Drew's low-end theory, scooters and citizenry, Canoo goes commercial, the future of work (and of VW), and Jeep's meeting in the middle
17th of March, 2021
A newsletter about the auto industry, mobility, design, and the cultures that surround us. Brought to you by Joe Simpson and Drew Smith of The Automobility Group. If you like what you see, tell your friends!
The GM-Wuling and Drew’s low-end theory | DS
Why it’s interesting: a pronouncement about the arrival of the $3,000 car piques Drew’s interest about about the low-end disruption of the car market.
When Joe and I first got to thinking about writing this issue a few weeks back, the item capturing the attention of the auto twitter universe was Mercedes’ BFS, a.k.a the Hyperscreen, a.k.a the entirely digital interface which will soon debut in the new EQS electric flagship.
Had we managed to gird our loins in time, you may have read pointed perspectives from one, other, or both of us. We would, most probably, have decried the bone-headedness of the overall concept, guffawed at the naive protestations of its chief designer, and squirmed at the thought of it attracting an unholy number of fingerprints.
Dear reader, you have been spared.
But as my mind turned to this edition, the one we’ve actually managed to write, the tech-for-tech’s sake of the BFS serves as a rather poignant counterpoint to a story about a far humbler, yet far more transformative automotive technology: the electric motor.
Yes, much has been written in the mainstream automotive press about the disruption brought about by the electrification of the car. Yet, to these eyes at least, much of the focus has been on the trickle-down effects from the top end of the market. For while we’re starting to see a groundswell of more affordable options, like the VW ID. 3 and the Honda E, it’s still the premium offerings from Tesla, Porsche, Rivian, Audi and the like that capture the imaginations of many I speak to.
But for whom are these vehicles really transformative? There’s a strong chance that if you buy any one of these vehicles, it’ll be a partner to your fossil-fuelled other car, and just another option for you to consider within a personal history - and a long-established culture - of private car ownership. They’re simply a different way to do something you’ve always done.
So where do we look for the real EV transformation? Where can we find something that opens up the world of personal automobility to a new market? The China-only GM-Wuling Hongguang MINI EV isn’t a bad place to start.
With 27hp, and up to 170Km of range, it falls laughably short of the kind of performance offered by the ID.3 (200hp, up to 550km). But with a price of about £3,300/€3,800/$4,600, it’s 90% less expensive than Volkswagen’s offering .
But does it look like 90% less of a car? I’d argue no. And if Chinese sales are anything to go by, neither does the market.
Unlike Citroen’s AMI which wears its cheapness with a toy-like, fuck-you joie de vivre, or Tata’s Nano, which was just unappealingly cheap, the Hongguang looks like a dignified, grown-up (albeit very small) car. It has the look of an object of aspiration, rather than one of derision or desperation.
Why does this matter? Well, nobody wants to look like they’ve bought the cheapest car off the lot, especially if its their first purchase. As humans, we want to be a part of the in-crowd, not the outcast. And the price of the Hongguang opens up the in-crowd to vastly more people who will never have owned a car before.
Two weeks ago, the chairman and CEO of the world's largest motor maker, Nidec, predicted that the era of the £2,100/€2,300/$2,900 EV will soon be upon us, further expanding the reach of the car in to new and nascent markets. Rather than shy away from the “cheapness”, I find myself dreaming of a new era of small car design, one that’s equal parts intelligent, exciting, and aspirational.
Bring it on, I say.
Why it’s interesting: in a bid to find favour with regulators, the micromobility provider is helping to bring the sensible city to life.
In another life, in a time that seems long, long ago (it was *only* the summer of 2019) I interviewed with Voi, a scooter sharing startup, in Stockholm, Sweden. The people were lovely, the ambition ambitious, and the remuneration somewhat out of line with what I was being asked to do. With a heavy heart, I declined the offer. Stockholm start-up life, it seems, would not be for me.
I was gutted, though, because I’d had a wonderful, wide-ranging conversation with one of the founders that brought together human behaviour, the environment, and infrastructure in the way that excites me most. We were at the height of scooter mania in Sweden, and in my then-hometown of Gothenburg, piles of scooters - tipped over in the night on the pavement, or dumped in public gardens, were an all too common sight. The backlash would surely be brewing.
So, we batted around the idea of the scooter company as a citizen, city authorities as clients, and the path that Voi intended to take towards both. When my hour was up, I went on my merry way, never to see him again.
So when the announcement of Voi’s newest scooter, the Voiager 4, popped up, I was fascinated to see air pollution and noise sensors, along with sub-metre positioning accuracy, included as part of the spec.
If you’re a scooter user, the spot data these sensors provide will be next to useless - there’s not much you can do about the air and noise pollution that surrounds you on your journey.
But if you’re a city, particularly one focussed on improving quality of life for its citizens, such sensors will be a boon. Just imagine a network of mobile environmental quality sensors that can pick up on pollution hotspots, and help you identify which interventions to make and where. Voi could also use the data to make route suggestions to users in advance of their journey, helping to route healthier journeys.
It’s a lovely demonstration of how cities, citizens and service providers can all win with a bit of joined-up thinking.
See also: MIT’s Senseable Cities Lab
Why it’s interesting: assumptions about disruption are often misplaced. Joe revisits one of his favourite topics sets – logistics, deliveries and vans.
The disruption of the mobility sector will not be evenly distributed. Today, talk still centres around the disruption of legacy auto brands by Tesla, Nio and, shortly, Apple. But if you’re looking for true disruption its often more interesting to look around the less obvious edges.
Today, I’m fascinated by a host of companies that are building vehicles and services that have the potential to change the game, but that also avoid taking a challenge direct to legacy German car brands. While I tend not to agree with everything Herbert Diess says, that route is hard (as Tesla have learned).
I think disruption is more likely to arrive in the world of logistics, deliveries and commercial vehicles before the private car sector gets flipped upside down. Which is why Canoo’s Multi Purpose Delivery Vehicle (MPDV) has me so excited.
Even before the pandemic, the home delivery revolution was driving commercial vehicle sales, forcing an ever-tighter integration of system and vehicle design. For example, Amazon invested in Rivian, and Rivian now builds dedicated electric delivery trucks for Amazon. The pandemic’s only accelerated this integration: FedEX and UPS have both reported a shortage of delivery vans. Where once just books arrived at your door, e-commerce can now deliver more or less anything you want. Consequently, the freight and logistics sector is forecast to continue growing.
What’s less well known is that commercial vehicles are lucrative for the large auto makers. At the launch of the 508, Carlos Tavares, head of PSA (now Stellantis) revealed that the company had two core profit centres; SUVs and vans. It’s often said in industry circles that Ford keeps rolling because of just two vehicles it makes. The F150 (primarily sold in the US) and the Transit van (primarily in Europe). Despite their latter-day lifestylings, both are, at their core, working vehicles.
So what’s interesting about this sector? A van’s size and typical use pattern makes it a perfect electric vehicle. It’s often the driver’s office and home for several hours a day. Payload, functionality, flexibility, durability and running costs are all prioritised both by large fleet buyers and individual owner operators in a way that private car buyers don’t.
In creating the MPDV, Canoo hasn’t just aped existing products. It appears to have closely understood the market and needs of owners and operators.
For example, major parts have been designed both for both a long life, and to be easily swapped out when they fail, because durability and time off road for service are critical in this sector. Canoo has also built in a level of modularity which means that the truck is designed to work as well as a delivery van, as it is as a mobile market stall or food truck. And it’s thought about the person in the driving seat who will sit there for hours each day, with an uncommon focus on usability, visibility and the provision of a customisable cut out zone where you’ll normally find a thick slab of instrument panel. This is designed to allow the integration of a customisable unit, which might hold a letter rack to keep the next street’s parcels close to hand.
While the product itself is impressive, it’s the economics – how the MPDV will improve the user’s efficiency and bottom line are the real story here. With a headline price of $33,000, it looks very favourable compared to a likely $46,000 for an electric Ford Transit.
Will price and efficiency be enough to make a mark in a segment which, as I discovered during a research project a few years ago, is fiercely brand loyal? One in which the service network and need for guaranteed reliability counts for so much? And where being on fleet manager’s nice list counts for so much?
Canoo won’t be without competitors and sceptics, but by not chasing Tesla it’s giving itself a much greater chance of carving out a leadership position. It’s doing it in a market that’s often ignored, but only going to grow in both size, importance and influence.
Why it’s interesting: much of the world is currently working from home. Assuming vaccination programmes succeed and citizens might soon regain their freedom of movement, where does that leave the future of work and the role of the office?
Back in February 2020, my work life involved spending one week in Gothenburg, Sweden, followed by a week in a shared space office space in Leeds. Cut to February 2021 and I’ve been to Sweden twice in the last year, my commute is a walk up into my loft, and my work day is interspersed with a heavy dose of home schooling. Oh, how I long for those 3am airport drives! The vagaries of a cross-Europe commute aside, a week in the office and a week focused at home provided almost the perfect balance of creativity and productivity.
A report out this week by commercial realtor CBRE suggests that once we move beyond the pandemic, rather than being fully remote or fully office-based, the majority of people would like to have that same freedom I experienced. This news comes off the back of a multitude of (mostly) tech companies committing to full remote working and offering eye-catching headlines, like paying San Francisco wages regardless of where you’re based in the world.
It’s a much-discussed topic, but two recent pieces stand out for me.
Back in September, Kevin McCullough of Plan Strategic wrote this fascinating piece entitled Work from home: careful what you wish for, which carefully challenges the notion that WFH should be a right and considered some sort of panacea for the woes of modern working life. Key points from Kevin’s piece include a challenge to the idea that working from home truly boosts productivity (there isn’t much evidence, and employees simply saying they are is a fairly weak metric). Paradoxically, remote working can also increase anxiety among workers causing them to work more and not less, leading to burn out.
But at the core of Kevin’s perspective is this:
Face-to-face collaboration is necessary for creativity and innovation. Bloom’s research has shown it is essential for developing new ideas and keeping staff motivated and focused. ‘I fear this collapse in office face time will lead to a slump in innovation … The new ideas we are losing today could show up as fewer new products in 2021 and beyond, lowering long-run growth.
Creativity is born from stimulus, human interaction and collaboration – and it’s also serendipitous. So often, it comes from the communal coffee machine or water cooler moment.
But Chris Herd of Firstbase, after speaking to 2000 companies, declares:
HQ’s are finished: companies will cut their commercial office space by 50-70%
It’s not hard to imagine that many large companies, regardless of their sector, will follow tech companies, and make as many people as possible work remote as often as they can.
While that might initially make them an attractive employer and widen their talent pool, the future of work is a complex design problem. If companies want to attract and retain talent, neither totally remote nor totally office-based approaches will work. Nor will taking unilateral decisions about which employees will work where, which is precisely what UK supermarket Morissons has recently done.
Post pandemic, for many, there will a pent-up desire to get back into the office and to travel. For others, they wont want to, and they shouldn’t be forced to.
But rather than cutting office space and travel budgets immediately, companies could embrace the change and use it to better get to know their staff and their workspace needs, review old working practices and cement new ones, and help creativity and a renewed sense of belonging flourish.
One thing that’s not yet much discussed, but which Chris Herd’s recent tweets highlight, is that for those who are starting to hate working from home, much of the animus can stem from trying to impose a rigid, office-like approach onto a remote work scenario, rather than creating an approach afresh.
And what about me? While I’m still stuck locked down in the UK, it’s become quite clear that I can’t go back to being away from my family for weeks at a time. Nor can I work at my best with my team while totally remote. So I’m moving to Sweden. I’ll be based at HQ, and will enjoy seeing my colleagues in the office when I can. But sometimes, when I need to get my head down, I’ll relish the chance to work from home.
The culture of code | DS
Why it’s interesting: the greatest barrier to VWs EV success seems to be cultural.
For those that have access, the January 19 edition of The Wall Street Journal contains a remarkable dissection of the challenges that VW has faced in bringing their first electric car, the ID.3, to market.
For those that don’t I’ll try and distill a few key points that had my jaw somewhere near the floor.
It was only 5 years ago that Herbert Diess called meetings to try and convince leadership that they needed to take electrification seriously.
Until 2019, there wasn’t a single person responsible for software development at Volkswagen, despite the presence of thousands of software developers across the organisation.
While Volkswagen tried to develop the ID.3’s software, VW.os, in-house, it turned to Continental and 18 other suppliers to develop the hardware. This required VW and Continental to develop an entirely new way of working, something they apparently only realised after the project had started.
As the 2020 launch date approached, VW realised that they couldn’t ship what they’d intended, so they sent the first 50,000 cars to market in the knowledge that they’d have to come back to dealers to be updated (presumably the over-the-air functionality was one of the features they couldn’t crack).
In short, both VW and Continental seemed completely unprepared for the task ahed of them:
“Karsten Michels, the senior Continental engineer working on the project, said the main problem was the teams simply ran out of time. “Maybe we underestimated how much work is involved and how little we could actually rely on existing legacy software,””
With my culture change clients, I talk a lot about the difference between the “Knower” and “Learner” mindsets. The former assumes that the knowledge that got us, successfully, to this point will get us to the next. The latter grants that any transformation will require the unreasonable injection of momentum that kick-starts an adventure in to the unknown.
And it seems that throughout the development of the ID.3, VW was pretty much stuck in Knower-land. They brought in ex-BMW software supremo Dirk Hilgenberg to remedy the situation. Per the article:
The biggest challenge, said Mr. Hilgenberg, isn’t the technology, it is the mind-set of the people—their reluctance to embrace radical change until circumstances force them to.
“In the middle of success it’s not easy to understand why you need to change now,” he says.
So the ID.3 is now in market, as is the SUV ID.4, and the 1.1 update to VW.os should be rolling out any time now. It’s not hard to imagine some sighs of relief emanating from Wolfsburg.
Yet there are further worrying signs of the cultural disfunction at play within VW. Firstly, it’s going to take another three years for V2.0 of VW.os to launch, an eternity in a consumer market used to massive annual updates from the likes of Apple. Secondly, per Reilly Brennan’s excellent Trucks newsletter:
Volkswagen board member makes independent AV software claim in Reuters report (link). 'We’ll make the bulk of the software on our own in the future.' This is most surprising for two reasons: the board member seems to have forgotten VW's large and expansive commitment to Argo AI (along with Ford Motor Company), and it further confuses the software direction of the company -- at VW now there's the Car.Software group, Project Artemis run by Alexander Hitzinger, the planned VW.OS software architecture group, and whatever project this board member is thinking about. More software is a good thing on balance, but VW's messaging on all of its various projects has been less than clear.
Why it’s interesting: Super bowl advertisements have almost become a bigger spectacle than the game itself. This year, Jeep gets political.
I wrote this piece on the night of the Super bowl, and since then it appears that ‘The Middle’ has been pulled by Jeep from both its official Youtube channel and website. You can still watch it here. What I can only guess about this move is that it illustrates the risk I discuss below for brands to be seen as being overly political, and the potential fallout that can ensure. It’s been replaced by a sickly, car-centric and desperately watered down piece called The Road Ahead. More’s the pity – for the background on how The Middle came about and how FCA CMO Olivier Francois chased Springsteen for years, it’s worth reading this piece on AdAge.
Rather like family gatherings, there’s an unwritten rule in corporate marcomms that you avoid subjects that are likely to inflame and offend, like sex, politics, and religion. But increasingly this butts up against a pressing question: can brands afford to stay apolitical? Trying to please everyone, to be vanilla, to fence-sit, to say it’s nothing to do with us, no longer cuts it with many consumers. Show me a brand that wants to appear value-less and is not prepared to take a stand in 2021 and I’ll show you a brand that’s destined for decline.
Jeep likes to position itself as the brand on the back of which modern America was built. It intertwines itself with the idea of freedom – both the freedom that automobile provides, and that America represents as a country. On home turf, it’s a brand with a clear identity and a strong set of values.
Even so, some may be surprised at the overtly political nature of this poignant, beautifully-shot Super bowl advert dubbed ‘The Middle’.
While the irony of setting the ad to the music of Bruce Springsteen, who joked he’d leave the country if Trump was re-elected, is not lost on me, it’s nonetheless a rallying cry for Americans to ‘re-unite’ and ‘find the middle’ ground.
The ad demonstrates an awareness of Jeep’s deep connection to the image of the United States, and of its role in shaping American culture, and takes a stand for unity at a critical point in American history.
Risky? Absolutely. But reckless? To this European onlooker at least, it treads a fine line, but one which is altogether less tone-deaf than BMW’s “Ok boomer” which I discussed in Looking Out #23.
With ‘The Middle’, Jeep has acknowledged the division within its homeland, is honest about the hurt that people are feeling, and offers itself up as part of the solution. Risk or recklessness aside, that’s simply brave.
That's it for this issue. We love feedback (positive and negative), and to answer any questions you have. So email Joe or Drew and we’ll get back to you.
If you like Looking Out, please forward it to people and send them to this link to sign up.