We’re getting closer to autonomous vehicles becoming a reality for mainstream consumers.
There is considerable optimism, bullishness and fanfare around the future of autonomous technology and the implications for the mobility of people and goods. Journalists often share that excitement, but as professional skeptics they are wired to cut through the hype—and that’s exactly what this panel of heavyweight transportation writers did.
We’re getting closer to autonomous vehicles becoming a reality for mainstream consumers, but sometimes we have to remind ourselves that the technology is still nascent. “I think it became real last March in Arizona with that fatal incident involving an Uber test vehicle,” Tim Higgins of The Wall Street Journal. “It really shook the industry, and created this reality that this is a lot harder than people thought maybe three or four years ago.”
Is it an infrastructure issue? Do we need widespread smart roads and smart intersections before moving to the next level? There's been big disagreement over whether the industry should wait for cities and the government to make these structural investments. “I think Silicon Valley would say, ‘We're not going to wait, we're going to follow the Waymo approach and put the cars on the road and let the world catch up,’” said Higgins. “Ford and GM were talking about autonomous cars going back generations. The idea was to put sensors in the highways and these things are going to work. But it's hard to say to the government ‘Hey, let's spend all this money for all sorts of signals and sensors’ when you're not quite sure what the future holds.”
Whether on the road or in the air, the focus is shifting from an emphasis on unit sales to disruptive business models. And companies are experimenting and learning in real time.
“With autonomous vehicles, it feels like people already have an incredible number of ideas of how these things are going to work and they've kind of invented a vision of the future,” said WIRED’s Jack Stewart. “It's like they've already promised what it can do, and now they've got to actually deliver on these promises.”
In aviation over the last 100 years manufacturers essentially gave away their after-market opportunity, content with the revenue generated solely by the product itself. More likely they were complacent and didn’t know any better. “They built airplanes, handed them over to the customer, and then didn't bother with them any further,” Said Graham Warwick of Aviation Week & Space Technology. “Who looked after the product during its life cycle? Most of the time, the customer. Manufacturers can use this new business model direction to build, operate and service the aircraft, and have a revenue stream that goes through the life cycle of the airplane.” KPMG's newly published whitepaper, Autonomy delivers: An oncoming revolution in the movement of goods, examines future of goods delivery, which we believe has massive upside potential. Think Uber Eats and Amazon Now. The way we purchase and receive everything from fast food to tennis shoes is primed for a major transformation.
"I’d say it comes down to the cost of labor of a human driver versus having one of these complex vehicles doing that kind of last mile delivery,” said Stewart. “Ford has done some experiments with pizza deliveries to see if people are prepared to put on their slippers and walk down to the end of their driveway and take it from an autonomous vehicle, as opposed to having the driver come up to the door and hand it over.”
In this sense, technology is enabling a wide variety of new business models. “I think what's going to turn out is it will be the business model that determines the outcome,” said Warwick. “For aviation, it's very much a case of build the airplane and then the market will come to it. These autonomous business models are saying, ‘Here's the technology, here's what we can do with it. Let's see if we can get the two to come together.”
What about Tesla? Model 3 sales are strong, but production and delivery is another issue.
“The Model 3 has been received well among critics and customers seem to like it,” said Higgins. “Now they're in delivery hell. The idea of churning all these vehicles out of the factory and getting them into customers' hands is a lot harder than they apparently thought. What I'm looking for is quarter-by-quarter consistency, which we haven't seen, really.”
“My internal skeptic is really frustrated with Tesla to be honest,” said Sharon Silke Carty of Automotive News. “Because my experience covering business is that when a company is under pressure to hit certain numbers, pump out a specific amount of cars—that often doesn't happen organically. I get frustrated by the amount of slack that the company is cut on a variety of levels for the things that they say they're going to do, that they end up not doing.”
In the end, when we’re talking about autonomous, connected and electronic technology and mobility the big open question is will the OEMs be able to do all these things? To Stewart, the most interesting things to look at are the partnerships that cropping up across the industry, such as BMW and Intel.
“I think it will come down to where only three or four of these partnerships might have a sustainable future,” said Stewart. “And they're all now jostling for position to make sure they're in one of those alliances.”