The automobile business has become a technology business with the advent of driverless cars that learn on their own via artificial intelligence. Now we have learned that Ford is involved in working on a cloud-based central monitoring system that will revolutionize transportation. There are privacy implications too, where governments will know where your car is at 24 hours a day.
From a technology standpoint, this cloud system will help prevent accidents, keep traffic moving, enable smart intersections and promote environmental advantages by bringing more efficiency to every transport mile.
Ford Motor Company President and CEO James Hackett discussed this concept this morning at the Bloomberg Global Business Forum in New York:
Three Transformative Technologies
Ford’s advantage in the future is that it’s got in its hand in three technologies that have been transformative. The first is the nature of propulsion which is moving from gas to electric. It might surprise you that less than 5 percent of the market right now is electric, but it’s estimated to be 30 percent in the near future.
The second technology has to do with robotics. You’ve heard about AI where the vehicle is so smart that it can drive itself in the future. The third technology, which isn’t as public, is the notion of a cloud-based system over the vehicles. The confluence of the three of these technologies means that we can now design transportation systems differently and with a system that enables and empowers a better CO2 outcome.
A New Cloud-Based System Being Developed to Control All Driverless Cars
This cloud-based structure is something that hasn’t been here and what it allows is the vehicle and the city to now have a connection. I was in a discussion yesterday with Prime Minister Trudeau and he asked while we were sitting in a traffic light late in the evening when there is nobody in the intersection, why does the red light stay on. In the future, the vehicle will be mediated through intersections like that with this smart system.
If you are an investor looking at this it will be over an $11 trillion industry. This is why the tech industry is so interested in our business because it’s a systems play of the smart technologies of the vehicle and the environment coming together. It’s talking about building bandwidth so the vehicles can communicate, 5G is really important. It’s also about making smart intersections so that the navigation of the vehicles are safe.
Then a third idea is parking where we can have the vehicle communicate with parking spaces. You lose more fuel efficiency trying to find a parking space than you do being stuck in traffic.
Combination of Vehicles and Technology Now Defines the Car Business
I look at the car business as a combination of vehicles and technology which is what’s defining it in the future, versus just thinking about it as a pure vehicle. Think of it this way, the cars have a number of computers and software in them today but the way they are in the future is really rolling computers. You have to think of the business differently because of that.
Ford Committed to be “In Market” with a Driverless Car by 2021
Ford is committed by 2021 to be in market with a driverless electric car. But this is a marathon, the cars will be super smart and they learn. The way they learn is by being driven. When they hit the market they will be safe, probably have narrow assignments as to what they can do, but over time they will expand.
The great thing is that when you hear about serving the world, this is going to allow us to do things because the vehicle is intelligent, like getting goods to people that couldn’t get it, helping people have jobs that don’t have transportation today or helping take older people to the doctor. This kind of assistance will be available with that technology.
This aspect of the car business is one where there is no profit yet, the technology is new, the design of the systems is emerging, but it’s where all the future will be.