As cities become increasingly choked with traffic, new ways of keeping our urban centres moving are being explored and – perhaps surprisingly – the car is still key to the mix. From updates on car-sharing to mini buses, the auto industry is fighting back.
There is an arms race underway in the field of mobility. Surprising new players are challenging the sector through their development of intriguing technolgy. Consumers and governments alike are turning their noses up at petrol-guzzling co2-emitters. And at the same time, the world’s largest car-makers are frantically trying to innovate in order to stay ahead.
The reason for the frenzied activity is clear. The ability to get around safely and seamlessly is one of humanity’s greatest challenges and few believe we’ll find a solution in the near future. As urbanisation continues apace, the pressure put on infrastructure in our cities will only grow. Already some swollen metropolises are buckling under that pressure.
But what does this mean for the car companies? If you were forced to pick an invention that defined the past century and reshaped the world more than any other, a strong case could be made for the mass-manufactured automobile. It’s a story that starts with Henry Ford in the early 1900s and has continued up until today. The rapid urbanisation we’ve seen around the world since 1900 has been made possible in large part by the mass-produced car.
Yet there has been precious little innovation in the first years of the 21st century. Although other industries have been turned upside down, the car industry has stayed virtually still. Cars are still manufactured broadly in the same way and sold using the same infrastructure of dealerships and global distribution chains as they have been for decades. Now, however, they are experiencing their “internet moment”.
In this report we look at how several car-makers, including Ford, are coming to terms with what the future might hold and how they’re preparing themselves. We start, however, in the present day looking at Munich, one of the best cities for driving. While some urbanists are keen to ban the car and get everyone cycling, Munich’s planners are including it in their thinking. They understand that future mobility revolves around one fundamental thing: choice.
Uli Büttner grew up in Saxony but his love for cars reveals a Bavarian spirit. The 31-year-old service consultant at bmw subsidiary Mini in Munich has owned eight cars in his life. His current runaround is a 1997 bmw 5 series, on special occasions he drives his 1986 bmw 3 series and for camping trips he owns a Ford Transit van. Büttner lives in central Munich and usually takes the underground or his bike to work for environmental and health reasons.
He says that driving would actually be faster because he can avoid rush hour and use high-speed roads. For him, Munich is a great city for driving. “Of course it’s hard to speak of ‘fun’ when you’re driving in the inner city,” he says. “But in terms of traffic planning, Munich is doing everything right. I love that you get out of the city very quickly. And the country roads around Munich are great.”
As the home of bmw and with Audi just up the road in Ingolstadt, it’s little wonder that Munich holds the car close to its heart. Yet thanks to a strong economy, this mid-sized city with its compact centre has grown fast over the past 10 years, putting pressure on urban roads. With 1.5 million people, Munich has the highest population density in Germany. Add another 1.4 million in the expanding metropolitan area and it becomes clear why the city has been investing heavily not just in public transport and its network of fast cycle routes but also in improving roads. In summer 2015 a new 1.5km tunnel opened along the ring road, greatly improving traffic flow and quality of life for residents; more ring-road tunnels are planned too.
Arguably the greatest strength of Munich’s traffic planning, however, is the speed with which you can leave the city. Outside of rush hour, it takes about 20 minutes to get on to any of the autobahns. Skiing in the Alps and sailing on the Tegernsee are just a few hours away. It is also this easy access to nature that makes the car so popular. Despite the urban density, two-thirds of households own at least one car, while 91 per cent in the suburbs do.
Georg Dunkel, head of the traffic department at Munich’s urban-planning office, knows it would be hard to convince residents to give up on driving. Asked if the city wants to get rid of the car, he is firm. “No. We want to create a mobility concept that accommodates every means of transport,” he says. “People depend on cars. But Munich has grown more than expected over the past 10 years. We’re reaching our car traffic limits.”
He believes that population growth means ownership rates will have to decrease “and car-sharing is an important topic”. DriveNow, the service co-owned by bmw, reckons that one shared car abolishes three to six private ones, so the city is keen to push it. Dunkel says they’ve recently made an agreement with DriveNow to introduce more electric vehicles as the city expands its network of charging stations. This won’t make Büttner sell his cars any time soon. But this is what the future of mobility is all about: giving people a range of ways to move around.
While Munich has been better than most at installing charging points, few cities outside Norway have invested anything like the money that electric-car companies are lobbying for. Also, because a charged battery is far from having the range of a full tank (and because it takes a minimum of 30 minutes to charge), consumers are wary of giving up on petrol.
So in spite of the calls for it to be outlawed and predictions of its obsolescence, the combustion engine is here to stay – at least for the foreseeable future. Of course you could always drive a hybrid Toyota Prius but then you might be mistaken for an Uber driver, the magnet for 90 per cent of insults hurled on our roads today.
Visiting Ford’s production facility outside Valencia is an easy way to assuage any fears that the car industry is about to be brought to its knees by the technology revolution. The plant was opened in 1976 and today hi-tech robots combine with skilled engineers to assemble 400,000 cars and vans and 330,000 engines each year. To put it another way, a new vehicle rolls off the production line every 50 seconds.
Yet it was a watershed moment in March 2016 when Ford’s president and ceo Mark Fields announced the creation of a new subsidiary: Ford Smart Mobility. It was an acknowledgement that the global behemoth could not thrive in the modern marketplace simply as an auto company. As Fields said in his announcement: “Our plan is to quickly become part of the growing transportation-services market.” It’s a market that already accounts for €4.4trn in annual revenues worldwide. The manufacturer that pioneered the first mass-produced car was also becoming, as he put it, a “mobility company”.
Ford was not the first car company to spot this opportunity but it has been working quickly over the past few years, even before Ford Smart Mobility was formally created, to catch up with its competitors. A Global Mobility Challenge was launched within the company allowing employees to propose ideas that might propel Ford into the mobility space. One of the smarter products to come out of this in-house competition was the Carr-E, a cute, spare wheel-sized rideable platform designed in Köln by Ford engineer Kilian Vas.
Showcasing the eye-catching device at the company’s European research and innovation centre in Aachen, Vas stands upright on top of it then leans forward to set its four small wheels in motion. A second later he’s zipping across the lobby floor, leaning to one side and then the other to steer. As he does so, built-in red lights act as indicators, making the Carr-E look like a miniature Ford hatchback. In this capacity it is designed to help drivers get from their parked car to their final destination but it can also be loaded up with objects up to 200kg.
While the Carr-E is a prototype several years away from being marketed, Ford is also investing heavily in other mobility solutions that have more obvious revenue streams. This involves a shift in terms of who Ford sees as its customer. “We’ve put together a new operating paradigm that says our customers aren’t just individuals who buy and drive our automobiles,” says Sheryl Connelly, resident futurist. “Cities are also an important customer.”
The company has conducted dozens of mobility experiments in cities around the world, including a Dynamic Shuttle at Ford’s Michigan campus that allows visitors to summon point-to-point rides on demand. In September it bolstered this side of the business with its acquisition of Chariot, a similar smart-shuttle service based in San Francisco. These types of services can be created in partnership with city transport authorities, representing a departure from Ford’s usual model of selling cars straight to consumers.
And this is where the company sees the greatest opportunity for autonomous driving as well. Just like Local Motors and their Olli autonomous bus, Ford is banking on autonomy coming to shared transit before personal mobility. “By 2021 we expect autonomous vehicles to be in operation and we believe the first market will be those people-mover, ride-hailing services,” says Connelly.
At the same time she’s keen to stress that autonomous vehicles do not represent “a watershed moment”. “Even if we see them in 2021 that doesn’t mean they’ll be readily available to every individual around the world.” Partly this is down to affordability but it’s also about perception. In a recent survey carried out by Connelly, people were asked if they could imagine driving an autonomous vehicle in the next 10 years. “People in India said yes to a degree of 84 per cent and China was at 78 per cent. But the UK, for instance, was down at 30 per cent.” This is because markets such as the US and the UK have “a long, rich history of feeling a personal connection to or sense of identity with their automobiles”.
So those who claim we’ll all be sitting in driverless cars in the next 15 years are perhaps overestimating people’s eagerness to accept the technology. As Erica Klampfl, Ford’s global future mobility manager, puts it: “A lot of timelines are dictated by choices people make so it’s not always a matter of when technology is available.” Moreover there are many regions of the world where car ownership is still on the rise – indeed where the notion of “ownership” has yet to be discarded in favour of “access”.
In the meantime it’s not as if Ford, one of the world’s biggest car-makers, is calling a halt to its development and production of cars. “Our investment in performance vehicles has never been greater,” says Connelly. “This shows that we still believe in nurturing the enthusiasm of people who love the thrill of the drive. We’re not giving up one for the other.”
Executives in the car industry preach that driverless technology will transform the car into a “mobile, connected workspace”. Does the world really need another space for checking your emails, let alone billions of them globally? We now have “connected” outdoor parks and wi-fi is being introduced on long-haul flights. The art of switching off is being lost – and the car is one of the last bastions.
It’s here that the ambition of driverless technology reveals its shallowness; after all, it’s about making sure we stay on Google wherever we are. Plus, driving can be enjoyable and there are many of us who actually like a gear shift. And once the accidents start piling up, let’s see how this works out.
The Nissan Leaf, launched in 2010, is now the bestselling all-electric car. But even though 230,000 models have been bought worldwide, its sales are currently behind expectations. Carlos Ghosn, the CEO of the Renault-Nissan alliance, has blamed cities and governments for not supporting construction of the necessary infrastructure. We ask the company’s head of electric cars in Europe if there is a future for electric vehicles.
How much do you think the lack of infrastructure is holding back sales of electric cars?
It takes a collaborative approach to really put infrastructure on the market. We’ve had success in service stations, in the UK and across Europe, where we’ve been investing collaboratively with the European Council and with local government and private enterprise. City-based charging does need more support from municipalities because it’s essentially about putting electricity cables and charging ports into streets.
Are you at all worried that other technologies that don’t require such extensive investment will leapfrog electric vehicles?
No. Our longer-term goal is to head towards zero-emissions mobility and the base facilitator of that is a battery and an electric motor. Then if you add on technologies such as a hydrogen-fuel cell or a bio-ethanol fuel cell, these will be built on top of that. But at its core it will be an electric vehicle. It’s important that we don’t wait, say, 10 years for long-range hydrogen fuel-cell transport to become an accessible reality because those years, from a climate-change and air-pollution perspective in cities, we can’t get back. So we need to move now.
As we enter the Berlin launch of car brand Lynk & Co – a subsidiary of Geely, the Chinese manufacturer that owns Volvo – we are greeted by 10 waiters eager to feed us lobster. If you want lobster you have to accept being spoon-fed by these young apron-clad men. This greeting could be a metaphor for what is then unveiled: a car that takes care of your needs without you lifting a finger. Well, almost.
The one that Lynk & Co is premiering – dubbed a “smartphone on wheels” – is a sleek, compact suv aptly called 01, due to hit the market in China in 2017 and in the US and Europe thereafter. According to the brand’s senior vice-president Alain Visser, it’s a direct response to consumers changing how they live their lives thanks to technology. We’ve shifted from a society that prefers ownership towards one that prefers experience.
That’s why Lynk & Co positions itself as a lifestyle brand. “It’s the story of the car but it’s what we do with the car,” says Visser. To that end 01 is equipped with an open application-programming interface (api) so that anyone can create an app specifically designed for the vehicle. The company is collaborating with Ericsson, Alibaba and Microsoft, who will allow them “to do things in the car where the sky is the limit”. One feature is a sharing button, which pings your network when your car is not in use so any friend with a “digital key” can have access. Similar to how phones have monthly packages, Lynk & Co offers a subscription model that will provide perks including insurance and groceries delivered direct to your vehicle. Lynk & Co is also cutting out the middleman – dealerships – so cars can be purchased direct from a showroom or online. Plus, cars can be traded up when a new range comes out with better technology. “We treat it almost like an iPad,” says Visser. “Within a year you can replace it.” If this leaves environmentalists shuddering, Visser assures us that Lynk & Co will introduce a used-car network so yesterday’s models don’t go to waste.
Lynk & Co has its work cut out if it wants to revolutionise the auto industry. For one thing, although the software may be groundbreaking, the hardware is not: the 01 is not a small car and although future models may be electric, this one has a traditional petrol engine.
The team relishes the challenges ahead. They launched in Germany to demonstrate that by bringing together the best designers from Sweden’s Volvo along with Chinese engineering, they can go head to head with Europe’s top car-makers. What’s most revolutionary is Lynk & Co’s attitude, which courts a generation increasingly forgoing traditional modes of transport and conventional status symbols. It’s an attitude that feels more in line with contemporary needs, whether you’re happy being spoon-fed or not.
If the likes of Tesla and Lynk & Co have their way then the traditional car dealership is not long for this world. Seeing the dealership as an unnecessary middleman, these companies plan to circumvent it and to sell straight to their consumer.
We would rather not hear the death knell of the dealership quite so soon. There is a real benefit in being able to inspect the car you’re going to drive off the forecourt, in kicking the tyres and running a hand over the walnut dash, in haggling with the dealer and leaving with a sense that you negotiated a bargain. That’s not to say that the average dealership doesn’t need to be spruced up a bit – but other car companies shouldn’t follow Tesla’s lead and lose the personal touch.
Local Motors was founded in 2007 in Boston with a plan to bring mobility squarely into the 21st century. Among its products is the Olli, an autonomous 12-person minibus, which uses light sensors and cameras to navigate.
“Olli offers a safe, smart and sustainable transportation solution that is long overdue,” says company co-founder and CEO Jay Rogers. He has a point; the four-wheeled pod could solve a host of mobility conundrums.
Like Ford, Local Motors is working with city governments to move beyond the testing phase. Nevada and Florida are likely to be early adopters but the company is also looking to open a micro-factory in Berlin in 2017.