Carmakers versus technology companies: who will have the “royal straight flush” in autonomous cars?

MotorChase starts today to count with the collaboration of his readers that have something nice to say. Those who, reflecting on our news and the directions that the automotive world seems to be taking, have something to add in order to make us think and imagine what will the future be. Our first collaborate is Carlos M. Leite, who sent us the text below on autonomous cars and started a very interesting discussion. Read and share your opinion on the topic with us in the comments box. To Carlos, our thanks!

By Carlos M. Leite **

While technology companies develop control systems for autonomous vehicles and use prototypes of automobiles, some carmakers react by saying that they will make their own systems and that technology companies will never be able to produce competitive cars (although a new company, Tesla, has gone from zero to global sensation in a few years).

Tesla-Model-3-official-4

At first, it seems easier for a manufacturer to set up a lab and hire programmers than a technology company to set up factories, suppliers and distribution networks, technical assistance etc. in a market that they don’t know. So why the big deal?

In fact, we have some parallel dramas. Google or Apple, while not intending to manufacture cars, produce a few prototypes, both as a proof of concept and as a bargaining tool, “I can do it, so either you associate with me in my own terms or you will have to beat me”. Some automakers have set up their labs and hired programmers, something like: “I can do that too, so either you associate with me in my own terms or you will have to beat me”. But why this poker game? Why not negotiating as fast as possible and getting everybody to do what they do best?

The problem is that, in the case of autonomous vehicles, this “autonomy” is not an improvement or an accessory. It will be a disruptive technology in the automotive market. The greatest fear of the manufacturers is to become a commodities supplier. For example, in the case of autonomous trucks: a logistics company purchases trucks from any company that sells them for the lowest price, installs the system “G-Trans” or “iTrans” (*) and, on the next purchase, makes a new price quotation for purchasing trucks again for the lowest prices.

The vehicle control system will be coordinated with the logistics system, and the logistics company can still negotiate with the technology company to share the shipping data (from where to where, from whom to whom, at what cost etc.), something that will be very valuable, as is the data of Facebook users. In a system of buses (or taxis), when the passengers pay for the trip with a card, you know who goes from where to where etc. Even in the case of private cars, the vehicle control system must be guided by GPS satellites and communicate with a command central to receive traffic information, for example. So the company that owns the system will have all your data. No, you will not be able to call the office saying you’re sick and go to the beach unless you go on foot (and you don’t take your mobile with you!).

It is evident that numerous technological innovations have been developed for the automotive industry since its inception in the late 19th century, but its characteristics and, mainly, the speed of implementation were such that the industry could absorb them without major traumas. But they can, just as telecommunication companies, shift from protagonists to mere “dumb” suppliers of infrastructure or equipment, while the technology companies get fame and fortune with “their” products and some kid in a garage is conceiving the next big deal of the year.

For the latest breaking news, Ford and GM plan to keep going independently, FCA is teaming up to Google, Tesla has revealed a new software upgrade that already adds some autonomic functions to existing cars (a pleasant surprise to their owners), Mercedes-Benz is still trying to bluff in public but is already “talking” and Apple and the oriental companies are still hiding their cards, but not for long. So, after only a few years of skirmishes, acquisitions and “kidnap” of professionals from both areas, the cards are being given and the bets are being made.

Speed is not everything, but it’s a big part of the deal, as Apple itself has shown several times. The second one coming to a market can win if it has a substantially better product, but the eighth, for sure, will have serious difficulties.

(*) I’ve created these names now; If Google or Apple ever use them, I want my part in cash, thank you.

(**) Carlos Moreira Leite, 54, founder of  Officina of Mydia, has graduated in Automotive Mechanical Engineering by FEI in 1984 and is the author of technical books and engineering software.

Gustavo Henrique Ruffo

I have been an automotive journalist since 1998 and have worked for many important Brazilian newspapers and magazines, such as the local edition of Car and Driver and Quatro Rodas, Brazilian's biggest car magazine. I have also worked for foreign websites, such as World Car Fans and won a few journalism prizes, among them three SAE Journalism Awards and the 2017 IAM RoadSmart Safety Award. I am the author of "The Traffic Cholesterol", a book about bad drivers that you can buy at Hotmart, Google Play, Amazon and Kobo.