Navigant Research Blog

European Turn from Diesel Unlikely Due to Scandals

— April 10, 2017

The revelation of Volkswagen’s (VW’s) diesel emissions cheating is nearing its second anniversary and the automaker is well along in the settlement process. Yet, skepticism about diesel remains strong. Global governments have maintained a steady stream of inquiries into diesel automaker environmental compliance efforts. The latest investigatory announcements are emerging in France and Germany, where diesels accounted for over 50% and 45% of the 2016 market, respectively. Fiat Chrysler Automobiles NV (FCA), VW, Groupe Renault, and the PSA Group are being investigated in France, while Daimler is under investigation in Germany.

Surprisingly, the sustained scrutiny of diesel has not gutted sales in Europe at a high level. A rising vehicle market on the continent lifted all powertrains, including diesel, last year, though diesel’s rise was markedly low compared to other powertrains. The relatively low rise might be partially attributed to ongoing scrutiny, but this would ignore the fact that diesel share has been falling in Europe since its peak in 2011 at over 55%.

In 2011, diesel accounted for around three out of four vehicle sales in Belgium, France, Luxembourg, Ireland, Spain, and Norway. The next year saw the first deployment of plug-in EVs (PEVs); since then, diesel sales have dropped considerably. Diesel share lost over 20 percentage points in France and Belgium, over 15 in Spain, and over 10 in Luxembourg. Ireland remains unchanged, but Norway, which has the highest level of PEV adoption at 24%, is down by over 45 percentage points. Diesel share in the region is down 6 points overall and plug-ins have been the primary beneficiary, growing from effectively nothing in 2011 to around 1.3% in 2016. Hybrids have also made headway, especially in 2016, moving from 1.3% to over 1.5%.

Across the pond, impacts from the diesel cheat are more striking. VW previously led the diesel car market, and its retreat has had a substantial impact. That impact was partly offset by the introduction of diesel SUVs and trucks from FCA (now also under investigation by the US Department of Justice, the Securities and Exchange Commission, and several state attorneys general), General Motors (GM), and Jaguar Land Rover (JLR). Overall, diesel sales fell 30% in 2016. Unlike in Europe, plug-ins have had less of an impact in the United States on diesel. This is largely due to the fact that diesel in the United States is competing in larger vehicle classes where plug-ins do not perform well. Instead, PEV gains are mainly affecting the once robust US hybrid market that is primarily dominated by small vehicles, where PEVs have the strongest value propositions.

What this means is that, assuming ongoing US investigations do not uncover new revelations that would take the new class of larger diesel vehicles from FCA, GM, and JLR off the market, diesel is likely to return to its marginal pre-VW-scandal share in the United States with some upward potential. But in Europe, dominated as it is by smaller vehicles, diesel sales may continue to fall as other fuel efficient options compete in those segments.

 

Excitement Tempered Around Self-Driving Cars

— May 28, 2014

In recent weeks, Google has been publicly discussing the progress of testing its self-driving cars in more challenging environments.  Most of the original testing was done on California freeways, so the driving was relatively straightforward.  The more recent test routes have included a lot of local driving and urban challenges, like pedestrians and cyclists.  These scenarios have made the company more confident that its technology is getting close to being ready for production.

However, some of the original optimism has been tempered by reality.  In 2012, when the project was first made public, Google’s estimate was that the self-driving car was about 5 years away (2017).  At the time, some technology commentators and the media got very excited about the potential and were forecasting production rollouts would begin well before 2020.  In Navigant Research’s report, Autonomous Vehicles, released in the summer of 2013, we forecast that it would be 2025 before the technology would be ready for public use.  Today, Google estimates the technology will be ready in 6 years (2020).  Our forecast has not changed.

More Maps Please

It’s quite possible that Google will consider its technology ready for commercial launch in 2020, but that doesn’t mean that automotive manufacturers will have satisfied their own testing by that date.  The automakers know that everyone will be watching autonomous technology very closely, and they cannot afford any mishaps.  The testing will have to be very comprehensive.  For example, GM has been testing its own Super Cruise system for 2 years already, and the production launch was recently described as “within the next 5 years.”

But it’s not just the testing that is holding up production release.  The current Google vehicles have a rotating lidar scanner on the roof that not only costs more than the rest of the vehicle combined, but also is visually unacceptable for most, if not all, manufacturers.  The hardware development has a long way to go to be able to achieve the necessary accuracy and blend into the vehicle styling.  The Google system needs a high-resolution scanner and also relies on highly accurate digital maps.  So far, the company has developed detailed maps of lane markings, traffic signs, and signals for about 2,000 miles of road in the United States, mostly around Mountain View in California.  The United States has about 4 million miles of roads.  A lot more digitization will be required for Google’s autonomous vehicles to be used anywhere in the country, never mind all over the world.

Navigant Research believes that self-driving cars will become a reality, but that the technology will be rolled out incrementally over the next 10 to 15 years.  It’s great to see serious progress being made, but we still do not expect any major manufacturers to rush autonomous technology into production before 2025.  More details on this will come out in our updated Autonomous Vehicles report, slated for publication later this summer.

 

Autonomous Vehicles Drive Themselves toward Reality

— March 19, 2014

Australian startup Zoox made a splash at the LA Auto Show in December by hosting a stand at the Connected Car Expo to promote its ideas about autonomous vehicles.  Zoox’s view is that the best way to introduce fully autonomous driving is to start with a clean sheet of paper and develop a new type of transport from scratch, rather than incrementally changing existing vehicles.  The initial concept currently under development is a taxicab that uses a chassis made of four identical quadrants.  Each quadrant will have a wheel with its own electric motor, and all four wheels can steer.

The passenger compartment will have no steering wheel or pedal controls and will utilize a carriage layout, with passengers facing each other.  The design is being optimized for rapid prototype manufacturing techniques rather than mass production.  Zoox is targeting taxi fleets as its first customers, because the business model shows that the biggest savings come from eliminating the drivers’ wages.  The vehicles will be designed for low-speed travel on city streets.

Experience Not Required

At the Autonomous Driving conference in Berlin hosted by we.CONECT, the Zoox team actively sought feedback from the other participants.  They are in the first year of a 7-year product development plan, so there is no vehicle to sit in at present, but the overall concept is well thought out and some detail work has begun.  I am sure that the Zoox developers will be tracking progress of the Navia, a robotic driverless shuttle, and Tesla has shown what can be accomplished in the automotive industry without decades of experience.

One recurring theme in Berlin was how to develop an automated driving system that can return control to the driver safely when necessary, particularly when road conditions change beyond what the developers anticipated.  While driver assistance functions are steadily getting more sophisticated, there are huge advances to be made before people can safely be removed completely from the driving process.  Today’s incremental improvement process involves automating the control systems that have been developed over the last century for humans to use.  This seems to be the fundamental challenge that Zoox has identified, and it wants to approach the solution from the other direction.

Maps from the Cloud

In addition to the intriguing Zoox concept, the presentations at the Berlin conference were of high quality and networking opportunities were abundant.  Here are some of the highlights that I noted that gave me some fresh perspectives on the current state of autonomous driving technology:

  • Professor Emilio Frazzoli of the Massachusetts Institute of Technology pointed out that the biggest potential benefit from autonomous driving will be carsharing, far exceeding improved road safety.  His detailed analysis of traffic in Singapore indicated that 800,000 personal cars could be replaced by only 300,000 shared autonomous vehicles.
  • Dietmar Rabel, from digital map company HERE (formerly known as NAVTEQ and Nokia Location & Commerce), promoted the Internet cloud for continuous map updates and introduced the concept of crowdsourcing for accurate map data.  Rather than relying on map suppliers to continuously update the information, sensor data from connected vehicles could be shared through the cloud, thus providing near real-time updated map and road condition information locally.
  • Geoff Ballew of NVIDIA explained how his company has grown from a supplier of graphics boards for PCs into a high-performance computing specialist.  Rapid data processing will be a key requirement for self-driving vehicles to become a reality.

While the automotive industry makes slow but steady progress toward the goal of a self-driving vehicle, it’s also good to hear about new companies approaching the topic from a different perspective.  I shall continue to watch with interest as I work on an update to Navigant Research’s 2013  Autonomous Vehicles report.

 

Connected Cars Offer Safety Risks and Rewards

— November 27, 2013

Distracted driving is becoming an increasingly severe problem in nations around the world.  Texting and cell phone use while driving continues to rise, despite harsher penalties for cell phone use.  Teen drivers are especially notorious for this trend.  In addition, vehicle information and entertainment systems are becoming more engaging, thanks to connected-car technology offered by automakers in partnership with communications providers.  While the adoption of communications technologies in vehicles presents serious safety concerns, the promise of the connected car is to make the driving experience less stressful and less dangerous.

When connected vehicles communicate with other connected vehicles, they can alert each other to their presence on the road and avoid accidents.  As described in the Navigant Research report, Autonomous Vehicles, when communications systems are used in tandem with automated driving systems, the driving experience can be removed from the driver entirely – removing human error and therefore making driving more efficient and safer.

Danger Ahead

The road to achieve this transformation, however, is likely to become more dangerous before it becomes less.  While the necessary technologies exist to make connected/automated driving possible today, the legal and regulatory barriers to be overcome are significant.  Therefore, drivers are likely to become more connected before their vehicles do – creating more distractions in the near term.

While the process of connecting people via smart phones has been quick, the process of connecting all vehicles will be very slow.  If every new vehicle sold from today forward had both connectivity and automated driving systems that enabled autonomous vehicle operation, the entire fleet would not be connected for another 15 to 20 years.  Therefore, while there are some fully autonomous vehicles on roads via various test pilots, mass-market adoption of these technologies will not take place for years, and the safety benefits will take longer to realize.

The first step is allowing autonomous vehicles on roads, and various U.S. and European local and national governments are beginning to develop policies to open their roadways to limited autonomous technology.  The second step is defining who may liable in the result of an accident.  While autonomous vehicles have proven significant safety achievements over conventional vehicles, these systems will fail and accidents will happen, as was made clear at the Connected Car Expo this last week in Los Angeles.

The last and possibly hardest step is vehicle data access.  Outside of opportunities for increased safety, connected vehicles will provide companies with new targeted advertising opportunities, and will enable local and federal governments to better manage traffic congestion and to develop policies concerning road infrastructure development and taxation.  Privacy concerns are pivotal in this regard.  The most resistant stakeholders to the advances and benefits of connected vehicles are likely to be the vehicle owners themselves.

 

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