Navigant Research Blog

A Humble Pickup Bed May Point to the Future of Mobility as a Service

— March 13, 2018

The US auto market is no longer the largest in the world, having been surpassed by China. However, it does lead the world in one thing: pickup trucks—no one loves a large pickup truck the way Americans do. While many may consider the pickup truck a crude, agricultural implement, over the past two decades it has become anything but. The debut of the redesigned 2019 GMC Sierra brings with it a fascinating new bit of tech that may well play a key role in the future of mobility as a service applications.

The humble pickup bed would seem like one of the last places you would look for cutting edge technology, after all, it’s just a box, right? At January 2018’s Detroit Auto Show, Chevrolet introduced the new 2019 Silverado pickup with a reconfigured bed that gave it a 20% cargo volume advantage over its competitors. In March, General Motors’ (GM’s) premium truck brand, GMC, launched its version of the Sierra with an optional carbon fiber cargo box.

Breaking the Mold

Carbon fiber has been used in many high performance vehicles for its combination of high strength and low weight, but its cost and manufacturing challenges have largely kept it out of mainstream vehicles. The highest volume applications to date for carbon fiber have been on the BMW i3 and i8 plug-in EVs. However, while BMW and its carbon supplier SGL have made advances in bringing down cost and improving reparability, they continue to use the same fundamental process that has always been used for making parts. That process lies down a woven carbon fiber matte in a mold infused with plastic resin and is then cured in a large autoclave to produce rigid thermoset components. This process has a cycle time of 45 minutes or more.

GMC and supplier Continental Structural Plastics are breaking the mold by using a sheet molding compound (SMC) process that replaces the glass fibers that have long been used with carbon fibers. Rather than a large woven matte that requires long, costly strands of fiber, SMC infuses the plastic resin with millions of short strands that are about 1-inch long. An SMC carbon fiber panel can be also be produced in about 1 minute and requires no autoclave curing. GMC showed a video of a carbon fiber pickup box being subjected to the sort of abuse a work truck goes through and it survived with no issue.

Thinking Outside of the Box—Environmental Impacts from SMCs

While it is great that GMC has a pickup box that saves 62 pounds over the steel equivalent and should be more durable, there are perhaps more important long-term implications of this new material technology. For instance, SMC could be incorporated into GM’s aggressive commitment to both zero emissions and automated vehicles. Automated vehicles are expected to be primarily utilized in mobility as a service (MaaS) applications, where vehicles will have much higher utilization and potentially shorter service life. Rather than scrapping MaaS vehicles every 3-4 years and expending energy to build replacements, a new vehicle architecture that utilizes carbon SMC structures with replaceable and upgradable components could prove to be far more efficient.

Navigant Research’s Mobility as a Service report projects 7.8 million automated MaaS vehicles could be deployed in 2026. If these vehicles can utilize a lower cost from a durable carbon fiber SMC structure, they could potentially remain in service for 2-3 decades with regular updates to propulsion, battery, sensing, and computing systems. When the SMCs eventually have outlived their usefulness, they can be ground up and remanufactured into something new.

Today’s trucks are test beds for new technology and the profits from their sales fund the development of tomorrow’s advanced vehicles.


Automated Driving at 2018 CES Is All About Business Models

— January 11, 2018

Ten years to the day after my very first ride in the automated Chevrolet Tahoe that won the 2007 DARPA Urban Challenge, I was in Las Vegas yet again for the 2018 International CES. In the very same parking lot where I took my first driverless ride, I climbed into the backseat of a BMW 5 series sedan sporting the logos of Aptiv and Lyft for an automated round trip from the Las Vegas Convention Center to Caesar’s Palace. As has been the case for most of the past decade, automated driving is the main automotive topic at CES, but now it’s more about the business models than the core technology.

For the second year in a row, General Motors (GM), the company that started the automated driving land rush at CES, is not here even in an official capacity. Supplier Aptive and several of the automakers that did return to Vegas have turned their attention to how they are going to transform their business models in the coming years as we make the shift away from buying and driving our own vehicles. Aptiv is just one of several companies—along with Waymo, Ford, GM, and Jaguar Land Rover—that have partnerships with Lyft to deploy automated vehicles.

The Hunt for New Revenue Streams

However, ride-hailing isn’t going to be the only application for automated vehicles in the coming decade. Automakers are keenly aware of the reality that shared, automated mobility will likely mean that there will be far fewer vehicles in the coming decades. With reduced revenues from sales, they are looking to services to generate new revenue streams. Given that, automakers need to maximize the utilization of these vehicles because the number of people in need of rides is hardly consistent during the course of the day.

While many surveys have asked consumers if they want to buy automated vehicles in recent years, it’s really the wrong question. For the most part, consumers will be unlikely to have the opportunity to purchase these vehicles. Instead, they will be owned and operated by manufacturers and other providers and made available on-demand.

Platforms Evolve, Targeting New Applications

The architecture of the vehicle will change from the traditional cars and SUVs we know today to something more flexible that can accommodate everything from passengers to pizzas to packages. Toyota unveiled a concept at CES 2018 called the e-Palette specifically targeted at these multimodal applications. It will be built in three sizes to accommodate different use cases.

Along with the vehicle, Toyota announced the e-Palette alliance to leverage the company’s Mobility Services Platform. Initial partners include Amazon, Didi, Pizza Hut, Mazda, and Uber to work on developing the vehicle, applications, and verification activities.

Ford CEO Jim Hackett also announced several business model initiatives to accompany the bespoke automated vehicle the company is launching in 2021. With its partner Autonomic, Ford is developing a transportation operating system cloud platform that will be available to cities to provide a range of non-competitive services like payments, authentication, and coordination.

On top of that, Ford’s transportation as a service platform will handle the logistics and deployment optimization for partners that want to utilize Ford’s vehicles. A pilot of the system will be launched this year in a city yet to be named along with Dominos, Lyft, and Postmates.

The business of mobility is changing, and the industry is trying out a range of solutions in the hopes of making both itself and the cities it operates in sustainable.


Disney vs. Netflix as Analogy for Auto Incumbents vs. Uber and Lyft

— January 2, 2018

TV and movie businesses may not seem like the best analogy for the automotive industry and the future of transportation, but if you consider the evolving relationships, there are some fascinating parallels. The relationship between two of the world’s largest media companies, incumbent Disney and insurgent Netflix, is becoming increasingly tenuous as both look to leverage disruptive technologies. In the mobility space, we are seeing a surprisingly similar dynamic between major automakers and ride-hailing companies like Uber and Lyft, with Alphabet and Apple on the periphery of the battle.

The Evolution of Entertainment as a Service

It’s now been a full decade since Netflix began its pivot from mailing plastic discs to customers to streaming video over the internet. Until a few years ago, Netflix was completely dependent on the willingness of content creators like Disney, Fox, Warner, and others to provide the materials that it mailed or streamed to subscribers. The studios did this in exchange for licensing fees because they saw it as advantageous to get in front of viewer’s eyeballs on the new distribution channel.

At first, the number of people watching Disney content on Netflix was relatively low and the studio saw it as an interesting experiment. The revenue numbers were small and had to be split with the distributor. Now, as it has become increasingly apparent that consumers are shifting away from paying to go to theaters and paying for cable TV services in favor of direct streaming to TVs and mobile devices, the idea of splitting that revenue pie has lost its appeal.

Disney’s Step into the Streaming World

Thus, over the course of 2017, Disney announced that it will launch at least two of its own streaming services, a sports oriented channel for Disney-owned ESPN, and an entertainment channel. When the latter launches in 2019, much of the Disney content that has been so popular with viewers will disappear from Netflix, including Marvel and Star Wars. Disney acquired a controlling interest streaming technology company, BAMTech, and its late 2017 bid for much of Fox’s entertainment business will give it control of rival streaming provider Hulu.

Meanwhile, Netflix has been reacting by investing billions of dollars in creating its own catalog of proprietary content. While the company has managed to generate net profits, it has also been burning cash at the rate of nearly half a billion dollars per quarter. As content from Disney and other studios disappears over the next couple of years, Netflix is likely to struggle to retain subscribers and its financial position may get significantly worse.

How Will the Auto Industry Respond to the as a Service Momentum?

Meanwhile, in the transportation space, ride-hailing providers have grown at an even faster pace than Netflix while continuing to lose billions of dollars per year. Automakers have taken note of the growing popularity of mobility as a service and see the threat to their core business of selling cars, just as streaming has eaten into Disney’s core distribution channels.

Most of the big automakers are actively developing ridesharing services that will increasingly leverage disruptive automated vehicle technologies. Just as Disney no longer sees the need to share the revenue from its creations with Netflix, GM, Daimler, Ford, Volkswagen, and others may eventually want to stop giving Uber, Lyft, and Didi a cut and instead compete with them directly.

Navigant Research’s Mobility as a Service report projects annual ride-hailing revenue of nearly $1.2 trillion globally. An ever increasing proportion of that is likely to go to the companies that build the vehicles that move people and goods as well as those that operate their own services.


Cities Looking to Automated Vehicles to Solve Congestion and Emissions Challenges

— November 21, 2017

Around the world, major cities have been setting targets to combat the negative effects of local transport on public health, local pollution, noise levels, and greenhouse gas (GHG) emissions. Cities are looking increasingly at the potential of automated vehicles (AVs) to help solve these problems through improved traffic flow, the near elimination of collisions, increased productivity, and reduced pollution and GHG emissions.

 Moving toward Full Automation

The concept of automated or self-driving cars has shifted from the realm of science fiction into reality, as showcased by some of the latest developments in cities around the world:

 Key Challenges Remain

Partial automation is becoming commonplace in all road vehicle classes. Full driving automation is starting to be piloted in numerous cities globally with regular commercial deployments expected in the next 2 to 3 years. Before AVs can become ubiquitous in city streets, new infrastructure investments, communication network upgrades, the need for fleets to operate in varied conditions, and concerns about cybersecurity need to be addressed. Cities also need to develop frameworks to integrate and coordinate AV mobility services with existing transit services to optimize the use of road infrastructure and avoid increased congestion. Although the AV was not at fault for the accident, the recent Las Vegas automated shuttle collision shows why vehicle-to-vehicle communications will also be crucial to the success of AVs.

If AVs are managed properly, highly integrated with public transport, and coordinated as part of a multimodal transportation ecosystem, the shift to self-driving vehicles could lead to reduced traffic congestion in cities, lowered demand for parking spaces, and highly beneficial energy and environmental effects. For more information on the potential effects of AVs in cities, see Navigant Research’s recent white paper on Redefining Mobility Services in Cities.


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