Auto companies are lacking key ingredients for the future of the automobile
medium.com
medium.com
Car companies can't outsource production to Foxconn.
Source: gesamtprojectintegrationleiter (complete project integration director) for a german car brand. After the car is "finished" setting up the production line and making the tools is a 24-36 month process. You _need_ suppliers both for sheer capacity and expertise. On my project, 17,000 parts (most with subcomponents) coming together. THEN crash, emissions, certification, etc.
Easier of course to do at small scale like Tesla, but growth and capacity planning are huge topics. Tesla's run rate is what 30K cars per year? (not sure, just a guess). BMW sold 2M cars last year. Factories, suppliers, labor, paint, tooling (not the fun stuff) consumes an unbelievable number of cycles.
Obviously that revolution will come from software, but there's no getting around the hardware. One of the software co's will have to buy a car company to achieve revolution and scale.
Someone is moving to create a billion dollar scale auto manufacturing facility in Atlanta. Seems nobody knows who, but guesses abound.
Both Apple and Tesla realize this is a solvable problem and have the money to make it happen. Blog Wait But Why brilliantly detailed the the return to first principles for enormous cost savings. We've seen it before, we'll see it again.
Someone did create Foxconn, after all.
A billion dollar plant isn't really novel for the car industry - that's what it costs to bring a new facility for a model or family of models online.
I think the missing link to do what you're describing (a 'flow shop' that can be very rapidly reconfigured to act like a 'job shop') would take an order of magnitude or two more investment which, given the automotive industry's single-digit profit margins, may be too risky for the incumbents. I've heard of Tesla trying to do this, but not without major difficulty (no one has ever scaled this while simultaneously building a brand new company and car and distribution network and being at the forefront of aluminum body components, etc.)
Insofar as the "flow shop" for car manufacturing "would take an order of magnitude or more investment", well, we all know one company that does have that kind of cash (!) lying around, and the interest in re-inventing the automotive industry.
I think you may be under-estimating the complexities market. In fact, the cheapest models in a give product are often the highest volume. So you have to deliver maximum value in each price segment.
It's not solely about price: The last brand to compete primarily on low-price was Yugo. How'd that turn out?
Also, if marketing is so non-essential, why does Google make any money? For that matter, how many non-free [choose your industry, including software] companies don't use paid-for marketing?
I am waiting for the day factoryless car companies are the norm, just the same way we have fabless semiconductor companies.
Imagine this, a car can be designed and validated, and then the designed is sent off to a contract manufacture like Foxconn. A few months time, cars will start rolling off the production line. Conceptually, it is the same as building an iPhone, just physically bigger and has a much higher functional safety requirements.
However, I don't think I will see this in my life time or my kids' lifetime.
The problem is that people grossly underestimate the complexity involved in manufacturing a car. The reason why these CEOs can get away with making such seemingly crass statements is that a lot of the things people are saying they should do, they either already do, or have been tried and didn't work.
The examples you cite are where existing tooling is used to manufacture a complete product. The Mazda/Ford owned assembly line can be set up for either product.
There are crazy hard barriers standing in front of fabless car companies, with little benefit.
Who wants to buy a car from a manufacturer with no support? Will the suppliers guarantee parts for 20 years? Or do you want to contribute to landfill problems and tell me to just get a new one?
However, I'd say that VW is probably the closest analog. Their car platforms are largely LEGO-like components that can be put together in varying configurations as needed by their different product lines. They have a handful of major platforms that underpin the majority of VW, Audi, Porsche, Seat, Skoda, and Bentley, and they are working on unifying Lamborghini with Porsche and Audi.
I know it's not what you're envisioning, but the reality of manufacturing places limit what can be done. Tesla is such an insignificant player right now that what they are doing manufacturing-wise is not yet relevant to the industry at large. They sell thousands of cars a year while the major industry players all sell millions. Tesla can survive with inefficiencies that would destroy Toyota.
Tesla was bragging that it had less moving parts thus less parts which will wear out and fail eventually. They didn't claim they had less parts overall or less complexity.
And even if Tesla could theoretically build a minimalist car, their current vehicles are anything but, they've invested a lot of technology into safety systems and electronics.
What about Magna Steyr, Karmann, or Valmet?
We have exceedingly large data sets -- equating to millions of km of driving from locations all around the globe -- and we use that data in a very disciplined and very effective manner.
(My particular area of interest is in the use of off-line machine learning algorithms to analyse and optimise the algorithms that go onto the vehicle as embedded software).
It is a time-consuming and capital intensive endeavour, no doubt about it.
Several industry writers have jokingly observed that a car like Tesla is really a "laptop with wheels".
If we extend that reframing to say that future cars are really "robots with wheels", it doesn't look so preposterous that Tesla, Google[1], and Apple (rumoured self-driving car) could dominate Ford, GM, Toyota, etc. It seems possible that a 75% or more of a future car's R&D costs will be the sensors + computer algorithms + petabytes of cloud data integration instead of things like the tires, paint formulations, suspensions, etc.
To riff on a phrase from CEO Reed Hastings, "The Goal Is to Become HBO Faster Than HBO Can Become Us" ... it seems reasonable for Tesla/Google/Apple to acquire competencies in assembling chassis with wheels faster than Ford/GM/Toyota to acquire competitive knowledge in robotics+algorithms. Time will tell.
[1] robotics company acquired by Google: https://www.youtube.com/user/BostonDynamics
It is true that there is no fundamental conflict between modern software development practices (Agile etc..) and process-maturity oriented standards like ISO15504 / ASPICE / ISO26262 / DO-178b etc... but writing the tools, build-systems etc... that let these differing concerns coexist in harmony does take some careful consideration, planning, and organisation.
Software companies are good at making software. But car manufacturers currently are some of the leading experts in computer modelling of physical world.
At this front leader is India and China. Tatu in India is doing stuff like gluing car parts together. And China has huge fleet of electric vehicles and recharging stations, in form of electric bikes.
Innovation, just because it does not occur where you think it should does not mean the traditional automakers are not constantly innovation. It is the reliance on many suppliers that allows for innovation to move ahead quickly. All this work towards self driving cars came from developments made by the industry in making safer cars, from ABS to traction control to self aiming lights to airbags.
Electrification, the odd thing here is that Tesla kept a 12v system when many have been trying to move all cars to 48v. I think the author is too quick to dismiss the big companies, look how fast GM turned up with the 200 mile range Bolt which should debut before Tesla's III, let alone probably reach higher production numbers
Software, the author seems wholly tied up in interfaces. Why do many cars have all these dials? Assurance for the most part and a lot of tradition. Plus they aren't distracting, they are causal glance information sources whereas pretty screens and graphics likely will be distracting.
Oh, as for quoting Lutz, while he may not be your cup of tea the guy knows the current industry and how it all works. He does come off like a politician at times and keeps his name in the press by being loud
here's an energy-consumption versus speed plot from MacKay's "Sustainable Energy - without the hot air" book:
http://www.withouthotair.com/c20/page_128.shtml
i reckon "everyone needs their own car" is nonsense. sure, a nice aspirational goal for the middle-class consumer world, but increasingly irrelevant as we update our thinking to match reality
edit: to give a tiny personal anecdote, i live in a city with decent public transport and haven't owned a car for over 5 years, and don't plan on getting one any time soon. i don't use taxis / uber either, it isn't necessary.
> i reckon "everyone needs their own car" is nonsense
Similarly we could see a large decrease in the need for at-work and on-street parking if a car can take itself off home. Perhaps there might be a rise in commercial car-parks scattered around a city where a car can retire to safety and for a charge while it awaits its next job. A clever car could pick the most efficient of those to be ready for all users.
The biggest concern I have about the rise of the electric car is that we are currently doing little about the cleanliness & CO2 emissions of our electricity generation. Clean/safe nuclear power can't come quickly enough.
The people tho like cars often say "I want a car with less computers". What they probably really want is access to the technology they have already bought.
I'm pretty sure Uber has not run it's course yet. They could almost destroy the market for self driving cars. Especially with competition.
I hope that cars go to the direction of bicycles. Currently bicycles are more standardized than ever, with more options than ever. And with more competition than ever. It's hard(?) to find a new bicycle with all parts coming from same manufacturer. To me it seems this modularity is ultimately good for consumers. If capitalism works, that's where cars should gravitate too.
They'll save a lot of money when they don't have to pay drivers anymore.
Or...
One person or company that owns a fleet of self-driving cars and sells them all on Uber.
I think this is what the writer mean when he said self-driving cars will eliminate the need for parking lots. You'll walk out of any building in the developed world and your ride to the next place will be an driverless Uber cab.
Also bus ticket costs me 45e/month. They have schedule, which is huge asset. You could make self driving bus, but that market isn't as big. And the cost savings aren't that huge. With bus, large share of the costs come from fuel and maintenance.
There are minibuses I can already order to my doorstep. https://kutsuplus.fi/tour
And for really seldom occasions renting a car is becoming more and more easy and cheap.
If it takes 15 years to develop self driving car, it's possible that 90% of the current market for it has melted away.
Over 100 years now car industries have started, evolved, grown, multiplied, consolidated, failed, and experimented to today. Amazingly efficient at taking chunks of metal and plastic from around the world, turn it into a car in 17 hours in one of three or four locations in America, transport it to where you are so it can sit on a lot for another week before getting sold to you to take home.
That efficiency is what makes it amazing. And that efficiency is going to be what kills it.
Apple will come in, make a better ipod as they want to do and support it as they can do.
I see a lot of companies determined to outsource all of their IT work. As we all know, most of the time this fails miserably. But even sadder is when it succeeds. IT is the brain of any organization. If you succeed in distributing all the brains of your organization, all you end up being is an integrator. You've just spent a big part of your resources training technical folks in a bunch of other companies all of the important parts of your business. Success! You've turned your company into a giant brainless robot which efficiently runs on very little capital. And then you stagnate.
This does NOT mean investing lots of money in IT ... but it DOES mean being careful about what tools you use and about how they integrate together, and about how they can be modified as the needs of the business grow.
I.e. the organisation needs to focus on open standards and cross-platform APIs that can be built upon to meet short-term and site-specific needs rather than an over-reliance upon specific vendors or integrated and centralised toolchains that cannot be modified or built upon by individual sites and teams.
Both Apple and GM still produce themselves their key components. Apple makes motherboards and operating systems. GM makes engines and has chassis production in house.
There is big differences, but this is not it. You could claim Apple is less agile, as they lack mass customization of hardware.
> ... their dashboards are (likely to be) gorgeous and
> vastly improved over the mostly superfluous dials and
> gauges car manufacturers think we need to see (when was
> the last time you had to check your RPMs or engine
> temperature?).
I'm all for better interfaces. Personally, I drive a diesel Volkswagen and having a customizable dashboard that could provide access to additional engine parameters and sensors, such as I can access today with a laptop connected using Vag-Com (see http://www.ross-tech.com) could be useful. But the key is to provide better situational awareness for the driver, not more distractions.
In the US alone, more than 40k people die every year and millions are injured while operating or riding in these machines. Self-driving cars may be the future in some urban areas and on interstates, but we need to continue to optimize vehicles for drivers, not make them into more distracting spaces where people can continue to indulge their addictions to communication and media consumption.
Does the author have any idea what he is talking about? Did he just make a small mistake when trying to add details to his ideas, or does the lack of subject matter knowledge reveal the writer's cluelessness?
It's easy to criticize and sound prescient when you hand-wave away reality.
I'd say one of the few that get it is Tesla. The huge touchscreen is pretty cool, even though you lose tactile feedback, a huge nav screen with consistent ota updates is neat.
When I saw one last year, I laughed my ass off (and dinted my head against the too damn low ceiling – are the back seats made for dwarfs?). Whatever they're running on it, the UX is woefully outdated and looks like our one-week demos made in 2011.
Not really an improvement over other car manufacturers, IMO.
I know this isn't the real case, and I know some brilliant people are working the problem for these companies, but I think that a better approach would be for a tech company to team up with the hardware company and leverage their combined strengths. That would probably yield a better product that is less "Jony Ive's magical mystery mobile". Shallow or not, that google car would embarrass me to ride in.
Now the same smug group makes jokes about Tesla (and Apple) and when it rises up to smite them they will be caught totally unaware. This time a trade embargo won't allow them to regroup.
Once upon a time a new guy will come with a vision. Hopefully he has enough money too change something.
I really don't understand why we are still driving with fossil oil. That's prolly due to the lack of competetion. car manufacturers thing we will buy their cars anyway.
I feel that a cup would be more effective sometimes tho. Don't get me started on jetting configs.