Part two in the ‘What’s interesting in the world in 2013‘ series is about an exciting and interesting development in the world of automobiles – as illustrated in the ‘Cars on autopilot‘ article.
I think (and a few others probably agree) that the car won’t go away, it’ll just end up massively transformed by both electric cars and self driving vehicle (and a combination of both) plus interesting innovations in car sharing schemes. I don’t think cities are pedestrian or bike only areas.
For a while, the automobile was given interesting cultural meaning and it enjoyed a long life as rite of passage into adulthood for entire generations. It’s no longer the case, even as we found out when working with Hyundai and being privy to the New Car Buyer Survey (NCBS) data from Europe and research from elsewhere. While Europe is indeed an economically depressed place and pessimistic from a consumer confidence point of view, the rest of the world isn’t faring any better either.
An often overlooked stat from the recent census is the fact that in the UK 58% of the working population drive to work compared with 16% commuting by public transport. Most Londoners feel like this number must be higher just because they use the tube, but as soon as you live anywhere outside a decent commuter train network reach, the reality is that it’s hard to get anywhere using public transport alone. Fast, cheap, comfortable – pick two.
The USA probably has similar stats (and arguments over train networks and infrastructure), but data suggests there’s been an amazing shift in the fuel consumption trajectory since 2004 – not the only cause, but it’s pretty clear that car sales have slowed down, fuel isn’t as affordable as it used to be for some and newer generations are not as interested in cars.
It’s probably safe to say that in both places, the problem is a generational one as much as it is an economic one. Asked if they prefer a 25 minute drive or 50 minute bus ride but with wifi, 80% of Gen Y-ers chose the bus ride and 80% of boomers chose cars.
I reckon it’s generational because it takes a lifetime’s worth of work to buy and maintain a car – jobs don’t offer that kind of security anymore, and they’re a big risk to take. Milennials aren’t lazy or self entitled; dare I say that no one my age has ever known lifetime employment, pension, health insurance, a company car or regular 9 to 5 hours. There’s an interesting shift in mentality around where people choose to live too - 66% of US college educated graduates first decide which city to live in, then look for a job. If public transport or the local biking culture are strong, there’s little reason to want a car. And if biking culture also benefits local business, it’s a no-brainer.
There are three interesting things happening:
1. Car sharing, for those times you do want the autonomy and flexibility it offers, without the running costs associated. It’s a tricky territory given that Zipcar was barely making a profit when it was sold to Avis for $491m, having it taken them over a decade to build the business. Another barrier that no one has gotten quite right yet is the gap between intent and the reality of actually posting your car up on a sharing site. Lots of festivals in the UK seem to be encouraging car sharing by giving car sharers better parking spaces, cheaper VIP tickets (or competitions to win them) and so on, so maybe it’s not communicated enough.
2. Electric vehicles, for people who can afford cars but care about the environment beyond self interest and want solutions that don’t run on fossil fuels. After ten years in the red, Tesla Motors, a maker of electric cars, has turned a profit of $11.2m and just raised $1bn from stock and bond sales. It’s doing interesting things at the moment and should be one to watch, in spite of Fisker, a hybrid manufacturer, laying off up to 75% of its workforce to prevent bankruptcy. Tesla may well be “a little bit Apple, a little bit Google and about to be huge“.
3. Self driving cars, addressing a number of tensions:
- The fact that some carmakers can produce twice as many vehicles per employee as they did only a decade ago but people aren’t buying as many cars (as Horace Dediu points out, one country produces 24% of the world’s cars. 4 produce 50% and 17 produce 90%.)
- Delivering a solution to people who couldn’t or didn’t want to learn to drive and were left behind willingly or unwillingly; bringing mobility to areas where there is none.
- And – AND – something I hinted at in the Strategist’s Handbook is Google’s ‘strategy in 7 words‘ exercise: “unlocking a vast amount of time that could be spent on the internet”.
Of course, what they do need to sort out is far trickier and less likely to happen anytime soon: a legal grey area that governs who to blame in a crash (vehicle to vehicle communication and vehicle to infrastructure are interesting areas too).