“Perhaps Technology Firms Can Accelerate The Future Of The Car”

As is their wont, technologists would like driverless cars on the road yesterday, but traditional automakers would rather ease into the sector with assisted-driving functions introduced gradually. A new Economist report is bearish on Silicon Valley’s chances of becoming kings of the road even should the industry go electric and autonomous, citing the nouveau carmakers’ lack of infrastructure (in both manufacturing and corporate) in dealing with many problems inherent to the business. I think the piece’s prediction from Boston Consulting that “cars with even limited self-driving features will never exceed 25% of sales” will only be true if they’re eclipsed by fully autonomous models before surpassing that number. Otherwise most models will probably soon have numerous robocar features at the disposal of human drivers. An excerpt:

The head of Google’s autonomous-car project, Chris Urmson, nevertheless argues that the conventional carmakers’ incremental approach will slow them down, and that a leap straight into fully self-driving vehicles will pay off quicker. However, even if he is proved right in terms of developing the technology, there are two other big barriers to overcome: regulatory approval, and drivers’ nervousness at ceding control entirely to a computer.

Carmakers have had to become adept at handling mountains of regulations and fending off liability lawsuits. These will be huge issues when any self-driving car is involved in an accident—which they will be, even if less frequently than ones driven by humans. Slowly feeding in autonomy may be a better way of convincing road users and legislators of the technology’s benefits. In a pessimistic forecast, the Boston Consulting Group reckons demand for cars with even limited self-driving features will never exceed 25% of sales, and fully autonomous ones will account for just 10% of sales by 2035 (see chart 2).

Perhaps technology firms can accelerate the future of the car. But whatever happens, this is a difficult business to break into. Google would like the carmakers it hopes eventually to supplant to help seal their doom by building its vehicles under contract. Unsurprisingly, none seems too keen on this. Apple’s cash pile of $178 billion is more than enough to set up a carmaking division and tool up its factories. But the technology firms have no manufacturing culture, and the skills needed to market, distribute and provide after-sales service for cars is unlike anything they are used to.•