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Is Detroit Dead Meat?

As the automotive industry enters the uncharted territory of autonomous cars, a popular notion among the technology’s Silicon Valley cheerleader is that it’s game-over for incumbent carmakers.

At a recent conference, Adeel Lari, professor at the Univ. of Minnesota, told me, “Automakers are dead meat.”

This presumption—hardly exclusive to Prof. Lari—derives from the observation that car OEMs lack the skills, tools and processes to develop software-centric cars. Software is already critical for safety and security in connected cars. The software battle can only intensify in the autonomous cars of the future.

I wouldn’t disagree.

But it’s a conclusion that requires an almost blind faith in today’s Google and Apple—that they can do no wrong in their autonomous car development. This makes the contrarian in me a little leery.

Prof. Lari is the director of Innovative Financing in the State and Local Policy Program at the Hubert H. Humphrey School of Public Affairs at the Univ. of Minnesota. He was a guest on the autonomous car panel I moderated at ESC Minneapolis. On that panel, we also had prof. David Levinson from the university’s faculty of the Civil, Environmental, and Geo-Engineering Department.

The two professors, avid promoters of self-driving cars, are convinced of sweeping changes autonomous cars will bring to our society and economy. Car insurance, they hypothesize, will become irrelevant (cars will be “fundamentally safe”). Race tracks—not highways—will be the refuge of throwback drivers who still enjoy driving (self-driving cars need no drivers). Autonomous cars will proliferate as car services (expanding the “sharing economy”). 

From left: Prof. Adeel Lari (Univ. of Minnesota), Mark Boyadjis (IHS Automotive), Prof. David Levinson (Univ. of Minnesota), and Sarah Palodichuk, Researcher and J.D. (Photo: EE Times)

From left: Prof. Adeel Lari (Univ. of Minnesota), Mark Boyadjis (IHS Automotive), Prof. David Levinson (Univ. of Minnesota), and Sarah Palodichuk, Researcher and J.D. (Photo: EE Times)

My sense is that academics tend to romanticize technology innovations, because it’s their job to predict and paint the big picture of future changes. For more commercial reasons, Silicon Valley main-chancers are equally infatuated with the idea of “game-changing” technologies and business models.

I get that. But I am a bit fed up with so many people going gaga over Google cars. I’m wondering how we get from here to there.

Reality check
So, I talked to a few automotive industry analysts for reality check and asked their views on three questions:

  1. Is Detroit really “dead meat”?
  2. What can incumbent car OEMs actually do to take control over the future of self-driving cars?
  3. What could possibly trip up Google Car?

Roger Lanctot, associate director, global automotive practice at Strategy Analytics, acknowledged that Tesla has “taken a great leap forward,” and he expects “similar rocket-sled progress from Uber.”  In his view, “It’s amazing what you can do with a big pile of cash.”

But here’s the reality. “We are on track for a record vehicle sales year,” Lanctot reminded. “Uber, Tesla, Apple and Google are not making SUVs and crossovers and pickup trucks—they aren’t making sports cars or family cars.” He added, “OK, Tesla is, but REAL expensive.”

Until one of these new automaker wannabes produces or launches a commercial car, we’re probably premature in building caskets for the incumbents.

Lanctot said, “So, Detroit can rest easy. But it needs to step up the game on safety, reliability, transparency, security, privacy, software updates and alternative ownership models.” In his opinion, “They aren’t dead meat. But they aren’t moving fast enough.”

To read the rest of this article, visit EBN sister site EE Times.

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