Are Germany falling behind in the race for Autonomous Driving?
Autonomous Driving is at the forefront of developments in technology. Driverless vehicles are one of the most talked about topics at present. In Germany, the automotive industry is the foundation of the German economy, with around 830,000 people directly employed in the German car industry in 2019 (German Federal Bureau of Statistics). More than 70% of all premium brand vehicles produced worldwide are manufactured by German OEMs. But are Germany now falling behind in the race for Autonomous Driving?
For the last 100 years, Germany have been leading the way with big players like Audi, BMW, Daimler, Porsche and VW dominating the automotive world. German cars became the epitome of quality and excellence, but it seems that in more recent times they may be threatened by other countries in the world, namely the USA and China.
Until recently, the mentality of German manufacturers was to continue doing what they’ve been doing – after all, they were the market leaders. They simply looked to perfect the conventional cars that already existed. Germany weren’t questioning their traditional business model because it was working, meanwhile new competitors in China and USA thought about things differently and began focusing on new innovative computer technologies, artificial intelligence and sensors.
Take a look at Alphabet (Google’s parent company), and its creation, Waymo - you’ll find a huge three story building in California focused on new autonomous driving technology. Driverless white vans circle around outside the building – demonstrating just how advanced they are. These vans of course do have drivers inside in case there are any machine faults or mistakes, however they aren’t needed too often. In fact, on average these vans make a mistake every 18,000km (2019). Now compare that to some of the German manufacturers in the same year and it is quite shocking – BMW for instance could only last around 7km! I think this highlights the amount of catching up that Germany have to do…
Amazingly, Waymo have been testing these autonomous vehicles on actual roads in Phoenix, USA. Around 400 people have had the chance to take a ride in these vehicles and the initial results and feedback has been positive – the supervisor had to override something in 2 out of 10 of the rides, but these were often only very minor things. Waymo now plans to add tens of thousands more vehicles in cities across the US over the next two years. In March 2020, Waymo raised more than $2.25 billion to accelerate their robotaxi advancements even more.
Then of course there is Tesla – with Elon Musk’s dream factory again in California. When Elon first announced that he was creating a new automobile – Germany, and the rest of the world, did not take him seriously – of course they do now! Tesla is now worth more on the stock market than BMW, Daimler and VW combined.
Amazon are also looking to shape up the race for self-driving cars after acquiring the autonomous vehicle company, Zoox, in a deal worth over $1 billion just last month. Zoox’s main focus will be on building autonomous robotaxis.
China are also heavily involved in autonomous vehicles. Back in 2016, Apple invested $1 billion in to Didi (essentially the Chinese Uber). Didi have continued to thrive and even throughout COVID19 continue to grow and take risks. In fact, they’ve recently signed a deal with Chinese carmaker BAIC Group to jointly develop self-driving vehicles, plus they also received circa €500 million investment from SoftBank to be used on their autonomous vehicles division. Didi have ambitious targets and plan to operate more than a million self-driving vehicles by 2030!
Germany have also been investing heavily in to Autonomous Driving projects, however it looks like they may be struggling to keep up with the likes of the US and China. There are a number of recent examples that suggest this, for example in June 2020, BMW and Daimler cancelled their ADAS projects after announcing their plans to collaborate in 2019. Additionally, a number of German companies have delayed their timelines for deploying autonomous vehicles.
Now it is not uncommon that China and the USA lead the way in technology. They’ve got Amazon dominating e-commerce, Apple dominating smartphones, Facebook dominating social networks, Microsoft dominating computer software and Google dominating search engines. However, what’s slightly concerning for Germany is that they were always the ones leading the automotive market…
With companies like Waymo taking over the market with their high-tech cameras, LiDAR, Radar and other sensors, it could have a really negative effect on the German cars. BMWs, Mercedes and Porsche’s are renowned for the pleasure they give drivers due to their smooth engines and steering – but what value is a self-driven BMW?
Yet with all this being said, Germany may not be ‘leading’ the market at this point, but this could be seen as a positive. Germany do not have the resources of China and USA and so perhaps being a few steps behind may allow them to see what works and what doesn’t and utilise their resources most efficiently. Germany are an automotive powerhouse and will always have niches that they can branch in to. Germany are renowned for producing some of the most reliable and efficient cars in the world – it’s clear that they will still be very much needed.
Plus, German Automakers are still working on a number of exciting autonomous driving projects. In 2021, BMW plan to equip their next car with Level 3 autonomy. Automated driving is on a six-level scale with 0 being no automation of the vehicle and 5 being fully automated vehicle in which drivers are not needed. At present, there are no passenger vehicles on the market that are over Level 2 automation, therefore this would be a great step for Germany!
To compete with the likes of Waymo and Tesla, German organisations are teaming up to share the burden of the cost. BMW have invested billions in to AD projects and in July 2019 also signed an agreement with Daimler. However, as mentioned earlier in the article this cooperation has been put on hold for the time being! Perhaps they need to even bring VW in to the agreement so that they do not fall too far behind.
Furthermore, in July 2019, Bosch and its partner Daimler received approval from German regulators to operate their autonomous parking feature without having a safety driver behind the wheel. This approval marks the world’s first fully automated parking function to be approved for everyday use (a fantastic achievement for Germany). Bosch are reported to have more than 2,000 engineers working on these ADAS projects. The company is also in the process of constructing a $1.1B facility in Dresden that will produce semiconductors for use in autonomous vehicles, as well as smart home and smart city technologies.
Moreover, General Motors made waves in 2016 with a series of aggressive moves within the tech sphere: it bought Sidecar’s assets, invested $500M in Lyft, and acquired autonomous tech startup Cruise Automation. In May 2019, GM announced an additional $1.15B investment in Cruise, bringing the operation’s post-money valuation up to $19B.
ZF also remain determined to create autonomous vehicles. They are focusing on Level 2+ automation for passenger cars, and focusing on Level 4 systems for commercial projects like robotaxis. ZF’s approach is to invest in technologies that will have near-term benefits for the public, rather than focusing on far more long term projects such as complete Level 5 autonomy passenger cars.
VW are also involved in autonomous driving projects. The Vizzion was unveiled in 2018 with no steering wheel at all, which represents Volkswagen’s vision of a fully self-driving vehicle that requires no human input to drive at all. Additionally, just this month (July 2020), Volkswagen announced that it had entered a joint venture with Ford to develop autonomous vehicle technology. The partnership saw VW invest $2.6 billion in Argo AI, Ford’s autonomous driving platform, and will give Volkswagen an equal stake as Ford’s. Argo AI now have the largest geographic reach of any autonomous driving technology to date. VW are also looking to invest in e-mobility too – planning to invest €30 billion in a bid to transform the company in to a global leader in e-mobility – with an aim to produce 22 million electric cars over the next 10 years (more than any other manufacturer).
Further positives for Germany are that despite Waymo and Tesla testing self-driving cars across the US, there is still no globally accepted standard for regulating the technology in a commercial setting. In recent news, Germany are now looking to produce a broad framework to regulate Level 4 autonomous vehicles on the road. Of course, there are a number of hurdles to jump, yet the German transportation ministry are confident that this could be ready by next summer. Of course, this doesn’t necessarily mean that the technology will be ready and pass by this time, but it’s definitely a significant step forward.
I’d be very interested to hear your thoughts. Are German companies being innovative enough? Are they stuck in their past and more traditional ways? Or are German organisations taking the right steps to competing with the US and China?