Hi, my name is Sudhi Uppuluri. I’m the CTO of CSEG, the founder of GreenRoute and the host of this podcast. Here is my conversation with Clay Phillips. Clay is the mobility lead at SBDC and has spent over 20 years of his life at General Motors, developing strategy to commercialize emerging technologies. So, I talked to him about what mobility means, what type of technologies he’s excited about and what picture this new mobility paints for us. Have a listen…
Thank you very much for talking with me today.
My pleasure.
I am glad you could be part of the technical conversation series we’re doing and really looking forward to talking all about mobility with you which is what you’re leading right now for the SBDC, Michigan. But could you give a brief bio of yours; you come from GM background? Don’t you?
I was with General Motors for about 20 years. About half of that was in product planning, portfolio planning & spent some time overseas in Europe, GM, Europe. I left the company a little over seven years ago and dove into innovation. I had spent the back half of my career at GM R&D, I had a hand in setting up GM ventures. So, it was all kind of early ” rubber meets the sky” type of work. At GM I had a great career, did a lot of interesting things, but as the more I got into R&D, tech commercialization and seeing out into the future and trying to have a hand in creating that future, I had the good fortune to work for Larry Burns. He was a great boss, mentor & friend and I think of him as a real visionary. He taught me a lot about how to think about the future and how to think about mobility very broadly. So I left about seven and a half years ago and I’ve been doing independent consulting. I’ve been doing a startup coaching and then three years ago, I joined the Michigan Small Business Development Center as their Mobility Technology Lead and in that capacity, I am supporting the entrepreneurial ecosystem in this and then building and curating a portfolio of early stage automotive and mobility starters.
Great. And that’s how we met.
That’s how we met.
So, you mentioned thinking about mobility broadly, so maybe that’s a great place for us to start. what does mobility the word mean to you?
Well, within the work that I do, and even what I learned from Larry, It’s not just cars on roads. It’s air, it’s land, It’s sea, it’s under sea. It’s moving people and it’s moving goods. It’s personally owned or public mobility mechanisms. So, it’s just about any as broadly as you’d like to define it. I think most recently when we talk about mobility though, it’s been pushed out even further to include the data, the mobility of the data that enables physical mobility. So it’s, and as we get into the more connected world of value of the data and the importance of data of all types becomes critical to being able to move people and things efficiently and safely.
But this has been around. For a while. Right? So cars, airplanes, and trains, they’ve all evolved, what is this term mobility particularly focus on or entail? Like, how is it different than the automotive industry that we’ve talked about 20 years ago? 20 years ago, no one, I don’t think they use the term mobility, right?
We had a narrower definition when you threw at 20 years ago. So that was 2001. Stanley Kubrick made a very famous movie “2001 Space Odyssey”. We didn’t have spaceships going to Jupiter in 2001, but he did see some things coming like video phone conversation. It was a scene in a movie about that. And if you think of HAL, it’s like a souped-up Alexa, so it could be “Open the pod bay doors, Alexa”. But the mobility definition of 2021 and the vehicles that were there and the things that were done for mobility, I think of it as very siloed there’s buses and trains and airplanes and cars and bicycles and all these things, but they were largely independent mobility modes. They weren’t interconnected and for the vehicles themselves in the US at least it was mostly cars, gasoline burning large vehicles unconnected, not terribly intelligent, increasingly electronic, but still fairly isolated. New 2001 vehicle was 1980s, 1990s engineering technology. So not too clever. Getting more efficient, perhaps, but it was still a very isolated, you buy it, you lease it, you drive it, very underutilized. The numbers that we keep hearing are 4% to 5% utilization and in that model, well, I said it was very siloed and each mobility device had a purpose, but there was no multimodal or intersectional process.
So when I first heard the word mobility, it was around electric scooters in the city, or mostly around that about 5 or 7 years ago is when I started hearing the word mobility before then it was still Automotive industry. Electrification was of course coming hybridization and fuel economy. Automotive industry was always focussed on fuel economy, more CAFE standards. But the mobility term that I remember hearing was 5-10 years ago.
It’s micro mobility.
When were the car companies using the word mobility, much earlier than that?
Hard to say. I mean we participated in the second and third DARPA autonomous vehicle challenge. So, I think maybe we were using the term more. To use that 20 or reference point OnStar was just a few years old. The first analog system was coming out. The first gen Prius was being launched and if memory serves GM we’re taking back the EV One’s. So it was just I think mobility, as I said earlier had a fairly narrow definition and it depended what part of the sector you were in. So if you were working for a metropolitan transit authority, you had a definition of mobility. If you are in the auto industry, you had a definition of mobility. If you were a motorcycle maker, you had a different definition. So it was very siloed. And the transition, when I think that the term has broadened out in the past, let’s call it 5 or 10 years to think more broadly about how do these different physical assets interact? How does the data interact? How does the data enable interaction with these different physical assets? And then in the world of advanced mobility where you see more we can use the ACES framework that autonomous connected electric shared, which is a common framework. Think about new mobility systems. It’s how does all this, how does this all come together? And then what can be done to make it significantly safer, significantly cheaper, significantly more sustainable, more equitable, more accessible, and do something more dramatic than the incremental annual model year improvements. It used to be lower, longer, wider and then it was now it was more like more tech features or more.
What’s the trigger technology, is the trigger the fact that now we have lot more information or what do you think created this knee in the curve and shift in framework from just evolution of cars to, ” how we move goods and people around?”
Well, I think a lot of this is technology enabled.
You think it’s the growth in the Silicon chips?
It’s the technologies that are clearly involved. Just like the ability to collect and process a lot of data, cleanly and safely. It’s the ability to take mass out. It’s the ability to get better about batteries and controls, enable better electric vehicles, but what I really think triggered it wasn’t the technology. It was outsiders. It was tech companies. It was startups. It was whether it’s Google, Waymo, Uber or Lyft, it was people on organizations that looked at the transportation industry, maybe this helps with the definition, it was transportation and now it’s mobility, but they looked at this and said this is really messed up. There’s tons of waste. Lots of people are dying and getting hurt. It’s resource intensive, it’s polluting. We can do a better job ormaybe a better job can be done. And so there’s an opportunity here and there’s a challenge. And going back to the 2021, that was a few years after Clay Christianson wrote his first book. So I think there was this whole people were starting to think more about disruption and looking at incumbents and established industry. As well this is right. This is the right target. And so that’s I think it was more people that were risk oriented and we’re playing with business models that were tech enabled and being able to put these things together in a way that would say we can do something big here and make a difference.
I remember when Uber said that autonomous vehicles is the way the profitability for them. So they looked at it and they were like, all right, well we’re losing a billion and a half a quarter or something but let’s make this vehicles autonomous then we don’t have to pay the drivers and then we can do positive.
Yeah. I think they used the word existential.
Yeah. That’s the first time that where I saw that some of these technologies are not only necessary but they were a disruption in the business model because you needed to take that cost from the equation away. Do you think that they were one of the key disruptors coming into the transportation industry?
I think it was more the Google X that became Waymo. I think they’re the ones that really started getting this thing moving. Critical, but the Uber folks kind of hyped it a bit and it got carried away. People were saying we’re all going to be driving and autonomous pods by 2021. So it’s like the same probably Kubrick made this made the forecast and missed it by time maybe they missed it also by the time. But I think, what I’ve observed over the last year or two in the pandemic, and this is a broad statement. I think our work on autonomy may have been scaled back, work on electrification is accelerated, particularly in commercial vehicle applications we’ve all heard. Some people say autonomy is taking longer because it’s harder than we thought. And I don’t quite buy that. I read Larry’s book autonomy last year or two years ago and he lays out a very good chronology of all of the work that was done on this over decades. A lot of smart people doing a lot of interesting and important experiments and I think if you went around and quizzed a lot of them, they would say we knew it was hard. Maybe we didn’t know exactly how hard or that we’ve had some assumptions that maybe we could get through this. And now we can’t. I think everyone who’s been in that space and has been serious about it so that this is hard and it’s going to take a while and it’s not going to be level 5, robo taxis, ubiquitous in all areas and all weathers. And also we got a little carried away with expectations.
For autonomous the way I think about it, it is is structured environment versus unstructured. So computers are great at crunching large amount of calculations. So you give them chess, which is structure environment they will eventually beat you, which happened. But when you give them an unstructured environment like a conversation, then it becomes very easy to trick the computer and humans are much better at it because we can deal with unstructured environment. So my take on that is that, autonomy will come but it won’t be the general robot taxis wanting everywhere, but perhaps in a structured environment, maybe it’ll be the Chicago loop where the taxis are running in a pre-determined grit.
It’s already being used. my understand either profitably or generating value, I’ll say that in off-road applications like mining agriculture. So, I think it’s finding the use cases. It’s merging the creativity of the technologist with the financial rigor of it has to pay for itself and then finding those use cases and those applications and to and taking the experiment. And if you can experiment someplace without putting lives at risk. I get a little nervous about autonomous semi-trailers running down the highway at 70 miles an hour. That makes me a little nervous, but I can understand the use case but if it’s tested on mines and farm fields where no one’s going to get hurt or likelihood of someone getting hurt is low, then that can validate the technology. And then it’ll earn its way into applications where it makes sense.
Right. It seems like autonomous, is a technology that came in first and then now looking for a killer app. You used a framework or an acronym earlier. You said ACES so it’s Autonomou,s Connected, Electrification and Shared. Shared I’m assuming is what Uber and Lyftis.
It could also include mass transit . I think the idea is increase the utilization of a physical asset to do work, to take people or goods someplace. And it’s that the idea around that is if you can integrate all of those with the technology enablers for each oneYou can build a better mobility ecosystem in those places where it can have meaningful value and it’s my understanding that the Google X team, their principal motivation and objective around autonomy was save lives and reduce injuries. That was job one or that was the prime directive.
because computers are safer drivers.
in theory. We’ll see. But that’s the motivation. And I say I’m an optimist but I’m not a forecaster .I think there are going to be incremental. It’s an incremental industry except for the transformers. The disruptors don’t think that way. So they bring not only technology to the table, but they bring a mindset to the table that I think is at least a decade has rattled the cage of the incumbent autoindustry. But I think the potential to bring creativity, business model creativity, technology creativity, financial creativity, to solve this problem that ultimately we can create much safer, much cleaner, much more equitable mobility systems and that’s good. That’s going to generate zillions of dollars of value and save lots of lives. But where I think people get ahead of themselves, if you are working on a specific technology you’re going to promote that. And this is where we get confused. I think we’re trying to get out in the front of where you need to be. And then that creates hype. And there’s a lot of reasons why when that happens.
I might put a full self-driving car, the term full self-driving car in that category.
Somebody might want to do that. And then when they don’t perform as branded, right, then you get into trouble. But there’s a promise out there and it’s just going to be lumpy, it’s I don’t think we’re going to have a claim. The current system was built up over a hundred years. It’s got a lot of stakeholders that have a lot to lose by the system changing and so one of the things that I’m a little concerned about is the proponents of advanced mobility whether you’re a businessperson or a technologist, you can underestimate the resistance that the incumbent industry will put into the system.
So when you mean advanced mobility, you meaning the outsiders that are not the big three automotive?
Well, there are people working in incumbent OEMs on advanced vehicles. They’re working on all the things, all the components of ACES. I think they have different metrics. The companies have different valuations. They have different resources. They have different objectives. To a large extent their business model hasn’t changed in a hundred years. It’s to design a vehicle that’s appealing, make it in big numbers, sell them through dealers and then have the customer come back in three or four or five or six years. Wash, rinse, repeat. And the transformative companies from the outside the innovators or the new hire horizon their business model interview innovators are saying, we don’t have that baggage. We’re not starting, we’re starting at a different point. And that leads to different outcomes. But I’m not trying to be a downer on this, but I think you’ve got oil and gas industry. You’ve got dealers. Ambulance chasing lawyers. You’ve got all kinds of sectors of society that have done well and continue to do well in the transportation ecosystem or the old mobility system and they’re not going to give it up easily or quickly. So I think there’s, sometimes you can underestimate how much subtle pushback can come in through what sounds like reasonably good arguments. They’re pushing back and trying to slow things down and that’s so that I think that gets that’s part of this where are we in 10 years or 20 years or 30 years, I have no idea. There are professional forecasters that do that, buT I’m an optimist. I think we’re going to get to those significant improvements in the mobility system, but it’s going to be big leaps and there’s going to be setbacks. I think there’s this back pressure in the system that is going to slow things down more than the optimists expect. So I’m trying to be, I’m an optimist with a tinge of realism thrown in there.
I know it’s hard to forecast and paint a picture of the future, what technologies are what mobility related elements that excite you the most?
I think about just in our own lives what would make mobility better for me selfishlt or for my ageing mother or a friend who is ill, you kind of make it real. And the reason I’m approaching it that way is that. There’s some companies and organizations paint this beautiful Jetsons future, where everything is different. Now, here we are today and in the future everything’s going to be different. Roads won’t be there. We’re going to be in flying cars or hoverboards, or who knows what, but are the all the infrastructure is going to be different build cities are going to be different. Transportation is going to be different. The way we live is going to be different. And I just think that’s delusional thinking. These infrastructures that we live with change very slowly but we can bring, like I said, the good ideas, the business ideas, the business models, the technologies to solve for important things. So what I mean by that is to finding mobility solutions for someone who cannot drive, whether you’re incapacitated, disabled I think that’s a really important use case to think about that kids or young kids but that covers a lot of ground. You could be living in a city, you could be living on a farm. So the way I try to think about as well, how can you help that person? And is it one technology, is it one business model or a collection or is it a variety? And which ones do you want to pick off and work on it first? And how do you then generate value. And I’ll flip that a little bit to the electrification issue. Battery costs have come down. Electric vehicles are getting better but there are setbacks. The bolt recall is a setback. It doesn’t mean EVs aren’t going to happen, but it’s a setback. And that’s nothing to be expected, but if you, it’s not just the vehicle, it’s not just doing good batteries or better batteries at lower costs. Better vehicles in more segments that are appealing to more people. It’s this whole energy system that has to be developed a supportive cleaner grid, more access to charging, security of the vehicle to charging, connectivity and that going to cost a ton of money and take a long time. I attended the center for automotive research conference in Traverse city a few weeks back and one of the panellists spoke to this fact that this could take trillions of dollars to do all of the things that need to need to be done and he also pointed out that as of today, a lot of this business is being subsidized at the supplier level, at the infrastructure level and at the demand level, that’s not sustainable. You can’t do that forever. You can do it to jumpstart or to kind of accelerate a market. But its going have to pay for itself at some point.
To go to your point about paying for itself and the autonomous, application, about two years ago or even last year I was of the mindset that I would never pay $10,000 additional on a car just so it can drive me to work. But I’v now realized that that is a wrong way to put it. It says, would you pay $10,000? So you don’t have to drive your kids to soccer and back every week, would you pay $10,000 to go to a restaurant, have a couple of glasses of wine and you don’t have to drive back. And would you pay that for your elderly to be driven to the hospital or go get mom from the airport so that you get all the time back. It can do jobs that you don’t have to Chauffer around. And suddenly the $10,000 sounds like a “sure. Sign me up!”
You take it the next step and you connect that with a shared mobility, service, and mobility as a surface type product, you would say, well, why do I need a car in the first place? If I can buy mobility, or why do I need two cars? Yeah, maybe I want personal freedom and I do need to drive long distances and to do something or do it at the drop of a hat because for whatever reason, but maybe you can go from two to one and you buy mobility to do other things for you to take you to a restaurant, to take your kids, to soccer, practice, to take your mom to a doctor appointment or something like that and that’s kind of where the robo taxi concept plays in. The first thing we’re not there and we may not be there for a long time. But I appreciate and I respect the people that are working on that because they’re trying to crack that nut and I think in some cases and in some where areas some regions it will happen. , so I don’t want to give up, but so we said for Uber, autonomy was existential because if they can’t get the driver out they’re never going to make any money. For the incumbent industry. It’s existential, because if autonomy works, you don’t need to buy a car or you don’t need to buy as many cars or as frequently, or you need to buy a different type of car. So when I think about that, I know this is when your OEM and tier one audience on this might like start throwing tomatoes at the screen, But I think one possible outcomes, like some of the suppliers could be in a better position than the OEMs, because they can serve two masters or multiple masters. They can supply the advanced vehicle makers with the don’t have brands or. And they can also continue to supply the branded OEMs, but a traditional branded OEM that doesn’t embrace or doesn’t figure out how to be profitable in the mobility space without changing their business model,If all they’re going to, if they just stick to them, the basic knitting of design engineer and sell , then I would say their future is pretty dim. But this can play out over decades. So it’s not like it’s going to happen tomorrow or in five years.
The necessary criteria for that is autonomy. It’s got to work to a level of comfort level that there’s widespread.
Yeah. And you’re talking about level, like level four, level five autonomy. They’re the most advanced it’s always going to work and it can go anytime, anyplace anywhere. And it’s not my area of expertise, but it’s hard to imagine any kind of full autonomous vehicle working in a North Dakota blizzard. So, but can you get it to work, in milder climate? Or in situations where the roadway is not too congested, suburban run into town for dinner or a movie or something versus I think downtown Manhattan or someplace Paris could be very challenging environments for technology.
As a consumer, I’m putting my consumer hat on and that might still be acceptable to me. If somebody were to say, would you like to upgrade to do the timing package, Sir, $10,000. And oh, by the way, this won’t work in the winter. And I would think, and available, we will drive my kids to soccer, and their school all summer. That might be, and that might be a good way to start.
my point of view is that some of these technologies we discussed them in the current mobility model of people living in suburbs and owning cars and sticking them in their garage. And, but if you break that, if you say, I’m going to look at this technology through a different lens. Let’s look at it through the lens of fleets. Does it work on a fleet? And I think sometimes the answer is these technologies work better in fleets and they create value in fleets where things were measured to the penny per mile. And it’s not just a nice to have it. Its I can create an autonomous electric delivery vehicle and instead of having two people in it, I’ve got one, or I’ve got the human isn’t doing the driving all the time. The human is processing packages for the next delivery or putting them on drones or putting them on a fleet of little bots to go out so that the van pulls up, boom out that goes to and then the human is having maybe personal interaction if it’s a business drop off, you want to have a relationship with your customer that a robot just can’t do you so the person in the system, their role changes. So it’s not someone, it may not be getting rid of the driver, but it’s making that driver or that person doing more value, add work in a sense. So I think about it things that might make sense or don’t make sense in the personal traditional model, when you put a fleet lens on it, sometimes you see some different things.
That might be more a different type of a job for the same driver could be more complex shop, perhaps even higher paying cause there’s more things to do.
What are we not thinking about? Do we have blind spots?
Yeah. Well, that’s how I think, part of my answer to that is what I talked about before the blind spot on underestimating, the resistance, the pushback from the incumbents so I think that’s one. When I read the literature, go to conferences, listen to the webinars. I don’t hear that come up very often.
The second one that comes to mind is , we have a hundred year plus business and people are kind of used to doing what they’re doing. They’ve accepted pain points. It’s just part of the part of the deal. You pay a lot of money for a car breaks. You gotta buy insurance, you gotta fill it with gas. You got to allocate find parking on the street or allocate part of your home garage to this thing. So, owning a vehicle is a real pain in the ass, but we’ve just accepted it because that’s just the way it is. And we behave and our whole environment has been built around roads and vehicles and that’s what we’ve got. And we tolerate congestion. We tolerate long commutes. We tolerate expensive parking. When you go into downtown Manhattan or San Francisco, I think it’s like 20, 25, 30 bucks an hour. so these behaviors that we have ingrained, they’re hard to change. It can be very hard to change. And even if there’s an attractive option out there, like you said, I could get this autonomous or semi-autonomous vehicle that could change. It could help me change some behaviors. It gives me more time back in the vehicle. We’ll take kids to soccer. That’s that could be good. But a wholesale change in behavior. It says I’m not going to have a big SUV anymore and I’m going to get a smaller EV , I don’t see that happening very quickly. But over time, these technologies and the business models as they come together, if they do a better job of matching the vehicle with the mobility need, I think that could change that that could be a real, very appealing thing to a lot of people. So it’s like, we all know families pay maybe two or three kids. I’ve got a suburban because they take it up north or they go go on holidays and go down south or something. And you do that 2, 3, 4, 10 times a year. Maybe. I don’t know. But most of the time you’re going to get groceries or going to work.
That’s why we have two different types of cars of different sizes. That’d be very happy to get rid of that type of a model.
I think, incumbent stakeholder pushback and just the challenge to change behaviors. And I think technologists tend to look at the shiny object and say, isn’t this a great idea? how many do you want? And I think a lot of people who aren’t technology oriented might look at this and say, well, it doesn’t work for me. I still need to drive 500 miles day. And in a day I was just sample of one. I don’t, it’s not statistically important, but I was back and forth to new England and upstate New York, half a dozen times over the summer to deal with some family things. I think it was probably well over 5,000 miles and each leg of these trips was 450 to 500 miles. And then there were some Oops. I got to do a hundred mile side trip or 50 miles side trip. I was thinking about that. It’s like, could I have done and then fully loaded vehicle, car top care, hot with air conditioner on full two or three people in the vehicle and the dog. Is there an EV out there that where I could have done this? And the answer is no, not yet. Maybe Rivian would work in a couple of months. And then as the charging infrastructure there to help them get to where I need to go and not sit at a charging station for an hour waiting to top off, right. So it’s these behavior.
There was an article that I read just the past couple of days about it was a test drive in the vehicle that we’re using, but it was a Polestar and it was in Southern California to Northern California trip. And if I recall right they had to make four stops. Along the way, for 45min or an hour plus to top up and so there each leg that they were traveling, I think was in the 150 mile, maybe 200 miles.
We did some modelling work on that. Somebody was complaining about not getting enough range as it were. They look at it and they said, okay, for me, miles perspective works. And then as they started driving up to the wine county, they realized I won’t have enough charge and they had to make a detour to charge it. And in our work we realized, oh, elevation. People don’t think about it as an elevation as well. Like when you’re going to go into the mountain, like elevation is a big energy consumer.
coming down is good.
That’s right. So to your point about shared mobility, one of the things that I would actually love to see sort of an Airbnb of cars. So imagine in my neighbourhood, we all have like a minivan or a SUV. You could take all the kids around and we all have a smaller car for other purposes. I mean, imagine there are two mini vans, two regular sedan cars, one pickup truck to haul certain things. And one little EV, like a Porsche EV that you and your wife and go on a date. And there was a little Airbnb reservation system among yourselves. And so you would say, oh, I need you to take the kids to soccer, like, let me see these for four hours. I need this many maps and then, or you need to go to Lowe’s and get a bunch of mulch. And you’d say, I need a pickup truck and a, when you were going on a date, but you are, you don’t want to be in a minivan or a pickup truck. So I think, you know, something like that Where not owning a vehicle can become quite attractive, because it opens the number of choices.
It could be that talks to the behaviour. So then you have to have a community of people that are going to get along. They’re going to agree on the system. They’re going to find a way to fund that system. There’s gotta be a way to deal with infractions to the system. Car gets brought up without full tank of gas or it’s dirty or something got damaged.
And they goanna get lower rating, isn’t it?
Airbnb did it. So people, the hosts worry so much about their stars. Like, oh, I’ve got to be a super host. I got to have a nice note and cookies for the guests and stuff.
I think some of these ideas are worth playing out the subscription model. Some of the OEMs have tried to launch my understanding that those have not done well, there have been several attempts to start them and then they were modified or cancelled.
What was the primary reason why they didn’t catch on?
I don’t know. I took a quick look at a few of them. They’re very expensive. but they give you optionality around. You could swap out a vehicle within a certain amount of notice and such, I think just intuitively you run into a problem. But someone has to own the asset. So it’s sitting on a, on a balance sheet somewhere it’s depreciating, and then there are seasonal and regional logistics issues. So, you know, summertime on a Friday in lower Michigan, what does everybody want? Big vehicle to run north? Or winter? All wheel drive. Summertime, give me that Corvette convertible, you know, it’s like, so you have to find a way to match that demand with the supply and even move the vehicles around, But I it could be a solution that is solvable. We just haven’t found the right Rubik’s cube twisting to get those variables to come together.
It’s all this mobility, new mobility technologies and business models. Are they us primarily for the US market or would they work in developing countries like China and India where labour is so cheap?
Well it kinda depends. What kind of technology you’re talking about? I mean the Europeans and the Chinese are way ahead of us in electric vehicle deployments and China seems to be trying to capture the flag on the battery technology, cost of battery production, autonomy. I don’t know if I have an opinion on that. I think it’s just in some, it may be more difficult in Europe and I’m just thinking of. The way the cities and the towns are organized and designed. it could be harder, China’s shown. And partly because it’s a command economy, they set out a goal and they just going to go do it. You want a Maglev train all over the country. Done.
Well, in all honesty, there’s only one Maglev train at the Shanghai airport, which I’ve ridden.
And They’ve got a lot of high-speed trains. They Do.
And thinking about that too, I’m not sure labour cost is really the issue. If I think there’s a truism that if you have an undeveloped infrastructure, you don’t have to go through the phases that Europe or US went through. And I think this is true, or at least the time. It’s a good story. In China they largely skipped over the copper wire telecom network for telephones, for landline phones. They weren’t handies to mobiles.
Same in India.
So you skip a whole generation, and all of costs, investment, everything. To just go to the next level. So I don’t have a good example of where that might happen in Africa or India or other parts of the world, but it’s conceivable that I think if you, that some countries or some parts of the world that are underdeveloped, even parts of the United States that are already developed, you could see a use case and an application of an advanced technology without going through the 19th century. I can’t think of a really good example, but there’s do you need to have a rail system that reaches every town in America? No, that would be nuts. Did the country’s different is big, large open spaces. So it’s faster to go by air.
So let’s do a little back to the future type of an exercise. I mean, you said we can’t do forecasting, but can you paint a picture of what 30 years from now look like? The reason I picked 30 years is because I have young kids in elementary school and in 30 years they’ll be my age. What kind of a world would they be living in when there might, which is in some ways going to happen really fast?
So I’ve got a couple of ways to approach that question. So that’s 2051. It’s like, oh, that’s forever. But you think about what was 30 years in the past? We were talking about 2021 go back another decade. And what’s happened in transportation and mobility from 1991 to 2021. There’s some more electric vehicles, cars are cleaner, arguably they’re more reliable, higher quality. They have a lot more features and user interface technologies are connected, telematics systems that were not even conceived of perhaps in the early nineties or on just about every. much safer, but the business model is largely, still the same. Now there’s there have been experiments, some good experiments, some not so good experiments. So you have the Uber’s and you’ve got Tesla out there, but the main, I was just talking about the US personal mobility business, goods business. It’s largely, I would argue that if you stand back and squint at it, it’s largely the same as it was three years ago
and electric cars have always been knocking at the door. GM has built one. Now I think now might really be the time.
So the potluck answer what’s 2051 look like? I think you have to think about do you expect the pace of change to accelerate or slow down? And in what area and why, and what are the funder macro fundamentals that are driving us in this country, driving the world, what could accelerate things to a better mobility future and what could get in the way. and a lot of those things are out of our control. They’re just completely out of our control.
The two big things I’m thinking of. one is population. We’re seven and a half billion and they forecast it via 11 billion. And then the other one is the energy consumption for all these 11 billion. So we have handle that
Just feeding people and a few not to be political, but if you throw a, I won’t say climate change about climate issues, Climate disruption, where things change from places that used to be wet, aren’t wet places that used to be dry. Aren’t dry. Things that you could grow in one place you can’t grow anymore. So the habitability human habitability becomes a challenge and parts. So they’re big. There could be some macro things that go out there, but I think we’ve seen a lot of change in the last 10 years I think we’ve seen more change than the last than the decade before that or the decade before that, in the sense of not that things have fundamentally changed or that we have ubiquitous. Modern mobility, but it’s partly the entrepreneur and the startup mindset and a risk taker, a mindset Let’s try this pivot. This didn’t work which is a very different mentality from the incumbent auto industry, So the more that innovator comes into the space and the more traction they get and the more success they get and the more that culturally changes and pervades the end of industry, I am optimistic that there’s going to be more experimentation, more successes, move off of the failures fast, which is why I was answering the question earlier about find the use case find value to generate, find a pain point to solve and do it in a way that may not be profitable right now, but you’ve got a path to profitable. You can see it, and then you can work towards that with specific use cases.
I don’t resonate too much with Flying taxis that a technology. So who wants to fly, who benefits for a flying taxi? What problem is solved by a flying taxi? And is there a pilot in it or is it autonomous and all that? I think that those are more pertinent questions. And if and how many of them are there out there? If all you’re doing is making wealthy investment bankers get to the Hamptons faster. You’ll probably get paid well to do that but that doesn’t change the world that doesn’t solve the big macro problems that I think do need to be addressed. So fundamentally more electrification for sure.
Well, the car park, you know, it takes 15 years for the car park to flip.
You said car park?
The number of vehicles in service. So there’s something like 280 million vehicles in the US light duty vehicles in the US maybe a bit more, the average age is about 11 years and there’s a long tail. So that in just rough numbers, if you started selling, if every vehicle sold today was electric, it would take roughly 15 years So that every vehicle on the road was electric. And you’d still have a tail. You’d reach critical mass sooner than that, but this is so some people then talk about we need to wait a way to incentivize and get the ICE vehicles off the road. I think we’re going to need ways for all of those. Industries and the entities that are on the losing end of modern mobility, advanced mobility, there needs to be way to mitigate that. So how do you help retrain internal combustion engine, powertrain engineers to do something else? How do you retrain taxi drivers to do something else? It’s like everyone, who’s got an axe to grind against advanced mobility, got to find a way to help them transition to something else. Just to soften the blow and that that’s a way to reduce the resistance from those industries.
And there will always be some trickle applications for those things. I was shocked to find out that dot matrix printers are still out there, at the rental car counter, when they’re printing you the receipt, it’s the dot matrix printer, because you need the impact for a carbon copy. And I was like, oh, that’s interesting.
Yes. I think there clearly by then there will be practical and meaningful applications of high levels of autonomy. we have those applications today, but they’re there in pilots and there’s small specific use cases. So as the technology matures, as the business models get better, as population age, and you need more types of mobility. That’s going to be fair. I think the whole connectivity, the whole internet of things, where X to X, whatever you want to call it. that seems to be just moving like, like white and that’s going to continue. So I can’t anticipate what that means for mobility but even if you don’t have fully autonomous capability, it should help with the safety of the mobility. So, if your phone and buildings and vehicles and bikes and everything’s talking to everybody, everything knows where everything is, you should be able to create a safer system, So I think those fundamentals of safer, more sustainable, more equitable, more accessible. In 2050, I think we’re going to be on all those metrics, we will be able to say we’ve made significant meaningful life-changing world-changing progress on these. I’m just not smart enough to know like how many or where or what at what pace and how there’s always going to be unintended consequences and things that we can’t anticipate.
So the world I’m imagining based on what you’re telling me is more than half of the cars driving around are electric. And a lot of them are driving themselves, driving kids and elderly, and maybe some of us around
but the grid’s got to get clean.
The energy consumption goes up. Does it go up?
I don’t know but some somebody knows, but I think the answer is yes. And it’s more regional, right? So the shape of the grid is different.
I’m an optimist. I think there’s going to be significant progress made on all these fronts. What I don’t see is et cetera or this is where we are today. And here’s the picture you said paint a picture, right? It’s not going to be the picture is going to look a lot like today skyscrapers are still going to be in that. Suburban houses are still going to be in the suburbs of Detroit. And there’s still going to be roads. There may not be traffic lights at some of those roads. People are still going to need to go places to visit friends and go to the hospital and go out to dinner and go to shows and things.
There might still be parking meters, but there’ll be every parking meter as a plug for you to plug in your electric car.
Perhaps, or maybe it’s just all inductive and you don’t need needs cables and cords anymore. I’ve said it a couple of times. I think a lot of this gets driven. The economics work when a big problem is solved and it’s an a creates benefit for a significant number of people, technology push visions of the future sometimes miss I hypothesize about the benefits that being that’s being created but the benefit isn’t really there. It’s just, it it’s an assumption. And when I started my journey to learn about best practices in innovation, I went to school on a lean startup methodology. And that just drills into your brain. Start with the customer, understand needs that they may not even understand and work to form a value proposition that addresses benefits that then can be monetized and worry, then you build a business model around that because you’re solving a problem.
Yeah, indeed. And that is a world that excites me because that is a world that. First of all from a selfish point of view it gives me a lot more time back. Yeah. I don’t have to drive around and suddenly kids are away. They’re off doing their own thing. and that, that gives us a lot more. Time and therefore productivity can go up and a lot more value in these.
But if there’s unintended consequences the cybersecurity of this whole system has got to be airtight because if you’re going to put your young kids in a machine that is supposed to take them to soccer practice?
Somebody hacked it changed the destination
Or what if they, or what if they’re smart enough and they hack it. No, we’re going to the movies, right?
Clay Thank you very much for talking with me today. It was a joy talking and getting deep into the mobility.
Thank you so much. I appreciate it.
This conversation was part of Tech DeepDive interview series where I have a no jargon conversation with automotive experts to help the rest of us understand and wrap our heads around the emerging technologies.
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