California a Testing Ground for Where Automakers are Heading

by Jon LeSage

Fortune Magazine writer Michal Lev-Ram has a few things in common with Ford Executive Chairman Bill Ford, former Ford CEO Alan Mulally, Daimler CEO Dieter Zetsche, and BMW CEO Norbert Reithofer. Each of them see a huge paradigm shift coming up as vehicle manufacturers transform into what Ford calls “personal-mobility companies.”

During a business trip to California, Lev-Ram narrated her experience getting stuck in heavy traffic on the Interstate 10 in Los Angeles and visiting corporate campuses upstate in Silicon Valley and San Francisco. In “The end of driving (as we know it), the writer also lays out social and economic trends that are more intensified now in California but are also disseminating to urban centers around the country……..

  • Demographics are changing as more people move into cities, especially young professionals. Car ownership is very different story than it was for their parents. “The car is no longer the gateway purchase to adulthood,” says Sheryl Connelly, Ford’s global trends and “futuring” expert.
  • Automakers have seen it developing for years and have set up facilities in Silicon Valley. Ford’s office in Palo Alto is working on connected vehicles and open-source software; Mercedes-Benz has about 150 employees in Sunnyvale and their latest project has been Boost by Benz, which shuttles kids to and from soccer practice. Volkswagen engineers in Belmont are working on advanced-speech recognition and autonomous vehicles. Newcomers to the auto-making business, Tesla Motors and Google, are based nearby; Tesla in Palo Alto and Google, with its driverless pod car test program, in Mountain View.
  • California is seeing increases in public transportation use, bicycling, walking, and usage of carsharing and ridesharing services. Municipalities are supporting these efforts, such as Santa Monica and Los Angeles adding the “Subway to the Sea” light-rail line that will connect downtown Los Angeles to the ocean view in Santa Monica.
  • Major cities across the US are seeing more of their residents go without car ownership and using other modes of transportation. New York, Philadelphia, Chicago, and Los Angeles have, in that order, the highest percentages of households without a vehicle.
  • Ridesharing services like Uber are finding a lot of interest among customers in major cities, who use their mobile device to get picked up right away and delivered to their destination. That’s taking business away from taxi services and legal/legislative battles are building up. GM and Toyota recently announced that they’re offering car purchase discounts to Uber drivers who use their personal cars to do their jobs.
  • Increasing traffic congestion and concern over safety are the drivers behind the autonomous vehicle movement. Google and its allies claim that driverless cars will cut down on collisions and inefficient driving – and will even reduce the amount of space needed for parking as these driverless cars could be directed to better places to park. Google and its proponents claim that unmanned cars will cut down on accidents and inefficient driving and even reduce the space that offices need to allocate to parking (the cars could just move themselves around). Instead of fighting traffic, erstwhile drivers could be working on their laptops, reading, even doing sit-ups in the back of a souped-up mobile gym. “We think the self-driving car is going to work and be far safer than human drivers,” Silicon Valley venture capitalist Marc Andreessen said to Fortune. “In 10 years it will be quite common, and one day we’ll think it was lunacy we ever let a human behind the wheel.”

Jon LeSage, automotive editor, green initiatives at Automotive Digest, also serves as editor and publisher of Green Auto Market.



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