The Global Auto Industry is Going Electric, Intelligent and Autonomous not Because They Want to - but Because They Have No Other Choice...
We all know the arguments and the advantages of moving toward electric, intelligent vehicles: Safety, convenience - and above all, a huge long-term reduction in greenhouse gasses.
Even so, concerns remain about an abrupt shift from Big Oil and the internal combustion engine that has been so much a part of the global economy for the past century. Consumers, faced with trading in their cars for an EV, still face an inadequate recharging infrastructure that leaves them suffering from "range anxiety." There are concerns about the ability of the electric grid to cope. Manufacturing and assembly plants need to be retooled and relocated, at huge cost to the auto makers. The UAW and other unions face disruption and job losses for their members. Environmentalists protest against construction of new, polluting, battery factories. Batteries, in turn, require base elements and rare earth materials that aren't currently available in the US, leaving supply chains potentially vulnerable. And safety concerns persist as self-driving trucks and cars appear more frequently on our highways.
But it's important to realize that the enormous green and digital transformation that is occurring in the global auto industry is not primarily concerned with either consumer demand or auto industry preferences. Public support for electric and autonomous vehicles is still quite low, and for the most part, the automotive industry would have been perfectly contented to continue manufacturing the same combustion engine vehicles that they had been making for the past one hundred years.
Unlike traditional product development, though, the development of EVs and connected and autonomous vehicles are not being driven by consumer demand. These new technologies are simply an integral part of an irresistible global juggernaut of digital innovation (smart phones, AI, the Internet of Things, the Cloud...) that has finally overtaken the transportation sector.
This digital transformation began with a series of revolutionary changes that included the emergence of Tesla (a technology company that also makes luxury electric cars); Uber and other Transportation Network Companies (TNCs), which demonstrated that taxis - and even individual car ownership - is no long necessary; and Waymo (Alphabet's self-driving vehicles that leverage Google's machine learning capabilities) and other AI-based companies that have moved to incorporate transportation into the Internet of Things (IoT), all connected through edge computing and the Cloud.
Add to this the climate change concerns that prompted governments around the world to set stringent vehicle emissions targets, and China's emerging prowess at manufacturing advanced electric and self-driving vehicles (and the new batteries that power them), and the traditional western auto manufacturing industry has found themselves being pulled kicking and screaming into the modern, competitive, electric and digital world.
As consumers, we're just along for the ride, because innovation, investment, geopolitics, and practical necessity, are driving the world toward a completely new economy - where electricity is the new oil, powering AI and self-driving vehicles that are integrally connected to the IoT through the Cloud and ultimately tied into Smart City ecosystems.
It's a brave new world, but like the Internet, smart phones, social media, and AI - it's coming whether we, as consumers, like it or not.