Economics

Automated vehicles are still the next big thing

Peter Franklin has just earnt a place on the list of people I follow on Twitter, after the piece he’s just written on automated electronic cars for ConservativeHome. Like Mr Franklin, I am rabidly enthusiastic about the potential for automated vehicles. Indeed, it was my letter on this subject to BA’s Business Life magazine that has just pleasantly and unexpectedly won me an iPad.

Automated vehicles are undoubtedly the transformative technology of the coming decade, and possibly the century (think of the roll-out time, if nothing else). Autocar is not going to seem such a silly magazine title any more, just as a lot of the magazine’s raison d’etre fades away.

I have to say that I don’t think that the method of propelling these vehicles is as clear-cut as Mr Franklin suggests. Petrol (and diesel) may persist through hybrid models for some time. Indeed, in remoter regions, it is quite plausible that battery technology will not develop quickly enough to make electric vehicles attractive in my lifetime. Even the Tesla’s top-end range of 465km would get a bit stressful if you were touring Yellowstone, or taking a road trip across Australia. This is not to say that we shouldn’t try to go electric: it’s just that the installed infrastructure base and the energy density that fossil fuels gives battery tech a high hurdle outside heavily- and modestly-populated regions.

The wholly-“taxi” model that Mr Franklin suggests also strikes me as a little off. Yes, it would be awesomely efficient. But, as a commenter highlights under the article, people like their stuff. Sometimes it’s useful to be able to “travel heavy”, with your roofbox, mountain bike, two kids, dog, and assorted paraphernalia. This means you need a lockable car sitting empty in a picnic spot car park, at least for some trips. This is why some people still own cars in London, even when Zipcar and the like are very convenient. So the taxi model (which, in reality, will in short order become the Uber-model) will be important, but it will also coexist with significant private ownership. There is very likely to be an overlap: if I own a big car for automated roadtrips during weekends but go overseas for a fortnight, I could lend my behemoth out while I’m gone.

So, the big question I asked last year remains: what’s the investment angle? I still think it’s too early to big winners among the car companies. I think the entire industry will benefit from this shift in the short and medium term. Only those that do nothing to adapt will fail, and the failure will not happen quickly, as there will always be petrol-heads. The obvious winners? Uber, for sure. It has become the dominant global transport arrangement platform, and this is a Google-like industry. But it’s still private, and I’m not a Chinese billionaire. Road hauliers? Smart meter providers? Power station operators? Others?

 

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Business, Life

What is the investment angle on driverless cars?

For the past three years I have been telling everyone that will listen that driverless cars will arrive within our lifetimes, and that my two-year old daughter won’t need a driving licence.  Today, that vision came a step closer, as the British government signalled that driverless cars would be allowed on British roads from 1st January 2015.  I am absolutely convinced that they will be the biggest technological revolution that the world has seen since the microprocessor, if not the internal combustion engine.

There are of course many legal issues to resolve. Will the driverless cars require a passenger who could step in if necessary? Will that passenger have to be a qualified driver? Who (if anyone) is at fault if a driverless car collides with another vehicle, a child in the road, or a tree? And, for the philosophers out there, if a driverless car has insufficient braking distance to stop in time to prevent it hitting three schoolchildren who have run into the road, would an algorithm tell it to mount the pavement and kill the one adult walking there?

However, I’m an optimist. I think these issues will be resolved. I think this technology will benefit everyone. But my real interest is, who will it benefit most and least. In other words, what is the investment angle? Who will be the unexpected beneficiaries of massively reliable, cheap and on-demand transport? Rural pubs? Leisure facilities for older people? And who to short? NCP and Addison Lee? Arriva?

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Business

Automotive nationalism

Over dinner last night, a German colleague was mocking the fact that Jaguar Land Rover was now in the hands of the Indian Tata Group. I don’t find automotive nationalism any more endearing than the standard kind, especially when it is so misplaced.

Jaguar and Land Rover have been American (under Ford Motors) more recently than they have been British. And what is wrong with Indian stewardship? Any nation that can keep British steam locomotives hauling massive loads on daily services well into their second working century can be trusted to guard and preserve British engineering. The Morris Oxford is India’s favourite car.

Most importantly, the cars that have come out of JLR in the Tata era have been absolutely superb: see the recent relaunch of the Range Rover Sport. So much so, in fact, that my dream garage at the moment consists of a new-model Range Rover Autobiography and an F-Type V8 S (to sit alongside the admittedly not-at-all-British ultragadget that is the Mission R). Even in matching grey, they’d make the German line-up of a Porsche Cayenne and a Mercedes SL look dull.

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