Why John Krafcik and Auto Industry Are Jumping on Driverless Car Bandwagon

John Krafcik interviewTrue­Car Pres­i­dent John Kraf­cik shocked a few peo­ple announc­ing his new posi­tion . While TrueCar’s future is in ques­tion with founder Scott Painter leav­ing soon, why would Kraf­cik choose Google over anoth­er automak­er? He’d been praised for lead­ing Hyundai to record U.S. sales, and would sure­ly be offered an exec­u­tive posi­tion with an OEM or tier 1 sup­pli­er. What’s behind the Google move?

Then there’s com­ments made this week by to Reuters that Mer­cedes-Benz is think­ing about start­ing up a busi­ness unit that would pro­vide on-demand lim­ou­sine ser­vice with­out a chauf­feur; the com­pa­ny may cre­ate an exten­sive fleet of autonomous vehi­cles to reach con­sumers who want on-demand trans­porta­tion ser­vices much more than own­ing a car. What’s behind this think­ing?

Auto­mo­tive engi­neers don’t think autonomous vehi­cles will make it to our roads in any real num­bers until the 2030-to-2035 time­frame – accord­ing to a study last year by the Insti­tute of Elec­tri­cal and Elec­tron­ic Engi­neers (IEEE). That’s at least 15 years from now. Here are a few points to con­sid­er on why autonomous, dri­ver­less cars have become the dis­rup­tive tech­nol­o­gy of the year.

  • Race to Be Lead­ing Auto Tech Com­pa­ny: Google is com­pet­ing with Apple and Microsoft to be the lead­ing auto­mo­tive tech­nol­o­gy part­ner. While Google has been test­ing a small fleet of its own self-dri­ving cars in the past year, com­pa­ny exec­u­tives have stat­ed they don’t want to become an auto man­u­fac­tur­er. That same ques­tion has come up for Apple late­ly as the tech­nol­o­gy giant tests out autonomous and elec­tri­fied vehi­cles. Google, Apple, and Microsoft have been invest­ing heav­i­ly in becom­ing the lead­ing sup­pli­er of mobile appli­ca­tions and devices, and soft­ware con­nect­ing cars to smart phones, telem­at­ics, and info­tain­ment fea­tures. Google through Android Auto, Apple through CarPlay, and Microsoft with its Win­dows Embed­ded Auto­mo­tive 7, are the lat­est offer­ings built around becom­ing the lead­ing con­nect­ed car tech­nol­o­gy sys­tems com­pa­ny.
  • Mar­riage of Detroit and Sil­i­con Val­ley: Kraf­cik will take the helm from Chris Urm­son, the for­mer head of the Google self-dri­ving car tech­nol­o­gy. Kraf­cik com­bines engi­neer­ing and mar­ket­ing, which is one of the secret for­mu­las behind suc­cess in the auto­mo­tive mar­ket. He worked as a mechan­i­cal engi­neer at Ford Motor Co. from 1990 to 2004, where he served as chief engi­neer for the Expe­di­tion and Nav­i­ga­tor SUVs. He spent 10 years with Hyundai Motor Co., with five years as the pres­i­dent and CEO of its U.S. divi­sion. He led the charge in boost­ing the automaker’s U.S. sales and mar­ket share. Google’s job offer indi­cates the com­pa­ny wants to be tak­en seri­ous­ly by automak­ers as the lead­ing tech­nol­o­gy sup­pli­er in dri­ver­less cars. Oth­er major sup­pli­ers like Con­ti­nen­tal Auto­mo­tive and Del­phi are deeply engaged in test­ing out dri­ver­less car tech­nolo­gies; Google clear­ly wants to be seen as the lead­ing voice out there in the mar­riage of Detroit and Sil­i­con Val­ley.
  • Mor­ph­ing Automak­ers: Daimler’s announce­ment has led to com­par­i­son to ubiq­ui­tous rideshar­ing start­up Uber – but Daim­ler has already played a siz­able role in the shar­ing econ­o­my. Its car­shar­ing divi­sion, Car2Go, is con­sid­ered by some to be even more sub­stan­tial than Zip­car in lead­ing the car­shar­ing space. Car­shar­ing is tak­ing off with users and rev­enues at a fast pace in the past cou­ple of years – just like Uber is see­ing dra­mat­ic growth in rides. Daim­ler exec­u­tives like Zetsche have been talk­ing about the chang­ing role of glob­al automak­ers in recent years. Daim­ler, along with BMW, Ford, Toy­ota, Hon­da, GM, and Nis­san, have been invest­ing heav­i­ly in new tech­nolo­gies, research cen­ters in Sil­i­con Val­ley, and new busi­ness mod­els like Car2Go. Some of that has to do with ambi­tious fuel econ­o­my and emis­sions reduc­tions man­dat­ed in the U.S. and Europe, which is a key rea­son that automak­ers con­tin­ue announc­ing elec­tric vehi­cle new vehi­cle launch­es. There may be some­thing even larg­er on the hori­zon. Futur­ists say that the iden­ti­ty of automak­ers will change dra­mat­i­cal­ly in the next 15 years – from vehi­cle man­u­fac­tur­ers to mobil­i­ty com­pa­nies. Along with envi­ron­men­tal con­cerns, there’s also safe­ty and mobil­i­ty issues sur­round­ing the “urban­iza­tion” trend – where young peo­ple are mov­ing into cities and have less inter­est in own­ing cars.
  • Lead­ing Advanced Tech­nol­o­gy OEM: Tes­la Motors is empha­siz­ing its lead­ing role in self-dri­ving car tech­nolo­gies avail­able as an option with its Mod­el S and upcom­ing Mod­el X. Tesla’s Autopi­lot soft­ware helps the car main­tain its place with­in a lane and its fol­low­ing dis­tance, as well as man­age its accel­er­a­tion and brak­ing. You can change lanes by switch­ing on the turn indi­ca­tor and the car will do the rest – mov­ing you auto­mat­i­cal­ly to that lane when it’s safe to do so. Autopi­lot is expect­ed to fea­ture a 360-degree ultra­son­ic sonar that will mon­i­tor every­thing with­in a radius to make sure the car stays safe­ly on the road. Every major automak­er has con­nect­ed car fea­tures that have been rolling out in recent years – with safe­ty, fuel effi­cien­cy, con­nec­tiv­i­ty, and con­ve­nience being empha­sized. Why would an elec­tric vehi­cle man­u­fac­tur­er jump into the self-dri­ving car race? The future of the auto indus­try doesn’t boil down to one lead­ing tech­nol­o­gy like hybrid or elec­tric pow­er­trains. All of the bases need to be cov­ered for build­ing brand iden­ti­ty and sell­ing more cars. These days, OEMs are rac­ing to be No. 1 in glob­al sales along with being sus­tain­able, effi­cient, safe, prof­itable, and the leader in advanced vehi­cle tech­nolo­gies.
  • “Semi-Autonomous” Vehi­cles: Autonomous vehi­cles may nev­er become 100% dri­ver­less in the future, and “semi-autonomous” may be more accu­rate; the main issue being instan­ta­neous high­way dis­as­ters like a car crash where the dri­ver needs to take over to save lives. Automak­ers are well on their way to offer­ing the safest and best tech­nolo­gies – some of them being clas­sic like GM rolling out cruise con­trol fea­tures in its prod­uct line­up. Audi is test­ing out self-park­ing car sys­tems, which should be a big hit with car shop­pers. “Con­nect­ed cars” is prob­a­bly a more accu­rate search term for where automak­ers will be invest­ing heav­i­ly in finances, intel­lec­tu­al prop­er­ty, and tal­ent­ed staff over the next 10 years – and it could be the same thing as semi-autonomous. The con­nect­ed car con­cept is built around tap­ping into avail­able data to max­i­mize a vehicle’s per­for­mance, safe­ty, and con­ve­nience. Some experts (includ­ing Auto­mo­tive Digest Pub­lish­er Chuck Park­er) expect to see lim­it­ed test appli­ca­tions for con­nect­ed, semi-autonomous sys­tems in the next few years – such as indus­tri­al vehi­cles or con­trolled envi­ron­ments like uni­ver­si­ties or cor­po­rate cam­pus­es.
  • Why Uber Says it Will Go Dri­ver­less: In May 2014, Uber CEO Travis Kalan­ick made com­ments about Uber going dri­ver­less. It was a day after Google unveiled the pro­to­type for its own dri­ver­less vehi­cle. That would bring down the largest cost of an Uber ride and increase prof­its dra­mat­i­cal­ly for the com­pa­ny, but that lofty goal is very far away. As for today, Uber spends a lot of mon­ey on adver­tis­ing to bring in more dri­vers and their cars. Why would Uber empha­size dri­ver­less cars? For one thing, Google Ven­tures is one of the largest investors in Uber (which may go pub­lic on the stock mar­ket). Per­haps Uber will play a role in Google’s heavy invest­ment in self-dri­ving car tech­nolo­gies? It could be an excel­lent client for Google to work with, and a tech­nol­o­gy test­ing plat­form with great poten­tial. Kalan­ick has also made com­ments about want­i­ng its fleet to be made up of Tes­la vehi­cles with the Autopi­lot sys­tems in place. Uber has also been par­tic­i­pat­ing in the Carnegie Mel­lon dri­ver­less car test pro­gram in the past year. The ride-shar­ing company’s self-dri­ving pro­to­type was spot­ted in Pitts­burgh with “Uber Advanced Tech­nolo­gies Cen­ter” appear­ing on the test car. “This vehi­cle is part of our ear­ly research efforts regard­ing map­ping, safe­ty, and auton­o­my sys­tems,” a com­pa­ny spokesper­son said. Uber’s exec­u­tives, based in San Fran­cis­co, seem to enjoy being part of the Sil­i­con Val­ley clique with Google and Tes­la. The com­pa­ny also hopes to one day not have to pay its dri­vers; as for now Uber has been enjoy­ing hav­ing its name quot­ed all over the media and being the epi­cen­ter of one of the coolest, cut­ting edge tech­nolo­gies out there. They’d be fool­ish to ignore the viral buzz around self-dri­ving cars.
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