The car, reinvented. From scratch.
We know little about the AppleCar, except that it was meant to be designed from the ground up. In this series, I asked the French engineer Philippe Chain, an alum of Tesla among other places, to go back to the drawing board.
By Philippe Chain & Frederic Filloux
The first time I met Philippe Chain, we spent more than two hours discussing automobiles and mobility. Trained at a top French engineering school, as well as INSEAD and Stanford, he has accumulated nearly 30 years of experience in the automotive industry. At Renault, Chain was a Chief Vehicle Engineer before switching to an electric strategist position. At Tesla, he was VP for quality during the development of the Model S, and later, he worked for Audi and for Faraday Future. Today, he assists several carmakers and governments willing to venture into the electric car industry, like for example Turkey — yes, Erdoğan wants his country to become a major player in the EV business…
The idea for the series came from hours of enthralling discussions about the future of mobility, car design, manufacturing processes, and the related economics.
This will be a multi-part series that will span over the summer. Please, if you have any thoughts give us some feedback at automotive@mondaynote.com. — F.F.
Part 1: The building blocks of the new car.
No industry is pulled down more by the burden of the past than the automotive industry. Also, no industry is slower at adapting its practices — design, manufacturing, marketing. The main reasons are an ossified culture and the amount of capital required to launch a new model. The Audi e-Tron I worked on for almost three years is part of a €14 billion investment in electric vehicles (EV) by Volkswagen-Audi. Still, while powered with three electric motors, this car is loaded with lots of technological relics like a mechanical differential, a mechanical steering column, a 12-volt battery and, my favorite, a CAN-bus data network (which enables communication between different parts of the car) invented in 1983. Commercially, the e-Tron is still sold through the usual dealerships and usually fully-owned, with a starting price of $75,000.
Twenty years ago, launching a new car boiled down to designing a new car using the largest possible amount of the preexisting “platform”, settling on the right marketing triggers to induce the buying process, and, finally, betting heavily on the salesmanship of thousands of dealers.
The exercise I will outline for the Monday Note starts with a totally different approach. When discussing this series with Frederic, he gave me the following brief:
“Let’s assume you are in charge of a new department of a company willing to foray into the car industry. Your mission is to reinvent the automobile from the ground up by deploying cutting edge technologies and innovative economic models. You will start with a blank slate to imagine the design of the car, its manufacturing process, lifecycle, environmental impact, and a novel distribution and ownership system. You work at say, Apple, with billions to spend and access to an incredible engineering talent pool to make something truly new — and profitable”.
At Tesla, I had my share of experimenting with new approaches to build an advanced car, and today, some of my clients harbor ambitions of substantially reinventing the automobile industry.
Let’s break down the problem in five different components (each of them will be a chapter of this series):
- Propulsion and powertrain
- Digital architecture
- Physical architecture
- Economics and manufacturing
- Distribution, ownership, and services
1. Propulsion and powertrain
We will be talking exclusively about electric cars. It is the only way forward. Carmakers that have bet heavily on hydrogen such as Toyota now yield to the obvious: an EV is cheaper to produce, has better performance, doesn’t need maintenance (which will change the economics of mobility as we will see in chapter 5). Its infrastructure already exists and can scale up easily. Hybrid was interesting in its time (the Toyota Prius is a great car), but it is… well, hybrid, i.e. torn between the ancient and the new world, therefore a bad solution.
Three forces will accelerate the adoption of the electric car.
• The first one is the regulatory pressure from governments and regional authorities, which will impose drastic reductions in emissions. The best example is the EU CO2 regulation that will mandate all vehicles sold from 2020 onwards to have, on average, an CO2 emission level below 95g/km, then going down to 81g/km in 2025 and 59p/km by 2030. No way to achieve that other than selling a large share of pure electric vehicles. Additionally, some cities have announced a ban on non-electric vehicles in the not-so-distant future, like for example Paris by 2030.
Soon we will see an anticipation effect unfolding: depending on their use, a customer willing to buy a new car today and intending to keep it for five years will start thinking in terms of new regulations and constraints in their own cities. In other words, there is little incentive to buy today an expensive combustion engine automobile if you intend to push it to 100,000 or 200,000 miles, as you might be prevented from using it at some point. The rate of adoption of EV might vary from place to place, but we will look at the likely evolution of the share of electric cars in different markets.
• The second underlying force is the cost vs. performance aspect. In itself, an electric motor delivering about 200 hp costs about $500 against $5000~6000 for the combustion engine equivalent. The battery costs, however, still give an edge to the piston engine: right now the battery pack would cost between $7000 and $8000. But two factors need to be considered. One is the efficiency: the ICE (Internal Combustion Engine) returns only 30 percent on the energy it consumes vs. almost 95 percent for an electric motor. Two, the cost of batteries is falling fast: it has been divided by ten during the last decade.
We will see how manufacturing (scale and technologies) everywhere in Europe and the gain in energy density will further improve the dollars per kilowatt-hour ratio. With this rapid cost decrease, and the other EV costs going down as we continue along the learning curve, it will soon become a reasonable economic decision to drive electric for more and more people.
• The third factor is the pleasure in driving a noiseless vehicle that accelerates like a race car. Not everyone agrees, of course. I will recount my meeting with a famous sports car manufacturer in Northern Italy. Despite their reluctance, I bet that eventually, this famous brand will build a first-class e-supercar in the next five years.
For the vast majority of users, the cognitive expectation associated with a car will shift. No more thrill from the vibrations of a roaring engine but the sharp excitement of a vehicle gliding, fast and silent on the freeway. And even if the sound of silence is not your cup of tea, the overall superior experience of driving an electric car will make a huge majority of drivers swear that they will never go back to the ICE age. They will bring up other motives like charging their car at any parking point, and not having to experience a gas station ever again…
2. Digital Architecture
In short: today’s car offers a pathetic experience compared to our daily digital life. It was one of the key aspects of Apple’s Titan project: making the car an extension of the home and its inhabitants, individually, with the same enjoyment from the interface.
The car of the future — achievable in less than five years — will have the convenience and the user experience of an iPhone, and the capabilities of a datacenter connected to the personal cloud. The vehicle will carry an OS, with an ecosystem of apps to deal with any situation. Arriving at the airport, the car will download a map, which is precise down to the centimeter and updated with construction works, parking spaces available, etc.. Once its passengers and luggage are offloaded, the car will go and park itself (or will be made available to someone else).
That will require a major overhaul of technologies like the above-mentioned CAN-bus that is four decades old and employed in every car (including, believe it or not, in a Tesla). We will explore how it will unfold and who could become the gatekeepers of this essential component (hint: maybe not the traditional carmakers).
3. Physical architecture
We will introduce two notions: the skateboard and the upper body. As its name suggests, the first refers to the base of the car: we no longer refer to the “chassis” — a term so 19th century — but a structure loaded with all the essentials: the propulsion- powertrain- suspension- brake assembly (one for each rotating wheel), the steering-by-wire system, braking circuit, crash protection set, electronic network, power management, and batteries. On top of that, the upper body will take the shape and size depending on the need: a sports or family car equivalent, a commercial vehicle, etc. Expect a wide spectrum of uses based on a similar skateboard: from a luxury SUV to a food truck toa self-driving shuttle roaming between airport terminals, to a small autonomous urban freighter.
4. Economics and Manufacturing
The modular structure described above will change everything. It will deeply impact the global manufacturing operations of the car industry. To some extent, it will tear it apart.
First, the skateboard and the upper body could be built separately. Maybe not at the same place (a handful of skateboards will fit perfectly in a shipping container for completion thousands of miles away).
Second, it will pave the way to a vast ecosystem of third-party upper-body manufacturers covering a wide range of uses and prices. Mercedes could make its own integrated combination, branded (and priced) as such, but the same parent company Daimler AG could also provide skateboards to a mobility brand in South-Africa in the same way that Bosch has components in dozens of brands.
The product cycle will accelerate as design and manufacturing will draw inspiration from the consumer electronic sector in terms of developments, adaptability, and reactivity. Already, when at Tesla in 2011, right after the launch of the Model S, I witnessed adjustments being wrapped up in a couple of weeks, while the same would have taken months of meetings at Audi or Renault. The car sector will become as agile as a cellphone maker.
5. Distribution, ownership, and service
Ten years from now, no one will buy or lease a car the way they do today. For one good reason: people hate the whole process. While at Tesla, all the surveys we got converged on two things: the best buying experience was the Apple store and the worst was at any car dealership, whatever the brand. Based on this, Elon Musk decided that Teslas won’t be relying on dealers, with their caricature-like salesmen and the shops located in remote and dull locations. Small showrooms will be located in urban centers, and orders will be finalized online. Full stop.
Ownership of the car won’t be necessary. As a passenger car sits idle 95 percent of the time, there are plenty of alternative options. Especially for a vehicle that will be almost maintenance-free. Selective/community car sharing, distributed-ownership, short-term/long-term rentals will lead to one key advantage: less congested cities, and better and more efficient mobility.
To be continued!
Again, send us questions & remarks.
— philippe.chain@mondaynote.com
and frederic.filloux@mondaynote.com
Episodes of the series:
01: The car, reinvented. From scratch.
02: Your next car will be electric
03: How Tesla cracked the code of automobile innovation
04: The Global Race for Battery Supply
05: Code, on wheels
