Looking Out #13
|Drew Smith||Jan 14|
Tuesday 14th January, 2020
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!
Why it’s interesting: Conventional wisdom said that new EV brands would disrupt legacy auto. Instead they’re flailing. For the legacy auto industry, its emissions regulations and EV sales causing headaches. Get set for a bumpy 2020.
It looks set to be a year of reckoning for the auto industry. On the one hand, I’ve returned from CES seeing little sign of progress. Not from Fisker’s latest rebirth. Or Faraday Future’s latest attempt to make themselves seem real. Or Byton and their ‘it’s finished now, honest’ M-Byte and that screen. The reality is that, much as a host of electric-powered start-ups have threatened to change the world, building cars, profitably and at scale is hard – and as this article in Automotive News points out, the signs aren’t at all promising for most of the disruptors. For some, things look very dark indeed, and it’s unlikely they’ll see out 2020. And yet, this doesn’t mean it’s plain sailing for the legacy auto companies, either…
Sure, CES showed there were definite signs of creative life at BMW. But Mercedes’ AVTR, complete with its bionic flaps (yes really) and Chrysler’s rushed-looking Airflow were good illustrations of how more experienced brands can turn out dud concepts (check out Drew’s piece on the issue with concepts, lower down the page). But the real issue facing the established auto industry in 2020 is European Union fleet-based emissions fines. To comply, most auto makers will introduce a raft of electric and plug-in hybrid models to their ranges. They’re needed, as their zero or low CO2 emissions ratings will help offset high-polluting (but typically high profit) vehicles in the range. Miss the average the EU has set for each brand and they’ll pay swingeing fines.
Problem is, Audi, Mercedes and Jaguar have all introduced electric vehicles already. And they’re of the SUV format consumers apparently can’t get enough of. But while Tesla’s model 3 continues to sit in top 10 best seller lists in several markets, Mercedes managed to sell just 55 EQCs in Germany in November, and has delayed the car’s introduction into North America to focus on European markets. Right. The E-Tron is doing better – selling on average selling around 1500 cars per month. But that’s across the whole of Europe, where Audi on average sells 60-70,000 vehicles a month. Not really enough to put a dent in a fleet emissions average.
It suggests we’re heading for a crunch. Customers who really want an electric car and have cash are mostly buying a Tesla (it would seem). And most customers still don’t seem quite ready for a full EV. Which means incentives may be needed to generate sales, and more affordable models are desperately needed. Which is tricky, because big batteries – to answer consumer range anxiety – are expensive. Some brands are already challenging the approach. Mazda – about to launch its MX-30 EV, and Mini with its E – have gone against the Tesla/Audi/Mercedes formula of big battery / expensive car. Mazda suggests that – for both cost and the environmental reasons – the ideal battery size is around 35.5 kW. But will customers go for a car with just 120 miles of range?
Looking out from Europe, both for the start-up brands and the legacy auto makers, things look like they’ll be tricky in 2020. Backed into a corner by the huge investment needed for EVs, the requirement to sell the high-profit but higher emissions performance cars and SUVs to fund it, and yet not able to afford the possibility of Billions of Euros in fines, something’s got to give. A rocky road lies ahead.
Why it’s interesting: the story of the last wave of true American behemoths is not just a fascinating tale, it holds cautionary advice for those designing products today.
Every now and then, a piece of writing comes along that sits at the very nexus of your interests. This is one of those times.
For years, I've explained to people that I got in to design research strategy, rather than designing cars themselves, because - after discovering I couldn't really draw them - I realised I was fascinated by the stories we tell about them. Like, for example, why we fall in love with our mum's Renault Virage or a cantankerous old Mercedes, while a gazillion dollar supercar can leave us totally cold.
These stories of attraction and repulsion operate at the level of cultures, too, and I've long been fascinated by the second coming and decline of the American land yacht, epitomised in no finer style than by the 67-68 Cadillac Eldorado, seen above.
So over the holidays, I was delighted to come across this remarkable piece of research by Paul Niedermeyer that charts the rise and fall of the Big American Car.
Apart from being a great read about the intersection of cars and culture in the era of American exceptionalism, it also holds some cautionary lessons for folk in the business of designing and building cars today.
First and foremost, it pays to remember that you are not your user. With their increasing independence and need to navigate the new urban sprawl, women became an important market for manufacturers. It was a market that majority male product planning and design teams failed to appreciate to their great cost, ignoring the nimble, small and spacious cars that might have won women over in favour of heaving, dim-witted (and yes, sometimes breathtakingly beautiful) behemoths. This ignorance underpinned the first death throes of the Big American Car.
The second lesson concerns being on the right side of history. For while the Big American Car had a revival in the late 60s and early 70s, it was the last cry of a dying beast and a deeply conservative reaction to the riptide of change running through American society. Cars like the Imperial and Caprice (the biggest of the Big American Cars produced, respectively, by Chrysler and Chevrolet) offered to shield you from the troubles of the world. But the realities of the Yom Kippur and Vietnam wars, the continuing liberation minorities, and their legion consequences could not be muted. The oil crisis and its chilling effect on consumption was the final nail in the Big American Car coffin.
There's so much more great stuff in this article, including an explanation of the Great Brougham Epoch and how it gave birth to the Stutz Blackhawk. I encourage you to dive in.
Why it’s interesting: a wave of recent retreats suggests that Auto and Mobility brands aren’t Hopelessly Devoted to shared mobility, unless it makes business sense. And right now, in many places, it doesn’t.
As I took my last spin around North London in a DriveNow Mini Clubman, Olivia Newton-John was belting out Hopelessly Devoted To You, her headliner from the movie Grease.
Guess mine is not the first heart broken My eyes are not the first to cry I'm not the first to know There's just no getting over you
The closure of DriveNow, BMW and Daimler's car sharing service, in London (£), the United States and a number of European cities, is not the first, nor will it be the last. Just this week, scooter sharing business Lime announced that it was withdrawing from 12 cities and laying off 14% of its workforce as it tries to find a profitable business model. Bosch is shutting down Coup, their scooter sharing business, too.
I know I'm just a fool who's willin' To sit around and wait for you But baby, can't you see There's nothin' else for me to do. I'm hopelessly devoted to you
The challenge continues to be the utilisation of the vehicles provided by these services. If a car, bike or scooter is waiting around for someone to love it, or at the very least drive it, it's costing the service provider money. So the retreat from some markets is about focusing on those that have sufficiently high utilisation to make the services profitable. Said BMW Group CEO, Oliver Zipse:
“There are potentially ‘disrupting’ business models that rely on car usage rather than car ownership, but they are focused on very specific areas with high population densities to ensure high utilisation rates.”
My head is sayin', "Fool, forget him" My heart is sayin', "Don't let go Hold on to the end" And that's what I intend to do I'm hopelessly devoted to you
Some are cheering - Auto sector analyst Max Warburton called it a "welcome outbreak of sanity - as the retreat signals that car manufacturers are getting the message that they should stick to what they know - manufacturing cars. Daimler CEO Ola Kallenius went so far as to state that the company's "basic business model" for the next decade is individual ownership. But the struggles faced by DriveNow, along with Lime, Coup and Uber should be a warning to those still banking on shared mobility to build their bottom line.
It's not all doom and gloom. Volkswagen's Moia service is jumping the pond to London, and Geely's Caocao service continues to expand in China and is dipping its toe in to Paris(). The wave on restrictions on car ownership in major cities may also, in time, provide a welcome boost to the shared mobility sector. Yet despite all the crazy that the first couple of weeks of 2020 have brought, it seems you still can't hide from the basics of running a profitable business.
But now, there's nowhere to hide Since you pushed my love aside I'm out of my head, hopelessly devoted to you Hopelessly devoted to you, hopelessly devoted to you.
Is a sit-down revolution around the corner?
Why it’s interesting: micromobility has been mostly about e-bikes and e-scooters, so far. But there’s a nascent set of interesting new product types emerging.
Think micromobility, and you’ll think e-bike or, perhaps more likely, e-scooter – popularised by the likes of Bird, Lime and Tier. But one of the more interesting trends to watch during 2020 will be the rise of a more diverse set of sub-car sized vehicles. Vehicles which are not just electrically powered, but provide the rider a seat or shelter canopy, too.
At CES, we saw for the first time Bird’s Cruiser, which blurs the boundary between a moped and a hybrid bike. Interesting it has pedal options, to get round various city/use enironment regulations. Meanwhile Segway showed several ride-in (rather than ride-on) vehicles – including the S-pod – a chair that’s highly reminiscent of Toyota’s i-Swing. Pity someone crashed it into a wall during the demo. Toyota itself announced not just a ‘woven city’ that’s it going to build, featuring an adaption of the e-palette delivery concept we saw two years ago, along with a series of what it calls ultra compact BEVs, including the previously seen i-Road, which we’re still hoping makes it into series production. It’s a vehicle I could actually buy for city and transit station commuting.
While it might not be trying to popularise a sharing economy, for pure design, my current favourite is Cake – the Scandinavian brand has developed a series of bike/mopeds with a modular design approach and a stunning aesthetic.
It’s easy to get caught up in the e-bike/scooter dominated landscape, but to drag committed car users out of their vehicles, exploring the space above a scooter but below a car remains largely untapped. Drew’s article above illustrates the perils of make sharing work with conventional vehicles, in the here and now. So the business economics of how these new typology vehicles – typically much more expensive than a scooter – is clearly the biggest hurdle. But luckily it isn’t going to stop some brands trying. And as we look to break out of our auto monoculture, we hope there’s space for at least some truly new vehicle typologies in our future mobility mix.
Reflections on CES 2020: is the tech industry lost?
Why it’s interesting: CES is the annual showcase for all the next big things in tech. But it’s started to pose more questions than it’s answering. And at its worst, shows a tech industry lacking vision or responsibility.
2020 started with a week at CES in Las Vegas for me. After a red-eye flight back and a weekend at home to reflect on what I saw, I’m underwhelmed. The step-change breakthroughs in tech over the last twenty years have set up an expectation problem – we’re all looking for the next big thing. This short attention span – of the stock-market, investors and consumers alike has led to a scenario where the tech industry is now on a tread mill of smaller! Thinner! Faster! More-connected! The question – especially surveying the array of larger, thinner, ‘bendier’ Samsung and LG TVs – why? And to what end?
The answer to this issue might seem easy: more disruptive innovation please. That the tech industry can now build sophisticated products and services that neatly combine hardware and software, and that consumers will buy, isn’t really the question. It’s the bigger contextual awareness and sense of responsibility that’s missing. There is real irony in the array of tech product at CES promising to improve the quality of your sleep, or help you stay mindful, or tell you where your kids are, or stay on top of mental health… by applying more technology to a problem that – for many people – is being caused by over-use and over-reliance on technology. Any acknowledgement of a wider, growing sense of tech’s malign influence was missing from view.
And this is without tackling the elephant in the room – sustainability. Yes, there were glimpses of approach changes – Samsung’s upcycling of old products into new – but overall there’s a studied ignorance here, of the feeling that sustainability isn’t yet a real issue for the tech industry. But soon the cat will be out of the bag that – to take the internet, its servers and email traffic alone – it has a huge carbon footprint – 2% of global emissions and growing. Take all tech products, the web, servers farms together and you’re looking at something greater than emissions from aviation. Gulp. And that’s not even considering the plastics, precious metals and throw-away packaging of many tech products. An issue for the industry in the same way that they are for auto – perhaps more so, when you consider the short lifespan of tech gadgets. And I left wondering whether it ultimately makes sense to fly hundreds of thousands of tech industry affiliates to a city in the middle of a desert to look at new tech. CES, as an event, raises more than a few sustainability questions.
Yes there were highlights – a handful of bright ideas from the start-ups at Eureka park, particularly in the realm of products which help people to live independently for longer, or over-come a disability. And two giants – Google and BMW – showed the way with their outdoor exhibits. These were cleverly curated, presenting technology in a very human way, placing it in the background and focusing on the experience and impact it can have on the lives of users, to have fun or relax.
But we’ve spent the Christmas period with the Australian bush fires as a constant background news item, illustrating all too clearly how our planet is in serious trouble. I’m taking the view that action starts at home, so next year, rather than using up my yearly carbon allowance by the end of January, I’ll observe CES remotely, from the comfort of my desk in Europe. I don’t need a bigger TV anyway.
Pair with NYTimes: the decade tech lost its way.
Why it’s interesting: Tech journalist John Gruber makes a strident case against public concepts that promise the sky, but deliver very little of substance.
Anyone who’s spent time around automotive design studios will know the frenzied rush to the finish line ahead of a concept reveal at a major motor show. Tight timelines tighten chests and fray nerves as folk pour their heart and soul in to putting their collective vision on centre stage.
But what does that concept car actually say about the brand that produced it?
With CES and the concept car launches from Mercedes and Sony behind us, and the gentle jog in to the Geneva Motor Show in front, technology journalist John Gruber gives us pause for reflection on the value of public concepts.
In the face of numerous tech demos and speculative concepts that are in no way representative of products in the pipeline, and in the absence of any really exciting new products, Gruber tears the idea of a public concept to shreds:
Concept designs (and worse, concept videos) are a sign of dysfunction and incompetence at a company. It’s playing make-believe while fooling yourself and your audience into thinking you’re doing something real. Concepts allow designers to ignore real-world constraints: engineering, pricing, manufacturing, legal regulations, sometimes even physics. But dealing with real-world constraints is the hard work of true design. Concepts don’t stem from a lack of confidence. They stem from a dereliction of the actual duties of design.
He then goes on to reference a number of fascinating articles looking at Apple’s design process, and their noted lack of public concepts. This passage from a 2005 article called How Apple Does It stood out in particular:
Ask Apple CEO Steve Jobs about it, and he’ll tell you an instructive little story. Call it the Parable of the Concept Car. “Here’s what you find at a lot of companies. You know how you see a show car, and it’s really cool, and then four years later you see the production car, and it sucks? And you go, What happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory!”
“What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, ‘Nah, we can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the manufacturing people, and they go, ‘We can’t build that!’ And it gets a lot worse.“
Gruber goes on to say:
Either it can be made, or it can’t. If it can, show it when it’s real. The iMac wasn’t designed at the conceptual stage as a fantasy — it was something Jobs, Ive, and their team thought Apple could really make. Designing at the limits of possibility is one thing; designing unbounded by reality is another.
Apple doesn’t sell dreams. They sell products and services that change our lives in the here and now.
Go to any major auto show these days, and dream-like visions still pepper the stands. While the financial cost is relatively insignificant (what’s a million or two among friends?), the drain on the creative energy of the designers charged with their creation is incalculable.
At a time when the industry seems so bereft of new ideas, perhaps that energy could be better spent shipping, rather than dreaming.
Why it’s interesting: As my home country burns, George Monbiot turns our gaze to the future of farming in big stainless steel vats.
Continuing on Joe’s riff on sustainability, this article by George Monbiot for the Guardian caught my eye.
Between the collapse of soil biomes, continued population growth, dwindling supplies of phosphates for fertiliser and the need to drastically reduce the carbon emissions from agriculture, the future of farming is looking particularly bleak. But unless you’re a farmer, there’s no need to fret.
There’s a revolution in food brewing, quite literally, as scientists work to develop replacements or the proteins, carbohydrates and fats from which our food is built. Fermented in tanks rather than harvested from greenhouse gas-intensive monocrops and animals, these nutritional feedstocks and the factories that create them are up to 20,000 times more efficient in terms of land use than traditional farming.
Not long home from a vacation in Australia - where my family, immediate and extended - have farmed the land, I don’t take Monbiot’s foretelling of the destruction of traditional agriculture lightly. But the successive droughts and devastating bushfires tell me that the country built on the sheep’s back, along with the rest of us, needs a new, more sustainable path forward.
Why it’s interesting: looking for a cultural shift? These tech-led new year’s resolutions are an interesting way to think if you’re looking to change your approach to tech
I spent the Christmas break considering the impact social media, my phone and use of tech generally is having on my life. Good and bad. One of the most interesting pieces I read was this by Punkt.
Entitled ‘thoughts for the 2020s’ it contextualises the glamorous reputation that the ‘roaring’ 1920s had, with what happened afterwards. And asks whether we’re heading down the same road to an unsavory future, one hundred years on. Drawing out the disruptive changes happening in the media as a key aspect (in the 1920s it was the introduction of radio) and society’s inability to comprehend the impact of a new media (the web, generally in our case), Punk sets out a few ideas for new year’s resolutions. If you’re trying to rediscover a slower, less-hectic and less tech-presurised culture they make for a good set of resolutions:
Stop looking the other way. Take an active interest in the surge in electronic mind access, bearing in mind that we ain’t seen nothing yet.
Make those personal changes we’re always hearing about nowadays: keep phones out of the bedroom, limit social media activity, notice passers-by, always carry a book to read, etc. Instead of installing willpower apps, install willpower.
If you’re thinking of reducing your carbon footprint, consider the impact of media streaming.
And above all, reject the stampede. Tell people that you generally communicate with phone calls (it’s usually quicker – they can ring you back later if they’re busy when you call), tell your political representatives that you want them to rule the world – not Big Tech. Set an example for the next generation. And don’t feel weird. This is anti-weird.
Ford has a series of interesting opportunities open at its new user-centred D-Ford labs, based in Palo Alto and Detroit.
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.
If you’d like to meet other folk who are just as interested in where the automotive industry is headed as we are, think about joining The Automobility Group Slack community.