Company / division: Carmakers
Toyota, Ericsson, Intel, NTT, and other companies have formed a consortium to figure out ways to manage the massive explosion of data that will be generated by cars over the coming years. As cars become more autonomous, they will need to gather enormously more data from cameras, radar, LIDAR, and other sensors and transmit at least a subset of that data over networks to central repositories for processing and analysis. That, in turn, is going to require some big decisions about which data to process locally, what needs to be sent over the air, and how much and which data to store on an ongoing basis in both locations. Since carmakers like Toyota don’t really have much experience with that kind of thing, network infrastructure vendor Ericsson and chip vendor Intel among others are going to work together with them to figure some of this stuff out, and have left the door open for others to join their effort in future. Notably absent from this initiative are other big automotive chip vendors like Nvidia, any cloud service companies beyond Japan’s NTT, or mapping companies like HERE, and given the strong roles they’re playing or likely to play in this area, the consortium does need to add additional members (including ones who compete with the founding members) if it’s to make real headway here.
Tesla On Track to Deliver First Model 3s by End of July, But Q2 Production Falls Short (Jul 3, 2017)
Update: following another release from Tesla on Monday, I’ve amended both the headline and content on this piece significantly from the first version published Monday morning.
Overnight, Tesla CEO Elon Musk had tweeted that Model 3 production would begin shortly, with the first deliveries happening by the end of July, with production ramping up slowly from there. Hitting the launch milestone is something of an achievement for a company that’s often missed its own self-imposed deadlines, but the real test is ramping production enormously above past levels, and that continues to be the achievement I’m far more skeptical of. The new numbers provided today suggest far lower total production than Tesla has promised in the past, at least in the second half of this year and first half of 2018. Later on Monday, the reason for getting that news out overnight became a little clearer, as Tesla released its production and delivery numbers for the June quarter, including a shortfall in both due to battery shortages. That’s bad news for Tesla, and more evidence of its inability to plan and execute on production in predictable ways, and therefore to meet the targets it sets itself. None of this gives me any more confidence in the longer term projections of Model 3 production.
The US House Energy and Commerce panel held hearings today on proposed legislation to regulate the licensing of autonomous vehicles for testing on roads. There is, of course, quite a bit of that testing going on already in various states throughout the US, but the Congressional effort aims to unify regulation on the topic and create a single set of policies nationally as a result. The carmakers are, in theory, in favor of that, but only if it reflects the lighter-touch approaches currently being taken by states like California, while safety advocates are pushing for tighter regulation, more testing, and generally slowing things down. There are sensible arguments being made on both sides here – no-one, least of all the carmakers, wants high-profile accidents featuring self-driving cars putting the whole field back by years. But given the potential of autonomous driving to increase safety over time, there are also strong safety-centric arguments for allowing reasonable testing to go on without burdensome oversight. Given the current state of US politics, I’m not 100% confident that we’ll get a sensible bit of legislation out of all this, but I do think that it’s inevitable and welcome that we’ll eventually have a national framework for not just testing but ultimately selling autonomous vehicles. Testing is an area that needs to be addressed today, but commercial vehicle sales are several years away and as such there’s time to get this stuff right and no need to rush into anything today. But there are some really thorny issues here that do need to be thought through in great detail, not least questions of liability and responsibility.
Nissan-Renault Plans to Combine Electrification, Automation and Mobility Within 10 Years (Jun 23, 2017)
Ex-Apple Engineer Chris Lattner Leaves Tesla After 5 Months (Jun 20, 2017)
This comparison leaked earlier in the week but Tesla has now made it official by posting it on its website (and Elon Musk pointed to it in a Tweet overnight). The only reason I’m including it is here is that it’s a great illustration of the hole Musk dug for himself with his puerile naming strategy for the Model 3 (he originally intended to name it the Model E, making the three current models the S, E, and X, but Ford objected so he flipped the E to a 3). That strategy has led many people to believe the Model 3 is the third iteration of the Tesla and therefore better than the other two models on offer, something Musk has been somewhat frustratedly trying to rectify for the last few months. This comparison, therefore, which is coming out months if not years ahead of the actual availability of the Model 3 to new buyers, seems almost entirely designed to clarify that confusion. Even the introduction makes the point Musk has been hammering home via Twitter recently: “Although it will be our newest vehicle, Model 3 is not “Version 3” or the most advanced Tesla”. All the specific side by side comparisons make clear that the Model 3 is indeed substantially inferior to the Model S – slower acceleration, shorter range, paid versus free supercharging, smaller passenger and cargo space, and so on. Again, this problem is entirely of Tesla’s own making, but also reflects an old problem in the tech industry: the Osborne effect, in which announcing a new version of a product while still trying to sell an earlier one reduces sales of the one currently available. This is just a unique spin on that particular problem given that the Model 3 isn’t actually a successor to the Model S.
It might seem odd at first glance that I’m covering an auto industry leadership change, but it’s news that’s very much in keeping with the “Tech Disrupts Transportation” narrative here on the site, and the nature of both the troubles that prompted the move and the move itself are reflective of that trend too. Mark Fields, who has been CEO for the last three years, is being replaced by Jim Hackett, who has been running Ford Smart Mobility. Although this New York Times piece and others this morning are focusing on the fact that FSM and therefore Hackett has owned Ford’s autonomous driving initiatives, that’s only part of its remit, and that’s worth noting. It also owns in-car connectivity, mobility itself (which is the industry term for ride sharing and other new ownership and other business models for cars), and data and analytics, among other things. In other words, with the exception of electrification, it has owned essentially all of what’s next in the automotive industry. That Fields would have put all that in a separate division is perhaps the biggest sign that he underestimated how central these changes would be to the future of the company, and it also makes sense to put the guy who’s been running all that in charge of the company at this point. Hackett will need to bring these initiatives to the forefront of what Ford does, along with electrification, where it’s moved more slowly than other car companies, if he’s to help turn Ford around. But he’s taking over at a really tough time in both the company’s history and the US automotive industry.