Cars of the Future – Mind Shift & Market Shift

Imagine a fully autonomous car and assume the self-driving system has been tested and its reliability is much higher than any existing transportation modes. What features will a customer value? You may either want a large window to enjoy the scenery or you may want a screen for each of your fellow travelers. Maybe an in-built video gaming console with support for AR/VR. Will anyone mind the power rating of the engine or heated steering? I doubt it. There may still be a market for cars with steering. In the book Infomocracy, author Malka Older a future where nation-states may not exist and how democracy may change in the future. She also imagines an interesting mode of transportation – a vehicle called Crow. They are like flying, autonomous RVs, which can fly to any part of the world. You can anchor them to your office or any other place.

As a fictional author, you can let your imagination fly and dream a future. But what about the CEOs and leaders of the traditional car makers who are navigating a major shift in a market, so-called S-curves. In such transitions, the technology, features, and value of a product or service undergo a major change. The incumbents are disturbed. The value of electronics and the innovation that goes into the electronics and software brain which controls almost everything keeps on increasing.

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Source: Freescale Semiconductor

If you are a traditional manufacturer you reach a stage where your core competency and edge are lost. The engineering skills and the thousands of patents on IC engines, transmissions are no longer relevant. Suddenly you need to manage the 7+ Linux kernels that are running your platform. In a scenario, where most car manufactures fall short on the user experience of their infotainment system this is a tall order. Upgrading infotainment software in a car is not an easy task in most models. Mik Kresten (author of Project to Product) recently shared a post on Volkswagen hitting a roadblock in building the software for their autonomous car. The post has garnered interesting comments on the many drawbacks that traditional carmakers have to overcome. Also, how difficult it is to get the mindset, organizational structure, and many other things right to be a successful player in the newly emerging market for electrical autonomous cars.

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image credit: YCharts

The market valuation of Tesla may look like an aberration, but what we may overlook are the challenges Tesla has overcome.

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