Three companies are among the leaders in paving the way to this disrupted future. They are Tesla, Waymo, and Zoox (Amazon).
Tesla’s latest self-driving software contains AI that learns autonomously by studying the behaviour of human drivers. States Dhaval Schroff, a Tesla engineer, “It’s like ChatGPT, but for cars.” Using neural networks, the self-driving software simulates billions of driving scenarios.
Historically, Tesla’s Autopilot used a rules-based approach, a structure where specific situations triggered structured responses. Examples included how to respond to lane markings, pedestrian movements, other vehicles, traffic signals, construction signs, speed limit indicators and more. Each of these was given programmed responses.
The new Autopilot doesn’t follow these codified responses to programmed scenarios. Instead, it has learned by watching real-life examples of human drivers. As a result, Tesla is using a new metric to measure autonomy success. It is “miles driven without human intervention.”
The goal is to have the Autopilot exceed human driver responses. To achieve this, Tesla used a neural network to help the Autopilot teach itself. It approached autonomy with a blank slate. It had no definition for what is a car, bicycle, pedestrian, or any other driving object. Instead, it learned by watching human drivers deal with billions of real-world situations. It taught itself to read signs. It learned the objects of the road and what drivers encounter. It had a library containing data from nearly 2 million Tesla electric vehicles. This treasure trove of real-world examples was its training wheels. How far away is Tesla from launching this latest iteration of autonomy? Currently, it is testing 5,000 vehicles using the new AI Autopilot.
Waymo began in 2009 as a Google internal experiment. From the start, its goal was to create robotaxis. It builds into vehicles, cameras, Lidar laser technology, real-time sensor data, and custom maps to help visualize the world. Its onboard systems can process billions of bits of data in real time. Its vehicles have been tested, having travelled over 19.3 million kilometres (12 million miles) in real-world and simulated environments.
In August 2023, Waymo launched driverless robotaxi services in San Francisco. The Waymo One app allows pedestrians to book a ride much the way they would call up an Uber. The San Francisco fleet of 250 outfitted Jaguars features high-tech sensors and cameras. Fares range from $18 to $21 U.S., on par with other ride-hailing services.
In March 2024, Waymo received approval to extend its service to a larger area of San Francisco and to Los Angeles where it is operating 50 vehicles in the heart of downtown and Santa Monica. Currently, Waymo in L.A. is restricted to regular streets. Its vehicles cannot drive to the airport or along the many Los Angeles freeways that crisscross the city. That soon will come.
When Amazon decided to get into the autonomous vehicle market it bought Zoox in 2020, a six-year-old company focused on making mobility-as-a-service in cities a reality. You can see a picture of a Zoox robotaxi at the beginning of this article and no doubt you noticed that it doesn’t resemble any vehicle you have ever driven. That’s because Zoox is a reinvention of the car.
Zoox vehicles were never intended to have a driver. They are designed for full autonomy in dense, urban environments. Like Waymo they feature cameras, radar, Lidar and onboard sensors. But unlike Waymo they are unconventional in how they operate with features like bi-directional driving and four-wheel steering.
If I were placing bets on what robotaxis will look like as we move from car ownership to mobility-as-a-service, I would put my money on Zoox-type designs dominating the future of the automobile.
Consider how often you get into your car. On average, we use our vehicles 5% of the time. The rest of the day they stay parked on driveways or in parking lots. Parking lots occupy land that can be repurposed. Donald Shoup, an urban planning professor at UCLA notes that in the United States with its 2 billion parking spots, “the area of parking per car is…larger than the area of housing per human.”
The Uber of the future is the robotaxi, a mobility-as-a-service that provides point-to-point transportation. It is more personal than a bus, subway or train. As mobility-as-a-service becomes more common, fewer vehicles will drive on urban streets. Once people get used to the efficiency of being chauffeured this way the need for personal vehicles will diminish. That will mean enormous cost savings per household yielding greater disposable family income. It means the house footprint will change with no need for a parking pad or garage (the latter at least not for a car).
In-service feature-rich point-to-point robotaxis will replace multiple vehicles on the roads. With fewer vehicles, it means our rush hours, where parkways look more like parking lots, will become a thing of the past.
For vehicle manufacturers, this massive disruption to their business models will cause many to fail as the ratio of cars per person will decline. That means fewer sales, fewer models, smaller production lines, and fewer jobs in the industry.
Some vehicle manufacturers recognize the coming mobility-as-a-service revolution. General Motors and Audi have considered becoming owners of the cars they build, offering them as robotaxi fleets. Other manufacturers will likely follow.
What are the implications for modern economies built around automobile manufacturing? North America represents the prime example. In 2022, the automotive industry produced 14.8 million vehicles and employed 3.3 million not including those in the supply chain providing materials and services. A robotaxi future won’t need 14.8 million vehicles. Manufacturers won’t need 3.3 million workers.
Mobility-as-a-service through robotaxis will profoundly impact lives as the 21st century unfolds. There are many positives. Our environment will be cleaner. Our air will be more breathable. We will see less of an urban heat island effect in our cities. With fewer cars on the road, we will mitigate climate change. The negatives will be the economic disruptions to manufacturers and workers for which current governments and society appear unprepared.
]]>When I was a young man the North American industry was dominated by three major manufacturers, Ford, General Motors, and Chrysler. It wasn’t always this way. In the early days of the automobile, there were many more than just the Big Three. But the cost of remaining competitive in the age of automated assembly lines and rising demand soon drove many small players out of the market. The last to go included companies like American Motors and Studebaker.
In Europe, the same kind of concentration evolved, but unlike North America, national policies protected domestic manufacturers leading to a more fragmented and diverse group of car companies. Even in Europe as the 20th century unfolded, we saw fewer and fewer players.
The arrival of South Asian competition was the next disruptive change that impacted both North American and European manufacturers. With lower labour costs and a knack for gauging what customers in foreign markets wanted, Japanese and Korean car manufacturers established themselves globally. Today Toyota and General Motors vie for who is the largest car manufacturer in the world.
Today the industry faces an emerging series of changes that bear little resemblance to what has gone before. The disruptors include:
According to a Gartner report, there will be 250 million connected cars on the road by 2020. These will be vehicles containing sensors that not only improve the safety of your daily personal commute but also alter the way we drive. Gartner may be too optimistic with that number but I share with you my latest experience in driving from Toronto to Atlanta and back over busy highways and in urban streets.
My new car is a Toyota RAV4 Hybrid. It has sensors that provide radar, lidar and images of the road ahead, to the side and even behind. It has blind spot and pedestrian detection, lane veering and correction, adaptive cruise control, and onboard navigation. In leaving Toronto I entered the daily destination and let the vehicle guide me. On the highway each day I barely touched the brakes as the adaptive cruise control adjusted my speed to the vehicles around and in front of me. When it rained my windshield wipers operated automatically adjusting speed to the amount of precipitation falling. It was, for me, a remarkable demonstration of automotive technology advancement from my previous vehicle bought in 2006.
When we ran into a roadblock because of an accident, taking a detour didn’t mean we would inevitably be lost. Instead, the car adapted to the changed routing and plotted an alternate way to get to our destination. And as I wound through the mountainous, off-highway roads because of the detour, the car even advised me to take a break because it sensed a change in my driving behaviour (all those sinuous curves had me touching the centre line from time to time). And all of this capability came from sensors and cameras tied to an onboard computer system that sensed what was happening around the vehicle and to me the driver.
That’s what cars today are capable of doing, and not even high-end, expensive ones. So once cars are connected and talking to each other expect a whole different ballgame with vehicles becoming aware of driver health and alertness and being able to bring a car to a halt when detecting danger to driver and occupants.
We, today, are less than a decade away from seeing this level of technology deployed on a global scale.
Google and Apple are not car manufacturers in the classical sense. The former is a software giant. The latter creates gadgets from iPads to iPhones to iMacs. But both are in the automotive business these days creating software algorithms that will produce self-driving, autonomous vehicles. They are joined by old guard car manufacturers like Ford, General Motors, Toyota, and new guard companies like Tesla.
The estimated date when autonomous vehicles become ubiquitous ranges from the mid-2020s to 2030. Autonomous vehicles will use IoT technology and AI to make them far safer than their human-driven predecessors. And once cars are self-driving it will mean a change in who owns these vehicles, or just uses them as needed for commutes.
It is fair to say that those living in rural areas will still buy cars. But urban commuters may forego ownership and instead just summon an autonomous car as needed to get from point A to point B.
China has recently announced a total transition to EVs and other zero-carbon vehicles beginning in the mid-2020s. Volvo, Daimler-Benz, Volkswagon, Ford, General Motors, Toyota, and others have committed to expanding production of EVs and fuel-cell cars. The United States is building EV-friendly highway corridors by populating them with charging stations. Tesla is rolling out an EV charging network. Japan has more charging stations per capita than any other country in the world with maybe the exception of Norway. The latter gives preferential treatment to EV owners on its local ferries, on toll highways, and when parking in cities.
By 2030 the car landscape will be significantly different from what we see today. China today has scores of EV car companies with names we have never seen before. Some will make it to North American and European markets. Traditional manufacturers that don’t transition to EVs will find themselves losing market share and the confidence of a public committed to reducing carbon pollution.That means impacts will be felt on the fossil-fuel infrastructure that has been in place to service the internal combustion engine and diesel-powered vehicles from the dawn of the automobile age.
Impacts will be felt on the fossil-fuel infrastructure that has been in place to service the internal combustion engine and diesel-powered vehicles from the dawn of the automobile age. Service centers and gas and diesel pumps today predominate. In 2030 they will live side-by-side with an equal number of fast charging stations and other zero-carbon refueling technologies.
Cars Will Become Shape-Shifters
Today the first materials with a memory are in laboratories and being field tested. These materials can deform and reform. They are self-repairing. They even restore finish and colour.
What does that mean for an industry built to service fender benders and collision repair? That’s an industry worth close to $200 billion U.S. today. And what about the companies that provide vehicle insurance for collision and damage? Or about the lawyers that get involved in accident litigation?
The future of car ownership is in flux, particularly for urban commuters. Millennials are already less interested in owning or leasing cars than their parents. The reasons are numerous. First, cars are expensive and millennials are still finding their way in the job market which is being disrupted by many other 21st-century technology phenomena. Second, urban millennials are environmentally conscious and less willing to contribute to carbon pollution and global warming, prepared to use public transit and mobility-as-a-service operators like Uber and Lyft to get around.
Without traditional buyers, to whom will manufacturers sell their vehicles? Will Uber, Lyft and other fleet operators like Hertz, Budget, Enterprise, and Avis be the principal consumers of EVs and autonomous vehicles that roll off assembly lines in the late 2020s? In the case of the latter, the business paradigm will be dramatically different from a car-for-hire service.
Or will the manufacturers become fleet operators themselves, providing a service to consumers of all kinds, from freight hauling to passenger commutes? Some speculate that manufacturers will enter into partnerships with mobility-as-a-service companies offering ride-sharing to governments, companies and individual consumers.
The automotive industry, software developers, insurance companies, governments, and financial institutions will all face challenges as the technologies described above become integrated into cars. With vehicles bristling with sensors they will become a way for governments to collect data about the condition of road infrastructure and the environment. Even the medical profession will benefit as cars observe drivers and note behaviour that could uncover a potential health problem. Automotive repair will change from fixing things that are broken to anticipating maintenance before things break.
Traffic management with autonomous vehicles will be less fraught with bottlenecks and accidents as AI combined with IoT sense traffic patterns and improve the flow of cars and trucks. And as for auto thieves, I’m not sure there will be much of a market for stolen vehicles or parts since embedded sensors within components and materials will serve as an alarm beacon almost impossible to block from a prospective buyer or the police. So much for Grand Theft Auto. And maybe so much for traffic cops.
In an article appearing in The Market Mogul today, the author writes about the “two accelerating forces that will govern the automotive industry’s future.” They are fragmentation or convergence, and regulatory pull and consumer push. Regulatory pull will induce technology adoption at a faster pace, responding to issues like government environmental policy. Consumer push will reflect attitudes on the part of the next generations of car buyers. All in all, the industry and its supporting cast are in for a rollercoaster ride over the next 10 to 15 years.
