The web economy will chopshop the car industry

A few news stories make it clear that the venerable automobile industry is going to wind up sliced, diced, and consumed by the new economics and technologies of the web, and in short order.
Ford has announced that it’s working with Amazon to integrate the Alexa virtual assistant service that runs on the Echo smart speaker and Fire TV devices, so that we can turn the on the lights in our homes with a voice command from the car, or start the car as we walk out the back door in the kitchen.
Ford is also integrating with Wink, the smart home hub company formerly an arm of Quirky purchased by Flextronics when Quirky filed for bankruptcy in 2015.
I get an odd pleasure thinking of an automobile as an extension of the smart home, like a thermostat or washing machine. But that’s one of the trends we are witnessing. And the relationship between Amazon and Ford — or any other permutation of the formula <Internet Giant> + <Automobile Manufacturer> — is deeply imbalanced because of the relative velocity of the two players. So we can imagine that the destabilizing impact of this relationship will shake the Automobile Manufacturer into its constituents, and anywhere that the Internet Giant is strong will be taken over by them.
In this case, imagine a few years down the line when a car is even more of a hardware commodity than it is now, and where you will select the ‘carware’ based on how well it integrates with your ‘homeware’. Say I am a big fan — and buyer of — Amazon’s smart home products, and not invested in Apple, Google and Microsoft alternatives. Amazon provides my critical UX, stores all my data, and the various devices integrate ‘seamlessly’ and complement each other well. So I may choose a Ford the way that people choose a Mac, Dell, or Microsoft tablet today, first choosing the OS and then the device.
Here’s a scenario that Ford provided to Geekwire as an example of the interaction through Alexa:

Owner: “Alexa, ask my Ford for my scheduled car start time.”
Alexa: “Here is the list of your current go times. You have a start time set for Monday at 7 a.m., with a cabin temperature set to 85 degrees Fahrenheit. Tuesday at 5:45 a.m., with a cabin temperature set to 75 degrees Fahrenheit.”
Owner: “Alexa, ask my Ford for my car’s driving range.”
Alexa: “You have an available range of 56 miles.”

In that scenario, Ford’s investment in proprietary on-board communications technology will turn out to be something like the Palm OS: a dead end in smart device operating systems. I will think of the Ford as another Alexa device, like my Fire TV Stick or Echo. I won’t care who manufactured the device. In fact, it could be branded Amazon, and built in Shenzhen by jobbers following an Amazon (or Apple, Microsoft, or Google) design.
However, the smart home-centric model isn’t the only model we are seeing at work. Consider the news from General Motors which is investing $500 million in Lyft, the Uber competitor. GM announced last year that it plans to deploy a ‘fleet’ of autonomous Chevy Volts by the end of this year, so it has seen the decline in car ownership accelerating in the future, and want’s to get ahead of it.
Millennials are much less car oriented than earlier generations, and the cost savings of car ‘sharing’ — or fractional availability, are huge: connect the dots, and you see imminent revolution in carland.
Cars spend 95% of their lives parked. Leaving aside the ecological and city planning aspects of that waste, the cost equation of fractional car availability — or sharing — will trend toward very low car ownership when all falls out. If GM wants to have a dominant role in the future economics of cars, they need to broaden their economic participation because there will be much fewer car purchases, and more miles on the meter per car.
They are hoping to become Lyft, or Uber, or the like, while operating as a car manufacturer in the meantime. Good luck. That’s the kind of self-renewing straddle that incumbents find so hard to accomplish. Will they be willing to accept Amazon-sized minuscule profits and plow profits back into disrupting their markets faster than others — like Amazon, Apple, Google, and Microsoft — will be doing?
It’s an easier bet to say that Uber — and maybe Lyft, although they are facing strong headwinds — might start building their own cars, and get out ahead of the auto companies, just like Amazon, Apple, Google, and Microsoft will. The brand value will come from those defining the most unique aspects of the product, and that won’t be automotive: it will be the user experience. You might choose a future Uber over a Lyft because it integrates better with your smart phone, not because of the seats or steering.

Exploring the world’s first 3D-printed cars

3D printing technology has made a lot of advancements lately, prompting people to create more useful objects. People have always dreamed about being able to select a car online, download a design, and print it in the privacy of their own home. That dream is quickly becoming a reality thanks to developments from Local Motors. Innovative technology has made it possible for the car manufacturer to create the world’s first ever working 3D-printed vehicle.
Strati_overall

The Strati

The idea of a 3D-printed car is not a new one. Before the LM3D Swim, Local Motors built the world’s first ever 3D-printed car, the Strati. Built and printed in Detroit, this electric car was the first step in mass producing printed cars.
Strati changed the way the world thought about 3D-printed vehicles. In 2010, printed cars were created, such as the Urbee, but they weren’t as mechanically involved as the Strati. In the past, car panels and features were printed, then placed on a traditionally-built structure. This meant that important components, such as the battery or motor, were not created using the 3D-printer. The Strati used direct digital manufacturing for the majority of the components.
Building a 3D car isn’t easy. To “print” a Strati, Local Motors had to first create the body using a Big Area Additive Manufacturing (BAM) machine. After the body was printed, subtractive manufacturing using a computer numerical control routing machine, or CNC, was used. That still didn’t include all of the features. Additional components were added over the course of several days. Manufacturing took a total of five days, with 44 hours of printing.
Local Motors plans on using this innovative process to further explore car customization and, eventually cut manufacturing costs. While the Strati was a small electric car, the company hopes to appeal to a wider audience by offering several different 3D-printed vehicles. Sport versions of the LM3D Swim, for example, are expected to be produced in the future.

Local Motor's new LM3D Swim.

Local Motor’s new LM3D Swim.

The LM3D Swim

Expected to be released in 2017, the Local Motors LM3D Swim uses a unique manufacturing technique. While the Arizona-based company isn’t a household name yet, it does have a history of working quickly to create innovative designs. The LM3D prototype has already been produced, but future models will have a slew of customizable features.
Because each vehicle is being 3D printed, buyers will be able to select from several different aesthetic features. Removable panels are a possibility, which would allow buyers to have much more control over the design they choose. Despite the advanced 3D capabilities, all vehicles would have the same powertrain and electronic engine.
Not all of the components will be 3D printed in the comfort of your own home. Body panels and the chassis would likely need to be traditionally manufactured. Local Motors has been working on a way to have as many parts printed as possible. As much as 90 percent of the car will be printable using a composite ABS plastic and carbon fiber material.
Even upgrades wouldn’t likely be performed at home. Local Motors claims it plans on melting each car from time to time in order to provide key upgrades. By melting unwanted components, the company can easily recycle them, cutting down on costs and waste.

Can you print a car at home?

While 3D printing technology does make it possible for buyers to print a car at home, it is impractical for them to do so. Local Motors is currently constructing a new microfactory to print and assemble the vehicles in. Construction in Knoxville, Tennessee is expected to be complete early next year, allowing the company to continue to focus on car designs and capabilities.
Local Motors is striving to get the LM3D series on the market. While each car has a hefty price tag of $53,000, the company is expecting several pre-sales. Preorders for the vehicles will start in 2016, but it will still be at least a year before anyone gets their 3D printed vehicle.
Because the manufacturing process and car style is still untested, federal regulations will require several tests to be performed before sales can begin. Standard crash testing is expected to start in 2016, with highway certifications quickly following.
3D printing technology has a lot to offer the automotive industry. The innovative technology that Local Motors is using will pave the way for more designs and advancements in the future. With successful pre-sales and testing, Local Motors can become a household name.
Matthew Young is an automotive reporter from Boston. As a freelance journalist with a passion for vehicles Matthew writes about everything on 4 wheels, be it race cars, SUVs, vintage cars, you name it. When he is not at his desk writing he can be usually found helping his dad in the garage. You can reach Matthew @mattbeardyoung.

In Detroit, Mcity wants to fast track a future of driverless cars

Driverless cars that know our schedule well enough to arrive at our front door exactly when we need one, that allow us to work or read or even sleep while we commute safely to work — that’s Silicon Valley’s dream for the automobile. Intelligent, autonomous, powered as much by code as fossil fuels.

Only, it can’t happen until the necessary technologies are fully tested — not in the lab but out on the road and under real-world conditions. That’s where the new Mcity comes in.

Mcity Track - 02

While it looks like a Hollywood set, above is a photo of Mcity’s testing track for driverless cars.

Mcity is a highly realistic environment comprised of dirt roads, worn asphalt, blind corners, construction zones, jaywalking pedestrians, even a tunnel. Mcity can be found not in Mountain View or Cupertino, but 30 miles west of Detroit, on the edge of the University of Michigan’s North Campus. It may look like a Hollywood backlot, but it’s much more than that.

Mcity opened last month at a cost of $10 million. It’s part of the university’s aggressive plan to make fully and semi-autonomous vehicles a near-term reality, not for the occasional Google car but for all of us. There’s also the hope that even if software eats the car industry, most of the nuts-and-bolts work remains in and around Detroit.

“There has been little work examining how to integrate the technical, economic, social, and policy considerations to permit a viable driverless mobility system,” James Sayer, deployment director for the University’s Mobility Transformation Center (MTC), told me. Mcity, he added, is one of the first attempts to do this.

Google’s driverless car experiments aside, Sayer notes that “we need to look at mobility as a complex system – not just the vehicle.”

This means Mcity is about more than just cars. It’s a public-private partnership to shape the coming integration between car, computing, and big data. Automotive companies, chip makers, and telcos have already signed up, some dropping more than a million dollars to support the university’s efforts.

We may truly be on the cusp of a transportation revolution. Radically improved commute times, radically improved safety, and badly needed reductions in greenhouse emissions are all within reach — thanks to the driverless car. What’s preventing this dream from becoming reality, obviously, is that the very technologies we stake our hopes on cannot actually be tested on the roads and in the real-world conditions that each of us face everyday. This is possible only through rigorously testing, analyzing and demo-ing these technologies in what is currently the world’s only large-scale, highly realistic road environment.

What happens when a child runs into the street? Or when a cyclist is in your car’s turn lane? Or GPS is down? How easy is it for someone to hack your car’s braking system? These must all be tested repeatedly, under real-world conditions, and not just by a party hoping to make a profit off their success.

A spokesperson for Mcity would not confirm if Google is involved with the project — Google co-founder Larry Page is an alumni — but she did tell me they are vetting additional companies that are interested in testing out their auto tech. Honda, Qualcomm and Verizon have already committed. Expect others to follow.

“Testing new technologies in a realistic off-roadway environment is an essential step before a significant number of highly automated vehicles can be deployed safely on actual roadways,” said Peter Sweatmen, the director of the University’s Mobility Transformation Center (MTC).

With Mcity, a giant step may have just been taken.

Think you’re locked into a mobile OS now? Wait until it runs your car

Apple’s going to reveal more about the Apple Watch on March 9, but CEO Tim Cook has already started dropping hints during a trip to Europe. The latest tidbit comes from The Telegraph: The Apple Watch will be able to start a car.

Which cars? That’s a good question that the Telegraph article and Cook didn’t address. It’s possible that Apple doesn’t know yet, and it hinges on deals with automakers who may be generally resistant to Apple or its rivals taking over in-car computing.

But for people who are considering purchasing new cars today, Apple getting into the key fob game could end up having a significant effect on your resale value. After all, if your car’s ignition only works with iOS — or has no smartphone integration at all — it’s going to be significantly less attractive to Android users who are considering buying your car secondhand. And if your mobile hardware not only powers features on your dashboard interface like mapping or music but basic automotive functions like starting the car then it only becomes more important for the vehicle’s valuation going forward.

A recent report from Glass’s — the British Kelley Blue Book — concurred. “If you are a car manufacturer that has chosen to go with Android, can you still sell your car to a committed Apple smartphone user?” head of valuations Rupert Pontin wrote. “Backing the wrong horse could see their models become not just less attractive to a growing group of buyers but also see their residual values hit.”

The two big players at the moment for in-car software from Silicon Valley are Google, with Android Auto, and [company]Apple[/company], with CarPlay, both of which will roll out on new cars this year. Neither company appears to be going anywhere, but it was possible to say something like that about BlackBerry in 2007 when my family purchased its most recent car.

Your car choice could end up having an even more powerful lock-in effect on your mobile platform choice than, say, an app store. After all, even if you’re a huge app user, you don’t usually spend thousands of dollars on apps that you expect to keep for years. And you can’t sell your old apps when you want to upgrade to new ones.

To be clear: It’s entirely possible — almost certain — than some of the entertainment systems rolling out this year will support both Android Auto and CarPlay. Car makers and chip companies like Nvidia have no incentive to lock drivers in to a brand they don’t make. But anyone who follows mobile app development knows that often new features and bug fixes don’t come to both platforms at the same time — and sometimes never make it to the third and fourth place platforms. For now, CarPlay and Android Auto manage maps and music in your car, but when features are as eventually as critical as keyless fob-free ignition — or one day, autopilot — you probably will want to have the phone or smartwatch that updates come to first.

It’s already possible to start a car with an iPhone. Hyundai, which is supporting both CarPlay and Android Auto, mused about NFC ignition two years ago. A firmware update pushed to the pricey electric Tesla Model S back in September enabled the feature, but the changelog, highlighting the issue, said that the feature was coming to Android “in a few weeks.” Unofficial developers have already started working on Tesla apps for Apple Watch. (There are also unofficial Android Wear apps.)

What’s clear is that as car development cycles inch closer to the more rapid and iterative software and hardware development processes favored by Silicon Valley firms, it’s going to wreak havoc on secondhand values. The Wall Street Journal reported yesterday that some electric cars — except for Teslas — have seen their resale values tumble.

Of course, if you believe the rumors, Apple might solve this problem for iPhone and future Apple Watch users when it releases the car it’s supposedly working on. But for anyone purchasing a new vehicle before 2020, that doesn’t help very much.

Tesla misses expectations, but says battery factory to come early

Tesla is slightly ahead of schedule with its gigafactory and now plans to begin producing batteries there by the end of 2016, according to the company’s fourth quarter shareholder letter. Previously Tesla said it would deliver batteries starting in 2017.

Construction of Tesla's gigafactory is underway.

Construction of Tesla’s gigafactory is underway.

Construction on the enormous factory’s structure began two months ago, according to the letter. Equipment installation will begin later this year.

But Tesla missed analysts estimates, which were expecting earnings of 32 cent per share for the quarter. Tesla posted a loss of 13 cents per share instead. As a result Tesla’s shares dropped close to 3 percent in after hours trading.

Tesla built 35,000 Model S vehicles over the course of 2014, but, as projected at the end of the third quarter, it wasn’t able to deliver all of them. Instead, 1,400 vehicle deliveries were pushed to the first quarter of 2015.

Tesla attributed the delivery delays to “one-time manufacturing inefficiencies” created by the introduction of new features and the dollar’s strong performance.

By the numbers:

  • Revenue for the fourth quarter (GAAP) was $957 million, up from $615 million for the fourth quarter in 2013.
  • Net loss (GAAP) was $108 million or $(0.86) per share, up from $16 million or $(0.13) per share in the same quarter in 2013.
  • Automotive gross margin (GAAP) for quarter four was 22 percent.

Tesla expects to deliver 55,000 Model S and X cars in 2015, compared to 35,000 in 2014. It expects to produce 10,000 of those in the first quarter.

BMW pushes security patch to hackable connected cars

Connecting stuff to the internet can sometimes introduce fun new vulnerabilities, and so it has proven in the case of millions of BMW cars.

On Friday the German auto outfit announced it was sending an over-the-air update to cars featuring its SIM-based ConnectedDrive module. This allows drivers to remotely unlock their car, but the German automobile club ADAC had reverse-engineered the telematics software and warned [company]BMW[/company] that a flaw made it possible for third parties to unlock vehicles.

In a statement, BMW stressed that there wasn’t a flaw in its hardware, nor would any driving-related functions have been affected. The update, which introduces HTTPS encryption to the car’s connection with BMW’s servers, is automatically downloaded as soon as the car module talks to that system.

Hackers were in theory able to dupe the car into unlocking by creating a fake mobile network, according to Reuters. There is no evidence that the flaw has been exploited, though it was present in up to 2.2 million BMWs, Minis and Rolls-Royces. According to PC World, BMWs in the U.S. will get the update this week.

On the one hand, it’s great that BMW was able to distribute the update so efficiently. On the other, a system such as this should really have been communicating using encryption in the first place. There’s a lesson here for the manufacturers of connected anything.

BMW workers get thumb protection courtesy of 3D scanning and printing

BMW is 3D-printing “finger cots” for some of its factory workers, the German carmaker said this week. Working alongside ergonomics researchers from the Technical University of Munich, BMW uses mobile 3D hand scanners to create tailored thumb-protectors for each worker. The printing is done with a selective laser sintering (SLS) process, using a precisely targeted laser to form a pre-modelled solid mass out of a thermoplastic polyurethane powder. The cots act as splints to counter thumb joint stress, helping workers who are fitting rubber plugs.