asks.

I think the future of driving is a very intriguing subject.  Self-driving vehicles could mean far fewer traffic-related injuries and deaths … and it could bring more mobility and independence to disabled people and the elderly.

We just need to figure out a way to get there.