Ford says it’s becoming more than just an automaker.
Sourced through Scoop.it from: www.wired.com
For starters, this shows how technology driven Ford still is. People don’t buy auto’s, they buy transport, they buy entertainment, they buy safety, they buy prestige and they buy faster horses just for starters. They never bought autos. Interesting to have that come from one of the original mass market brands that set out to make motoring accessible to the masses.
IMHO the market for self driving cars is not the perfect market for a car manufacturer to be, especially in countries where they hold leadership positions. Here’s why:
– People buy cars as a means of expression. The car to some degree is a representation of self. A key part of that expression that has been sold to us for over a century is own your own car and feel how good it is to sit behind the wheel. What will people think of you based on the car you drive? Who wants to spend tens of thousands of dollars to sit behind a miniature entertainment screen. They have them on planes to pacify passengers who want to be at their destination, not in a metal sphere.
-Self driving cars, like hybrids, are more expensive. The LiDAR systems such as from Velodyne, currently designed for self driving cars add around US $8,000 to the cost of a car. Then there’s the markup!
-The car may no longer be a status symbol or a form of self expression, because you are not enjoying controlling it. Unless you consider it a status symbol to be able to watch a video or play games while traveling (which you can just as easily do on public transport) then why own one?
If the average person has their car parked 95% of the time and it is no longer an object of desire, then it becomes just another utility. As a means of transport we then have multiple choices including public transport, ride-sharing or car-pooling and more importantly new services that will come from the likes of Uber, Lyft and others.Taxi drivers ought to have a think about their futures too. Taxis will still exist in this future, but drivers would be redundant.
-A car is a depreciating asset unless it is a collectors item and by the laws of economics, that demands scarcity. I can see more people going for shared ownership models. So if its not a status symbol and there is no value in owning one, why buy one at all?
-So if people then go for a model where they rent access to a vehicle, fundamentally a driverless taxi (or public transport), this means that car manufacturers like Ford could see their market decimated. They could become global leaders of a market that has shrunk by more than 50% in a matter of decades. Of course that being the case, they won’t be able to buy cheaper components like LiDAR because the manufacturers won’t get the economies of scale that they need to bring the prices down to the level that working and middle class people can afford.
The good news is that driverless technologies could reduce the number of vehicles on the road dramatically as more young people chose to not own cars at all and use the most convenient service available at the time. That’s a good thing for us when it comes to traffic congestion, pollution and lifestyle in general. It would not be a good thing for Ford shareholders. IMHO of course:)