Company / division: Ford
Ford and Lyft have announced a partnership under which Ford cars will begin running as part of Lyft’s network, first with human drivers and eventually with autonomous technology doing at least some of the driving. This is just the latest in a series of deals Lyft has done around autonomous driving, with previous ones including Drive.ai, nuTonomy, and Waymo, while it also works on its own autonomous technology effort. Ford, meanwhile, has been very clear about the fact that it sees ride sharing as the initial application for its autonomous driving efforts, but of course doesn’t have a ride sharing service of its own to test it with – partnering with Lyft is one way to accelerate that effort while also learning things that could be applied to its own effort if it chooses to go that way. Ford is the second car manufacturer to partner with Lyft overall, with GM an investor and early partner, though that partnership has definitely seemed looser recently. This is the key thing with pretty much all Lyft’s partnerships: they could all turn into something really interesting, but none of them commits the companies to do anything specific over the long term, which leaves Lyft vulnerable to being left at the altar by its various partners if they decide to go in a different direction.
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.
Tesla is now worth more than Ford after delivering a record number of cars for the quarter – Recode (Apr 3, 2017)
There are two things here: firstly, Tesla’s Q1 delivery number, and secondly what’s happened to its share price since it was announced. Stock valuations are interesting, but far from definitive as indications of what companies are worth or who’s “winning” in any meaningful sense. Tesla’s stock price is all about trajectory, and an unusual (perhaps even unwarranted) amount of investor confidence and enthusiasm that the company which is currently very small and unprofitable compared to its legacy peers will quickly catch up on both fronts. That, in turn, requires believing in Tesla’s manufacturing projections, which require a massive increase in its growth rate, from 56% annual growth in the past year to something much faster to hit its 500k target for 2018, which would be a six-fold increase over its 2016 numbers. Long-term, it seems very likely Tesla will reach that kind of scale, but given its track record, there’s every reason to believe it will hit this and other related targets later than it has projected. On that basis, then, the valuation seems that much less justifiable on the basis of any near-to-medium-term results.
This article is based on a study by a company called Navigant Research, and it seems to be an evaluating of companies’ strategic assets rather than any actual capabilities today, so it’s worth noting that context for their rankings of companies here. Notably, they rank traditional carmakers in the first six spots, with Waymo apparently the first non-traditional / tech company in the rankings. That’s notable, because all the numbers suggest Waymo is out in front in testing of autonomous driving technology in California by a long way, and although we don’t have equivalent data for Michigan, where Ford does much of its testing, I’d be surprised if it had done many more miles. So this is mostly an evaluation of the benefits the big automakers derive from their existing massive scale and capabilities in building vehicles and bringing them to market, something none of the pure tech companies has (Tesla, of course, has some small-scale manufacturing capability and is looking to ramp fast, but comes in 12th in the rankings nonetheless). This jives with my perception that, even as these tech companies do increasingly well in developing their own technology, they’re very unlikely in most cases to build the cars, and as such the traditional car companies are still in a position of strength and potential leadership when it comes to actually building and deploying the technology.
via USA Today
This is a really important aspect of autonomous driving that’s not talked about nearly enough. In the SAE levels system for describing autonomy in vehicles, all the layers between 0 and 5 require the driver and vehicle to work together at least to some extent, which means that even when the car has taken over a task, the driver is supposed to remain ready to take over when the car requests him or her to re-engage. The problem here is that we tend to switch off, whether deliberately or merely passively, when our focus isn’t actively required, and that means that machines have to give us an awful lot of notice when we need to take over. In practical terms, that’s often impossible, and that can actually make cars operating at levels 3-4 in particular less safe rather than safer than human drivers. That has important implications for those manufacturers which seem to be trying to work incrementally up from Level 2 to Level 4 or 5 over time, like Tesla, because there seems to be an increasing consensus that we may need to skip those middle levels entirely. And it also means, as I’ve pointed out a couple of times before, that lots of experience operating test or production vehicles at Level 2 or 3 is not nearly the same as being ready to produce a Level 4 or 5 vehicle.
via Bloomberg (we discussed this topic in depth during this episode of the Beyond Devices Podcast and this talk by Gill Pratt, head Toyota’s Research Institute, is also very illuminating on the same topic)
Ford and Toyota Establish SmartDeviceLink Consortium to Accelerate Industry-Driven Standard for In-Vehicle Apps | Ford Media Center (Jan 4, 2017)
This announcement builds on an existing partnership between Ford and Toyota around in-car entertainment systems, and it’s hard to see it as anything but a concerted effort to bypass CarPlay and Android Auto. Ford supports both technologies after being a holdout early on, but Toyota never has. It’s likely that for most of the consortium members those options will be present in addition to their proprietary systems, but it’s clear these carmakers aren’t willing to cede the in-car UI to Apple or Google.
This is an important new domain for Amazon and Alexa, one of the first that gets it out of the house with its voice assistant. Of course, it’s also one of the slowest-moving technology products, with massively long upgrade cycles and very long development cycles too.
Many of the major auto manufacturers are underway with their own testing of increasingly autonomous vehicles, though they’re still a long way from production – Ford has said it intends to provide such vehicles in 2021 for ride-sharing/hailing services. But this is an increasingly crowded space and one of the biggest questions is which manufacturers will make their own versus licensing technology from Alphabet’s Waymo or others.