Tech Companies Are Changing Auto Consumers’ ExpectationsJune 03, 2019
With the advent of Everything-as-a-Service culture, people want more than just a hood ornament from the vehicles they use, they want an experience along the way. It is no longer enough to make driving your car as comfortable and luxurious as possible, now instantaneous service, minimal logistics, and sustainability are basic expectations of our journey, and that experience is not something that traditional automotive models can support.
OEMs vs. Tech
Automotive companies may have had an unchallenged market share for decades, but they are being violently shaken up by Big Tech companies staking their own claim (read “The Future On Four Wheels” for more on this disruption). While technologies such as AI and IoT are very much in the silicon valley arsenal, the traditional OEMs have experience, distribution channels and manufacturing clout on their side. The manufacturers know that they need to leverage their established channels to enhance their offerings, and are looking at how to respond to a changing market. “The incredibly aspirational nature of vehicles is changing, and so is the traditional business model [of manufacturers],” says Sreenivasa Chakravarti, the Vice President of the Future Manufacturing Enterprise Team at TCS, “vehicle features need to evolve continuously in the market—the traditional 24/36 month cycle of product innovation might not be valid anymore.”
The need to change and respond to the agility of startups backed by big tech companies is opening up some interesting strategies in the OEM space. “The big manufacturers and conglomerates are going smaller, creating subsidiary start-ups to attract the best tech-native talent,” says Chakravarti. Bringing in fresh ideas that directly relate to the market demand for “CASE: connectivity, autonomy, sustainability and electrification” is giving the OEMs a new lease within their established market. They are also leveraging the connectivity already within their vehicles to try to create a new paradigm for private vehicles. “Think of smartphones: the differentiation there is not in the hardware, it is in the platform that sits on top of the phone. Vehicles could connect to your house, office, entertainment system—the journey would be completely changed in every aspect except driving.” Turning a car into a platform of sorts with modular features would improve the experience for the rider and re-imagine private vehicles from an aspirational transport mode to an entertainment space for riders. As autonomous vehicles become more capable, and ride-sharing schemes overcome real-world challenges, this could ensure that private/shared vehicles remain viable alongside other future transport options.
A New Approach
Jay Rogers of LM Industries, parent company of Local Motors, sees an entirely different future for mobility, specifically urban transport, that frames ride-sharing and smart mobility as a much more entertaining, relaxing and community-building experience. Local Motors’ vehicle Olli is an autonomous, 8-person passenger vehicle (“a living room on wheels”) aimed at the highly polluting “first-mile-last-mile” travel, and ties together emerging technologies, ride-sharing concepts and the need for sustainable transport. 3D-printing the vehicle in small factories, Rogers expounds the benefits of “micro-manufacturing” and explains how new technologies like 3D-printing, automation, and connectivity bring new possibilities to the table: “Running a design challenge, quickly producing a vehicle, running it in cities, and improving the second version—only with new technologies is that wholly different business model possible.”
Building their product in this bespoke and local way, Rogers sees Olli as a way of responding to what he calls ‘ride-sharing 1.0’ (ie. Uber and Lyft) and the current focus on autonomous travel that still does not satisfy the rider’s desire for comfortable, safe, and entertaining travel. “I don’t want an uncomfortable back-seat, I don’t want to listen to your music, I want features, I want 5G connectivity… The fact that a vehicle has no driver is immaterial to me, what I want to know is does the vehicle do a lot for me as a rider,” says Rogers. Using its technology-enabled business model, LM Industries is moving towards a future for shared mobility that echoes the smartphone model that Tata also envisage—”you lease it for two years, you upgrade it, and it’s a platform for other peripheral services,” says Rogers. Each of their visions of vehicle-as-platform, however, cater to different users: those who want connected cars, and those who want a different mode of first-mile-last-mile transport.
Rogers argues that retrofitting these services into “a sedan that was made autonomous” and bending manufacturers to a new way of working can’t work within the current paradigm. “The automotive industry is so big and insular that it is not interested in change… all these electric autonomy projects are still pointed towards an old industry and that’s really held back progress [for shared mobility].” New transportation methods need a completely new way of building, distributing and using vehicles, says Rogers: “Deploying vehicles within a five-hour radius, upgrading them, and having them fully recyclable after their end-of-life is how you build strong regions of mobility revolution.” This localized version of an automotive manufacturing model allows for much more sustainable operating practices, and transport that is more suited to the user after all. “With a less energy-intense way of building, you could use bio-plastics, biopolymers, bio-fibers… you can chop up the material and use it again to print,” says Rogers, “the world is asking for better shared-mobility and they need to see it.”
The future for transportation is clearly diverging away from traditional models. Tata and other OEMs that have dominated the space are opening startups within their ranks to compete with fresh and agile new players, and companies are forging new pathways to rethink transport from the beginning. As autonomy continues to face regulatory and societal barriers, sustainable, enjoyable transport is becoming more of a priority to consumers, and manufacturers are taking note. “OEMs are expanding the journey by integrating your car with all your external services,” says Chakravarti, “there are lots of new models, like buying ‘ridership’ and pay-as-you-use, that are more user-focused.”
The traditional automotive business model is quickly crumbling without consumer support and this is opening up a space for projects that are tailored to consumers and their experiences. “Smart mobility is here to stay,” says Rogers, “it’s just like the uptake moment for the smartphone, people know instantly what it represents.” With enthusiastic support from multi-nationals and local champions alike, the only question is: when exactly will these feature-rich platform vehicles emerge, and why aren’t we there yet?
Towers-Clark, Charles. (2019). “The Near-Future Of Transport Is Connectivity, Not Autonomy”. Retrieved from https://www.forbes.com/sites/charlestowersclark/2019/05/29/the-near-future-of-transport-is-connectivity-not-autonomy/#b5c3a435064f.