Autonomous vehicles are often painted as a utopian-like technology that will transform parking lots into parks and eliminate traffic fatalities — a number that reached 1.35 million globally in 2018.
Even if, as many predict, autonomous vehicles are deployed en masse, the road to that future promises to be long, chaotic and complex. The emergence of ride-hailing, car-sharing and micromobility hints at some of the speed bumps between today’s modes of transportation and more futuristic means, like AVs and flying cars. Entire industries face disruption in this new mobility world, perhaps none so thoroughly as automotive.
Autonomous-vehicle ubiquity may be decades away, but automakers, startups and tech companies are already clambering to be king of the ‘future of transportation’ hill.
How does a company, city or country “own” this future of transportation? While there’s no clear winner today, companies as well as local and federal governments can take actions and make investments today to make sure they’re not left behind, according to Zoox CEO Aicha Evans and former Michigan Gov. Jennifer Granholm, who spoke about the future of cities on stage this month at Disrupt SF.
Evolution in mobility is occurring at a global scale, but transportation is also very local, Evans said. Because every local transit system is tailored to the geography and the needs of its residents, these unique requirements create opportunities at a local level and encourages partnerships between different companies.
This is no longer just a Silicon Valley versus Detroit story; Europe, China, Singapore have all piled in as well. Instead of one mobility company that will rule them all, Evans and Granholm predict more partnerships between companies, governments and even economic and tech strongholds like Silicon Valley.
We’re already seeing examples of this in the world of autonomous vehicles. For instance, Ford invested $1 billion into AV startup Argo AI in 2017. Two years later, VW Group announced a partnership with Ford that covers a number of areas, including autonomy (via a new investment by VW in Argo AI) and collaboration on development of electric vehicles.
BMW and Daimler, which agreed in 2018 to merge their urban mobility services into a single holding company, announced in February plans to unify these services and sink $1.1 billion into the effort. The two companies are also part of a consortium that includes Audi, Intel, Continental and Bosch, that owns mapping and location data service company HERE.
There are numerous other examples of companies collaborating after concluding that going it alone wasn’t as feasible as they once thought.
The workers strike against General Motors — now in its third week — has cost the automaker more than $1 billion during the third quarter, according to a research note from J.P. Morgan analyst Ryan Brickman.
And those losses are accelerating with each passing week. GM lost about $480 million during the first week of the strike and another $575 million in the second, according to Brickman. GM is losing about $82 million of potential profit in North America every day.
TechCrunch will update the article if GM responds to a request for comment.
The effects of the production stoppage, which began Sept. 16 when 49,000 United Auto Workers went on strike, is causing a ripple effect through the Detroit automaker’s global operations. AP reported Tuesday that GM has shut down its pickup truck and transmission factories in Silao, Mexico, affecting 6,000 workers there. GM has also had to close an engine factory in Mexico and an assembly plant in Canada because of the strike.
“GM’s US production stopped immediately when the UAW [United Auto Workers] walked off the job on September 16 and we estimate its Canadian and Mexican facilities became progressively impacted throughout the first week,” Brinkman wrote in his research note this week.
Jefferies analyst Philippe Houchois also weighed in this week noting that the strike could restrict GM’s ability to make investments.
While pay, benefits and the status of temporary workers are the primary drivers of the strike, so are concerns about changes within the automaker towards electrification. GM and the rest of the automotive industry are pouring money into developing electric vehicles. But this shift is also affecting workers because electric vehicles, which require fewer parts, are easier to build. The UAW has said the shift from gas to electric engines could lead to a loss of 35,000 jobs over the next few years, according to a research study conduct by the union and recently noted by CNBC.
Last November GM CEO and Chairman Mary Barra announced plans to cut more than 14,000 jobs in North America, shutter factories and eliminate several car models in an effort to transform into a nimble company focused on high-margin SUVs, crossovers and trucks and investments in future products like electric and autonomous vehicles.
The actions were meant to safeguard the automaker from an expected downturn in the U.S. market and increase GM’s annual free cash flow by about $6 billion. But it has also caused discontent and concern among workers.