The Future of the Car: Electric, Autonomous, and Ownerless
This week’s podcast is an absolute doozy 😉.
I spoke to Hau-Thai Tang, Ford’s Chief Product Platform & Operations Officer, about the future of the car.
People (myself and EV included, see resources at the end of this email) have been talking about how the nature of the car needs to – and will – change for several years. Electrification, autonomy, shared ownership, micromobility and more have featured extensively in the newsletter and podcast.
But this is the first time that I've spoken in depth with an executive from a traditional car company for the podcast. I was curious to share how at least one incumbent thinks about the coming shift. And it is going to be a big one.
First, the car largely defined the 20th century, from mass production to mass consumerism, from suburbs and urbanisation to infrastructure built to the drumbeat of geopolitics. Car ownership became associated with progress and wealth, something that populations aspired to as their middle-classes grew.
Second, the car hasn’t changed all that much in the last hundred years. Your average four-door may not look much like a Model T, but it still uses an internal combustion engine (ICE) that burns fossil fuels to get you from A to B.
In fact, if we gauge innovation by the volume of firms entering and exiting the industry – a good proxy for disruption – peak innovation in the car industry happened a hundred years ago.
But our idea of the car will change enormously over the next decade.
The threat of climate change, exacerbated by the emissions of vehicles driving trillions of miles each year (close to 3 trillion last year in the US alone) is forcing us to find a new model. Urban air pollution, traffic jams, and unliveable cities are also factors that make that search more urgent.
What might a new paradigm look like? Electrification, autonomy and new business models are all emerging. And this week’s guest is perfectly placed to explain how from a standpoint of an changing incumbent. If you want to hear what Hau has to say about the future of the car, you can listen (or read a transcript) here.
The Big Idea
Hau and I covered so much ground that summing it up under ‘one big idea’ doesn’t do it justice. There were three main areas where Hau shared particularly interesting perspective:
Electrification
Ford reckons the proportion of its sales that will be of all-electric vehicles could be 40-50% by 2030, driven partly by the success of its EV releases so far. Hau says that 80% of customers who have switched from an ICE car to a battery electric vehicle say they’re never going back. That’s raising hopes that EV adoption could happen rapidly.
[W]e believe the adoption curve will not be linear. It's going to be exponential [...] You’ll start to see a lot more supply, a lot more choice in terms of battery electric vehicles across many different markets and segments. [...] So we're saying, 40 to 50 percent of the mix globally by the end of the decade. But I think that acceleration will happen within the next five years.
Connectivity
As well as moving toward greater electrification, Ford is making a big bet on ubiquitous connectivity. Its vehicles will collect more data from drivers, and Ford will use that data to improve products. Here’s Hau with an example:
If you go ask [customers], they'll tell you I want 300 miles [range] because that's what they're used to with their ICE vehicles. But if we show you the data and say, on average, last year you drove only 20 miles a day and your longest trip happened two times. We can help you sort of “right-size” your needs.
Richer data, in theory, benefits customers and producers alike. It also shifts the way a company like Ford might do business. Instead of selling cars to buyers on, say, a six-year cycle, it can sell additional services. In the future, Ford could very well look more like Netflix than it will a traditional car company.
Autonomy
Another huge shift – albeit one that’s a little further away – is autonomy. Hau laid out what developments in autonomous driving will look like for cars:
I think first and foremost, we look at it as building blocks and areas that make drivers better drivers and safer. Then we look at [the] things that are just chores and pain points. Parking is a great example... nirvana then is getting to a conditional full driving system, level three or four, where customers can really not only take their hands off the wheels, but can be eyes off and mind off.
There are external obstacles to autonomy too – not least the fact that people are easily distracted – but in certain situations, like stop-and-go, low-speed traffic, autonomy could be easier to achieve. I discussed obstacles to fully autonomous vehicles with Prof. Missy Cummings. There’s a link to that conversation below.
Hau and I also discuss:
🎭 Steering cultural change at a 100 year-old company [13.48]
🛴 How ‘multimodal mobility’ could be the future of getting from A to B [37.04]
🕺 Grease, Mustangs, and the future of petrolheads [47.54]
Listen to this, too
Back in May 2019, I spoke to Missy Cummings, the director of Duke University’s Humans and Autonomy Laboratory about vehicle autonomy. Her perspective on self-driving vehicles is a little different to Hau’s – and it’s a perspective that’s definitely worth understanding. Missy has just been appointed a new senior adviser for safety at NHTSA, the National Highway Traffic Safety Administration.
For a different perspective, listen to my discussion with Chris Urmson, the CEO of Aurora, a self-driving car company.
Further Reading
A Brief History of Motion (Tom Standage, 2021)
Behemoth (Joshua Freeman, 2018)
EV#344 on micromobility (Exponential View, 2021)
‘Ford, SK to invest $11.4 bln to add electric F-150 plant, three battery factories’ (Reuters, 2021)
‘Trends and developments in electric vehicle markets’ (IEA, 2021)
‘Levels of Autonomous Driving, Explained’ (J.D. Power, 2021)