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FT Future of the Car Summit 2017

 

Future of the car summit 2017

Future of the Car Summit 2017

Jim Farley, president and CEO of Ford EMEA, opened last week’s FT Future of the Car Summit by observing that his company is in the process of transitioning from a car manufacturer to a mobility provider. “That’s easy to say but hard to do when allocating budgets,” he conceded, noting that day-to-day competition remains a top priority.

“The future will not simply be about technological solutions,” he told delegates in his keynote speech. “The winners will be those that understand the human, society, legal and economic solutions. We cannot fall in love with technology for technology’s sake.”

Farley said recent moves such as Ford’s 2016 acquisition of US ride-sharing provider Chariot and its $1bn investment in artificial intelligence company Argo AI earlier this year would be key, bringing new insight and new engineering capabilities into the company.

Farley also confirmed that Ford will bring 13 new electrified vehicles to market over the next 5 years, including a 300-mile EV utility vehicle by 2020. “I’m most excited about the plug-in Transit,” he added. “You can ban cars from cities, but how will you get goods and services in?”

In a panel discussion, Erik Fairbairn, CEO of charging station provider POD Point, told the summit that EVs have now progressed from the fringes of society to what he called “the consideration phase” of the mass market. “That’s your fundamental leading indicator,” he said. “The mass market now understands that EVs are coming and are genuinely considering whether an electric car should be their next purchase.”

Gilles Normand, senior vice president for electric vehicles at Renault, told the summit that his firm’s Zoe ZE 40, launched late last year with an upgraded battery and real-world range of up to 186 miles, has “clicked” with a broader range of consumers. “We moved from a population of technology enthusiasts and green supporters to something that is much wider,” he said. “Orders for Zoe are up 90% year on year.”

Normand noted that the pace of technology improvement has overtaken even Renault’s internal projections. The Zoe ZE 40 raised battery capacity from 22kWh to 41kWh, a rough doubling of energy density that the company’s 2012 roadmap had pencilled in for 2018 rather than 2016.

Normand added that while EV prices are falling, internal combustion costs are steadily rising as emissions regulations tighten. He predicted price parity between EVs and petrol superminis by 2020 and for cars the size of the Megane by 2025. “As far as this industry is concerned, 2020 is tomorrow morning,” he noted.

POD Point’s Fairbairn added that the two trends won’t stop at parity. “The EV is on a path that will make it significantly cheaper after 2020,” he said.

Wilko Stark, head of strategy at Daimler, parent company of Smart and Mercedes-Benz, told the summit that car makers face four overlapping challenges that his company refers to as CASE: connected cars, autonomous driving, shared mobility services and electric cars.

“All four CASE items have the potential to be completely disruptive to the automotive industry, but we have to balance our investment,” he noted.

Daimler has plans to introduce 10 new battery electric vehicles by 2022, the result of a €10bn investment, Stark said. He added that Mercedes-Benz aims to create a flexible supply chain to allow EVs to make up 25% to 30% of its sales by 2025, building EVs and conventional cars on the same production lines.

Stark said his company would use a modular approach to create different sized EV batteries up to 100kWh, with powertrains offering front, rear and four-wheel drive.  “All of our vehicles will have a range of 500km or above under WLTP,” he added, referring to the tougher European testing procedure due to be introduced later this year.

Last year Daimler began working with BMW, Volkswagen Group and Ford to develop a high-power charging network in Europe – the consortium intends to equip 400 sites with six charging stations each, using 800-volt supplies that will allow future EVs to recharge at up to 350kW. “The aim is to add 400km of range in 20 minutes,” Stark said, noting that the venture recently received approval from anti-trust authorities in Europe.

Lance Bradley, managing director of Mitsubishi Motors, told the conference that manufacturers must adapt to changes in market expectations, particular among younger consumers. “I have an 18-year-old daughter who would no more walk into a car dealer than fly to the moon,” he observed.

Improved communications will be vital, he suggested, noting that customer misunderstandings were common when Mitsubishi first introduced plug-in vehicles. “I literally had people writing to me to say, ‘What happens if it’s raining, because you can’t take an electric car out in the rain?’”

Bradley said Mitsubishi developed a series of videos showing customers how to get the best out of plug-in cars, sending links to customers for the first few weeks after purchase.

Maarten Sierhuis, director of Nissan’s Silicon Valley Research Center, began his presentation by calling for a show of hands, asking who thought fully autonomous vehicles (AVs) would be technically possible. About 99% of the audience raised their hands.

Sierhuis went on to suggest that true AVs might be harder to perfect than many people think, due to the difficulty of programming cars to deal with the myriad of unforeseen circumstances that can crop up. He added that nobody has yet developed AV technology that is safe in all circumstances without human supervision.

He also noted that cost is likely to remain an issue for some time. “This is tough,” he said. “Google and Uber have sensors on their cars that cost $80,000 apiece. This is not possible for consumer vehicles.”

To deal with today’s shortcomings, Nissan is working on a system of distributed artificial intelligence, with cars able to solve problems independently but also to alert each other. As a last resort, Sierhuis said Nissan’s AVs will be able call on human operators – akin to air traffic controllers – who can assess an unexpected situation and help the car decide how to proceed.

“We call this SAM – seamless autonomous mobility,” said Sierhuis. “It’s similar to how NASA solves how to drive robots on Mars, with people still in the loop.”

Timo Möller, head of the McKinsey Centre for Future Mobility, said large scale surveys carried out by his company showed that 70% to 80% of the public would be willing to use an autonomous vehicle if it was certified as safe. He also cited a separate study that assessed passengers’ response to being transported in a prototype AV: “In tests, it was only the first 30 minutes that people were nervous, with a higher pulse rate. After 30 minutes, everything went back to normal.”

However, Möller warned that for AV technology to succeed it must be made foolproof. “The technology needs to become easier to use – you can’t be expected to read a handbook before using an AV taxi.”

By Lem Bingley

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