[msb-alumni] Delphi to Offer Rides in Self-Driving Car at Consumer Electronics Show

From: Steve <pipeguy920@xxxxxxxxx>
To: <msb-alumni@xxxxxxxxxxxxx>
Date: Fri, 6 Jan 2017 15:28:57 -0500

BlankDelphi to Offer Rides in Self-Driving Car at Consumer Electronics Show

Car electronics supplier Delphi Automotive went coast-to-coast in 2015 in a
self-driving Audi Q5 sport-utility vehicle to prove the autonomous automobile
had arrived. Caption: Delphi Automotive will give test rides to hundreds of
potential customers in driverless Audis this week at the Consumer Electronics
Show in Las Vegas. (AP).

Now, Delphi is shifting from stunts to selling. In Las Vegas this week at CES,
formerly known as the Consumer Electronics Show, the company will give test
rides to hundreds of potential customers in driverless Audis over a course of
rugged terrain and tunnels. The goal: to walk away from this critical conclave
with a handful of hot prospects for its self-driving system.

"The last two years at CES have been more about just showcasing the technology
and saying, Look what it can do," said Glen De Vos, Delphi's vice president of
advanced engineering. "This year, the discussion is all about the path to
production."

Self-driving cars are finally making the leap from the lab to the showroom.
Tesla Motors Inc., BMW, Ford Motor Co. and Volvo
Cars have all promised to have fully autonomous cars on the road within five
years. Alphabet Inc. just spun off its Google Self-driving Car Project,
renaming
it Waymo, and then promptly unveiled its driverless Chrysler Pacifica minivan
and said it's in discussions to put its technology into Honda Motor Co. models.

When CES officially opens Thursday, the talk won't be about proving technology.
It will be about selling to automakers, ride-hailing companies, transit
services
and, ultimately, consumers.

"We're close to bringing this to a lot of people," John Krafcik, the former
auto
executive now running Waymo, said
at its formation. "We're kind of at an inflection point."

At a show once known for mobile phones and video games, vehicle technology will
cover an exhibit space the size of four football fields, some 21 percent more
than last year. Some 138 auto-tech exhibitors will all be seeking a piece of
the
autonomy
business that Boston Consulting Group says will increase to $42 billion by 2025
and account for a quarter of global sales by 2035.

And since it takes about four years to bring a car to market, now is the time
to
cut deals with suppliers and tech partners to outfit models with self-driving
systems that will debut early next decade.

"CES 2017 marks the beginning of a new era," said Luca Mentuccia, senior
managing director and head of the automotive practice for consultant Accenture.
"Autonomous driving has become the next major battlefield."

One reason for the push to get robot rides on the road is fear of the so-called
Prius problem, according to Mark Wakefield, managing director and head of the
automotive practice for consultant AlixPartners. The Prius became synonymous
with hybrids after Toyota Motor Corp. pioneered the technology almost 20 years
ago. Today, the Prius still dominates the market for gas-electric cars.

"Nobody really wants to be the competitor to the Prius, where you let one
company effectively frame the experience in the buyer's mind," Wakefield said.
"Then when you come out with one, it's like, 'Oh, you make one, too?"

Google's self-driving car project has garnered the most attention as it clocked
more than 2 million miles of road testing over the last seven years. Waymo
hasn't yet revealed its business model, but it can draw from the success of the
Android model its parent company employs in the smartphone market.  Unlike
traditional automakers, Alphabet's businesses tend to focus on recurring
revenue
streams, such as search ads. Android, which powers four of every five
smartphones sold globally, funnels money to Google services.

Similarly, Waymo could build underlying software for autonomous vehicles,
license it to carmakers and cash in on services and data. "Google's playbook
here is well-tested," said Jonathan Matus, chief executive officer of Zendrive,
a transportation data startup, who formerly worked on Android. "They understand
how to use the platform to create dominance."

Consumers will probably get their first taste of automated driving in the
backseat of a robo-taxi. Uber Technologies Inc.
is testing a fleet of autonomous Volvo XC90 sport-utility vehicles in
Pittsburgh
and Arizona. Ford, which said last week its test-fleet will triple to 90 cars
this year, says its first autonomous vehicles will go to ride-hailing and
ride-sharing services in 2021. General Motors Co. plans to test self-driving
Chevy Bolts in Lyft ride-hailing fleets in Arizona.  The idea is to get
consumers so comfortable with the technology that they buy it for their own car.

Volvo has said it will offer its self-driving system as a $10,000 option on the
XC90 in five years. GM is developing a
semi-autonomous system known as Super Cruise that will allow for hands-free
driving on highways.

"Chevy Bolts in a Lyft fleet will give people exposure," Wakefield said. "As
they gain confidence and think, 'Wow, Chevy does some pretty neat stuff," GM is
hoping that rubs off and convinces them to buy a Bolt with Super Cruise.

It also makes business sense to put the first autonomous cars into a shared-use
situation. Because the sensors that give a driverless car a 360-degree view of
its surroundings are still pricey, spreading the cost over all the riders in a
robot taxi will help to defray the expense.

"The high cost isn't solved yet," Wakefield said. "There's not an assumption of
making tons of money on this first generation or two.

The dramatic improvements in safety that should come from semi-autonomous
features such as automatic emergency braking will accelerate consumer demand
for
autonomy, according to Adam Jonas, an analyst with Morgan Stanley.

"It took air bags 15 years to get high penetration in cars," Jonas said.

Palo Alto, California-based Tesla which doesn't exhibit at shows such as CES
may
be the biggest accelerant for autonomy. Tesla is now outfitting all its cars
with the hardware required to enable the robot to take the wheel. Chief
Executive Officer Elon Musk says Tesla will soon be ready to flip the switch on
the technology, which pressures other companies to keep up.

Just last week he tweeted a link to the dashboard video of a Model X whose
warning chimed a moment or two before two other cars crashed ahead of it on a
European highway.

"Tesla is being a disrupter," Wakefield said. "Instead of going slow and being
methodical like other automakers, they put it out
there and the others have to come up with a competing product."

Autonomy also is getting a boost from U.S. regulators, who in December proposed
new rules that cars be embedded with chips to communicate with each other to
help avoid accidents. Vehicle-to-vehicle communications, known as V2V, could
arrive within five years and make driverless cars smarter and safer. "Every
government agency we work with has been waiting for this rule," said Jim
Barbaresso, national practice leader for intelligent transportation systems for
consultant HNTB Corp. Now "you're going to see more momentum in connected
vehicles and more activity among automakers."

For Delphi and its partners Mobileye NV and Intel Corp., the first application
of their self-driving system could be an airport tram or a rental-lot bus. By
eliminating the human driver, autonomy could cut the operating costs of such
systems by 70 percent, De Vos said.  "The economics are really compelling,"
said
De Vos, who will be giving tram operators test rides in Delphi's driverless car
in Las Vegas.

"After CES, we expect to really be getting serious with three or four
customers."

[msb-alumni] Delphi to Offer Rides in Self-Driving Car at Consumer Electronics Show

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