Updated: April 28, 2017
This narrative was the subject of the Weekly Narrative Video for the week of April 24-28, 2017. “Tech Disrupts Transportation” has also become the most used narrative tag on the site – this is an incredibly busy segment of the tech industry right now. You can see the video on YouTube here or embedded at the bottom of this essay.
There are three major shifts underway in transportation: electrification of the powertrain in vehicles, increasingly autonomous vehicles, and a move away from ownership and towards sharing and other models. It’s fair to say that none of these shifts has been primarily driven by the traditional players and stakeholders in the market, while all three have been driven by tech companies coming from outside the industry.
Though traditional car companies have pursued partial electrification through hybrids for years, it has really been Tesla which has lit a fire under the automakers with regards to fully electric vehicles – it’s almost impossible to imagine the Chevy Bolt without Tesla’s influence in recent years. The pace of adoption of electrification has increased dramatically as a result of this pressure from outside the traditional bastions of car making.
Similarly, when it comes to autonomous driving, it’s been Google (now Waymo) and companies like Uber and Tesla once again which have really pushed the envelope in terms of aggressively pursuing autonomy. and which have in turn put pressure on the traditional carmakers to move faster here.
And in sharing and other new models for urban transportation, it’s Uber and Lyft and their equivalents in various markets around the world which have begun to suggest a world in which many people who previously owned cars won’t do so, and will instead use a combination of ride hailing, ride sharing, car sharing, and other models to get to and from work and elsewhere.
Having said all that, the major carmakers have now embraced each of these three major shifts and are working hard to catch up where necessary, or even to build on existing leads in certain areas. I mentioned the Chevy Bolt, but we’re seeing an increasing number of pure EVs as well as more plug-in hybrids, and experimentation with other fuel sources such as hydrogen fuel cells. Autonomous driving is a major focus at most of the big carmakers, and I spent considerable time talking with them about the efforts being made at the North American International Auto Show earlier this month. And when it comes to urban mobility and other new models for car usage, the carmakers are again investing in both proprietary and agnostic models for ride sharing on at least an experimental basis, and in some cases by investing in existing large scale services (such as GM’s investment in Lyft).
The big question is how all this will come together over the next few years – Tesla is very much plowing its own furrow when it comes to its major initiatives, with few partnerships with other entities, while Waymo is partnering with Fiat Chrysler and potentially others around autonomous driving, Uber is working with Volvo on the same topic, and I already mentioned GM’s investment in Lyft. And I haven’t even mentioned the chipmakers like Nvidia, Qualcomm, Intel, and others and the multitude of other suppliers to the car industry like Mobileye who will need to come together to make this technology work in practice. Where will the dividing lines be between the various domains these companies will occupy? Will it continue to be the tech companies from outside the industry who shake things up and drive the greatest change, or will the existing scale and scope of operations of the big automakers allow them to catch up and begin driving this change? I think there are far more questions than answers here at this point, but I’m loath to accept the idea that it’s the tech companies and not the automakers who will drive all the disruption in transpiration in the next few years.