Within ten years your car (or truck) is going to be put out to pasture. And, while it is there, your new car will drop you off at your restaurant and then go find the cheapest parking space to wait for your text to come pick you up. 
The automobile and its related industries are about to go through the largest inflection point in its history, which goes back 120 years. For you and me, it’s going to be fun and it is starting now.
Inflection Point. I first wrote about inflection points in my article about universities and Massive Open Online Courses (MOOC). Strategic inflection points are times in the life of a person, business, or industry when all the rules change and to survive you must substantially change, quickly. To the uninformed and unprepared, inflection points come as a surprise.
Strategic inflexion points in industries are caused when changing external forces meet viable, disruptive innovations and then a completely new industry structure forms. Like a line of dominoes, once one falls, it’s just a matter of time until everyone is affected.
This is happening in the auto industry right now.
Tesla Model S
Where is the Auto industry now? In an article in Fortune Magazine called 21st Century Corporation – Every Aspect of Your Business is About to Change writer Geoff Colvin describes how Tesla is changing how the auto industry functions. Tesla, which has no costly dealer network, lets buyers design and order their cars online. Because it is an all-electric car it is less costly to assemble. And when there are problems with their cars, they can often fix the problem by sending software updates to the car through the mobile-phone network. As Colvin writes, “General Motors creates $1.85 of market value per dollar of physical assets, while Tesla creates $11.00.” Tesla is leading a major disruption in the auto industry.
At the same time, there are major demographic changes afoot. Fewer younger people are getting licenses as many millennials are moving into cities and choosing public transportation, which is much less expensive. And many older Americans are becoming more tech-savvy and are interested in the potential and safety of self-driving vehicles.
When will Self-Driving Cars be Ready? Tesla and Google are moving rapidly. Elon Musk, the founder and President of Tesla, says their self-driving car will be ready for regulatory scrutiny in two years. (Fortune 12/21/15) He then believes it will take five years for regulators to give their final approvals. The U.S. Department of Transportation National Highway Safety Administration has already established five levels of vehicle automation. Musk’s Tesla is focused on the highest level – “Vehicle is designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip. This includes occupied and unoccupied vehicles.” Right now four states have laws that permit self-driving vehicles and 13 more states have laws pending.
Reasons Self-Driving Cars Are Better. Google and Tesla have “autonomous” driving cars on the road right now. These are essentially “auto-pilot” vehicles. One Tesla Model S car with rally drivers in it drove from Los Angeles to New York City last fall in about two days. And the car steered itself 96% of the trip.
Here are six reasons self-driving cars are better.
- These cars have GPS technology that gathers information quickly and adjusts faster. Cars will have several cameras and sensors that keep track instantly of what is happening around the vehicle. And new vehicle-to-vehicle (“V2V”) technology allows cars themselves to communicate with each other.
- These cars are just better drivers. They keep their “eyes” on the road all the time. They keep steady speeds, which uses less energy. They drive straight in their lanes, no swerving. They do not fall asleep. They can process information while driving without being distracted. And they will park themselves – as many of you have seen this feature is now available in several brands.
- They are much safer and will have fewer accidents. Google test cars have driven 1.4 million miles on public roads and had only 17 accidents, and all 17 caused by the human “pilots”! Each year we have 6 million car accidents in the U.S. and 94% are caused by human error. One study concluded that for every 10% of our cars converted to self-driving vehicles we will save 211,000 accidents and 1,100 lives.
- They can greatly increase traffic and space use efficiency. In a fully utopian and autonomous driving world, the cars would not need road signs and stop lights. They would communicate with each other and synchronize traffic patterns. They would not have to stop at intersections. Because of the V2V communications they could fill-in space during rush hour more efficiently. And, parking becomes much more efficient because cars will automatically locate open spaces closest to your destination. Tesla offers this now through their onboard app called Summon.
- Not only will self-driving cars make drivers’ lives safer, they will make life more efficient. You will be able t
o read, do e-mail, or rest while your car does all the work. You could even have meetings like the one pictured in this luxurious Mercedes self-driving car under development. - Self-driving cars will be a huge benefit to people with disabilities, senior citizens, and younger drivers who are today most easily distracted with smart phones and text messaging.
One Question Remains. It is now clear to experts the self-driving car will be a reality. The technology is here and all that is left is the tweaking. So the final question is, how fast will humans let go of their steering wheels and leave the driving to the car?
