The race to build a million-mile car

Futuristic images of cars were splashed across the Consumer Electronics Show this week, as the world’s largest tech gathering ogled the concept cars of the coming driverless era.

But there is one crucial detail that was not mentioned in the fancy presentations: the new cars may need to last for a million miles.

“This is a topic we are working heavily on,” says Johann Jungwirth, chief digital officer at Volkswagen.

Durability and longevity will be essential for self-driving vehicles, he explains, because they will be part of transportation fleets that are in near-constant use.

“I can see the vehicle life going up to 500,000 or even 1m miles or more,” he says, adding that refurbishment programs will help extend vehicle life. “That is one criteria that is becoming more important in the future.”

This shift will represent a massive disruption for carmakers, as the advent of autonomous fleets of electric vehicles has the potential to upend their traditional business models.

McKinsey, the consultancy, estimates that by 2030 one in 10 vehicles sold will be used for ride-sharing, and that sales of private vehicles will slow as a result.

All the major carmakers, many of whom will be displaying their latest products in Detroit this week at the North American International Auto Show, are testing self-driving cars: GM says it will have a pilot fleet of robo-taxis on the road next year; Volkswagen has said that it will have large-scale fleets deployed in multiple cities in 2021.

Concept cars like Toyota’s e-Palette, Volkswagen’s Sedric, and Mercedes’ F015 show that automakers plan for the designs of these vehicles to be radically different from anything on the market today.

In the auto industry, the practice of designing long-life vehicles is not without precedent. Long-haul trucks and special-purpose vehicles such as London’s black taxis are made to last for up to 1m miles with proper maintenance.

Toyota showed off the e-Palette at the Consumer Electronics Show last week, a versatile, autonomous vehicle which will be used for package deliveries © Bloomberg

Car owners typically replace their vehicles after 10 years or 100,000 miles, and those vehicles sit idle for most of the time. But as transportation services such as Uber, Lyft and China’s Didi continue to grow — and potentially become autonomous — transport fleet owners will have very different requirements.

“The economics are going to be driven by the depreciation of the vehicle, particularly for transportation-as-a-service, so the longer you can keep that vehicle on the road, the better the economics will look,” says Chris Urmson, chief executive of Aurora, a Silicon Valley autonomous vehicle start-up, and one of the pioneers of Google’s self-driving car team.

To make these autonomous fleets last longer, carmakers and components suppliers imagine that different parts of the vehicle will be replaced at different rates.

The economics are going to be driven by the depreciation of the vehicle . . . so the longer you can keep that vehicle on the road, the better the economics will look

Paul Warburton, vice-president of automotive at Fujitsu, the Japanese technology group, compares the future vehicles to how passenger aeroplanes are maintained — long-term investments that get upgraded during their lifetime with new seats and engine parts.

Many aeroplanes, he points out, are still flying when they are 30 years old. “You will run them for a longer period, and keep them maintained to a higher standard,” he says.

Like aeroplanes, the vehicles will be serviced on a predictive basis with maintenance done in advance so that the car never breaks down on the side of the road. “For example, for seat manufacturers, the seat will sense it every time they are used, and when the seat it worn out, it will be replaced,” Mr Warburton says.

He predicts that this will mean big changes for components makers which will become responsible not only for providing parts but also for servicing them. “Components will start to be delivered as a service,” he says. “The only way for them to survive is for them all to reinvent themselves as service companies.”

Certain components will be made to last longer — such as the chassis of the car and door hinges — while other car parts will be designed for regular replacement.

“You can imagine a chassis that will last for a million miles, but a battery system that would need to be replaced regularly,” Damien Scott, chief commercial officer at Renovo, an autonomous car start-up.

Paragon of durability: London’s black taxis are one of the few existing vehicles made to last for up to 1m miles © Getty

The interior of the car might be replaced or reconditioned every year, he adds, while the software system will be constantly updated over the air.

As for the engine, the shift to electric motors will be a key part of extending vehicle life. Because these have fewer moving parts than an internal combustion engine, they can last longer.

Nevertheless, some component makers say the changes coming to the auto industry have not yet had a direct affect on them.

“There hasn’t really been a change in specification yet,” says Upton Bowden, head of advanced technology for Visteon, a components supplier that was part of Ford. “What we used to do in the past, we know that isn’t going to work in the future, the question is, how do we have to change?”

When it comes to vehicle lifespan “is it 20 years? Or 200,000 miles? It quite possibly could be along the lines of what you see in commercial trucking today,” he says.

Delphi, the components group that specialises in powertrains, also says it has not seen a significant shift. “The vehicle itself and what the [carmakers] provide, will change a lot,” says Mary Gustanski, chief technology officer. “But the products that Delphi provides really won’t,” she says, pointing out that the company already makes certain heavy-duty vehicle components to have a long life.

The reality is that all the hardware on these cars is pretty expensive. But we are very confident that the economics of a robot taxi service can support a vehicle platform that is higher cost

Underpinning all of this is the question of what the business model of transportation will look like once the technology becomes widespread.

Today’s self-driving cars cost hundreds of thousands of dollars because of the sensors and computing power required. Most pilot test cars are also hand-assembled.

While that price tag will come down once autonomous cars are manufactured at scale, the vehicles will still cost more than regular cars.

“The reality is that all the hardware on these cars is pretty expensive,” says Karl Iagnemma, chief executive of nuTonomy, an autonomous car company that was recently acquired by Aptiv. “But we are very confident that the economics of a robot taxi service can support a vehicle platform that is higher cost.”

A key unresolved question is who will own the fleets of vehicles: transport companies like Uber or Lyft; rental car businesses such as Hertz or Avis; or the carmakers themselves.

Some carmakers, such as GM, have said they do not want to own their own self-driving fleets. But others, like Volkswagen, say they will experiment with selling transportation services in certain cities.

At Uber, the company is testing both options: it has ordered a fleet of 24,000 self-driving Volvos that will be delivered over the next three years, while also allowing carmakers including Daimler to plug their own self-driving cars into the Uber network.

Jeff Miller, Uber’s head of automotive alliances, waxes eloquent when discussing all the possibilities for future car designs for these fleets, including their longevity. “That will definitely be one element when you make a purpose-built vehicle, because you get to start from scratch,” he says. “You get the opportunity to design a different motor, brake, door hinges, everything that has a much longer life. Those are all interesting engineering challenges that could be solved once the market is validated,” he says.

“You could absolutely make a million mile car, just no one has done it yet.”

Additional reporting by Peter Campbell

Detroit auto show presages big changes

The world’s largest carmakers are preparing to gather this week at the Detroit Auto Show under a spectre of the greatest change to ever sweep the industry and uncertainty about the all-important US market, writes Peter Campbell.

Many will talk about electric ambitions and the promise of battery-driven cars in the future.

Yet for all the attention given to new technologies, the fate of North America, which remains a major profit generator for many carmakers fuelled by motorists’ love of large, fuel-guzzling engines, will be a big concern.

The US car industry is expected to sell 16.9m cars this year, down 1.7 per cent from 2017, according to IHS, the research group.

At the same time, the industry is anxious about a wholesale disruption of manufacturing operations. They are largely built on a system of frictionless trade between the US, Canada and Mexico enabled by the North American Free Trade Agreement. But the administration of Donald Trump has thrown the existing arrangement into doubt, as the US tries to renegotiate the longstanding treaty.

“Any constraints on trade within Nafta or with other parts of the world would be damaging for the auto industry as a whole,” says Arndt Ellinghorst, an automotive analyst at Evercore. “However, our house view remains that we think Trump cannot himself decide to withdraw from the agreement.”

A product frenzy is expected this year, with IHS forecasting that 75 new car models will be launched in the US, compared to 57 last year.

Stephanie Brinley, a senior auto analyst at IHS, says almost half of these will be sports utility vehicles, a format that will continue to “dominate the market for several years”.

This post originally appeared on Financial Times

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