#CES2017: Aftermarket to the Rescue

Has it really been 50 years? Listening to a George Hotz Udacity podcast got me to thinking that the upcoming CES 2017 in Las Vegas will be a turning point in automated driving technology. It was just two years ago that Audi was self-driving itself from California to Nevada for CES 2015, but we don’t seem to have come that far in perfecting automated driving. In fact, the biggest headlines have come from people losing their lives in autopilot-equipped Tesla’s in the U.S., Europe and China.

Dying on the highway is becoming popular again in the U.S., with highway fatalities on the rise. Meanwhile, the U.S. Department of Transportation repeatedly intones the estimates of experts attributing 94% of crashes to the failings of human beings.

The 94% figure, which we are hearing more and more frequently, is part of the argument promoted, interestingly enough, by both Alphabet/Google and the National Highway Traffic Safety Administration. Both agree that humans are the source of all driving woes – or at least 94% of them – and therefore should be removed from those tasks. This is, of course, reminiscent of the complaint that business would be so much easier to conduct if it weren’t for those pesky customers.

Near the end of his talk, Hotz assesses the various paths to automated driving. He points out that he has met with multiple car maker CEOs, all of whom, he says, are at least five years away from delivering anything. (Hotz is the apostle of what he calls “shipability,” which he recently modified to “buildability.” His sub-$1,000 vision of semi-autonomous driving, though, has now escalated to $2,000+.)

He notes that the next closest prospects for building or shipping vehicles capable of automated driving are Alphabet, Uber and Tesla. He notes the recent departures of senior Google car executives and founders at Alphabet and concludes that the team, now headed by a former auto industry executive, is crippled and unlikely to realize the objective.

As for Uber, he questions whether funding sources have the stamina and tolerance to support the ongoing bleeding and burning for another five years with an uncertain outcome. With each passing quarter Uber looks more and more like a Ponzi scheme with no payoff… except for the passengers.
Which leaves Tesla Motors, with whom Hotz was unable to reach a development deal but for which Hotz harbors abiding respect. The bottom line for Hotz, though, is speed to market and in that respect the aftermarket rules.

With that in mind, one can’t help but root for Hotz’s success even if his semi-open source gambit allows him to take advantage of the open source community while preserving his core value proposition. Regardless of how you feel about Hotz’s open source strategy, though, his activities reflect the current state of automated driving development which is hard core research. (It’s worth remembering that Hotz is only currently offering aftermarket enhanced cruise control – Level 2 automation.)

Unlike Hotz, Polysync is offering a true open source development platform which the company has already begun selling to universities in the form of development kits. Both the Hotz and Polysync initiatives point the way to automated driving research expanding and stimulating aftermarket opportunities.

CES 2017 will see more dash-mounted solutions from Harman’s Navdy to Caruma, Nauto, Carvi and Brandmotion all designed to enhance driving with driver alerts, sensors, cameras and wireless connections. There will also be parking assist systems from companies such as Pearl Auto integrating cameras, OBDII connections and smartphone displays for collision avoidance, parking assistance and back-up camera applications.

Hotz is probably right that Alphabet seems to be losing its way, car companies are taking too long and Uber is losing too much money. But where there are lives to be saved, there are solutions to be sold and CES 2017 will be the place to find those solutions.

While you’re in Vegas you might want to check out:
http://tinyurl.com/zzf4qwm – Go NV: CES Summit on transportation.

Roger C. Lanctot is Associate Director in the Global Automotive Practice at Strategy Analytics. More details about Strategy Analytics can be found here: https://www.strategyanalytics.com/access-services/automotive#.VuGdXfkrKUk