M:bility | Magazine – Q3 2019 by Automotive World

M:bility | Magazine Q3 2019

An Automotive World publication

Is Tesla in crisis? Fires, crashes and missed deliveries anger the Wall Street bulls

Also inside How can CASE revolutionise cities? Amazon: the car of the future will talk back Motor City vs. Silicon Valley: who wins the talent war?

Automotive World est. 1992 Informing the decisions of automotive industry stakeholders since 1992. https://automotiveworld.com

M:bility | Magazine - Q3 2019

Published in June 2019 by:

Welcome... …to the Q3 2019 issue of M:bility magazine. ‘Mobility’ is the buzzword of 2019, but while the term can be easily crowbarred into a press release, turning statements of intent into reality requires a bit more finesse. Today’s marketing ploys would suggest that the business of making cars has been turned on its head as investment is funnelled into connected, autonomous, shared and electric (CASE) technologies. But while manufacturers look to the future, it has become clear that the core principles of running a business must remain intact. In May, Volkswagen Group Board Member, Frank Witter, advised that “cost discipline must be kept inline” amid a “very challenging environment”; BMW’s Harald Kruger noted how “strengthening the core business” whilst moving forward with “future projects” would be crucial. Meanwhile, Daimler’s Bodo Uebber advised that long-term success will only come by focussing on the ability to “reduce cost and strengthen methods to increase efficiency and flexibility throughout the company.” Hitting quarterly sales targets is tough at the best of times, and can be impacted by headwinds out of an automaker’s control. Shifting consumer demand and foreign currency fluctuations can soon turn a successful quarter on its head, and at a time where R&D spend is sky high, it can make for a perfect storm. Tesla’s recent struggles illustrate this perfectly. For many, the company is at the forefront of innovation, even proposing the launch of so-called robotaxis by 2020. However, missed delivery targets and a mounting challenge to attract new orders have seen Wall Street lose faith: its stock price has halved in less than six months. Observing the recovery of one of the automotive industry’s most watched names will prove fascinating, but for overly optimistic supporters, it is a snap back to reality.

Automotive World est. 1992 Automotive World 1-3 Washington Buildings Stanwell Road, Penarth, CF64 2AD, UK www.automotiveworld.com T: +44 (0) 2920 707 021 support@automotiveworld.com ISSN: 2053 776X Registered number: 04242884 VAT number: GB 815 220 173 CEO & Managing Director: Gareth Davies Editor: Freddie Holmes Contributors Betti Hunter Freddie Holmes Jack Hunsley Jörn A. Buss Megan Lampinen Romed Kelp Xavier Boucherat Production: Anmol Mothy

Freddie Holmes Editor, M:bility Magazine

An Automotive World publication

T h a t ’ sr i g h t . A A AMe mb e r sc a nr e q u e s to u rs e r v i c e s t h r o u g hs i mp l ev o i c ec o mma n d su s i n ga n y A ma z o nA l e x a , Go o g l eHo meo rGo o g l eA s s i s t a n td e v i c e . A tA A A , we ’ r eu s i n ga d v a n c e dt e c h n o l o g i e st op r o v i d e a no u t s t a n d i n gme mb e r s h i pe x p e r i e n c e .

Shaping the future of urban mobility Location intelligence delivers a new approach A leading on-demand service needs operational efficiency and frictionless UX. Location intelligence from HERE helps accelerate developments, build new capabilities and delivers meaningful insights. Discover more at here.com

M:bility | Magazine - Q3 2019

IN THIS ISSUE q3 2019

Battery electric vs. fuel cell: truck makers must place their bets

Carpooling: where business and environmental needs align

Amazon extends voice-centric lifestyle to the car

As business models evolve, MaaS moves closer to mainstream

Tesla stock slumps as Wall Street bulls see red

A ‘quid pro quo’ approach could hold the key to reshaping city mobility

Contactless payments keep cities in touch with future mobility demands

When it comes to AV progress, miles and disengagements don’t tell the whole story

How to solve a problem like the semi-autonomous vehicle?

Michigan’s private playgrounds present new avenues for AV testing

Find a shared mobility platform that can do it all

Auto industry embarks on hunt for mobility experts old and new

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M:bility | Magazine - Q3 2019

Michiganâ&#x20AC;&#x2122;s private playgrounds present new avenues for AV testing

Amazon extends voice-centric lifestyle to the car

Battery electric vs. fuel cell: truck makers must place their bets

22 As business models evolve, MaaS moves closer to mainstream

Tesla stock slumps as Wall Street bulls see red

Auto industry embarks on hunt for mobility experts old and new

Carpooling: where business and environmental needs align

An Automotive World publication

ÂŠ Nikola Motor Company

M:bility | Magazine - Q3 2019

Battery electric vs. fuel cell: truck makers must place their bets It is unsustainable to spread investment across the entire spectrum of alternative powertrains; truck makers must begin to make a choice as to which solution works for them. By JĂśrn A. Buss and Romed Kelp of global consultancy Oliver Wyman

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M:bility | Magazine - Q3 2019

hile truck manufacturers face many challenges, the most immediate and significant is likely the need to develop an alternative powertrain that will eliminate, or at least significantly reduce, greenhouse-gas (GHG) emissions.

Over the past year, a slew of new regulatory hurdles for commercial vehicles have been proposed or adopted, calling for drastic cuts in GHG emissions. Among the most notable: in May 2018, the European Commission proposed its first ever carbon-dioxide (CO2) standard for heavy-duty commercial vehicles that would require a 15% reduction from 2019 levels by 2025, and a 30% cut by 2030. California’s Phase 2 GHG regulation is slated to take effect in 2020, with longer term reduction targets in 2024 and 2027 for heavy-duty vehicles. Several major global cities and a few national governments are also moving to enact future bans on diesel vehicles and, in some cases, all fossil fuel vehicles.

What is much less clear is which technology in particular should substitute internal combustion. The industry may have reached a consensus that the future for passenger cars will be electric—even if the timetable may still be debated—but no such agreement exists on where to go with commercial vehicle powertrains in the mid- and long-term. As a result, even as pressures mount for action, truck makers are more often than not uncertain about how to respond—a reluctance to act they may come to regret.

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Given such trends, it’s time for truck and bus makers to become proactive about exploring the wide range of alternative powertrains that are being developed. They need to start placing their bets on which is most likely to provide the best performance and efficiency over the long run.

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It’s time for truck and bus makers to become proactive about exploring the wide range of alternative powertrains... They need to start placing their bets on which is most likely to provide the best performance and eﬃciency over the long run

M:bility | Magazine - Q3 2019 Regulatory: Legislative Pressures In the case of the EU, the earlier regulations placed emphasis on NOx and PM level, recent standards proposed to curb HD/MD CO2 emissions by 2030 HD CO2 standards in Europe (Provisional Agreement, Feb 2019)

Exemplary NOx emissions1 in g per liter 41,0

Euro 0 (1990)

Euro 1 (1993)

25,0

Euro 2 (1996)

Determine reference values for future CO2 reduction goals

18,0

13,0

7,0

Euro 4 (2006)

Euro 3 (2001)

Euro 5 (2009)

Stagnation caused by Euro norms

Euro 2

2019

2022

2025

2030

Review of the targets, assess effectiveness and propose changes

Objective:

- 30%

0,9 Euro 6 (2013)

HD fuel consumption since 1960s2 in liter Diesel/100 km

- 15%

Euro 4 Euro 6

Fuel efficiency increased Euro 1 Euro 3 Euro 5 by >30%

20 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

• Reduction of CO2 emissions by 15% until 2025 and up to 30% until 2030 in comparison to 2019 – OEM-specific CO2 targets tracked via total fleet consumption, including rigorous malus payments in case of violation and bonus systems for alternative powertrains – Mandatory publication of CO2 emissions from 2019 for all models via VECTO (Vehicle Energy Consumption Calculation Tool) backward simulation software • Additionally, non-binding sales targets for 2025: new truck sales at 2% zero emission vehicles (less stringent CO2 target)

No limitations to fuel consumption and CO2 within Euro norms

1. Common Volvo engines as measured and published by Volvo Trucks; 2. Including civil transport Source: European Commission, Eurostat, lastauto omnibus, eurotransport.de, Volvo, Oliver Wyman analysis

A diverse array of emissionsreduction strategies Today any diesel truck emits carbon dioxide (CO2), nitrogen oxide (NOx), and particulate matter. To cut emissions to levels that adhere to standards required by European cities, incremental development of next generation advanced (bio) diesel hybrid engines becomes expensive and ultimately ineffective. In the end, even these non-plugin hybrids are only capable of reducing emissions by an estimated 20% under the most optimistic scenarios. For this reason, we see only three alternative solutions manufacturers need to consider in order to meet the latest standards on emissions and prepare for a future of even stricter rules. They are:

• compressed or liquified natural gas-powered vehicles (CNG/LNG)

• battery electric vehicles (BEVs), • fuel cell electric vehicles (FCEVs) Each of these has respective advantages, drawbacks and variations that historically lean powertrain R&D teams will have to deal with. Still, they represent the most promising mid- and longterm propulsion technologies. Most manufacturers do not have the bandwidth or expertise to cover all three options effectively while still supporting diesel engines, and as such, will have to eventually make a bet. Given the current state of the technologies, long-term zero emission freight hauling can only be achieved via battery and possibly hydrogen FCEVs. Not surprisingly, nearly all global truck OEMs have announced batteryelectric model launches despite high battery cost and weight concerns. The hope is that dynamic wireless charging, currently being tested, will help keep battery weight low and load

28,0

capacity high. While fuel cellpowered trucks offer longer ranges, the current outlook on their total cost of ownership (TCO), as well as substantial infrastructure requirements, make them a less attractive option. For the interim period, CNG and LNG gas-powered trucks appear easier to implement but are limited by fuel infrastructure and the inability to comprehensively solve CO2 concerns—unless we talk about Biogas. At least they address part of the emissions question around NOx and particulate matter.

Varied uptake Because there are no common standards on emissions across geographies, truck manufacturers will be forced to take a regionspecific approach to the problem, which will result in higher costs and less effective products. Given the current landscape of regulations, infrastructure development, usage

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M:bility | Magazine - Q3 2019

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Batteries are the biggest cost drivers in electric vehicles and, given current technology, they add significant weight to the vehicle, adversely affecting the loading capacity of the truck and its TCO

profiles, and manufacturers’ strategies, it is reasonable to expect the following regional scenarios to develop as truck makers wait for battery advances and/or a less expensive solution to hydrogen fuel cell infrastructure:

• i n E u r o p e : a significant adoption of CNG and eTrucks for urban distribution and more

LNG trucks in the long-haul segment beside a long-haul diesel reliance

• in the US: a slow adoption of CNG and LNG solutions and some eTruck pilots by larger fleets, but outside of California an ongoing reliance on diesel trucks for both short and long haul

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• in China: a strong push directly to eTrucks and fuel cell technology for all forms of trucking, building on the already successful eBus development The investment in a multitude of interim and long-term alternative technologies will require significant capital expenditure and

M:bility | Magazine - Q3 2019 Competitors – OEM activities Industry players around the globe are proactively experimenting with multiple solutions considering the infrastructure situation Infrastructure (no. of stations)

CNG or Propane

Today: 3.3k stations in Europe Plan 2025: 6k stations

Infrastructure Infrastructure availability development costs

LNG Today: ~100 stations (Liquefied in Europe Natural Gas) Plan 2025: ~400 stations eHighway

Only pilot testing stretches currently; some city/bus solutions

MAN

Volvo

Scania

IVECO

Powerrail

Inductive Charging

MAN

Toyota

Today: ~100 H2 stations in Europe Plan 2025: ~800 stations

Legend: Infrastructure availability No significant infrastructure

IVECO

Catenary

Full Electric Very limited dedicated (battery) charging stations currently for MHDTs Reference ~70 Tesla Super Chargers in Germany Fuel Cell Electric

Examples (Europe and overseas)

Infrastructure Development Costs Established infrastructure

No additional costs

Very high additional costs

BYD

Esoro

Tesla

Degree of commercialisation Freightliner

Overhead Charging

Freightliner

Nikola

Degree of commercialization In R&D/testing phase

Available to customers

However, not all solutions ready for implementation and mass-market adoption Source: ICCT, NGVA, EAFO, Hydrogen Council, Company websites, Press Research, Oliver Wyman analyses

skill, and it is likely to diminish the competitive advantages of some manufacturers and disrupt downstream revenue. Consequently, OEMs need to be proactive in adapting their business models and rethinking technology investments, aftersales, and remarketing in relation to the technology that is selected.

Four elements to success Manufacturers can proactively address these issues in four ways that will handle potential challenges spanning the entire truck lifecycle. First, rigorous technology investment prioritisation—that takes into account customer acceptance and the need to remain differentiated—will help OEMs manage R&D effectively. This will not just focus on the powertrain, but ideally will involve

a ‘powertrain pack modularisation strategy’ with a flexible chassis structure to accept various powertrain solutions over time. This approach will help minimise costs and allow truck makers to remain flexible in order to address changing needs. Strategic decisions will need to be made on whether to build innovation leadership in specific fields, be a fast follower, or hedge investments and whether to buy technology from the outside. A key enabler of success will be forging partnerships with diverse stakeholders. In addition, lobbying political decision makers regionally and in key global markets for common emission rules would also be advisable to reduce the complexity and cost of investments. Secondly, OEMs need new sources of downstream revenue once eTrucks become mainstream. Today, conventional powertrains contribute significantly to aftersales and bottom-line profits.

Solution

With eTrucks, where the principal component is the battery, sales of powertrain-related spare parts will begin to dry up and a major source of today’s aftersales revenue and profits will go with them. What’s more, battery manufacturers may opt to sell directly to truck owners in the aftermarket, eliminating that source of aftersales revenue as well. While a CNG/LNG solution will prolong truck makers’ ability to generate spare parts revenue, it is an interim solution at best, given the emissions problems with natural gas. In the end, a temporary solution is likely to create complexity and stranded assets in the supply chain. In order to be future-ready, OEMs need to develop new sources of downstream revenue, such as advanced connectivity features, over-the-air updates, uptime offers, and mobility packages built around risk-based pricing and truck-as-a-service offers to balance the erosion in spare parts sales. Efforts to control the battery

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M:bility | Magazine - Q3 2019

“

Where the principal component is the battery, sales of powertrain-related spare parts will begin to dry up and a major source of today’s aftersales revenue and proﬁts will go with them

replacement market are a given, even if the promise of controlling this business would be difficult for OEMs, and likely come with low profit margins. The third consideration is around successful remarketing. The usedtruck business will require a rethink, particularly around

vehicle architecture and modular lifecycle concepts including retrofitting and strategies for revitalising each unique truck technology. For example, used trucks from Europe historically find a second and third life in Eastern Europe, the Middle East, and Africa. With fragmented markets for each alternative

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solution, remarketing will be limited to markets where technology, emission standards, and infrastructure are supportive. Ultimately, this will hinder usedvehicle sales abroad and limit residual values. These exports have already seen a decline because of existing technology

M:bility | Magazine - Q3 2019 Overview of approach levers

• Move away from pure vehicle sale and some aftersales to offering holistic operator models and transport solutions

In terms of powertrains, a rigorous investment and portfolio process within future technologies is required

• If necessary, infrastructure must be actively shaped • Stay agile through ecosystems

• Complete overhaul of aftersales offerings, adapted to the new reality

• Aligned products and services

Rethink Remarketing • Defining extended lifecycle concepts: options for retrofitting and renewal concepts for batteries, software and electronics • Remarketing chains are to be adapted dynamically with regard to technical possibilities: Trucks will be made significantly more modular in the future

Source: Oliver Wyman

gaps and the flood of out-of-date EURO 5 vehicles after their ‘ban’ in Europe. Rapid adoption of eTrucks will further aggravate these pressures. As such, remarketing chains must be adapted to local technology

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opportunities, while considering the expectations and needs of second- and third-life markets. The final strategic necessity is to develop new sources of differentiation. OEMs must

If their business models are strategically repositioned, the world’s major truck makers will be able to capture a fair share of future proﬁt pools that arise from zero-emissions trucking

Remarketing

• Balanced investment in line with technology trends

New sources of revenue in Aftersales

Business and profit models to be fundamentally renewed

Aftersales

Innovation

Business Models

We see 4 principal levers which OEMs must focus on

fundamentally overhaul their business models, recasting and reconfiguring themselves as providers of integrated transport solutions. In the past, conventional powertrain performance, based on power and fuel efficiency combined with reliability and truck load capacity, has been a key source of competitive advantage and differentiation, as well as a core driver of TCO. Until now, truck makers have had full control over the powertrain, including strong ties to the short list of truck transmission manufacturers. A switch to eTrucks carries a significant risk of losing that control, with performance and load capacity mainly driven by the battery. Batteries are the biggest cost drivers in electric vehicles and, given current technology, they add significant weight to the vehicle, adversely affecting the loading capacity of the truck and its TCO.

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M:bility | Magazine - Q3 2019

“

The shift to alternative powertrain technologies will not happen overnight. However, manufacturers must act now

With the battery manufacturing space being dominated by Asian companies—holding over 90% of battery production capacity (excluding Tesla)—OEMs can expect to have little control over this core differentiator. As such, individual OEMs must seek alternatives early on to mitigate that loss, further product

commoditisation and associated price pressures. This will require a shift in focus from truck sales and individual aspects of business to integrated service offerings and new mobility solutions. The shift to alternative powertrain technologies will not happen overnight. However, manufacturers

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must act now, not only to deal with the associated technical and commercial challenges, but also to proactively turn the disruption into opportunity. If their business models are strategically repositioned, the world’s major truck makers will be able to capture a fair share of future profit pools that arise from zeroemissions trucking.

ÂŠ BlaBlaCar

M:bility | Magazine - Q3 2019

Carpooling: where business and environmental needs align BlaBlaCar's Chief Executive speaks to Megan Lampinen about tackling environmental concerns through shared journeys

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M:bility | Magazine - Q3 2019

Interest in shared mobility schemes has been growing rapidly over the years, providing an alternative to private ownership and public transport. Users of car-sharing, ride-hailing and carpooling are often attracted by the schemes’ affordability and convenience, but there’s an environmental bonus as well. Most people recognise that any time you put more people into one vehicle, it cuts overall emissions. But by how much?

Building up the numbers That depends on several factors, including how many people use shared mobility. BlaBlaCar has watched this segment closely over the past 15 years. Last year, as its carpooling community topped 70 million people across 22 countries, it decided to investigate just how big an environmental impact it is making. “We thought it would be great to validate something we never have before,” Nicolas Brusson, BlaBlaCar’s Chief Executive and co-founder, told M:bility. “Intuitively we always knew putting more people in cars had to be good, but we never put some real numbers behind that.” BlaBlaCar brokers long-distance carpooling. Drivers offer a seat in their car, typically when they travel between cities. The average journey ranges from 200 to 300 kilometres. In 2017 it added the BlaBlaLines app,

rom electrification to hydrogen fuel cells, the automotive industry is investing heavily in a range of technologies to reduce emissions and address air quality concerns. But there’s more than one way to go about cleaning up its footprint. A number of players are focussing not on the vehicles themselves but on the way in which individuals use their vehicles.

“

Intuitively we always knew putting more people in cars had to be good, but we never put some real numbers behind that

specifically targeting shorter journeys like the daily commute. “The Holy Grail of carpooling is really around commuting,” said Brusson. “That’s where the biggest problems are in terms of traffic, CO2 emissions and people driving alone.” In the company’s home market of France, 13.5 million people drive to and from work every day, but the average car occupancy on these trips is just 1.08 persons. The number of carpooling users remains relatively small, but the long-term potential could be big. Commuting lengths are increasing as more individuals move to the suburbs. A

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recent study showed that in the city of Paris, the length of the average car commute has tripled over the past 40 years. If every car could double the number of passengers, the region could halve its emissions.

The CO2 findings Today, cars are responsible for around 12% of total European Union (EU) CO2 emissions. “The car is one of the biggest levers we have in terms of reducing CO2 emissions from transport,” said Brusson. “At the end of the day, we can crack this by making the car more sharable.”

M:bility | Magazine - Q3 2019

“

The Holy Grail of carpooling is really around commuting. That’s where the biggest problems are in terms of traﬃc, CO2 emissions and people driving alone

In order to pinpoint exactly how much CO2 is saved each year by its carpooling community, BlaBlaCar teamed up with the research consultancy Le BIPE. The partners analysed real usage data from 6,884 BlaBlaCar members across eight countries over 12 months. For 2018, they found that the carpooling community saved 1.6 million tonnes of CO2. That’s equivalent to the amount of CO2 absorbed in a year by a forest the size of 5,000 football pitches or six months of traffic in Berlin. And this is just the beginning. The savings will grow in line with shared mobility. By 2023, BlaBlaCar estimates that its users could be saving 6.4 million tonnes of CO2 every year. “One of the drivers for us to do the study was to really understand the different levers at work and have a genuine CO2 study on the network,” explained Brusson. Like most objective

studies, this one uncovered both pros and cons from the rise of the carpooling scheme. On the plus side, most users would have taken their own car for a specific journey if they didn’t share on BlaBlaCar. However, some may not have travelled at all. One concern is that making low-cost travel more freely available will create more demand, and hence encourage more car journeys. “The truth is, we also have some negative impacts,” conceded Brusson. “These are well offset by the positive one, which is people not travelling in their own car.”

Regulatory environment EU regulators are well aware of the impact transport emissions have on global warming and air quality, and have laid out tough targets for light vehicles in the years ahead. For example, by 2021 automakers need to reduce

their fleet average CO2 by 40% compared to 2007 levels. While the regulatory environment has focussed on vehicle emissions, it has largely overlooked vehicle use. “The key will be to create a regulatory environment that promotes shared mobility, whether that is through tax relief or carpool lanes,” Brusson suggested. “There are many ideas around this but they are not very well coordinated. We have had discussions in France but it varies country by country, sometimes even region by region.” Some regulatory approaches towards emissions have provoked heated protests. In Paris, the ‘gilets jaunes’ movement has been particularly active in protesting the steep rise in diesel taxes. Blanket punitive regulations like this may not be the most effective means of encouraging multiple occupancy. “Doing it this way will not result

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M:bility | Magazine - Q3 2019 in a solution any time soon,” said Brusson. “You will only provoke a very adverse reaction from people who rely on their car. Look what happened when they wanted to increase diesel prices— you get a revolution. On the flip side, how about giving an incentive to share?”

The team is also exploring ways to incentivise electric vehicle usage, though Brusson cautions that the model for this may prove more complex: “In this area, I think we’re more in the territory of communication and education than in a specific economic reward.”

concerns about the environment,” said Brusson. “But people are starting to recognise that side of the equation. A few years ago, the focus groups would barely mention the environment. They would highlight how the scheme is good economically and its convenience. Now a few are

“

The truth is, we also have some negative impacts. These are well offset by the positive one, which is people not travelling in their own car

Brusson is hopeful that Europe will emerge at the forefront of carpooling. To start with, interest in shared mobility on the Continent has been strong. At the same time, it represents a more compact region, making it easier to match commuters than in a vast market like the US. “Europe should lead the change,” he urged.

For this year, the company is looking specifically at integrated mobility and combining a marketplace of buses with a marketplace of cars. “We want to bring in buses, which to some extent also represent shared road travel,” he pointed out. “It’s BlaBlaCar and BlaBlaBus.”

Future iterations

Environmental awareness

BlaBlaCar is looking to incorporate more environmental aspects into its service, such as a loyalty programme offering discounts based on usage levels. “It is almost like the business needs are aligned with the environmental needs to some extent,” he noted. “The more drivers share, the better it is for us as a growing business and the better it is for the environment.”

Awareness levels around the environmental implications for shared mobility may be low at the moment but they are growing. It’s a topic that arises frequently at the French and German focus groups conducted by BlaBlaCar. “It is not exactly a trigger for carpooling—very few people would say I joined BlaBlaCar because of my

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starting to say how it’s also great for the environment.” Ironically, that heightened awareness may stem in part from the shift away from environmental awareness in the US. “The issue is in the news more frequently now, and it’s more polarised. In the US you have Donald Trump saying he does not believe in global warming. But to some extent the fact that it is more polarised today is good from a consumer education standpoint, because it’s talked about.” People in the carpooling community are reacting to such reports on social media, ‘liking’ and sharing comments more regularly on the topic than ever before. “People are more sensitive to this than they were, and especially those who share their car,” he added.

ÂŠ Amazon

M:bility | Magazine - Q3 2019

Amazon extends voice-centric lifestyle to the car While Alexa may have first found her place in the home, Amazonâ&#x20AC;&#x2122;s familiar digital assistant is now getting settled in the car as well. By Freddie Holmes

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M:bility | Magazine - Q3 2019

he industry has few steps left to take in its quest for a fully digital cockpit. Where there were once buttons and dials now lie screens and gesture recognition. Voice control has long been the toughest of nuts to crack, but the lag and inaccuracy associated with early systems has largely been resigned to distant memory. Many automakers are now turning to the likes of Amazon, Apple, Google and Microsoft for a masterclass in natural language understanding, and whilst it’s still not perfect, the technology has come a long way.

It is a trend that has been borne out of both a collective push from the industry and a subsequent pull from consumers; as the technology becomes more readily available— and capable—it is not only the early adopters that want a piece, but the mass market. John Scumniotales is Director and Head of Product at Alexa Auto, and has overseen Amazon’s move into the automotive space for the last three years. The focus, he says, has always been on bringing the Alexa experience—much loved by those who have already welcomed her into their homes via Echo and Dot devices—into the car. It is interesting given that voice control is consistently one of the most problematic in-vehicle

technologies; in 2018, J.D. Power found it to be the leading source of complaints for the sixth year running. But while the technology has widely failed to hit the mark so far, a recent study found that this may be due to the fact that, accuracy aside, drivers crave familiarity. Recent findings from the market research firm found that three-quarters of those surveyed want the same brand of voice service they use at home within their next car. “We’ve heard directly from our customers that they want access to the same services Alexa brings them in the home when they’re in the vehicle,” notes Scumniotales. It is something that many automakers have accepted, with Alexa now available in a growing number of new models. “There’s no doubt that customers prefer to use a voice assistant they are familiar with.”

From home to car As the branding would suggest, Alexa Auto has been tailored for the cockpit as opposed to sitting at home. It has not been a straightforward task, with various tweaks required to meet the challenging and safety critical environment of a vehicle.

“Our Echo family of devices were built for the home with the assumption there is high quality Wi-Fi-based connectivity, and a not so hostile acoustic environment,” said Scumniotales. “When we first started building our offerings for the vehicle, we had to work with the fact that, even in an urban environment, the car can lose connectivity, such as in a parking garage or a tunnel.” Then there is the troublesome acoustic environment, with background noise coming from air-conditioning or an open sunroof. Meanwhile, society remains in a golden age for distracted driving. “We have had to look at where it is appropriate to use Alexa in the vehicle,” continued Scumniotales. “We had to contextualise some of the existing Alexa experiences; it is probably best that a driver does not receive video calls whilst driving, for example. We limit some of those capabilities to ensure we provide the appropriate functionality with regard to driver distraction.” Alexa Auto enables drivers to make traditional hands-free calls— just ask her to call a friend from the contacts list in your tethered smartphone. Then there are local search and navigation services,

“

Many automakers are now turning to the likes of Amazon, Apple, Google and Microsoft for a masterclass in natural language understanding

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M:bility | Magazine - Q3 2019 and the ability to interact with other connected devices at home. On paper, this is not particularly ground breaking. The key differentiator is that drivers no longer need to memorise specific vocabulary and grammar. The idea is that drivers can interact with the vehicle just as they would with another human. “It is a simple and appropriate interface,” said Scumniotales. “We believe that voice is the next way in which people will interact with their environment, but we don’t believe it is exclusive. There are tactile controls in the vehicle that drivers, passengers and customers will continue to depend on, but while we think it will be a voice first environment, it is not voice exclusive.”

What’s the link to mobility? Amazon may not have the most obvious ties to mobility, but the company is closely involved in one of the most significant changes taking place in the automotive human-machine interface (HMI).

While the tech giant is not at liberty to divulge its position just yet, it is likely that digital assistants such as Alexa will become a key interface for autonomous vehicles. Consider how a train or bus provides updates along the way and upon arrival, or how an elevator offers instruction upon entry and exit. Only this time, riders should be able to hold a seamless conversation. While current autonomous prototypes such as Waymo’s do feature a stop-go button, voice interface looks likely to become the norm for driverless vehicles in future. It removes the question of where to place buttons in a shared cabin, as well as eliminating the

on az

issue of grubby controls. “We think Alexa can play a great role in that future,” noted Scumniotales, “where the vehicle becomes even more of an extension of the home.” Another element of interest is home-to-vehicle connectivity. Many vehicle features today can be accessed via a smartphone, be it defrosting the windscreen, presetting the air conditioning before a journey or to check on an electric vehicle’s state of charge. Conversely, Alexa could be used on the journey home to ensure that the central heating and lights

“

We think Alexa can play a great role in that future where the vehicle becomes even more of an extension of the home

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M:bility | Magazine - Q3 2019 are turned on, and as the car pulls into the drive, that the garage is unlocked and ready to open. Alexa could even play a welcome home song of choice. “If I leave my home in the morning, I could say ‘Alexa, let’s go.’ This would precondition my vehicle, potentially load traffic information and prepare everything for the journey I’m about to embark on,” said Scumniotales.

Echo and Alexa devices, under the banner of ‘smart car meets smart home.’ Drivers would be able to control Internet-enabled devices, such as lights, home security systems, TVs and garage doors, directly from the car. The automaker doubled down the following year, stating that owners of Ford plug-in electric vehicles such as the Focus Electric could start/stop the engine and lock/unlock the vehicle’s doors

cloud and the vehicle,” said Scumniotales. “We take that issue very seriously. It is paramount in how we design these solutions.”

Listen up There has also been concern with regards to how voice data is stored, used and shared by digital assistants on the whole.

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Users can see all of their interactions with Alexa and choose to delete any they wish. We are very transparent and allow the customer to be in control of that experience

Cyber security However, this does raise the subject of cyber security. Any device that is connected to the Internet is at risk of remote hacking, and that puts Alexa, the car, and any devices with which it can connect, at risk. The ability to manipulate devices within the home via an in-vehicle digital assistant may seem farfetched, but there have certainly been more obscure cyber security breaches. In 2013, US retailer Target was hacked via its heating, ventilation and air conditioning (HVAC) contractor, and in 2017, a casino was hacked via a thermometer in a connected fish tank. At the 2016 CES, Ford announced it would integrate its SYNC voice command system with Amazon’s

through Alexa. Many brands including Volvo, Nissan and BMW now enable similar capabilities across various models. “At the beginning of the decade there were about six systems communicating with the headunit, and now there are 2,000,” noted Harman’s then Vice President of Technology Strategy, Alon Atsmon, back in 2016. “The more connectivity you have, the more challenges there are.” Amazon is very much aware of the trend and its implications. “When it comes to privacy and security, we’re looking at that very closely. The Alexa experience in itself requires an encrypted, trusted connection— the same is true in terms of how we interact with smart home devices, the connection between the home and the cloud, and the

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Many consumers are not keen on the idea of companies ‘listening in’ to private conversations— Amazon’s recent statement that an in-house team is assigned to review certain Alexa conversations to hone the technology was not well received. Apple and Google have similar initiatives tied in to their privacy policies for Siri and Google Home respectively. Generally speaking, Alexa is only listening out for the 'awake word'—her name—and Scumniotales is keen to highlight that customers are always in control. “Users can see all of their interactions with Alexa and choose to delete any they wish,” he concluded. “We are very transparent and allow the customer to be in control of that experience. Privacy is a number one tenet for us as we build out these solutions.”

ÂŠ BMW

M:bility | Magazine - Q3 2019

As business models evolve, MaaS moves closer to mainstream Platform providers debate what it will take for Mobility as a Service to become the new normal. By Megan Lampinen

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M:bility | Magazine - Q3 2019

ransport options have never been so plentiful, or so convenient. Whether someone needs a van to move furniture over the weekend, a scooter to reach the train station or simply a ride home from a restaurant, there’s a service out there catering just for them. The emerging Mobility as a Service (MaaS) industry has attracted both newcomers and industry incumbents, each with their own priorities.

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MaaS schemes offer a tremendous opportunity for collecting and monetising data. Shared vehicles tend to spend much more time on the road, therefore providing more information about specific locations and use patterns

For traditional vehicle manufacturers, operating in this space offers a way of advertising their vehicles, and selling them. New revenue streams like this could become increasingly important as ideas on ownership evolve: suddenly, not everyone aspires to own a car. At the same time, MaaS schemes offer a tremendous opportunity for collecting and monetising data. Shared vehicles tend to spend much more time on the road, therefore providing more information about specific locations and use patterns. However, this trend does raise concerns for established automotive manufacturers, particularly in terms of brand loyalty. “We have found that mobility users are less attached to automaker brands,” commented Mo Al-Bodour, Senior Connected Car Specialist at automotive technology consultants SBD Automotive. Chairing a panel debate among service platform providers at this year’s M:bility | Detroit, a two-day event hosted by Automotive World, Al-Bodour shared some insights from SBD’s own research. Respondents in general showed overall indifference when asked if they were more or less likely to use a shared mobility service depending on the brand of vehicles. “People don’t care about the brand when they are looking at convenience, or saving money, or just getting from point A to B,” he clarified.

Business model evolution

model emerged, allowing for the user to drop off the vehicle in a different location if they wanted to. “With one-way trips, the disadvantage is that you can’t reserve the car,” said Mark Thomas, Vice President of Marketing at Ridecell, a company that provides fleet platforms for new mobility services. “However, if the provider has a critical mass of vehicles that free float within a city, users can simply look to see what car is available and reserve it for the time it will take them to walk there and pick it up.”

MaaS is closely associated with multi-modal journeys, but even within the car-share segment alone there are various business models in play. The original model pioneered by Zipcar required users to pick up a car from a set location and later return it there. Then the one-way

Understanding the specifics of a given city is pivotal. “Every city is different,” observed Johannes Gruenenberg, Business Development Manager at INVERS, a MaaS operating system provider. “You can’t just cut and paste your business model like a McDonalds restaurant.”

This could mean a change in roles for some industry players, as well as new partnerships. “Companies need to decide what their future role will be,” AlBodour said. “Will they just manufacture and sell cars? Will they enable mobility platforms or sell the mobility services and be customer facing? A decision has to be made.”

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M:bility | Magazine - Q3 2019 When Ridecell is working with a client on a specific city, they often look to pinpoint the ‘hot’ and ‘cold’ zones for usage and then deploy a predictive model harnessing artificial intelligence (AI). “Every vehicle on the customer’s network has an estimated time before it will be rented again. This AI model allows for some pretty cool applications,” Thomas explained. For instance, if it predicts that a vehicle in a ‘cold’ location will not be rented for a day, the provider can pay to have someone move that vehicle to a ‘hot’ zone downtown where it will very likely be rented within 20 minutes. “Local knowledge is important to allow companies to effectively run a service,” he added.

Making the most of it Creative and flexible approaches like this may be needed to secure a profit, which is no easy feat. Uber, which doesn’t even have to invest in buying cars, still manages to rake in hefty losses every quarter. “Imagine if Uber had to buy all

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those vehicles itself,” observed Thomas. “It would be a completely different game. Companies entering the car-share segment generally own their own fleets, which means they have to get as much use out of them as possible.” Each business model has a peak demand and utilisation curve. With typical car-share, demand is highest during the day, when people can easily find parking. During the morning commute and in the evening, when users may be going out for dinner, they tend to prefer ride-hailing. The savvy operator will put two and two together and repurpose his carshare vehicles for ride-hailing during certain times. BMW has done just that through its ReachNow service. “BMW is one of our customers,” observed Thomas. “It has taken its fleet of vehicles and hired chauffeurs so that customers can use the app to request a car or a ride. This is just one way to get the most use out of a fleet.” Utilisation is not just about vehicle occupation but also how long the vehicles are used and how many

The savvy operator will put two and two together and repurpose his car-share vehicles for ride-hailing during certain times

miles they cover. “These are all important aspects for the MaaS provider because it helps them determine if they can increase their membership,” said Gruenenberg. “Zipcar has said that it is interested in people selling their second or even their first car and instead relying entirely on MaaS services.” Software as a Service (SaaS) specialist Vulog recently examined member behaviour within mature markets, which for MaaS simply means there’s been a service in place for two years. It found that in the last year alone, free-floating vehicles have seen an 11% increase in trip length. “Trips are trending upwards, meaning many people are using these cars for a range of different purposes, not just for going from point A to B for work but also for weekend trips,” clarified Alex Thibault, Vice President and General Manager, North America, Vulog. “People are really relying on these cars.” Infrastructure, however, could make or break it. “Shared mobility operators attract more customers if infrastructure exists,” Gruenenberg stated. “Whatever the distance I need to travel, I will choose the specific service that meets my needs.” The average journey distance for shared scooters in Detroit, for example, is 1.5 miles. Bike-share averages between one and five miles. Moped sharing journeys in Europe average four miles. Uber is generally used for longer trips, and somewhere in between there is public transit. If the services and the infrastructure are in place, then residents are more likely to conclude they don’t need to own their own car. “At that stage, we can have the big discussions about a pure MaaS environment,” said Gruenenberg.

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M:bility | Magazine - Q3 2019

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If autonomous ride-hailing services take oﬀ as they are expected to, it will change the composition of who is buying. That buying power will change the dynamics of the automotive world

Recent statistics suggest this is the direction in which the market is gradually heading. Car2go has historically claimed that 10% of its users are thinking about selling their car or have sold their car already. “There is definitely a shift where people are getting rid of their cars and moving to MaaS,” Gruenenberg added.

car2go a few years ago, which found that each shared vehicle removes nine to 12 vehicles from the road. In Canada, the city of Vancouver has seen a big impact from the Evo carshare service, which has grown dramatically. In 2017, Evo operated 750 free-float cars in the city. Today it operates 1,300. Thibault pointed to a recent study in which 15% of Evo users said they would consider selling their cars because of the service’s dependability.

The University of California, Berkeley Transportation Sustainability Research Center (TSRC) conducted a study with

While private ownership may decline, shared mobility fleets will still need to purchase vehicles. For automakers, this is less about a

Who is buying?

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drop in volumes and more about a change in who is buying. “In the future, it is the mobility service providers that will be buying the cars, particularly as the industry moves towards autonomous vehicles (AVs),” said Thibault. He expects that sometime between 2025 and 2030, the majority of cars in North America’s cities will be sold to mobility services and not to private owners. “If autonomous ride-hailing services take off as they are expected to, it will change the composition of who is buying,” he added. “That buying power will change the dynamics of the automotive world.”

M:bility | Magazine - Q3 2019

Tesla stock slumps as Wall Street bulls see red With Musk’s US$420 valuation going up in smoke, Freddie Holmes takes a look at the problems behind Tesla’s slumping stock price and where it can go from here

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M:bility | Magazine - Q3 2019

n August 2018, Elon Musk indicated that Tesla could be taken private at US$420 per share, a tongue in cheek nod to cannabis culture. “Funding secured,” he tweeted.

That ‘$420’ quip feels a long time ago now, with Tesla currently left in a haze of debt, product safety concerns and a share price that has slumped some 40% from prior highs. A seemingly never-ending series of challenges face the electric vehicle (EV) manufacturer, which has been under the cosh to meet quarterly sales targets and source new injections of cash. Wall Street bulls appear to have had their faith tested to new levels; the bears argue a reality check was just a matter of time. As of 24 May 2019, Tesla’s stock price hovered around US$191—not much higher than valuations seen during the first quarter of 2014. Adam Jonas, an analyst at Morgan Stanley who has watched Tesla closely for years, recently suggested that the automaker’s stock price could plummet to just US$10 in a worst-case ‘bear’ scenario. Wellknown for his optimism around Tesla, Jonas has inadvertently achieved cult status as a ‘Tesla bull’. He even lays claim to a parody Twitter account: ‘Bullish Adam Jonas.’ The latest downgrade is an about-turn from previous sentiments, and also illustrates the challenge of making electric vehicles (EVs) at scale in the modern automotive industry.

Absolute unit of a slump In a call to clients hosted on 22 May 2019, Jonas explained how the investment bank’s outlook for

This did not end well, leading to a federal lawsuit and his removal as Chairman for misleading investors.

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That ‘$420’ quip feels a long time ago now, with Tesla currently left in a haze of debt, product safety concerns and a share price that has slumped some 40% from prior highs

Tesla had deteriorated. Even as recently as December 2018, “Tesla was seen as a growth story,” he reflected. “Today, it’s seen more as a distressed credit and restructuring story.” This change of tune follows several years of promising product launches and a generally positive vibe from the investment community. Back in August 2015, Jonas had increased Morgan

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Stanley’s price target for Tesla from US$280 per share to a staggering US$465, heralding the brand’s ‘unique position’ to lead in shared, autonomous and electric cars. Following the reveal of the Model 3 in April 2016, Jonas noted that while Tesla may not have disrupted the traditional automotive industry to the degree that had been expected, “we are now getting a feeling that this may be starting to change.”

M:bility | Magazine - Q3 2019 What has hit Tesla so hard?

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For those of us who always thought Tesla's valuation was absurd, this is just an overdue correction with further to go

Then came first mentions of the Tesla Semi in July 2016, with preorders for the all-electric HD truck soon coming from big names in freight such as UPS and Budweiser producer, Anheuser-Busch. By November 2016, however, Jonas cautioned that reservation holders for the Model 3 should be prepared to wait longer than expected, with production targets deemed somewhat lofty. This would prove a common topic in years to come.

There are a number of reasons why the investment community has grown cautious around Tesla’s performance in 2019. A handful of serious—some fatal— crashes have drawn criticism of its driver assistance feature, Autopilot. Then there are issues with the batteries that power its vehicles; a couple of recent fires have reignited past problems seen with its electric powertrains. But while product issues are not to be ignored, it is production that could prove to be the problem. In short, the automaker is haemorrhaging cash, and is not selling enough cars.

In December 2018, the stock price began a sharp and prolonged decline, moving from a high of US$376 that month to around US$190 over the course of just five months—equivalent to a decline of nearly 50%. “For those of us who always thought Tesla's valuation was absurd, this is just an overdue correction with further to go,” noted Jonathan Storey, Director of industry consultancy Automotive Reports, and author of Automotive World’s ‘Strategy update: Tesla’.

“I feel like the priority is missed deliveries, and what they might indicate about demand going forward,” said Karl Brauer, Executive Publisher for Autotrader

Tesla's volatile stock price Tesla's volatile stock price

400 '$420' tweet

Model Y reveal

Tesla's biggestever Q-over - Q sales drop

350 300 250 200

Adam Jonas' $10 'bear case' Plan to go private cancelled

Price cuts in China

Missed Q4 delivery estimate

Model 3 pricecuts Q1 loss

150

NTSB releases incident report after Model 3 crash

100 50 0 19-Jul-18

07-Sep-18

27-Oct-18

16-Dec-18

04-Feb-19

Price per share (US$)

26-Mar-19

15-May-19

04-Jul-19

Source: Automotive World

An Automotive World publication

M:bility | Magazine - Q3 2019

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Accidents and ﬁres can be addressed through updates to design and technology, but a shift in the market that puts downward pressure on unit sales is something beyond Tesla’s control

and Kelley Blue Book. “Accidents and fires can be addressed through updates to design and technology, but a shift in the market that puts downward pressure on unit sales is something beyond Tesla’s control.” Indeed, Morgan Stanley’s Jonas highlighted demand as being “the first domino” in a line of factors that could see the share price continue to tumble. Based on Q1

results, annualised vehicle deliveries could be as low as 250,000 in 2019—far below Tesla’s outlined target of between 360,000 and 400,000.

the Chinese pieces fit together is far from certain,” mused Brauer. Or, as Jonas put it: “Could there be a worse time to depend on China to sell robot cars?”

A mounting trade war between the US and China is also expected to make such targets tough to meet. “If the company can ramp up production, sales and profit in China, that could counter any drop off in US demand. But making all

A leaked email, sent from Elon Musk to Tesla employees, recently claimed that the company would in fact beat its previous record for deliveries, which was seen in Q4 2018. “If we rally hard, we can do it!” it read.

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M:bility | Magazine - Q3 2019 Money, money, money Then there is the issue of cash flow, not an ideal complement to skyhigh spending. In May, another email to staff described a ‘hardcore’ cost-cutting scenario that would be enforced, with the company burning through US$700m in the first quarter alone. “The rate at which it is burning cash has left investors wondering how much longer it can operate like this,” said Anna-Marie Baisden, Head of Autos, Macro Research at Fitch Solutions. “Questions over whether Tesla can produce at volume and be profitable still remain.”

departure rate of senior executives is also concerning.” Indeed, 2018 proved to be something of a revolving door for senior roles, with VP of Communications, Chief People Officer, Chief Accounting Officer, VP Global Supply Management and Senior Director of Production and Quality all finding pastures new within September alone. The trend has continued into 2019, with a marquee exit being Deepak Ahuja, one of Tesla’s longestserving executives, who retired in March 2019. Other notable departures include two separate General Counsels, a Senior Director of Engineering, and directors of

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The rate at which it is burning cash has left investors wondering how much longer it can operate like this

In his call to clients, Jonas suggested that Tesla’s manufacturing outfit was designed for significantly higher production levels, which would make dwindling demand all the worse: “[Tesla] built this hulking physical infrastructure to supply more like a million cars a year, not 350,000 cars a year. That's what's creating this bleeding.” Storey of Automotive Reports holds a similar opinion. “The company is a long way from showing it can achieve a sustainable profit,” he said. “The

Growth, Global Security and Global Communications.

What next? Tesla’s story is a curious account of how a company has continued to secure funding and ignite enthusiasm for new product launches, despite clear financial concern and troubled leadership. Bear in mind that Mark Fields was ousted as Chief Executive of Ford Motor Company in May 2017 following a widely lambasted drop in share price

under his leadership. Fields appeared to be positioning the company for ‘future mobility’, alas a lack of emphasis on manufacturing efficiency was deemed a crucial error. Ford stock hit US$10.87 per share on May 19, down from just shy of US$18 per share—a decline of just under 40%—when then Chief Executive Alan Mulally retired in the summer of 2014. From smoking cannabis on camera and categorising legitimate analyst questions as “stupid”, to furnishing his private Twitter account with memes and joking about drivers using Autopilot to film porn—at a time where several Tesla crashes were in the headlines—Elon Musk is not the archetypal automotive industry veteran. And that he is, having been at the helm of Tesla Motors since 2003, longer than Dieter Zetsche has held the top job at Daimler. The promise of affordable, highly automated EVs has largely proven enough to keep apologists on side. “Our Tesla [stance] is hard to live with at times,” Jefferies analysts noted on 24 April 2019, “but we see value in Tesla’s EV/connectivity technology and experimentation—no matter the management style—and remain confident there is a path to sustained profitability.” A recent investor note from ARK Invest suggested that Tesla’s stock could hit between US$560 and US$1,200 by 2023. The opinion is not shared by many. “Even those who had much greater faith in this stock have had that faith tested, not only by recent events but perhaps more by the growing perception that Elon Musk does not have a realistic vision for the company, nor the skill-set to manage it properly,” said Storey. “Tesla’s valuation has been based on an assumption of

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M:bility | Magazine - Q3 2019

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Vehicle manufacturing is inherently capital intensive; throw in the added complexity of producing batteries, pioneering in driverassistance technology and juggling activities such as space travel and solar power, and it is not surprising to see Tesla struggling

incredible success. I use the word, ‘incredible’ in its original sense, meaning not believable, so a return to a more sane valuation was always on the cards.” With all the talk of bulls and bears, it is important to remember that the automotive industry itself is a challenging beast. It is far from business as

usual today, as pressure to cut harmful tailpipe emissions and reduce the shocking frequency of road deaths has forced the world’s major automakers to invest eye-watering sums in new, unfamiliar technologies. Vehicle manufacturing is inherently capital intensive; throw in the added complexity of

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producing batteries, pioneering in driver-assistance technology and juggling activities such as space travel and solar power, and it is not surprising to see Tesla struggling. While Volkswagen, General Motors and Toyota et al are looking to the future for longterm stability, Tesla may well have to turn its attention to the present to ensure survival.

A ‘quid pro quo’ approach could hold the key to reshaping city mobility Moving around a city can often be a frustrating affair. For decades the daily commute has been spent in gridlocked traffic, crowded buses and cluttered train cabins. However, the future of city mobility does not necessarily have to conform to the norms of the past, as long as public and private players are willing to scratch each other’s backs. By Jack Hunsley

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M:bility | Magazine - Q3 2019

he potential benefits of the connected, autonomous, shared and electric (CASE) vehicle megatrends are well discussed. Greater connectivity could allow workers to access their latest projects from the cloud and connect to conference calls on the go. Autonomy could be used to create a seamless, conveyor beltlike mobility network. Shared services could remove the need for private vehicle ownership by eliminating the single occupancy vehicle, while electrification could yet go some way in aiding the battle against climate change. However, possibility and reality are two very different concepts. Even if the CASE trends look set to profoundly change city mobility, it remains unclear exactly how this future will be moulded.

A future shaped city by city An important point to recognise is that the CASE trends will have a significantly different impact on a regional basis. Embracing the future of mobility is unlikely to be achieved with a single sweeping effort, as Tom Mayor, a Partner at KPMG and the consultancy’s Industrial Manufacturing Strategy Practice Leader, noted at this year’s M:bility | Detroit conference, a two-day event hosted by Automotive World. “This future will be shaped city by city, as living and commuting patterns are very different,” said Mayor. For example, in 2018 KPMG tracked 500,000 mobile phones in Chicago and about 400,000 in Atlanta during the morning commute. In Chicago, there were many five to tenminute journeys, with few people going from the exterior tollway into the city unless they were on a train. Atlanta was very different

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This future is going to be shaped city by city as living and commuting patterns are very different

due to its spread-out suburbs, and thus most of the traffic was from suburb to city. As Mayor explained, the suburb to city commute in Atlanta means it is likely to require different forms of mobility services. Even if the underlying technologies used in Chicago and Atlanta are the same, a shared, autonomous pod designed for short inner-city commutes is unlikely to fulfil the needs of a commuter in Atlanta, who may end up spending upwards of an hour in traffic. Likewise, a vehicle designed for an Atlanta commute with greater connectivity, space and comfort could prove cumbersome and surplus to requirements in Chicago. “Cities are going to require different vehicles. That is going to lead to a whole different set of ideas,” added Mayor.

Vehicle miles travelled While the end result may vary, the initial challenge is the same. As Mayor noted, even by KPMG’s most conservative estimates, by 2040 there will be half a trillion more vehicle miles travelled in the US alone, facilitated largely by greater levels of shared mobility.

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“The biggest lever we have in CASE is sharing,” said Justin Holmes, Director of Corporate Communications and Public Policy at Zipcar. “If you picture a street congested with vehicles today and then fast forward to a street with electric vehicles (EVs), they look quite the same. Likewise, with connected and autonomous the picture is still uncertain. If today the most popular mode of transportation is single occupancy vehicles, in the future it could be zero occupancy vehicles.” As Holmes continued, while connected, autonomous and electric mobility have huge roles to play in the future, their potential will only really be unlocked if shared mobility is truly embraced. In order to achieve this, he stressed the need for companies and governments to offer incentives. “We see a combination of price incentives, and more importantly, the implementation of the right policy levers,” he added. “It may be in the short term that tech providers lead in this future, but the ultimate winners will be cities. What we’re starting to see is that the smart tech operators are beginning to think about that future now—a world where

M:bility | Magazine - Q3 2019

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If today the most popular mode of transportation is single occupancy vehicles, in the future it could be zero occupancy vehicles

mobility services aren’t necessarily just services to be regulated, but where the government and the private sector can partner together to deliver more solutions.”

schemes and proof of concepts that would allow both parties to learn together.

In such a future, the role of the automotive industry will be to provide the platforms and technology. In return, governments will open the door for pilot

In many ways, this approach is at odds with how the automotive industry has worked with governments previously. As Devin Patel, Vice President of Business

Changing ways

Development at Passport, highlighted, the origin of Uber is an example of which automotive should aim to avoid going forward. “When Uber entered the market they came in with a motto of ‘do not ask for permission, ask for forgiveness’,” he said. “In today’s ecosystem, you are seeing new positions being created within the government specifically to focus on how to integrate with

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M:bility | Magazine - Q3 2019 new tech providers, as governments do not move as quickly as these companies.” This growing interest in integrating with the automotive industry comes as a doubleedged sword, however. While governments are beginning to increase their understanding of the CASE trends, it is important to stem enthusiasm where necessary. Here, autonomous driving is an excellent example. “All the discussions around automation have made city mayors interested in mobility solutions, which is a fantastic opportunity. The downside is that for some people this can be a distraction,” said Holmes.

providers and operators want to compete against the efficiency and scale that public transportation can offer,” he added. Tweaks can already be made today in urban planning, explained Lisa Niscoromni, General Motors’ Manager of Local Government Relations.“We are

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None of us here as mobility providers and operators want to compete against the eﬃciency and scale that public transportation can oﬀer

“Shared is a huge component of this,” added Patel. “People keep saying that autonomous will solve this and that, but the real way to solve congestion is with shared autonomous vehicles.” In short, it is important for cities and automotive players to understand that the CASE trends must be given equal attention to maximise their overall potential. While viewing any of the trends in isolation could help solve certain use cases in the short term, in the long term this approach could prove troublesome.

Room for the old world Even if the CASE trends can revolutionise mobility, this does not mean that the old world should be totally scrapped. In many cases, it is important to approach new mobility options with an ‘if it is not broken, do not fix it’ mentality. One example here is that of mass transit, which Holmes described as the backbone of any shared mobility solution. “None of us here as mobility

it can be used as public parking locations. “For emphasis, this is some of the world’s most valuable real estate,” said Holmes. “But Mayor de Blasio believed—as we do—that in order to accelerate this future of more shared mobility solutions, we need to leverage that real estate in more efficient use cases.”

already seeing many changes to zoning regulations that are removing the off-street parking requirements for developers. That has made investing—and especially affordable housing in urban areas—more palatable, because those parking spaces cost a lot of money,” she said. “In many occasions now, we can partner with private property owners as they no longer need to have 1.25 parking spaces per unit and instead would rather invest in five spaces for shared vehicles.” This concept of good land planning is also applicable to dense urban environments. For example, Zipcar this year began working with New York City. As part of the tie-up, Mayor Bill de Blasio has offered the company strategically placed real estate so

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In return for prime real estate, Zipcar is offering insight and data to the city of New York, which will help it evaluate the success of the programme and showcase whether Zipcar can offer a solution that could persuade New Yorkers away from private vehicle ownership. This quid pro quo could hold the key in transforming city mobility. Just as major automakers are likely to struggle in juggling all of the CASE trends at once, adapting city mobility networks for this future appears a task too large for any one entity to master alone. “We need to remember that many of our customers are the same,” said Niscoromni. “City customers are looking to optimise that quality of life and we want to optimise our customers’ experiences and goals.”

ÂŠ Mastercard

M:bility | Magazine - Q3 2019

Contactless payments keep cities in touch with future mobility demands In order for inner-city travel to be a painless procedure, Mobility as a Service (MaaS) providers must work with public transit operators to adopt new payment solutions. By Freddie Holmes

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M:bility | Magazine - Q3 2019

ompanies known for providing credit and debit cards may not be the most obvious stakeholders in the future of mobility, but the rollout of new mobility services could see the physical ticket resigned to the history books. In its place will be the digital wallet, which many commuters already use through contactless card and smartphone payments.

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Why should engaging with a city be any diﬀerent to buying a cup of coﬀee or a cinema ticket?

Today, the process of travelling across a city can be draining. Cycling through various screens for a printed ticket at an automated kiosk takes time, requires excess infrastructure and makes the convenience of private vehicle ownership ever more attractive. Queuing up at the ticket office is not much better, and adds staffing costs to the equation. In order to remove single-occupancy cars from the city centre, public transit must be fast, reliable and seamless. This is where contactless payment systems can make a real difference. “Why should engaging with a city be any different to buying a cup of coffee or a cinema ticket?” asked Matt Blanks, Transportation Lead at Mastercard. Blanks has previously been involved with Oyster card projects in London, as well as the 2012 Olympics. He leads a team that has worked with various transport operators around the world, such as Singapore’s Land Transport Authority (LTA) and Transport for New South Wales in Australia. Contactless payment technology has been a breath of fresh air for many travellers. In the UK, 50% of all public transit transactions in London are now contactless. It may seem a simple tweak, but it has allowed for a raft of other improvements downstream. “The city has been able to close its ticket offices, remove cash from buses, and reutilise those resources to run the night tube,”

explained Blanks. “A big challenge for cities is handling an increase in demand for transport, but with no increase in budget. We look at more efficient ways to leverage global products to handle that.”

Payment in the future of transportation Based on 2018 data from the United Nations, 55% of the world’s population lives in urban areas. By 2050, that figure is expected to hit 68%. Much of this urbanisation will be localised within Asia; Tokyo is currently the world’s largest city with 37 million inhabitants, and New Delhi is expected to overtake the Japanese capital by 2028.

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Around 43 megacities—those with more than ten million inhabitants— are also expected to form around the world by 2030. While issues such as housing, energy, employment and other basic services will take precedence, mobility is also a key indicator of economic and social prosperity. In order for residents to utilise public transportation or other mobility offerings, those services must be affordable, accessible and simple to use. “With the pressure this massive urbanisation places on cities, we have seen various consumer challenges and friction points,” said Blanks. “We have learned from the retail sector how consumer interactions can be simplified, and saw transit as a significant way to help make cities more efficient and open for residents and visitors joining them.”

M:bility | Magazine - Q3 2019 Today, many travellers no longer need to queue up for a physical ticket, and instead can use a contactless card in their wallet or smartphone options such as Apple Pay, Google Pay or Samsung Pay. “You can use those directly on transit; it is about breaking down barriers to interacting with a city and making it quick and easy to travel,” explained Blanks. “It sounds cliché, but transportation is the lifeblood of a city. If people cannot use the Jubilee line on the London Underground, the Canary Wharf business district struggles to function.”

The new normal Semiconductor manufacturer Infineon estimates that by 2020, more than 60% of all payment transactions will utilise contactless technologies such as Near Field Communication (NFC). Many trains, metros and city buses all utilise contactless payments today. The same technology can be used to unlock shared pedal-assist bicycles and e-scooters, too. It has also found various uses within automotive; a handful of electric vehicle charging providers allow for contactless payments, and DS Automobiles even offers a car key that links to your bank account. But with the wider concept of ‘future mobility’ in mind, the greatest gains should be seen within

public transit. “Planning a journey is very simple, but payments across multiple journeys can still be quite complex,” said Blanks. “That is what needs to be simplified. Otherwise, we will not reduce this reliance on cars, and cities will choke with congestion.” This is why companies like Mastercard and Visa are working with authorities to implement new solutions that make the most of a city’s existing infrastructure, and handle the growing number of travellers on its network of trains, buses and other mobility services. As Olabisi Boyle, Vice President of Internet of Things at Visa, noted in the Automotive World special report, The path to integrated mobility: “Waiting line moments need to decline in order for smart mobility to progress.”

cities need to change how they interact with citizens in order to change the way they behave.” The company has been working with Chicago to this end since 2017. City planners have been investigating how payments can be made faster and easier, but also how people can be encouraged to travel off-peak. “Chicago really struggled with how it moved people around the city, so we partnered with the mayor’s office and a few other key partners to incentivise and nudge customers travelling on the Chicago Transit Authority (CTA),” said Blanks.

Chicago

It is not just commuting that causes congestion, but also regular events taking place within the city, such as baseball games. With mid-week games starting shortly after work, many fans end up travelling in the same direction as those heading home. To soothe congestion, incentives were offered for those willing to delay their trip, or even travel earlier. Anything from discounts to free drinks have been offered as an incentive to spread out that demand, making things easier for everyone involved.

Mastercard in particular is focussing on two key issues: making it easier to use a transportation system, and managing overall demand for travel. “The biggest pain point is how you gain access to a train and how you buy that ticket. The second is that

“It is about simplifying the interaction, and then managing that demand through a range of partners and technology providers to make it less congested,” explained Blanks. “People don’t want to think about how they pay

“We understand the pain points of cities and transport operators, where there are inefficiencies, how people move around, and how we can help them manage that demand,” added Blanks.

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People don’t want to think about how they pay for their transport, and many cities add unnatural pain points to a public transit system

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Contactless payment has revolutionised Bogota’s bus network for their transport, and many cities add unnatural pain points to a public transit system. We can save them money and time, and make it easier for people to travel around.”

Bogota Similar initiatives have taken place elsewhere, such as Sydney, London and Bogota. According to traffic analysis from INRIX, the Colombian capital was the third most congested city in 2018. Local authorities have been pressing to revamp the efficiency of its bus network, which avoids much of this traffic via the TransMilenio bus rapid transit system. Access is granted through the prepaid Tullave card—‘your key’ in Spanish—with riders able to simply tap a contactless terminal mounted in buses without breaking stride. However, long queues remain a serious problem, as funds need to be reloaded onto the card at kiosks. Third party top-up stations had been trialled in shops, but the scheme proved largely unsuccessful due to inconvenient locations. In 2015, Mastercard launched a new debit card, via its Maestro brand, in combination with domestic bank

Bancolombia. This allowed travellers to make contactless payments directly from their own bank account, without having to queue and top up their Tullave card. Payments could be ‘post-paid’, with a day’s worth of travel settled in one go. “You tap in and out as you go through the day,” explained Blanks. “At the end of the day, that transaction is cleared so there is one charge on your account.”

A cashless society In future, the idea is that urbanites will be able to ride-hail to the train station, take the train and then hop on an e-scooter for the last mile to work. That will only be an attractive proposition if payment is painless. But is it a realistic ambition? “We have technologies available now that can do all of that,” said Banks. “It is just about where the ecosystem goes, and how you put all those players together.” As he points out, such a scenario would require a mix of private and public players all working together. “Our technology can easily take one payment from you as a consumer and pass it on to those three separate companies—it’s more about how those players and the city

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decide to work together,” he continued. “We can support all of those things, it just depends on how the game plays out with all of these different MaaS providers.” Looking ahead, cities may eventually navigate toward an entirely cashless transportation system, with physical printed tickets shunned in favour of digital wallets. “Never say never,” said Blanks. “If you look at the way the industry is going with MaaS, it is about connecting all of these players together with one account. That account naturally comes through a digital device; whether you pre-fund your journeys or you post-pay them, you have one credential that gives you access to everything.” The smartphone in particular will be a “portal into the city”, suggested Blanks. That is not to say other methods will not remain available, but it will be challenging to use a variety of mobility services seamlessly with physical tickets and a number of different technologies. “It needs to be one simple technology that can be used around the world,” he concluded. “For cities to survive, they have to make it quick, easy and simple to use public transit.”

M:bility | Magazine - Q3 2019

When it comes to AV progress, miles and disengagements don’t tell the whole story A record amount of companies developing and testing AVs on California’s public roads means record amounts of public test data, but is it even useful? By Xavier Boucherat

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alifornia law now requires that all companies testing autonomous vehicles (AVs) in the state provide data to the California Department of Motor Vehicles (CDMV) on the number of miles driven autonomously, along with details on each and every disengagement. These in turn are made public, with results for 2018 released in February 2019. There were few surprises: of the 48 companies listed, Waymo is still king of the road with 1.2 million miles logged. A total of 114 disengagements means a rate of 0.09 disengagements per 1,000 miles. GM Cruise came second, logging 448,000 miles and a disengagement rate of 0.19 per 1,000 miles.

I don’t think you’ll ﬁnd anybody inside the community that thinks these numbers are a great measure of progress

competitors, it emerged that Apple was reporting every instance in which the driver was taking control of the vehicle, including non-emergencies. This was later changed, such that these disengagements were removed from the count. These stats underline the fact that the CDMV’s definition of disengagement lacks clarity, and is

open to interpretation. It reads, for example, that a safety driver taking control of a vehicle in selfdriving mode to ensure safe operation qualifies as a disengagement. In November 2017, a vehicle run by GM Cruise, nicknamed ‘Pickle’, stopped on a crosswalk in San Francisco as a traffic light changed from yellow to red. The safety driver took control, so that the car didn’t block the

But one figure in the latest data demonstrates perfectly the flaws in the California system: Apple, which came third in miles driven with just under 80,000, logged 871.65 disengagements per 1,000 miles. Far from lagging behind its

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M:bility | Magazine - Q3 2019 crosswalk. This is arguably an example of the CDMV’s definition, given the presence of pedestrians at the crosswalk, yet a report by Jalopnik in 2018 revealed the incident was not recorded.

The company was clear on what it didn’t want: disengagements should not include incidents where a system error leads to a dropout where it wasn’t necessary, operational constraints where the driver has been trained to disengage the system, or scenarios such as the end of a test

Furthermore, Apple’s sudden change of tactics raises further questions: what exactly constitutes an emergency? Previous suggestions from the tech giant have failed to expand much upon the state’s ideas: “A disengagement should be defined as an unexpected event or failure that requires the safety driver to take control of the vehicle in order to prevent a crash or traffic violation,” it wrote in a 2017 letter to the CDMV. However, the company was clear on what it didn’t want: disengagements should not include incidents where a system error leads to a dropout where it wasn’t necessary, operational constraints where the driver has been trained to

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M:bility | Magazine - Q3 2019 disengage the system (such as navigating a construction site), or scenarios such as the end of a test. The system has drawn a fair number of critics as a result. “TuSimple does not view these numbers as great measures of progress,” said Chuck Price, Chief Product Officer at TuSimple: “I don’t think you’ll find anybody inside the community that does see them as a great measure of progress.” Instead, the self-driving truck developer is one of several advocating the concept of ‘meaningful miles’, and lessening scope for companies to simply rack them up along routes with low potential for learning, such as a highway at night.

That said, there are those who believe that whilst the system is imperfect, it still holds value. Jeff Blackburn, Head of Business Development at Metamoto, a simulation platform being used by AV developers, believes that with some tweaking, regulatory agencies

It’s all we’ve got!

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The latest AAA survey reports that 71% of participants are afraid of the idea of riding in fully self-driving vehicles, up 8% on the previous year’s survey. This follows a year of high proﬁle selfdriving vehicle incidents, including the death of Elaine Herzberg in Tempe, Arizona

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If they could come up with a structure which deﬁned what an autonomous vehicle disengagement was, and how these should be reported, I believe that would yield data transparency which in turn would gain public trust in AVs

such as the National Highway Traffic Safety Administration (NHTSA) could roll out such a system to help the industry tackle one of the biggest obstacles to AVs: public acceptance. Underlining the challenge ahead was this year’s report from the American Automobile Association (AAA). Its latest survey reports that 71% of participants are afraid of the idea of riding in fully selfdriving vehicles, up 8% on the

previous year’s survey. This follows a year of high profile selfdriving vehicle accidents, including the death of Elaine Herzberg in Tempe, Arizona. Meanwhile, the CDMV reported collisions involving AVs more than doubled in 2018 to 67, up from 29 in 2017: a natural consequence of having more companies test on the road perhaps, but a statistic that’s unlikely to soften concerns. “Automated vehicle technology is evolving on a very public stage

and, as a result, it is affecting how consumers feel about it,” said Greg Bannon, AAA’s Director of Automotive Engineering and Industry Relations, in a statement. Developers are keenly aware of the need to get the public on their side, and have expressed support for California’s goals if not its approach. “Apple believes that public acceptance is essential to the advancement of automated vehicles,” wrote the tech company, adding that “access to

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What’s needed, says Blackburn, is better definitions. Otherwise, he argues, testers could potentially game the system. “If the authorities could come up with a structure which defined what an autonomous vehicle disengagement was,” he suggests, “and how these should be reported, I believe that would yield data transparency, which in turn would gain public trust in AVs.” Faulty though California’s methods might be, it is worth remembering they are also among the most developed in the world, the product of many years of experience in its role as the cradle of life for the self-driving agenda. They will not disappear over night, and could yet prove the foundation upon which all other nations, let alone the rest of the states, develop their own AV regulations. The state is therefore in a good position to set worldwide standards to make AV testing data as transparent and meaningful as

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The industry will need to consider carefully how to produce fair and comparable reports

possible, and as such it must continue to refine its processes. Recent data from China has underlined the importance of this: the Beijing Municipal Commission of Transport released the country’s first self-driving test reports, detailing 150,000km as logged by eight companies working in the capital. Of these, Baidu is the largest, accounting for more than 90% of the miles driven. A separate report by the Beijing Innovation Center for Mobility Intelligent also covered the testing, mentioning 23 disengagements. However, the disengagements per

kilometre driven metric is missing from both reports. On the one hand, this could be a cause for concern, as it means there is little way to compare the Chinese tech giants with those in the US. On the other, it might speak to the inefficacy of the metric: driving conditions in Beijing are very different to California test-sites, with arguably more potential for disengagement as a result of other drivers’ disruptive behaviour. The industry will need to consider carefully how to resolve inequalities like this, and how to produce fair and comparable reports.

transparent and intuitive data on the safety of the vehicles being tested will be central to gaining public acceptance.”

questions remain around the validity of disengagement reports in their current state

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ÂŠ WEY

M:bility | Magazine - Q3 2019

How to solve a problem like the semi-autonomous vehicle? Great Wall Motorsâ&#x20AC;&#x2122; Dr. Vladimir Djapic speaks to Freddie Holmes about the challenge of Level 3 autonomous driving and the need for accurate maps

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any believe that driverless vehicles will be commercialised by gradually introducing higher levels of driver assistance. It is an opinion that has been nurtured by the Society of Automotive Engineers’ Levels of Driving Automation, a scale which describes six levels ranging from zero (no automation) to five (no steering wheel). Sitting in the middle is Level 3, offering a mix of both human and computer-based control of the vehicle. However, there is a lack of clarity as to exactly how and when the driver could be required to take the wheel. Ask five industry stakeholders for their interpretation, and you will likely receive six different answers.

With a Level 3 system engaged, the driver is no longer required to remain alert, despite the fact that the vehicle can only operate under ‘limited’ conditions. Somewhat confusingly, the driver must also be ready to take over if required— there is a clear conflict of interests. The argument is that the vehicle would be able to detect when a hazard is too challenging, and control can simply be passed over to the driver. This is based on the

assumption that he or she is ready to take over, despite having no obligation to monitor the road. It is a recipe for disaster. The risks became abundantly clear during the tragic event that transpired in Tempe, Arizona last year. The safety driver, by all accounts a trained operative in charge of monitoring the Uber Advanced Technologies Group test vehicle, was engaged in other activities when the self-driving system failed to register a pedestrian crossing the road.

The challenge of shared automation Despite the inherent challenges, many automakers continue to pursue Level 3 technology. Many of the world’s major manufacturers, including Volkswagen, BMW, Volvo and PSA, are members of the L3Pilot project, a €63m (US$70.34m) effort funded by the European Commission to validate and commercialise Level 3 autonomous driving functions. Audi’s self-proclaimed Level 3 ‘traffic jam pilot’ has also been available since 2017 in the A8.

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As the industry continues to pursue shared control of the vehicle, any eﬀort to make that handover scenario safer should be welcomed

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With the system engaged, the driver is not required to “continuously monitor the car and can focus on another activity,” Audi states. And yet, he or she “must remain alert […] capable of taking over the task of driving when the system prompts them to do so.” This so-called ‘handover’ scenario has left some scratching their heads. “The most difficult design challenge is Level 3 automation, which includes highly advanced self-driving capabilities that ‘sometimes’ require an occupant to take over if the automation fails,” said Chris Rockwell, Chief Executive of human experience consultancy Lextant. “It’s one of the reasons many manufacturers are skipping Level 3 and going directly to Level 4 automation.” Michael Hafner, Head of Automated Driving and Active Safety at Mercedes-Benz Cars, warned that drivers may assume a Level 3 system is more capable than it is. “Overreliance, or ‘blind trust’, in a system can be very dangerous,” he said.

The map as a sensor As the industry continues to pursue shared control of the vehicle, any effort to make that handover scenario safer should be welcomed. Advances in human-machine interface (HMI) aside, high definition (HD) maps have been put forward as a partial solution. In short, HD maps can help to prepare an autonomous vehicle (AV) as it enters the unknown. If a long-range sensor cannot accurately judge how sharp an upcoming turn may be, for example, the map can ensure the

M:bility | Magazine - Q3 2019 vehicle slows to an appropriate pace. At a complex intersection, that same map can ensure the front-facing camera knows which traffic lights to watch out for. As such, numerous players have dedicated mapping vehicles running on public roads around the world today. Based in Farmington Hills, Michigan, American Haval Motor Technology (AHMT) currently has two cars roaming the Detroit area in autonomous mode, collecting valuable map data and honing the accuracy of the overall system. A subsidiary of Great Wall Motors, AHMT is leading the Chinese automaker’s push for autonomous driving in the US. So far, tests have shown that the roads of Michigan are easier to map out than those in its home market of China, where crowded lanes can block the view of image sensors. In June 2018, Haval—Great Wall’s SUV brand—won an award for its prowess on an autonomous cross-country course in China, but the automaker is now developing Level 4 autonomous vehicles that will operate on pre-defined urban routes.

Various other players such as TomTom are developing HD maps

As Mapping & Localisation Manager and Tech Lead, Autonomous Driving Systems at AHMT, Dr. Vladimir Djapic oversees how HD maps are integrated within these platforms. In his view, Level 3 systems should be approached with caution. “Level 3 is a very difficult situation,” he said. At the very least, the technology should be

aware of any upcoming hazards— a road collision or a snow blizzard, for example—and pull over, rather than immersing the driver at short notice. “One of the important sensors that will enable this is the HD map,” he said, “because it provides information on different elements of the road, which can be combined with vision sensor data.”

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With a Level 3 system engaged, the driver is no longer required to remain alert, despite the fact that the vehicle can only operate under ‘limited’ conditions

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M:bility | Magazine - Q3 2019 Calming the nerves For anyone that has used a highway pilot system, it can be a nervy experience at times. While straight roads with clear lane markings are generally handled well, today’s systems can be easily spooked and shove control back to the driver with little warning. Oftentimes, it is because a turn—whilst gradual—is sharper than expected, and the system bails out. If it knew the gradient of the corner in advance, this would help to provide context on the road ahead and not only what is in the vehicle’s immediate line of sight.

scenario there may be red lights everywhere. An accurate map can provide context and tell the car where to look—or more specifically, where in the image the region of interest is.” In fact, he suggests that the industry should strive to employ the level of accuracy required by a Level 5 system across the entire spectrum of AVs. “Otherwise, will these features really be trusted?” he continued. “Let’s not simply develop something that ‘does the job’ because it is labelled as a Level 2 technology. The better the system is, the more it will be trusted by drivers.”

behind the wheel blindfolded, yet upon a machine beeping, is supposed to take over,” he stressed. “To stress how difficult that is, who would we trust in that situation: the person that is blindfolded and has no sense of what is going on, or the machine? In my opinion, a Level 3 system should have the same level of accuracy as a Level 4 or 5 system.” It is tough to argue the merits of a Level 3 system from this perspective, but as the industry pushes on with autonomous drive technologies, it should not ignore the support of a HD map. Alas, some believe AV

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It is very difficult to detect whether a specific traffic light is red or green whilst travelling quickly; in a city scenario there may be red lights everywhere. An accurate map can provide context and tell the car where to look

“The map should definitely be considered as another sensor, but a sensor that can provide information on what is coming up,” said Djapic. The same line of thinking applies to more challenging manoeuvres, such as negotiating traffic lights without driver input. “If you don’t have a HD map, you almost cannot do the job,” he warned. “It is very difficult to detect whether a specific traffic light is red or green whilst travelling quickly; in a city

The issue of trust The progression from driver assistance to full automation should be carefully considered. Having the driver as a ‘fall-back’ in the event of a failure has already proven risky in the wild. While Great Wall continues to investigate all levels of automation today, Djapic has his reservations around shared control of the vehicle. “A person could be

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developers should do just that. HD maps have come under fire by a small collective within the industry, with the suggestion that vehicles could become reliant on the map rather than the sensory input of a camera. Precise maps are “a really bad idea,” noted Elon Musk during Tesla’s investor-centric Autonomy Day in April. The same camp has suggested LiDAR will also become surplus to requirements in future.

ÂŠ University of Michigan

M:bility | Magazine - Q3 2019

Michiganâ&#x20AC;&#x2122;s private playgrounds present new avenues for AV testing Autonomous vehicle proving grounds allow developers to hone technologies from the safety of closed-course tracks. But unlike traditional test beds, they must be able to replicate real-world environments, and in some cases, model the layout of a city. Freddie Holmes speaks to the American Center for Mobility, one of the latest of such set ups to be established in Michigan

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M:bility | Magazine - Q3 2019 ust like any other vehicle destined for public use, autonomous vehicles (AVs) require thorough testing—and lots of it. Not all of that can be carried out in the open, however. Strict regulations dictate how prototypes can operate amid normal traffic, with various hoops to jump through before receiving approval. Even then, so-called corner cases—rare incidents that could prove problematic to an AV—are not ideal when considering the potential damage that could be caused.

At off-road test facilities away from the public eye, that is not the case. Test dummies can take the place of pedestrians, crashes will not incur any lawsuits, and corner-cases can be repeated over and over. As such, anything from abandoned military facilities to derelict manufacturing sites have found a new lease of life as AV proving grounds, letting developers off the leash to put prototypes through their paces—safe in the knowledge that any risk is primarily limited to financial loss at worst. There are hundreds of vehicle testing grounds around the world, but very few that can replicate the complex driving environments an AV will face on a daily basis. It is not simply about honing attributes such as noise, vibration and harshness (NVH). These cars need to learn how to interact with complicated intersections and pedestrian crossings, and how to react to other road users—particularly vulnerable actors such as cyclists. As would be expected, the necessary scale and subsequent cost of such a facility means they remain relatively few and far between.

Proving grounds The GoMentum Station in Concord, California, is a staggering 2,100-acre abandoned naval base that has been used as a test bed by the likes

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There are hundreds of vehicle testing grounds around the world, but very few that can replicate the complex driving environments an AV will face on a daily basis

of Honda, Toyota and Lyft. Paul Cummings, Group Lead for Systems Integration, Automated Vehicle Research at Honda Research Institute USA, has described the base as “an ideal proving ground” due to its controlled environment, “which can be continuously modified to represent a wide array of settings that an automated vehicle must navigate, especially for urban operation.”

for Testing & Research of AVs, a 4.5-acre facility operated by the Nanyang Technological University in Singapore and supported by the city-state’s Land Transport Authority. It was built from the ground up in 2017, with mock roads, intersections, and even ‘skyscrapers’ to replicate potential cell-signal interference. A small section is also outfitted with a rain and flood simulator.

Both Waymo and Uber have their own test facilities in California and Pittsburgh respectively, which act as replica towns. Then there is CETRAN, the Centre of Excellence

Opened in 2017, K-City is a 79-acre mock town situated roughly an hour from Seoul. It is South Korea’s primary private test bed for AVs. In the UK, the RACE

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Motor City becomes mobility central Michigan in particular has become something of a hot bed for such facilities. Consider the University of Michigan’s Ann Arbor-based Mcity; the 4000-acre Chelsea Proving Grounds, which has received a US$30m investment from FCA; the Toyota Research Institute’s 60-acre site at the Michigan Technical Resource Park; and the American Center for Mobility (ACM). The latter is a 500-acre site adjacent to Willow Run, a former manufacturing park in Southeast Michigan best known for making aircraft during the Second World War. Having served under the ownership of both Ford and General Motors in the past, its sprawling grounds today house the ACM, a joint initiative developed by a handful of players including the state Department of Transportation (DoT), the University of Michigan and the Michigan Economic Development Corporation.

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We act as a bit of a matchmaker— it is a neutral meeting point to do collaborative research without a formal agreement

facility located in Oxfordshire houses a 10km network of tracks to test both connected and autonomous vehicle technologies. A similar facility has been established by the Research Institutes of Sweden and Chalmers University in Gothenburg; the AstaZero facility contains a variety of test environments, including rural roads, multi-lane roads, high speed areas and city driving. Transpolis, a dedicated ‘urban mobility lab’ in Lyon, France, is also a test bed for AVs, among other technologies. Available to developers is a one-kilometer highway, a ring road, a country road, and a fake city of 30 hectares where traffic lights, pedestrian crossings and bus stops help to replicate urban driving.

Like most AV proving grounds, the idea is to foster the development and deployment of future transportation systems. It works with automakers, Tier 1 suppliers and a wide array of infrastructure companies. Relevant players also have the option to invest and sit on its Industry Advisory Board. “But they don’t just plunk down dollars and then come in and test,” advised Jeff Rupp, Chief Technical Officer at ACM. “There are programmes, experiments and research projects in which they want to be involved, and we can help them deliver those types of projects. We act as a bit of a matchmaker—it is a neutral meeting point to do collaborative research without a formal agreement.” The benefit of such a large playground is that testing can essentially be carried out in realistic scenarios, rather than having compact test cases one after the other. Compared to other facilities in the area, it is one of the larger stretches of land on offer. “Mcity has

a lot of great features, they’re just very densely packed,” explained Rupp. “If you’re driving from one end of the site to the other, you might experience ten different unique things. But in the real world different types of roads are not that densely packed. If you just want to experiment on one element, you only get a short run at it.”

Sister act As it happens, Mcity’s Director, Huei Peng, sits on the ACM Board of Directors. “Their staff and our staff meet regularly,” noted Rupp. The two entities are currently working together to find projects that can “graduate” from Mcity to ACM. “We’re working on a research project proposal right now involving data acquisition systems and data management,” said Rupp, “because there are massive amounts of data being generated by AVs, and you need to be able to ingest all of that and make it useful.”

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If you want to replicate real world scale, you need to come to a larger facility. We have areas where you can hit higher speeds for longer periods of time—it’s more naturalistic in terms of driving

As one would assume, creating realistic driving environments in which to hone AVs requires space. Of the ACM’s 500 acres, vehicle test environments take up around 300 acres or so. By comparison, Mcity has about 16 acres of roads and traffic infrastructure. “If you want to replicate real world scale, you need to come to a larger facility,” continued Rupp. “We have areas where you can hit higher speeds for longer periods of time—it’s more naturalistic in terms of driving.”

All for one Previously a veteran of 15 years at Ford Motor Company, Rupp reflected on how his position in the industry has changed. Rather than helping one automaker move forward, he is now part of a wider entity assisting the entire industry in its shared pursuit of future mobility solutions—and not only automakers, but also Tier 1s and infrastructure providers.

More compact facilities such as Mcity, he says, are more focussed on performing initial research and development activities, testing concepts and trialling innovative approaches. The next step is usually to expand that programme. “When you’re ready to go larger scale or prove out commercial

readiness, you need a different type of facility,” said Rupp. That said, he is quick to underline that there is no competitive dynamic between ACM and Mcity. “We are really more of a sister collaborative; we’re certainly not competitive in any way because our purpose and intent is very different.”

The ACM has a mutually beneficial relationship with Mcity

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“It is probably a better use of my time, and a better way to have an impact as an individual,” he mused. “So many people are hurt or killed in crashes, it is a huge problem. When a human driver is on his or her game, I’m not sure that a machine can perform better unless it has access to information a human does not. But humans are fallible: they make mistakes and get distracted, and it is not possible to maintain the level of attention that is required. That fallibility indicates there is a huge opportunity to make a change.” Safety is a driving factor behind the billions of dollars being pumped into driverless vehicle development, but there are other societal issues that must also be considered. Not everyone has the same level of access to transportation, and vehicles must be designed and deployed with the needs of all riders in mind. “We want to do whatever we can to help the industry move forward as quickly as possible to achieve all of these great benefits in terms of safety, fuel economy, accessibility and time efficiency,” concluded Rupp. “We are not picking winners and losers at ACM, we are trying to help everybody progress. We will learn, they will learn, and we can accelerate everybody—we’re all in it together.”

ÂŠ Vulog

M:bility | Magazine - Q3 2019

Find a shared mobility platform that can do it all Once known for spearheading the development of car-sharing platforms, French technology company Vulog is now leading automakers into the shared mobility landscape. By Betti Hunter

hared mobility options continue to expand across the world. Urban dwellers increasingly view cars as less of a status symbol and more as a way to get from A to B with minimal fuss. As gridlock in cities intensifies and drivers struggle to find accessible, low-cost parking spaces, many urbanites are

keen to leave their cars at home. Until recently, alternatives were limited. Public transit and taxis were for a long time the go-to replacement, but users from North America to Europe and Asia resent uncomfortable, often unreliable buses and trains and expensive cab fares.

The rise of ride-hailing and carsharing models changed everything. According to Zipcar, back in 2000 its notion of providing a free-floating city fleet of easily accessible rental vehicles was dismissed as crazy, and initial critics of Uber wondered whether passengers would be willing to

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The appeal of these services has much to do with their convenience. Most, if not all, car-sharing and ridehailing services are accessed via smartphone apps, allowing users to book a vehicle or trip with a couple of quick clicks. But such services need a complex platform to, among many things, coordinate and enable communication between the user, vehicle and the operating system. Such platforms are often difficult to develop in-house. In response to demand, a handful of companies have stepped into the fray to provide full technology stacks.

carpool with strangers or be driven by someone without a traditional taxi license. But Uber now claims to provide over 15 million rides per day, and multiple car-sharing services now operate in cities worldwide. Research by Navigant suggests that revenue from the carsharing sector alone is set to grow to over US$6.2bn by 2020. Once dominated by pioneering start-ups, this new mobility landscape is experiencing an influx of new players—including many established names from the traditional automotive industry.

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Most of Vulog’s customers now, whether they are a vehicle distributor, energy company or car rental organisation, are looking to become platforms for vehicle rental and usage

Not just for car-sharing Leading the charge is Vulog, a Parisheadquartered technology company that was an early player in the shared mobility sector. Founded in 2006, it was instrumental in fostering the first round-trip car sharing initiatives via its hardware and software development. “Vulog offers an end-to-end suite, starting from the hardware that goes inside a vehicle through to a mobility platform that, in a nutshell, combines a vehicle with a user,” said Alex Thibault, Vice President and General Manager of Vulog North America. “We have devised a number of tools, both on the

customer facing and the operator sides, which cover everything— CRM capabilities, ticketing, fleet control and maintenance, as well as marketing.” The company’s technology is currently used to power over 25 shared mobility schemes across five continents. But though Vulog’s genesis was oriented towards carsharing models, it is now approaching shared mobility in a more holistic way. The company’s focus has broadened as it works to etch out a space in the market to

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help larger operators and established players launch new mobility projects, including micro options such as scooters. “It’s not just for car-sharing anymore,” said Thibault. “Most of Vulog’s customers now, whether they are a vehicle distributor, energy company or a car rental organisation, are looking to become platforms for vehicle rental and usage. We’re dealing with more companies that want to launch car sharing and scooter sharing in a given city.”

M:bility | Magazine - Q3 2019 According to Thibault, the company is no longer a mere software and hardware provider. Instead, Vulog is leveraging its years of experience in the field to help prospective mobility providers into the market rapidly, no matter the starting point, through a variety of fully integrated or guided, customisable solutions. As a step towards opening up the mobility market, the company has updated its Artificial Intelligence Mobility Applied (AiMA) platform, which can now support freefloating schemes for instant vehicle access within geofenced areas, including scheduled bookings. “The big thing that we provide is our ability to cater everything from cradle to grave,” said Thibault. “If a company wants to launch a project

in two and a half months, we send someone who is able to reverse engineer three vehicle models for it to be able to launch in this extremely tight timeframe.” With projects in China, Western and Eastern Europe, North America, South America, Australia and New Zealand, the company cites its nowglobal reach as crucial in its ability to pull best practices from a range of markets and tailor solutions depending on customer needs. “Vulog is the only true global platform in the world,” Thibault told M:bility. “When launching a service in China, it can’t be the same as a service launching in the US, or in Western Europe. Every single time a new service launches somewhere in the world it helps us learn, and helps us to offer

customers the best possible stack with the most options available in the marketplace.”

Scooting forward This adaptability is a valuable asset, but Vulog is not just paying attention to regional differences. The company has been watching as the urban mobility landscape shifts to encompass diverse new initiatives. “It is important for everyone in our team to evolve with the times, because what was happening a year ago is completely different to what we are looking towards in the next couple of years,” said Thibault. One trend that Vulog has kept a keen eye on is micro-mobility, which the new iteration of the AiMA platform is well-placed to facilitate. In 2018 a partnership with Miamibased electric scooter-sharing company Dashee was announced, followed swiftly by the news that Vulog would be partnering with Segway to expand its scootersharing services across Europe.

“We have a number of customers around the world that want to launch mopeds and kick-scooters as an addition to their moped or car-sharing services, and we want to offer as many automakers as possible the chance to work with us and our customers,” explained Thibault. “Segway is both a partner for us and a hardware provider—they have a kick-scooter that comes off the line without needing any more hardware. All a mobility provider needs to do is press a couple of buttons and a few clicks on the back office, and it is uploaded directly onto our backend platform.”

Vulog’s Artificial Intelligence Mobility Applied (AiMA) platform

As a result of the partnership, existing Vulog customers in Europe seeking to expand their services will be able to add Segway’s kick-scooters to their operations. It’s an attractive

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M:bility | Magazine - Q3 2019

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A service launching in China cannot be the same as a service launching in the US, or in Western Europe

prospect for many mobility providers due to the relative ease of customer acquisition. “The cost of user acquisition for scooters is very interesting,” said Thibault. “It’s not necessarily harder to do with car-sharing, but with scooters it is so easy to just pop in a credit card and start riding, which is very appealing to users.” However, scooters are currently experiencing a backlash of sorts. Though they offer urbanites a

cheap and fun way to traverse a city, many citizens and authorities complain that the scooters are left to pile up in certain zones, leaving some streets clogged while other neighbourhoods remain underserved. “Having 20 scooters within 100 yards of each other is not a good way to roll these services out, and there is a trend where cities are asking for more information on where these fleets are located in order for them to control what is happening on their streets,” acknowledged

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It is important for everyone in our team to evolve with the times, because what was happening a year ago is completely diﬀerent to what we are looking towards in the next couple of years

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Thibault. “That is why Vulog developed predictive algorithms that enable our customer base to split up these vehicles and to optimise locations based on anticipated demand.”

Make it your own As well as partnering up to push scooter-sharing to the fore, the company is also leading global automakers into the shared mobility landscape. Currently, Vulog is working with PSA in North America, Kia in Europe and Dongfeng in China, and is set to announce two further highprofile projects later in 2019. “Automakers are in the process of figuring out the B2C landscape through forming partnerships,” said Thibault. “What is interesting is that they gradually want to make the user experience their own. Many automakers will launch a project with Vulog’s app when they need to get to market quickly, but will eventually want to own that customer relationship. They will graduate to their own app, which can still run on our stack without a problem. Frankly, we encourage it.”

ÂŠ Ford

M:bility | Magazine - Q3 2019

Auto industry embarks on hunt for mobility experts old and new The automotive industry is not alone in its pursuit for engineers, and is jostling with tech hubs to acquire the necessary expertise in computer-related fields. The Michigan Mobility Institute is investigating the practical aspects of securing the right talent. By Freddie Holmes

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M:bility | Magazine - Q3 2019

he concept of future mobility has sparked a scrap between various industries to secure new talent. As the automotive sector looks beyond simply manufacturing vehicles and toward the provision of services, a variety of new job roles are opening up. Filling those positions may not be easy.

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The unrelenting pursuit of next-generation mobility has highlighted a gap in local talent, with tech hubs often luring prospective engineers away

As a heartland for automotive manufacturing, Michigan is well versed in the traditional facets of making a vehicle. However, the unrelenting pursuit of nextgeneration mobility has highlighted a gap in local talent, with tech hubs often luring prospective engineers away. Silicon Valley is an obvious example, but the likes of Singapore, Tel Aviv and Bengaluru have also become a first port-ofcall for those with a software and electronics skill set. To get around the issue, a dedicated facility has been established to educate and upskill the next generation of mobility experts in Detroit. And for good reason—employment opportunities are expected to soar in coming years. Home to the likes of Ford, General Motors and other automakers, along with many of their core suppliers, the city aims to position itself as a leader in the development of driverless cars, electric vehicles (EVs) and shared mobility services. Ford recently bought the currently decrepit Michigan Central Station, which is being renovated as an 18-storey mobility lab. The state has passed legislation that allows automakers to hone autonomous vehicle (AV)

Professionals with the relevant software, robotics and electronics skills have various career options on the table, be it at a global tech giant or within the aviation, military and automotive industries. All are after the same talent—it is a tug of war.

technology across the state’s 122,000-mile road network, supported by dedicated AV proving grounds: the University of Michigan’s Mcity, and the American Center of Mobility’s Willow Run facility. Earlier in 2019, Waymo voiced plans to build its next generation of self-driving vehicles in southeast Michigan, in partnership with local Tier 1 Magna. Around 400 new jobs are expected as a result. Detroit startup Rivian is also eyeing local production of its EVs.

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Facing change, again The Michigan Mobility Institute was founded in 2018 by Jessica Robinson—previously with Ford’s Smart Mobility unit and Zipcar— and Chris Thomas, a co-founder of future mobility investment firm Fontinalis. NuTonomy founder Karl Iagnemma and Alisyn Malek, co-founder of May Mobility, sit on the advisory board.

M:bility | Magazine - Q3 2019 It is the first initiative from the Detroit Mobility Lab, an entity tasked with placing the city at the forefront of next-generation mobility. “If the City of Detroit and the State of Michigan are serious about becoming one of the leading future mobility start-up ecosystems in the world,” said Thomas at the time, “we need to create an entity dedicated to producing professionals who will lead in these specialisations.”

The market crash of 2008 is widely seen as the worst economic disaster the automotive industry has ever faced. But following the eventual resurgence of manufacturing in Detroit and its neighbouring townships, players soon found themselves fighting tooth and nail for engineers. A report by the Michigan Department of Treasury in June 2009 found that the state had the highest unemployment rate in the country—between 10.6% in Ann Arbor and 17.4% in Flint. By 2012, local news outlets reported that manufacturers in the state were ‘begging’ for automotive engineers, with job listings rarely taking more than three days to fill. Today, unemployment in Michigan is at around 4%. Looking ahead, the state is set to recruit the next generation of mobility experts with the same vim. It should be emphasised that existing jobs will not be supplanted. Instead, an additional array of talent outside the automotive industry’s traditional expertise is required. “Michigan is quite rightfully proud of the number of engineers it has in the region—it has been the source of its strength. But as we began speaking with companies that are changing and

Initial investigations have confirmed expectations that talent could be tough to source, and particularly in Detroit. However, it is a challenge the state of Michigan has faced before.

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Talent could be tough to source, and particularly in Detroit. However, it is a challenge the state of Michigan has faced before

hiring, the topic of talent kept coming up,” explained Robinson. “It turns out there has not been much research into the talent needs for the future of mobility, and folks in the industry have told us that it is too important not to focus on.”

Is Michigan falling behind? While Michigan may be facing a talent shortage, the problem extends elsewhere. The fact is that so many industries are

adopting new software-driven technologies and business models that workers with the necessary skills are more sought after than ever before. “Speaking honestly, everybody is behind,” said Robinson. “Job creation is happening so fast. Silicon Valley has historically been well-positioned in software, but even there you have a talent war for computer software engineers who are going into all other kinds of industries—entertainment, apps, and whatever comes out of Silicon Valley next.”

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M:bility | Magazine - Q3 2019 Indeed, the automotive industry faces strong competition from outside industries. Automakers could do little more to set out the stall for future mobility; motor shows and press releases are dominated by buzzwords relating to connected, automated, shared and electric vehicles—widely referred to as the CASE megatrends. Mechanical and hydraulic engineering will remain vital, but automakers must continue to shake the image of being behind the times. “Folks that come

Get in early With seasoned experts in high demand, part of the talent acquisition challenge could be eased at a grass-roots level. The institute plans to launch a Master of Mobility degree in 2021, a qualification that will run in partnership with select universities, and based directly on industry requirements. “We think it’s something the industry needs,” said Robinson.

of computer operating systems, all the way to detailed network perimeter protection strategies. For someone that has been embedded in the mobility space for years, even Robinson is surprised at the rate of change within the automotive industry. The prospect of a legitimate qualification in mobility ten years ago may well have been laughable. “I do not think we were even talking about mobility [back then],” she mused.

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Will we have dedicated mobility engineers in future? Yes, I think so

out of our schools with traditional engineering degrees, and even computer science degrees, are not thinking of mobility first. This is due in no small part to the fact that as an industry we do not always do a good job of telling the story about these careers,” said Robinson. “It is as much a question of how many people are entering the industry as it is how many leave school with the right skillset. Historically, automotive hasn’t recruited computer programmers in the numbers that we are seeing now.” “We are competing with everyone else from a tech perspective,” agrees Mary Reardon, Head of Talent Acquisition at Continental. The so-called megasupplier has numerous locations throughout Michigan, and in 2018 announced it was ‘realigning for future mobility’. “As an automotive industry, we are always going to need our mechanical and electrical engineers, but we will probably see a growing mix of individuals in future. Who knows what the next hot technical skill will be in five years from now.”

Research carried out in tandem with Boston Consulting Group found that the development of AVs and EVs could create 100,000 USbased jobs over the next decade. Around 30,000 of those positions could be filled by engineers with degrees in computer-related subjects. The education system needs to put future mobility on the table as an attractive career path to ensure a steady stream of entrants into these roles. “We do not plan to be an accredited university, but we are in conversation with a number of schools that have engineering or computer science programmes to talk about how we could work together,” continued Robinson. “These are schools within Michigan, outside Michigan, and even outside of the country, to make sure their students are well-positioned.” Washtenaw Community College in Ann Arbor, for example, runs a degree in cyber security, covering everything from the fundamentals

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Robinson pointed to early trends seen in the aviation space as an indication of the importance of specialised training. Leading schools such as Stanford and MIT almost closed their aerospace engineering programmes following World War II, she recalled, as demand for passenger air travel did not pick up as hoped. However, airline companies convinced faculties to retain their programmes and continue training future experts. The future mobility space could follow a similar trajectory. “We need to continue investing in this engineering talent—we didn’t have dedicated aerospace engineers before then. Will we have dedicated mobility engineers in future? Yes, I think so.” The Michigan Department of Talent and Economic Development is looking to prepare students for positions in ‘high tech’ fields such as cyber security and advanced engineering; it expects around 545,000 jobs to open up through to 2026—jobs that “employers are in desperate need to fill,” it says.