The future of motoring is ACES: part 2

Tuesday, 17 December 2019

The car industry doesn't agree on much, but it is united on the concept of ACES - Autonomous, Connected, Electric, Shared - being the foundation of our motoring future. 

All key carmakers now have strategies around ACES and all the big players are well into developing actual technologies - at an unavoidably high cost that they'll also have to somehow swallow.

As much as customers accept these technologies are coming and are a good thing, not many are prepared to pay a huge price for them.

What's happening in each these fields? In part one we ticked off Autonomous and Connected, so now it's time for Electric and Shared.

ELECTRIC

Audi e-tron Sportback, e-tron GT and Q4 e-tron, Ford Mustang Mach-E, Mercedes Benz EQC, Seat el-Born, Kia Soul EV, Mini Cooper SE, Mahindra electric XUV300, Volkswagen ID3, BMW iX3, Tesla Model Y, Volvo XC40 Recharge, Rivian R1T, Porsche Taycan… potentially the Peugeot e-208 and 2008, Skoda Vision E, Mercedes EQB, Great Wall electric utility, Mahindra's version of the Ford Aspire and the Honda-e. Quite likely more still.

**READ MORE:

* Will we all be driving EVs in a few years?

* Troubled European car market gets a boost from EVs

* New Zealand's electric vehicle future**

And that's just the pure EVs seemingly set to land over the next two years. More plug-in hybrids with varying degrees of range are also incoming. And let's not forget those hydrogen cars, relying on a fuel that NZ seems able to produce, by using fuel cell tech (which basically creates an energy to power electric motors) they're also part of this crowd.

Although overall electric car penetration is still slight – just 18,000 registered as of the end of November - and will very likely continue to account for a modest slice of overall new car sales for years, make no mistake, they're here, they're staying and, when factoring in the used and grey import offerings as well, are becoming increasingly visible.

Are we ready for this? Though more recharging stations will never go amiss, a reliable and virtually national recharging infrastructure is in place, most of our electricity comes from renewable sources (green tick there) and, yes, before you ask, the grid can cope. Even if every light vehicle was electric, there's sufficient generation capacity to charge off-peak.

Cost, cessation of the Road User Charge exemption and ethical concern about battery component sourcing and battery disposal are more telling inhibitors.

The first truly affordable EV has yet to land, but we're hearing exciting talk from budget specialist Mahindra. Improvements in battery cost, range and life, if not type, are also set to roll out. As much as the industry predicts ultimate shift to solid state batteries, it also believes lithium-ion will continue until 2030 at least.

Stanley Whittingham, the Australian scientist whose research was critical to developing rechargeable lithium-ion batteries, emphasises that's not such a bad thing.

'They are going to become cheaper and more readily available to everyone, and the research we're doing will increase (like, double) the energy density and make them safer at the same time,' he says.

​That'll allow cars to go farther and allow batteries to be smaller. 'If we can put twice the energy in the same volume, then we can make batteries much smaller. You use less material, so they'd be less costly.'

The European Union's plan to cut carbon emissions by 40 per cent from 1990 levels within a decade is a driving impetus for EV development, and not just by makers in that region. The intent to fast track share of electric cars to 30 per cent of the total western European market has spurred Japan into greater action. Toyota, after pioneering the mass-produced hybrid, has only just launched its first EV (for China), but will have 10 sister models out by the end of 2020 and suggests all of its cars should have electric versions by 2025.

The sleeping giant continues to be China; the world's largest car market, under Government mandate, is an EV production giant – yet almost all products are for domestic use. That won't always be the case.

The irony of this EV boom is that any opportunity is set to come with great pain to the car industry; the inevitable impact this quite literal transfer of power will cause job losses ruinous to national economies.

Daimler and Audi have each just announced almost 20,000 job cuts due to the EV impact. All told, carmakers are eliminating more than 80,000 jobs during the coming years, according to Bloomberg News.

With Volkswagen Group, PSA Peugeot Citroen and Hyundai running massive operations there, car-making has become the Czech Republic's biggest industry. It and Slovakia (Kia, Land Rover) makes more cars per person than any other country.

However, core profitability comes from it being an industry engine room. A vast web of component-makers creating parts for internal combustion engines employs almost twice as many people as the car factories. Their sales were worth almost $NZ40 billion last year. See the challenge?

The Czech government estimates that about 40,000 national jobs depend on the combustion engine, and accepts that even if the workforce were to retrain for electric platforms, far fewer will be needed. Sobering.

SHARING

Buy a pizza and chances are the last thing on your mind is generously divvying it up for your friends, workmates or neighbours. It's just not human nature.

When it comes to sharing as an urban mobility solution? Happily, that's a totally different concept.

The ultimate expression of sharing goes well beyond what we see now. Uber, Lyft, bike and scooter sharing are a great and important start, no argument, but in tomorrow's world it's all about robo-taxis, flying cars, pods and hyperloops.

Dare we? Well, evidence supports that a growing count of Kiwis, inner-city dwellers in the main, are looking to think about entertaining less private car ownership and more vehicles on-demand. Not such a bad thing in a country where almost 3.8 million vehicles are registered, at least 40 per cent within Auckland.

Notwithstanding a few significant hiccups – Uber being shut out of London, for example – shared mobility is definitely on the move. Some might say it's because more of us have become socially responsible; we see it as a way to lessen the urban mobility burden. Well, think that if you like. Reality is different. What really drives this is income. This has become a great earner.

A recent report reckons the sector, when embracing all aspects – that's everything from ride hailing, bike sharing, ride sharing, car sharing and so on, whether organised or impromptu, involving all vehicle (and powertrain) types, business models, global regions – is expected to enjoy, by 2026, a 10-fold rise in value from its worth last year, when it had an estimated value of $NZ197 billion.

NZ is doing its bit to feed the beast. Having transformed the way we travel moderate distances in big cities, Uber is now branching provincially. And now there's a big competitor, Zoomy.

In the car-sharing world? Plenty going on there. Peer-to-peer car sharing services like Roam and YourDrive, or options like Audi NZ-aligned Mevo and Toyota New Zealand (TNZ)-backed Cityhop, where you can pay to use a car by the hour for city errands or several days, are working.

Neeraj Lala, TNZ chief operating officer, can see far-reaching opportunity not only for Cityhop but all aspects of shared mobility.

'How we own, use and pay for cars is changing fast. If you think the car-sharing market of Ola, Uber and Zoom is maturing, think again,' he says.

'These smartphone and app-based ride-sharers and car-rental by-the-hour services are just the first steps in the shift towards Mobility as a Service (MaaS).'

He foresees MaaS as being perhaps the largest transformational change to happen to the motor vehicle industry. It's a large arena attracting powerful players from manufacturers to digital developers, financial services, car rental companies and public transport operators.

Initially MaaS was about shifting from personal vehicle ownership to ride-sharing services and commuters in our largest cities, he says.

'Now have more mobility options than ever before – they can use their car or leave it at home and take a bus, a train, pick up an e-bike, rent an e- scooter or 'e-hail' a taxi to work.

But with increasing connectivity via a smartphone and the Internet of Things via 5G, MaaS is likely to be much, much more.'

TNZ sees a near future where a customer will be able to book a vehicle, pay for its use, its insurance, the power consumed by the car and a share of its road user charges via one application. Going one step forward, the same app will connect to public transport systems and pay for a bus ride or unlock an e-bike.

Even further into the future MaaS is likely to cover an entire door-to-door trip involving a multiple of transport modes, including autonomous cars and other service providers, Mr Lala says.

What else? Well, there's Spark's collaboration with homegrown driverless vehicle start-up Ohmio, which has taken the 3D-printed autonomous, electric, self-learning shuttle from initial trial at Christchurch Airport to Auckland's Wynyard Quarter for a starring role, and utilitarian duty, in the telco's latest ad.

Also continuing trial in Canterbury is autonomous, electric flying car, Cora, one of several projects vying for status as the world's first pilotless air taxi. Developed by California-based Kitty Hawk Corporation, represented nationally by Zephyr Airworks, it has support from Air New Zealand.

Where does it all end? Perhaps right back with an expedient any one of us could offer now as a simple gesture of goodness: the century-old idea of carpooling.

But with a tweak. Entrepreneurial San Francisco outfit, Scoop Technologies, whose cited mission is to provide a bridge to the 'utopian future' of smart mobility, reckons it can make a go of a carpooling app.

Scoop's involvement is to match workers who need a lift with co-workers or neighbours who are going the same way. Drivers are reimbursed by riders.

Pointing out that 80 per cent of US drivers commute in single-occupancy vehicles, spokesman Charles Knuth says 'we are trying to break down some of the barriers of why the average person doesn't carpool today and provide them with a way to do it, when they want to be able to do it.'

Knuth claims carpoolers are more satisfied with life than the rest of us and, relieved of the stress of driving, many plan to channel their energy into positive endeavours, such as exercise.

'Making that shift, even if it's only for one or two commute days per week, has significant outcomes in their daily lives.'