# Fast Company article: Maybe in 10 to 20 years we'll see Self Driving Cars



## Retired Senior (Sep 12, 2016)

Gee, I have been saying that my generation, the Baby Boomers, would never accept these vehicles and that it may take a full generation of kids living with these damn things before they really become popular. This article basically concentrates on the technology - and that it is definitely not ready for prime time!

Fast Company


*For years, automakers wildly overpromised on self-driving cars and electric vehicles-what now?*

*Tech execs and auto company leaders are becoming increasingly pessimistic about the future of AVs-and they are far less sanguine about electric vehicles (EVs) as well-because the raft of rosy projections in recent years have not even remotely come true. *

Pilot models of the Uber self-driving car is displayed at the Uber Advanced Technologies Center on September 13, 2016 in Pittsburgh, Pennsylvania. [Photo: ANGELO MERENDINO/AFP/Getty Images]

By Jeffrey Rothfederl

Just before Uber's IPO in May, court documents were unsealed relating to a lawsuit filed against the ride-sharing company in 2017 by Waymo, Google's self-driving car unit. In these documents and in testimony during the case, which was settled in 2018, a rare candid view into what auto and tech industry insiders actually believe about autonomous vehicle (AV) development emerged.

Simply put, Uber-and, as it turns out, many other automobile manufacturers-have been wildly overpromising.

Starting around May 2016, Uber projected in public and private presentations that it would manufacture 13,000 autonomous vehicles by 2019, only to change that forecast four months later to over 75,000 units. The company also said that human safety drivers, who take over the wheel when an AV needs help, would not be required on its cars by 2020. And in 2022, the company declared, tens of thousands of fully self-driving Uber taxis would be in 13 of the largest cities.

As it turns out, even Uber didn't have any faith in these claims. According to the released court files, nobody at Uber vetted its AV deployment figures, which Eric Meyhofer, head of Uber's Advanced Technologies Group, described as nothing but "hypothetical scenarios."

He added, "They are assumptions and estimates. I don't think anything in this document would be described as accurate. It's a set of knobs you turn to try to understand parameters that you need to try to meet." Perhaps more damning, the Uber employee responsible for the forecasts said that while she was designing them, executives had asked her "to think about a way" to show accelerated Uber AV development.

These unflattering glimpses into Uber's AV program-which surfaced in connection with Waymo's allegations in court that a former engineer stole technical secrets and used them to launch Otto, a self-driving truck startup acquired by Uber in 2016-embarrassed Uber. (Waymo ultimately settled for 0.34 percent of Uber's equity, or about $250 million). And that was before Uber was implicated in the first ever pedestrian fatality involving a self-driving car when one of its Volvos hit a woman who stepped out of the darkness into the road in Tempe, Arizona, last year.

The result of all this? Uber is more cautious now in its autonomous vehicle pronouncements. So much so that just this week, the company's CEO Dara Khosrowshahi said at an Economic Club meeting in Washington, DC, that it will take more than 50 years for all Uber cars to be driverless, a lifetime away.

But if Uber is crowing less, its diffidence reflects a bristling sentiment among big and small auto manufacturers: company executives are becoming increasingly pessimistic about the future of AVs-and they are far less sanguine about electric vehicles (EVs) as well. They have grudgingly reached these dour conclusions chiefly because to their dismay, the raft of rosy projections imagining by 2020 streets full of EVs and at least a flurry of AVs have not even remotely come true.

One example among many from the electric vehicle realm: in 2010, J.D. Power and Associates predicted that within a decade, global hybrid and EV annual sales would top five million units. The EV segment is nowhere near that goal and, if anything, is retrenching. In the first quarter of this year, about 92,000 plug-in cars were sold in the U.S., down from over 100,000 in the prior quarter. Tesla, the number-one player in the EV market, saw its global unit sales fall more than 30 percent, and the company is rapidly burning through cash, drowning in debt, laying off workers, and struggling to survive.

In the U.S. plug-in hybrid segment, sales of market leader Toyota Prius Prime were a lowly 4,026 in the first quarter, a 40 percent decrease from the prior quarter. And GM's once ballyhooed Chevrolet Volt went out of production.

All told, fully battery operated and hybrid EVs are barely a niche market, accounting for about 2 percent of vehicle sales in the U.S.-and that's with government-backed incentives to encourage buyers. And in China, up until recently a bright spot for EV manufacturers, sales of electric vehicles were only up 1.8% in May compared with a year earlier. That's the slowest growth rate in about 18 months.

It's easy to discern why EV sales are so anemic. For one thing, electric vehicles are overwhelmingly sedans, which have not been a consumer favorite for years. Moreover, most EVs still do not match the performance and reliability of internal combustion engine cars and the lack of charging infrastructure makes them unattractive for anything more than short hops.

Meanwhile, the autonomous vehicle market is, of course, nonexistent at this point. Yet, only three years ago, then Renault-Nissan CEO Carlos Ghosn promised hands-free urban driving in his company's cars by 2020 when "you're going to have what we call a totally autonomous-driven car-hopefully totally in line with the regulation."

Nobody talks like this anymore. Instead, top executives in the auto and tech industries, like Uber's Khosrowshahi, are nervously tamping down expectations. In November, Waymo's CEO John Krafcik told a tech conference that it will be decades before autonomous cars are widespread on the roads, and they may always need human assistance to drive in multifaceted environments, such as bad weather or areas crowded with construction or emergency equipment.

In April, Ford's CEO echoed those remarks in an appearance before the Detroit Economic Club. "We overestimated the arrival of autonomous vehicles," Jim Hackett said. While he claimed that Ford would have a driverless vehicle ready by 2021, "its applications will be narrow, what we call geo-fenced, because the problem is so complex."

The languid EV and AV rollouts are creating a mixture of confusion and desperation in the auto industry and among the tech companies that have staked their claims in it. No one doubts that the automobile is in the midst of a 100-year sea change-electric and autonomous vehicles in some form will eventually be commonplace. But there is a growing suspicion from inside the industry that the way auto companies are navigating this incipient revolution-primarily by wildly investing hundreds of millions of dollars a month in often-redundant research and development efforts whose returns on capital seem to be slipping further away-is foolhardy and lacks imagination.

The problem is, a few top executives in the industry privately concede, the auto companies are slapping fresh ideas on old chassis, when the real outcome may be unlike anything that we envision today. Last year, one CEO described the expensive hunt for EVs and AVs as a "down payment on nothing."

And more recently, another CEO echoed those sentiments: "I don't know what is going to happen with new styles and powertrains. And I certainly don't know _when_ it is going to happen. And yet we are all at great expense chasing the same uncertain result, which so far looks a lot like the cars we already make."

Or, put more pointedly, expenditures on EV and AV development are leaving some automakers-startups and incumbents-in such a deep hole that they won't survive to place their nameplates on these vehicles when they are finally perfected.

A recent study by industry analysts AlixPartners found that by 2023, global auto companies will have earmarked more than $250 billion for R&D and capital costs related to producing electric vehicles. By then, auto companies will have launched some 200-plus EVs and virtually all of them will be unprofitable as the oversaturated market will almost certainly demand elevated incentives in order to sell the cars. Making matters worse, the vehicles will lack the advantages of scale gained from manufacturing at high volume.

The same report found that an additional $61 billion has been earmarked for self-driving car technologies-and that's just counting the early investments. Uber's AV unit runs through about $20 million a month, and Waymo has already spent over $1 billion on R&D, while GM acquired AV startup Cruise for about $500 million and since then has attracted funding of well over $1 billion from Honda and venture firms. Still, according to a separate AlixPartners consumer survey, car buyers say they would be willing to pay only $2,300 extra for self-driving functions, about a tenth of the cost of installing self-driving features available today.

Assessing the impact of EV and AV investments, auto specialists at consulting firm Strategy& calculated that at current expense levels, operating margins in the auto industry will fall by half in five years to a woeful 3 percent from an already anemic 6.2 percent today. And return on invested capital will dip under 2 percent from 4.6 percent, well below the cost of capital and trailing other industries, including consumer products (11 percent), aerospace and defense (10 percent), and software (7 percent). John Hoffecker, global vice chairman at AlixPartners, called this untenable financial situation "a pile-up of epic proportions. Auto companies believe that they have the chance of benefitting from first-mover advantages, but they face the possibility of going broke in the process."

This dire message seems to be getting through to some former EV and AV flag-wavers. A recent flurry of new partnerships and downsizing of business units working on these cars appear to be directed at conserving resources even as these companies are skittish about losing their relevance when electric and autonomous vehicles finally arrive. To that end, GM and Honda are collaborating on battery development; BMW, Volkswagen, and Daimler are in talks to share R&D efforts for autonomous vehicles; and Ford and VW, which had each previously budgeted billions for solo EV and AV projects, are discussing a joint arrangement. Even Apple, which had designs on building a self-driving car, has fired 200 people from this campaign and is focusing instead on new mobility software.

These events do not reflect a strategic plan as much as fear that in the auto industry the center of gravity-the flow of money-is moving away from the big manufacturers and toward companies that are designing the individual components critical to the success of the next iteration of automobiles. The most probable future scenario transforms the auto industry from today's top-down sector with large automakers in commanding heights above a network of suppliers, dealers, lenders, and service centers-each of whom is figuratively and often literally in debt to the manufacturer-into an ecosystem of interrelated but relatively equal companies.

"It is likely that the real automobile revolution we should be paying attention to is not in the vehicles but in the automobile industry itself," the auto CEO said. "A business model with dozens of auto companies all making the same car will not be viable much longer. Companies need to figure out their most profitable place in the ecosystem and base their business models on that decision."

Perhaps the most obvious illustration of the ecosystem model is the smartphone arena, in which brand-name handset providers are in essence assemblers of parts and components made by other companies, and the phone is a skeleton on which third-party revenue generating apps and content are placed.

Translated to the EV and AV platform, much of the value of these vehicles will reside in parts of the car that traditional automobile manufacturers have little expertise in: sensors, batteries, propulsion software, artificial intelligence systems, route mapping platforms and databases, GPS hardware, and infotainment and connectivity programs. Auto manufacturers will be primarily making the handsets into which these advanced technologies will be placed.

Through that lens, the electric and autonomous vehicle landscape takes on the contours of a series of innovative mobility ideas in which automobiles serve as handmaidens and not as the main attraction, as they are seen today.

Among the blueprints gaining currency was posited recently by Larry Burns, former head of research and development at General Motors and the author of _Autonomy: The Quest to Build the Driverless Car-And How It Will Reshape Our World_. Burns envisions car ownership being a subscription service, in which for a monthly fee customers have self-driving vehicles of their choice on demand. Rather than sitting unused after, for instance, dropping a passenger at a suburban train station, the AV might go back home for additional trips, run errands for the family, serve a one-off passenger, or even take itself in for maintenance, recharging, and upgrading.

That's just one thought among many. Also viewed as viable is the possibility of massive convoys of AV trucks riding their own lanes on interstates, like trains but more efficient and more flexible in their routes. Or retrofitting highways to wirelessly charge car batteries. Or hydrogen-carrying trucks that deliver fuel to AVs that signal they are low and in between jobs, overcoming the distribution challenges standing in the way of fuel cell vehicles.

Of course, it is more likely that these musings are just hints and bits and pieces of what the next few decades really hold. But the common denominator is that a cluster of companies will be needed to manage the scheduling, logistics, refueling, maintaining, manufacturing, designing, and software engineering to keep EVs and AVs on the road.

Bob Lutz, the former top executive at GM, Ford, and Chrysler, who has become something of a black sheep for claiming "the end of the automotive era" and saying that automakers should "kiss the good times goodbye," believes that his colleagues have been unimaginative in safeguarding their own survival. "Right now the trends that everybody can understand," Lutz says, "is trend number one, vehicles are becoming more and more autonomous. Trend number two, electrification is gradually increasing. Those two trend lines they can understand. But they can only understand them for the next two or three years. And beyond that, let's just say people have great difficulty envisioning further out."


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## TheDevilisaParttimer (Jan 2, 2019)

Thanks for posting a real article about SDCs. It’s amazing technology but marketing hype has outstretched capability.


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## Jinxstone (Feb 19, 2016)

No matter how much rideshare companies and developers push SDCs people aren't going to give up their cars. Besides the cultural indoctrination of driving equals freedom to move around, the population isn't concentrated enough. It might have worked in the 1900s when people were concentrated in the city but urban sprawl has changed that. Uber only looks at the city center. People in the suburbs aren't going to give up their cars. Eventually, big franchises like McDonald's are going to realize that SDCs will destroy their drive thru profits. SDCs are just a pipe dream. They'll end up being a very limited market.


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## backstreets-trans (Aug 16, 2015)

Nobody tell tomato he would be crushed into ketchup by this news.


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## The Gift of Fish (Mar 17, 2017)

backstreets-trans said:


> Nobody tell tomato he would be crushed into ketchup by this news.


No, he'd interpret this article as "SDC are launching now! Not next year; not next month, but NOW!"


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## backstreets-trans (Aug 16, 2015)

Jul 3, 2016 we heard



RamzFanz said:


> 2-4 years, absolutly no later.


What ever happened to these guys.


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## SFOspeedracer (Jun 25, 2019)

Good read .. course Uber didn’t have faith or a lick of hope in all the autonomous claims they put out. even with their rundown of copter technology with uberair, every ad had the same “throwing it out here and seeing the public’s reaction” ring to it with no thorough layout/breakdown. It was everywhere in downtown SF business watch. All impulse marketing in hopes of frantic driver partners scurrying to drive as much as possible


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## Gtown Driver (Aug 26, 2018)

I would say they don't pay us enough for this shit so bring em on...

but yeah the logistics of it won't be realistic for a long time and likely not in the capacity they expect it to be.


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## losiglow (Dec 4, 2018)

I've said it before. Mainstream AV's are a ways off AND the internal combustion engine isn't going away anytime soon.


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## rkozy (Apr 5, 2019)

losiglow said:


> I've said it before. Mainstream AV's are a ways off AND the internal combustion engine isn't going away anytime soon.


One of my pax was in a Tesla the night before. He had just been on a 700-mile road trip from Tennessee to Iowa. Hearing him recount the story of how long it took to make the journey with all the battery re-charges along the way was excruciating.

There's no way a big segment of the public is ready to deal with the logistics of operating an electric vehicle, especially if they live in a more rural setting.


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## everythingsuber (Sep 29, 2015)

TheDevilisaParttimer said:


> Thanks for posting a real article about SDCs. It's amazing technology but marketing hype has outstretched capability.


There's the thing. Most of us love the technology but the BS gives it a bad name.


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## Retired Senior (Sep 12, 2016)

I guess, when you get right down to it, we all are Road Warriors....


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## SFOspeedracer (Jun 25, 2019)

Retired Senior said:


> I guess, when you get right down to it, we all are Road Warriors....


We really are, it will take more than a flipswitch of automation to separate us from the love of the road in our hands


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## TheDevilisaParttimer (Jan 2, 2019)

rkozy said:


> One of my pax was in a Tesla the night before. He had just been on a 700-mile road trip from Tennessee to Iowa. Hearing him recount the story of how long it took to make the journey with all the battery re-charges along the way was excruciating.
> 
> There's no way a big segment of the public is ready to deal with the logistics of operating an electric vehicle, especially if they live in a more rural setting.


I don't think think we will switch over until solid state batteries. Even after that there is still a chance the future maybe hydrogen instead.


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## everythingsuber (Sep 29, 2015)

Retired Senior said:


> I guess, when you get right down to it, we all are Road Warriors....


What is this "Road Warrior" rubbish. Why Did the US do this? Why?

It. Is. Max. Mad Max. ?

Why did you change its name?

There was a time Australia made great movies. Breaker Morant, Picnic At Hanging Rock, Odd Angry Shot, Alvin Purple, Alvin Comes Again etc. Mad Max was the pinnacle though.

Why did you change its name?

We didn't change Citizen Kane to "The Sled"?

Ive never understood that.


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## CarpeNoctem (Sep 12, 2018)

everythingsuber said:


> What is this "Road Warrior" rubbish. Why Did the US do this? Why?
> 
> It. Is. Max. Mad Max. ?
> 
> ...


If I were to guess, it may be that the first Mad Max movie just had a cult following in the US. IMS, it was not a major box office hit opening. Plus, typically, sequels (named like MadMax 2) are not taken very seriously in the US hence "The Road Warrior". While there are many great sequels, there are a lot more duds. In short, marketing to garner more $$$. As I say, just a guess...


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## goneubering (Aug 17, 2017)

The Gift of Fish said:


> No, he'd interpret this article as "SDC are launching now! Not next year; not next month, but NOW!"


"Right around the corner!!!!"


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