Regular listeners of Decoder know car CEOs love coming on the show. There is a lot of change in the car industry, a lot of big ideas about how to manage that change, and a lot of big problems to solve: the transition to electric vehicles, the fact that cars are basically turning into rolling smartphones, how to make self-driving work safely, and more. And, of course, we always end up talking about Tesla — because how can you not?
In the past 11 months, I’ve spoken to Ford CEO Jim Farley, Polestar CEO Thomas Ingenlath, Jeep CEO Christian Meunier, and most recently, Herbert Diess, CEO of Volkswagen Group. We’ve also spoken to a handful of CEOs of companies building autonomous driving technology: Luminar CEO Austin Russell, Argo AI CEO Bryan Salesky, and Waymo CEO Tekedra Mawakana are all working on self-driving cars in various ways.
There are some themes that keep coming up in these conversations, and we wanted to highlight the similarities and differences for you. It’s fascinating to hear how different car companies approach the same problems — what goes into the decisions made by incumbent automakers versus the newest players. Sometimes they agree with each other, sometimes they completely disagree. All these folks are trying to reinvent the car industry, but they’re making very different tradeoffs along the way, and it’s illuminating to hear them all at the same time.
OK, all of the car CEOs we’ve had on Decoder, so far. Here we go.
This transcript has been lightly edited for clarity.
We have to start with electric cars: 2022 is the year that so many companies have said their electric vehicles will arrive. Plus, by now, virtually every major car company has thrown out some prediction for when it will be fully electric. But there’s been a lot of variation in how these companies approach the move to electric. Some are making entirely new cars with new names, others are keeping the names and turning the same cars electric. So listen for the different approaches and the different ways each company is tackling the many obstacles to going electric.
We start with Ford CEO Jim Farley.
NP: Do you anticipate that, sometime in the future, Ford will only make electric cars, that you won’t make any gas or diesel vehicles at all?
JF: I would say for retail, I could see that day. We have to get to solid state [batteries], and a lot of things have to happen. Infrastructure would have to improve in places like South Africa and Australia. Ford is unlike a lot of our competitors; we didn’t really shrink our global footprint. So we’re still a very large company in Australia and Thailand and South Africa. I think it will take some time for those societies to move to full electric, but the only exception for us is that we’re such a dominant commercial brand.
NP: You mentioned Ford still has a lot of the federal tax credits that bring the price of EVs even lower for most people. Those do run out, they are finite. Some other carmakers have run out of them. Are you lobbying the Biden administration to extend that program, to offer more tax credits?
JF: Look, Ford was the only major car company to support the Paris accord and the California standards, when it was not popular in Washington, DC. And we absolutely think that to make this move to e-mobility, customers are very rational, they do the math. If electric vehicles are cheaper for them to own and operate, that will be one more thing that makes them more compelling. So we think it’s a pretty important initiative for the new administration. The key is going to be to balance a lot of other things beyond just moving to electric vehicles and zero emissions.
Next is Volkswagen CEO Herbert Diess. Volkswagen has made some big promises when it comes to electrification: they have said they will stop selling gas cars in Europe by 2035, so I asked him about that.
NP: When do you think you’ll have enough batteries? When will there be charging infrastructure?
HD: I think this transition into EVs has certain constraints. I think the plan to get to 50 percent [EVs] by 2030 is extremely ambitious. If [VW] owns, here in Europe, about 20 percent market share, for that 20 percent market share to maintain 50 percent EVs, we need six gigafactories. Those factories would have to be up and running by 2027, 2028 to be able to deliver on our 2030 goal. It’s close to impossible to do that. I have high respect for our team who is facing the challenge because you have to buy all the machine tools. You have to build the plants. You have to find the locations. You have to train the people. You have to make sure that the supply of the raw materials is safeguarded and is good. This is huge. It’s not just saying, “Let’s switch off ICE cars.” It’s just impossible.
The second thing is that electric cars only make sense if the energy is renewable — only if the energy is really green energy that comes from wind or solar or nuclear. As long as we have nations based on producing electric energy from coal, it doesn’t make sense to sell electric vehicles there. Think about Poland: I believe it’s 100 percent coal currently. Before we sell electric cars, we have to convert the primary sector into 100 percent renewables. his has to go hand in hand with the conversion of primary energy production. This requires time, and this is why two ambitious plans will not work. That will be counterproductive, even, because running EVs on coal-fired car plants is even worse than running gasoline cars.
I asked Jeep CEO Christian Meunier the same question.
NP: Do you think you’ll sell any gas engines in 2040?
CM: In 2040?
NP: Yeah. Just five years after the farthest timeline you’ve announced. Do you think you’ll have any gas engines?
CM: I’ll be tempted to answer that no traditional ICE will be in a Jeep in 2040, but maybe I’m wrong. We’re a global brand, so we’ll be accommodating different markets. But I think all the markets in the world are evolving in the direction of electric. And you can take the BRICs [Brazil, Russia, India, China], you can take, say, India, you can take Brazil, you can take China. Obviously China has made the move to electrification, but even India is moving, putting incentives to bring BEV [battery electric vehicles] there. They want to have BEV built in India. Latin America is a little slower because they have the flex fuel and obviously there are some other political and economical ramifications to it. But think about a country like Brazil; it’s 100 percent hydroelectric, they produce electricity from water. So that’s a pure cycle. There is no detriment to nature. So it’s a really good technology and over time they will move into electrification. So 2040, it’s going to be very small if there are any gas engines.
NP: One of the things other companies seem to be doing is creating new brands for their electric vehicles. So, Ford has the Mustang Mach-E, it’s a whole new car. They’ve got the Lightning. Chevy has the Bolt. Toyota, famously, has the Prius. You have not done that. You have not created new electric vehicles. You’ve electrified, or hybridized, your existing vehicles. Why do that? Why not split it out and make it clear: “This is a technology brand that offers this, and these are our existing cars.” Why hybridize the existing vehicles?
CM: Because Jeep is going to become electric. There’s no point in having another brand. Jeep is going to become electric. So, it’s going to become, at one point, 100 percent electric. The question is, how fast? It will go through different stages, but it’s going to be a pure electric brand at some point in 10, 15, 20 years. So, I think there is no point in doing this, at least for Jeep. There’s no reason to do it.
When manufacturers really believe in electrification, why do that? I don’t really get it. Why would you create another brand for electric cars, when you’re going to keep your ICE? So, you’re going to have a polluting brand and a non-polluting brand. I don’t understand.
I was excited to ask Polestar CEO Thomas Ingenlath about the transition to full electric. Polestar was supposed to be an electric car company spun off from Volvo, but their first car was a hybrid.
NP: If you think the future is EVs, obviously hybrids are an interim step, but why start with gas-engineered cars at all?
TI: We had that discussion, of course, in the beginning. Why do you have a hybrid at all in your lineup? In the end, [we said] “Should we really be so dogmatic about it?” It is a car that has the longest electric range of a hybrid; 120, 130 kilometers. For a lot of people, that car is actually a great entry into that electric arena. It helps people to actually feel comfortable about driving an electric car, people who might have never, ever thought about it before. They discover with that car, “Wow, actually the electric part is the really cool part about it,” and it was always clear. It is that one fulfillment of a dream that we all had, a super beautiful GT, and the technology is awesome.
Hybrid is part of the electric journey. We will, of course, from now on have the electric lineup of the portfolio. Yeah, a little bit of an unorthodox beginning, but then again, it’s the whole thing, the whole brand Polestar. It’s not just a marketing exercise where you do a perfect plan from A to Z. It is a living thing. It has its history, how it all grew, and I think it has its charm to it, that we actually don’t just simply do everything textbook. [We] give it a little bit more [room] to breathe, and at the end decided, it is absolutely in line with what the company philosophy is about and that’s why we felt at the end of the day, electric will be a certain period of Polestar. In 50, 60, 70 years, we will still be Polestar, but technology might have changed again.
So sometime in the near future, there will be a lot more electric cars on the road. But we’re going to need somewhere to charge them. Right now, EVs have problems with range: you can’t go that far on just one charge — and unless you’re driving a Tesla, the charging infrastructure is pretty messy in the United States. Building out charging networks is a huge priority both for companies and policymakers — the US government will spend $7.5 billion on charging networks after passing the Biden infrastructure bill.
We talked to Secretary of Transportation Pete Buttigieg about charging as well. Here’s what he had to say.
PB: One definite example is the deployment of a nationwide network of electric vehicle chargers. It’s a good example of the role of the government: we don’t need to invent a new electric vehicle charger. The private sector has come up with a lot of versions of it. We don’t even need to deploy electric vehicle chargers ourselves single-handedly in a network that’s owned and operated by the government. Again, the private sector is there for that, but we have a very important role to play in terms of making sure that a network is laid out across this country for everybody; that it isn’t just in the most immediately profitable places, but also in the places that, collectively, add up to eliminating range anxiety for any American anywhere who is weighing whether to buy an electric vehicle.
That means filling in for market failures. It means accelerating market processes. It means using the purchasing power and guidelines that are available to the federal government to encourage made-in-America components and facilities to thrive in the EV charging space.
When you want a company to do something that’s not in their shareholder interest, there’s got to be more to the picture than pressure. That’s why this is about using billions of dollars to achieve that outcome, but we’re not going to just use those dollars to incentivize something that would’ve happened anyway, to pad profitabilities that would exist regardless. So it’s about smoothing that picture. Right now, you can make a buck putting an electric vehicle charger in a lot of places in the US, but those places might not make the biggest difference in terms of our development into an EV country.
I wanted to start with Volkswagen CEO Herbert Diess in this section, because Volkswagen has a substantial charging network in the US. It’s part of a program that they call Electrify America. Volkswagen was forced to start that program because of a scandal called Dieselgate. Basically, Volkswagen skirted emissions regulations by tampering with its cars to make it seem like they were producing a lot less pollution than they actually were. To atone for that, as part of a settlement with the US government, Volkswagen agreed to spend $2 billion on electric vehicles and charging infrastructure. But I’ve wondered if that punishment was a blessing in disguise. I asked Diess about it.
NP: I want to talk about charging infrastructure. You run Electrify America — that’s a Volkswagen project that came out of the Dieselgate settlement with California. Do you want to run Electrify America? When you have to do that because of a settlement related to a scandal, there’s a part of me that suspects that you’re doing it begrudgingly. There’s another part of me that thinks of this as a huge opportunity to own the major charging network in America.
HD: From the beginning, of all the penalties we received in America, I most liked this idea of a charging network because the idea of paving the way for our electric cars — or even making electric cars viable in America — would ultimately be an asset for us. I really liked it, but still, this was a big investment. It’s not going to pay off too soon, but over time, we are noticing that charging will be a business model. There’s not a lot of investment going into charging now. Of all the petrol companies, Shell is currently the biggest charging network. There’s a lot of business potential in charging. We also see that our incomes are gradually improving because the usage is getting higher. With every electric car we’re selling, it’s getting better.
That is why we think charging will play a major role. Supplying the energy, dealing with energy — it gets much more complex because the prices for electric energy are fluctuating. … You have to be able to buffer, and cars will provide a huge opportunity to be able to contribute to net stability [in the electric grid], because you basically can load the car when there’s a surplus [of energy]. We will experience times where you get your refueling for free, because there’s just so much energy surplus because of so many renewables in the network. This is a new business model and we want to participate. Yes, in America, this program was not entirely voluntary at the beginning, but ultimately I think it was the baseline for one of our strategic approaches into the EV business.
Next up is Jeep CEO Christian Meunier. When Christian was on Decoder, Jeep had just announced a new plug-in hybrid Jeep Cherokee, and they had already released the plug-in hybrid Wrangler. Here’s Christian.
NP: One of the big stumbling blocks to full electrification is charging networks. You can have a vision of all electric cars everywhere in 2040. Here in 2021, Tesla has a great charging network and every other company has a bad charging experience. That is just the way every review has gone. It’s the way my experience with electric vehicles has gone, and it’s the way other people with electric vehicles feel. How do you see that expanding?
CM: I think the responsibility of our governments, whether it is in the US or in Europe or elsewhere, is to accelerate. Because it is one thing to put pressure on compliance, it’s another thing to make sure that everything else follows and you put the right focus to get the grid in line. I think the risk would be that the grid is not supporting all these electrification efforts. So that’s a risk. But I think it’s the responsibility of our government to do that. Obviously we’ll work with them. We’re pushing them because it has to happen quicker than it’s currently happening. And it’s also [based] on the production of electricity.
At some point in time, we’re going to have to do something to produce more electricity to support all these needs. I’m hearing that in California there is some recommendation to use the grid at certain hours and things like that because there’s not enough to support the electric cars on the road already. So that’s a big challenge. And it has to be solved between, I would say, now and 2023, 2024. Because the volume of electric cars sold in the United States, in North America, in Europe, is going to be much higher. There are strong plans that are being developed but it’s going to be about execution. So the government will have a lot of pressure to deliver on that mission.
Ford CEO Jim Farley weighed in, too.
NP: When you drive a Mach-E around, [and] you open the charging map, Ford looks like it has a lot of charging stations, but they’re not yours, right? The software is sort of collating a bunch of partnerships with other companies, other carmakers, and seeing all the charging stations around. But sometimes they’re incompatible; sometimes they don’t all charge at the same rates. You’ve got a Lightning, you’ve got a Mach-E, they use different charging technology.
If I was talking to you like a standard tech company executive, I’d ask, what’s the industry standard? How are you going to adopt it? How are you going to enforce it? How do I know that my USB-C cable plugs into computers all the same way? It feels like with charging you’ve got the exact same problem, but on a massive scale.
JF: It’s a big deal, and you can see why it’s such a big focus for the new administration in their infrastructure investment. I think there is a lot of work to do.
I think we’ve done a very good job with what’s out there at Ford. I have no hesitation whether a Mach-E customer [can live] life with a Mach-E every day. I don’t see any risk at all in the charging experience. But there is a lot of improvement that we can make. I totally agree.
I will say, though, that Ford has the opportunity on the commercial side to do what Tesla’s done on the retail side, because we’re 40 percent of that industry, and we absolutely intend for the charging experience for our commercial customers to be a Ford experience that’s going to be unique. And we know these customers very well, and they have very different charging experiences and requirements. So I would just encourage us both, when we think about charging, we should think about not just retail — we should also think about the commercial vehicles, because it’s quite different and it’s starting from scratch.
Another thing that came up in these car CEO conversations is software. Cars are turning into rolling computers with all the same costs and concerns that every other computer has. Software controls everything from the drive train to the entertainment in the center console. Some of the biggest players in tech making moves to control that software. Apple has CarPlay, and Google has options that range from connecting your phone all the way to running the entire car on Android. Every car company has to make the complicated decision about which software to use or if they are going to make their own.
Here’s how Ford CEO Jim Farley described his decision to sign a deal with Google.
NP: You just signed a deal with Google; Android is going to power Sync in the future. How long should people expect Ford to support the computers in their cars the way that I expect Apple to support my iPhone for eight years or 10 years?
JF: This is such an important question. It’s actually the first time I’ve ever been asked this question.
I would tell you that we have to go through a kind of game-changing mentality of simplifying our technology stack so we can support all the software releases for all this complexity. This is probably one of the key areas that I spend the most time on.
We’re up to millions of connected vehicles now. I think at Ford we’re a trusted brand, frankly, more than a lot of technology companies, if you look at the surveys. We’re going to have to commit to the resources to support these vehicles that we’re launching now for decades to come.
The real lift is going to be, how do we simplify going forward so that we only have certain hardware and embedded software solutions, complexities, so that we don’t go crazy with our software resources?
Next is Volkswagen CEO Herbert Diess.
NP: You recently took over the software division [of VW], CARIAD. How do we build a compelling user experience? How do we deliver software updates? When you turn the car into a computer, you inherit computer problems. Why is CARIAD a division of Volkswagen instead of Volkswagen, if that is the future?
HD: I think you’re absolutely right in your verdict. The differentiation, the competitiveness, and the customer experience will all depend 90 percent on software. Now, I’m still convinced that design, performance, brand image, and marketing will all play a role, but software is becoming really dominant in the integration. … Product integrity in a complex, open room of solutions has always been a core task. What’s really new is that it’s so decisive to be able to integrate software in the different properties.
A car today already is 10 times more complex than a smartphone. It has 10 times more lines of code than a smartphone. The safety criteria is extremely different. The real-time environments are really difficult: if you think about braking or steering, you have to build in redundancies, and then you have to make the whole thing communicate to each other. Being updateable means that part of your software runs in the cloud, and you get the continuous updates. … The question is: who is going to succeed? Who can do it?
For the companies that are just working on self-driving technology, like Argo AI, the product is the software. Here is Bryan Salesky, CEO of Argo.
NP: Ford and Volkswagen are obviously gigantic car companies. They’re good at things like alloy wheels and leather seats and all the other things that go into making cars. They make cars. You don’t make cars. What is the Argo product? Where does it begin and end?
BS: The product is really, at its core, a whole lot of software that runs on some pretty specialized hardware, that connects to a car in a safe way. And I would say those car companies do a lot more than just make leather seats and alloy wheels — I don’t know if you’re setting me up here, but the car companies are increasingly becoming software companies in their own right. If you look at the car as a digital device, there’s actually an API, and a really important one that we interface with to be able to control basic things like steering and braking, and being able to do that in a safe and secure way is actually not trivial.
So, heavy respect for what they do, and working in concert with the automaker makes sure that those interfaces are done right and in a secure and safe way.
NP: So they put a specialized computer in their car, it runs your software. Do you have any hardware demands? Or is there a set of sensors that you require? Is there stuff that you make, or is it off-the-shelf? How does that part work?
BS: It’s sort of an amalgamation of things. So, they certainly have computing that their control software operates on. We have something that almost looks like a mini data center in the car that’s able to process data from sensors that are positioned all around it. So the car is able to see through sensors that we make as well as buy — it’s able to see 360 degrees around it, 400 meters away, day, night, and is able to pick up on things that, I would venture to say, most human drivers don’t even necessarily see or notice. So, many times a second, the car is reading that information and making decisions about how to navigate through the street.
Volvo and Polestar use Android in their cars. Here’s Polestar CEO Thomas Ingenlath with some great points about the idea of “just using CarPlay or Android Auto.”
NP: What is the balance between letting Google own what has become a primary user experience in the car and what you want to design?
TI: Well, it’s a customer benefit. If we promise to have a voice recognition that works, if we promise to have a navigation that actually knows that new restaurant around the block that opened a week ago, [customers] want to know the opening times when they put it into the navi. That is what we never can do on our own. That experience we can only do if you have a great partner with a great search engine behind it and everything. Do we give up that experience? No. People sitting in a Polestar don’t think that suddenly it is populated by something outlandish owned by Google. It is such a Polestar experience nevertheless. It’s a partnership. And that is where, if you go, then, to Ford or wherever, it will be a brand experience there. That is still possible.
Let’s face it, on my Apple iPhone, I have Google Maps, and just because I use Google Maps, it’s not that I suddenly say, “Oh, but this is not an iPhone anymore.” So I think there, we have to be a little bit more sophisticated in how we discuss it. It’s not like suddenly the whole product experience becomes a Google experience. Yeah, there’s a part of it, and I embrace what they do for our car and it’s a great partnership. And I think there the expertise of both brands comes together and creates just a beautiful product.
NP: What’s your data sharing agreement with Google like? How much data do they get to pull out of the car?
TI: Yeah, that’s absolutely like on the phone, where the customer can actually totally switch, even within the individual apps, he can decide on how much data he provides and how much he keeps for himself. So that is where that works very much like in any phone setting, where you go in and do your privacy settings.
NP: But the telematics that you collect about the cars, how much of that do you share with Google?
TI: Well, it’s very similar. Of course, this is not like the whole software. The software that runs the car is, of course, an automotive software. The Google part is the entertainment part. So that’s where people have to understand it’s not like the whole software of the car is run by Android. That is really the entertainment part, where you go into the app store, the navigation, and all of that, is the Google Android part. While, of course, the whole safety-relevant, drivetrain-relevant, the battery management, all of that, the whole autonomous capabilities of the car, all that is our software.
NP: The reason I ask is actually about autonomy. As cars begin to drive themselves more and more, as there are more driver assistance features, things like maps become critically important to the operation of a car and telling the car where you want to go. And there is obviously a connection between your autonomous driving system and the user experience of telling the car in the center screen. The map underneath actually tells the car where it is and what might be coming up. And then the data that is collected to refine and improve self-driving — that’s a lot of layers that need to connect, and it seems like Google sits right at the middle of it for you. I’m curious how you see that relationship developing.
TI: No, there is clearly a big, big distinction between what is the entertainment system, and okay, the navigation is of course sitting in there. But what we provide today with our [Pilot Assist], which has very much made that difference, we don’t call this an autonomous system. It is a support system where you’re still in the loop, but this is a software that is completely independent from the Google software. In the future, in our next car coming, when we develop this to a highway pilot, [it] then will reach autonomous qualities, but you really can let go [of the steering wheel] at some point in time. That is a system which we’re developing together with a software company here in Gothenburg, Zenseact, and we have Luminar LIDAR then for that. So all of that is on a completely different page where we develop this technology.
NP: Do you think the auto industry should kind of give up on developing the infotainment stack? I watch every car review on YouTube, and every car reviewer just sort of waves at the center of the car and says it has CarPlay and Android Auto, and then they move on. I’m very curious, is that the end of the road? Is there more innovation there yet to come?
TI: I think this has become far too much of a big, big, major question. Imagine in the past, we were always buying our radio from, I don’t know, Blaupunkt or whatever company there was. It was never the carmaker who made the radio. It was never the carmaker who made a phone. We just simply bring the stuff into the car, and I don’t see it as such a major thing. It definitely is not like suddenly this becomes the major domain. Maybe I’m too naive. Maybe I’m such a naive guy, but I don’t think that it is really this big devil that we invite to our table, and suddenly we lost it all.
And of course, it’s not as naive as saying, come on, we buy a seat from Recaro. I know that there is a bit more to it. Of course, we have to be smart and clever how we do the contracts and how much the user experience is still a brand-owned experience. And I think so far, my experience with Google is that they absolutely support that we have a brand-owned experience, even though we use their system in our car. So far, over the five years that we [have been] working now together on that, I have not had a negative experience, but I would be, now, more scared than we were in the beginning, rather the opposite.
CEO Austin Russell from Luminar is next. Luminar is a company that makes a specialized LIDAR sensor, one that sees farther than anything else on the market, and Russell is focused on keeping the cost way down. That’s the entire business proposition for Luminar. But in our discussion, we also talked about software.
AR: We want to be a turnkey solution for this, and to some extent have already started evolving into that for these different OEMs. And really the reason why is: to be able to build an autonomous vehicle, the LIDAR is just one part of that holistic solution. Now, it is a key bottleneck that’s been preventing the deployment of, in large part, this industry just by way of having something that meets the performance requirements, that meets the economic requirements, that can actually be scalable here. But at the same time, the LIDAR itself doesn’t drive your car. You need the software to go along with it, as well as some of the rest of the ecosystem there to be able to push forward with that.
Now there’s some argument that some would say, like, “Okay, what on earth? Why are you guys screwing around with software?” They’re like, “Yeah, okay. You carved out your value proposition in hardware, but you have folks like Waymo and Cruise and all these multibillion-dollar software development companies that are taking that on.”
The whole point is to have a solution. You take that $100,000 roof rack full of [LIDAR] stuff, or $200,000 roof rack, and effectively put it into a package that’s more on the order of $1,000 than it is $200,000.
So that’s a huge part of the equation. No question. Is the cost and the economics there? But it’s also just as much building a solution that’s tailored for production vehicles, that actually can be put into a car in an auto-grade solution, in capacity, and having the software that’s focused around the use case in the application and the domain. You’re going to have a completely different level of software complexity trying to build for an urban environment than you are for the highway environments that we’re focused on for the initial deployments with OEMs.
Hearing from Austin is a great segue into another common theme, autonomous driving.
Autonomous driving, or self-driving, refers to the goal of eventually being able to get in a car that drives itself — where you can answer your emails, take a nap, whatever, and your car gets you to your destination without you ever touching the steering wheel. That goal, at least for cars owned by private individuals, is still pretty far off. But in certain cities, you can already hop in a driverless taxi. Waymo is running driverless taxis in Phoenix, Arizona, and you’ll hear the Waymo CEO talk about that.
Waymo takes a conservative approach to discussing just how much these cars can do and is careful to highlight their weaknesses. On the other end of that spectrum is Tesla, which refers to its software as full self-driving. That software is still in beta but it allows its users to do things like park and change lanes automatically. Critics say “full self-driving” is a dangerous misnomer. So listen for the debate about the nomenclature here. You’ll hear the CEOs refer to the levels of self-driving. That’s a scale developed by the Society of Automotive Engineers (SAE) where level zero is no self-driving whatsoever, and level five is full self-driving. At levels one and two, there’s some automation, but you’re driving. At level three, the car is mostly driving but may ask for your help. And at level four, the car is driving but can’t drive in all conditions.
How we talk about what autonomous cars can and can’t do, and how we’ll get to a place of actual autonomous driving, is a big debate here, and the CEOs have a lot of interesting insights on that. Here’s Waymo CEO Tekedra Mawakana.
NP: Self-driving cars — what’s taking so long?
TM: We’ve been at it for a while. I would say it’s the engineering challenge of our generation. That is what’s taking it so long. To do it, and do it well, I think means two things. One, that safety is at the core of everything we do. And safety takes time. And secondly, we actually have to learn along the way. It’s like a process of discovery.
What’s funny to me is when I think back to when I joined Waymo almost five years ago. And I remember thinking, “Oh, product market fit’s probably done. It’s ready to commercialize.” And I realized, no, you actually have to put the technology into the real world and that’s how you get it ready.
That is the goal for the customer. Our goal in Phoenix was to learn. Malls have seven, 12 entrances; which one do you expect to be picked up at? The reality is when you give us that address, we may not be at the same entrance you are and when there’s not a human in the car for you to call, or to call you. So what are the operational challenges associated with actually having a fully autonomous service?
NP: You said 20 million miles, which is Waymo’s favorite statistic. You have driven more miles than anybody else, but the problem you’re describing is very local. It’s very small, you could get 100 million miles and you still might not know where the exit of the shopping mall is. Is that a challenge that you’re splitting? Are you attacking that differently?
TM: Yes, so when we talk about the number of miles that we’ve driven, that’s across all 25 cities, and that’s really important. We’ve tested rain, we’ve tested heat in Sun Valley, snow. Those miles are training the [Waymo] Driver for scenarios that we’re not currently operating a service in. When I talk about pickup and dropoffs, or the chaos in a parking lot, those are very specific to the service that we’re offering and the feedback that we’re getting.
Here’s Bryan Salesky from Argo AI.
BS: I think something that we’ve understood over the last decade, is that it isn’t enough to just see and understand the world, you also have to predict what it’s going to do. If things are in motion, you have to operate in and among other human drivers. And you don’t want to be moving in an overly robotic way where the car is going to be constantly starting and stopping, and moving left and right in ways that an external observer would say, “What the heck is this thing doing?”
I started doing robotics in like 2004 or 2005, in that neighborhood. And I remember one of the first assignments I had, building a simulator. We were at the whiteboard and very little prior art existed, in the application we were in. And it was like, “All right, let’s start making a list of all the things that we’re going to encounter in the world.” And I’m new to this industry, I’m staring at the whiteboard with a marker, and I’m looking at a guy that’s been doing this for 15 years, and I thought to myself, “Is this really the starting point?”
NP: That’s hilarious.
BS: So, yes, we have come a long way since those times. I think that the dream was always suspect if the dream was, “We’re going to deploy millions of cars and go from literally zero self-driving cars on the street, to millions in a couple of years.” I mean, change doesn’t happen that quickly. On the other hand, if you look at it from a basic compute and storage and silicon standpoint, we’ve made substantial progress in the 17 years I’ve been doing this.
At some point, though, the volumes will go up in these fleets. Component costs will come down over time. I can’t predict when this will happen, but it will happen. And at some point, you’ll be able to offer this on personally owned vehicles. And at that point, have there been major technology changes where the sensor footprint of the car has decreased, or where it’s starting to blend more with what level two systems may have become at that point?
I don’t know. I’m so far in the future, though, Nilay, that I just put a bunch of dots on the screen for you. I have no idea how to connect them yet, time-wise.
Argo AI has partnered with Volkswagen to create the ID Buzz, a retro-futuristic van with level four automation capabilities that will function as a taxi. So here’s Volkswagen CEO Herbert Diess’s take on that, and on the software side of their autonomous work, which is run by VW’s division CARIAD.
HD: In the end, it’s not about software: it’s about good integration between the right sensor setup, the right computer hardware to make all the perception, the planning, and then finally making the right decisions to run the car safely. Our aim is to be able to drive a car as Volkswagen. We have two areas: one is pushing robotaxi technology with Argo. This involves shuttle services, limited areas, relatively slow speeds — they are typically ODD, which is learned and programmed. Then it goes area by area and city by city.
The other way we are pushing is private mobility: we have the Audi team and CARIAD team working on that because we think that autonomous driving will not only cover this area of robotaxis, but also private cars. Step by step: first we tackle driving at level three or level four on open highways — German autobahns — and then we get into more complex areas. This will happen at the same time. It’s two different technologies. Some of our approaches involve sharing computing technology. Some sensors are shared — but ultimately those tasks are so different. At one stage, you think about a completely autonomous car, which is able to handle an area right from the start. On the other hand, you think about driving at higher speeds in a less complex area in a car that is also able to take over from a driver for a certain period of time.
Jeep CEO Christian Meunier had kind of a different view on how autonomous driving could help people while cars still maintain that “fun to drive” feeling that he believes is core to the Jeep brand.
CM: I think we want to keep the pleasure to drive intact. We sell lifestyle machines and machines that people enjoy driving and have fun driving in. So, we’re not going to eliminate that. And if the customers at one point want to eliminate it, then there is no need to have a Jeep. If the car drives and does everything itself, I think you lose that emotional connection with your product, with your car, and we don’t want to do that. You know that we’re not going to build a car around a screen. A Jeep is first a Jeep and the technology is going to be an enabler.
Jeeps, when you look at the design of a Jeep from the Willys to now, there is functionality and authenticity in everything we do. The wheel arches, they’re not round wheel arches, they’re square, right? It’s because of efficiency off-road. The functionality is still going to remain a very important piece. We’re not going to build technology and then have a car around it. That’s not a Jeep. We’re still going to build a Jeep that people will enjoy driving, be proud of, and whenever they’re going to want to use that [level four] technology, they can fall asleep. They can fall asleep. They can go for a ride with their Jeep, or they can go for a walk and the Jeep will find them at the bottom of the hill. That’s freedom.
We just talked a lot about electrification and self-driving, which of course leads us right to Tesla. Tesla came up in almost all these conversations, as did Elon Musk. The company and Musk are major innovators in the industry, and every other company is forced to react to them from time to time. And it’s not always positive — as we hinted above, Waymo CEO Tekedra Mawakana has a bit of a beef with Tesla’s messaging.
NP: We are on stage after Elon Musk was on stage. Tesla has something called full self-driving, which is level two-plus on this complicated scale of self-driving that no one understands. You’re level four. You want to go to level five. Do you think that the full self-driving, driver assist stuff, where people tune out, is poisoning the well of the self-driving conversation at all?
TM: In the early days, I guess 2013, the Google self-driving car project [before it spun out into Waymo] focused on auto assist technology. What we learned in our experience is that people trust the technology beyond its capabilities. We witnessed employees actually shaving, and sleeping, and plugging into the back seat, even though we told them that was beyond the capability. And so I think the problem is, we’re human. When we get in the car we have other stuff to do. We’re leaving home and we need to get to work but we have three emails we meant to send, but the cat ran out, or whatever.
And so I think the problem is you have to give people the chance to just do what they want to do, which is not focus on driving. And so what we’re focused on, the reason we’re focused on level four, is that we believe it is the only way to safely deploy this technology in a way that improves road safety, which is the mission that we’re built on. It’s a very different business model when you’re talking about driver assist. I have that in my car. It makes me stay in the lane. It’s delightful for what it is, but it isn’t something that allows me to tune out.
Bryan Salesky from Argo AI brought up Tesla in the context of self-driving, too.
NP: People do dumb things in their Teslas, which are advertised to have a thing called Full Self-Driving or Autopilot. There’s a lot of confusion there, so what, in your mind, beyond just, “Can you sleep in it?” What is the difference? What is the line that you can evaluate?
BS: Do you have to pay attention and keep your hands on the wheel or not? Is it hands off, mind off, or not? To me, that’s the fundamental question. And regardless of what marketing terms you use, at the end of the day, Tesla’s very clear that you need to be paying attention, have your hands on the wheel, and be prepared to take over if the technology’s not going to do the right thing. It would appear people are free to use that product however they want, at their own risk. My view is that, regardless of what marketing terms we use, we’re never going to speak to the everyday consumer when we use terminology like L2, L2-plus. I mean, I listen to myself on this show this last hour: “L4,” “Well, Nilay, I’m not sure that L3…”
I can talk all day long and people’s eyes are going to glaze over. I remember hearing a story a while back about Volvo and some pedestrian-detection technology that they had. They were running through a test for a customer and the salesperson leapt out in front of the car and got run over.
Well, you know what? The car wasn’t equipped with it. It turned out it was an option and that car did not have that option. I don’t know if that story is accurate or not, but we clearly are not putting this information out there in an easy-to-use, easy-to-understand way. To me that’s a thing the whole industry needs to solve. And not just autonomy. I’m saying this is an automotive industry issue that we need to push on.
NP: Do you think Tesla rolling out Autopilot in beta, letting people do dumb things with it, constantly generating news cycles about it going sideways — there was a video the other day where it was getting confused by the moon in the sky. I don’t know if you saw it.
BS: I saw it, yeah. It saw it as a yellow light…
NP: Yeah, do you think that stuff is just poisoning the well? Is it making change harder?
BS: Maybe. Here’s what I wonder. Out of the Autopilot accidents, the collisions that have occurred, I’d really be interested in those who can be interviewed to just say, “Did you know how the product was intended to be used and did you knowingly use it differently? Or did you knowingly ignore the instructions?” I wonder.
I’m going to make the counterpoint to what I was just saying. Maybe it actually isn’t so much an education thing and it just goes back to the old adage with consumer products, which is: If there’s a way to abuse it, it will be abused. I don’t know. Maybe that’s what’s at play here. I think it’s worthy of discussion, though, because it’s clear that there is a problem and we need to get to the bottom of it.
Maybe it’s all of the above. Maybe it’s education and it’s also, “Hey, you know what? Maybe a driver monitoring system’s not a bad thing.” Like if your car really does require a person to stay focused on the road, maybe you actually need to monitor and make sure that they are, for it to be engaged or stay engaged. There are conversations here that I think are really important to be having right now because at the end of the day, the core foundational case for all of this in my view is safety. There is a convenience element to it as well, but these are safety products at the end of the day.
And here is Polestar CEO Thomas Ingenlath, who, since he runs an electric car company, is particularly interested in Tesla’s charging network.
NP: Have you talked to Tesla about opening up the Supercharger network, about participating with them or having them participate with you?
TI: Well, there have been talks in the past and I’m sure there will be talks in the future. They sometimes say they will open it and let’s see if they, at some point, really will do it.
NP: Do you ever think of just going crazy on Twitter to compete with Elon Musk and build the Polestar brand the way that he builds the Tesla brand?
TI: No, I don’t think that is my style.
NP: How do you think about competing with Tesla as a brand? Tesla famously does no marketing. They’re a very different kind of company.
TI: You have to be authentic and, that’s maybe his way of being authentic, and fine, we have to be authentic our way, and we have to be, as a brand, as authentic as possible and I think we should never, ever try to imitate somebody [but] to see, who are we? Let people participate in our story and that is, I think, the way we really followed over the last years, that we make people understand why we’re doing things, what we believe in, and try to share the joy and the passion about what we create and try to make that better with the people giving us feedback. That’s our way and we are not a brand that would put a specific person into the limelight for us.
It’s a different way of building it, and having said that, it’s still fairly individual and I think a colorful brand. I think that we will never [be] shy of expressing an opinion. We went out and declared the end of the combustion age and said goodbye to that. We were very bold in declaring that it’s our way, going with Google Android. We have very clearly stated that we dislike the way of compensating for CO2 emissions, that we truly believe that the way to zero emissions is something that we have to do without compensation and really make it happen over the next nine years that we have a zero emission car. I think that’s where we made our points and feel that we built our brand around these beliefs.
Next is Jeep CEO Christian Meunier.
NP: Elon Musk has recently made some more comments on opening up the superchargers to work with other cars. Is that a conversation you’ve had, or that Stellantis has had with Tesla?
CM: We have discussions, obviously, with all the OEMs, Electrify America, all the providers of the charging stations, because I think it’s in everybody’s interest to find a solution that will work for everybody. When Tesla starts selling more volume, they’re going to need more charging stations as well, and they won’t be able to be standalone. So, I think it’s really going to be a common need for all the manufacturers to find a common solution. It’s not about having a unique solution by brand; it’s never going to happen. I think it’s going to have to be a public infrastructure that is available to all the brands for that to work.
Up next is Volkswagen Group CEO Herbert Diess. In other parts of this interview Herbert kept calling Tesla “our American competitor” which I thought was hilarious.
NP: Tesla’s great advantage is very tight integration of hardware and software. Even through the chip shortage, Tesla was able to swap out chips and rewrite the software based on what chips were available in a way that virtually no other car company was able to do.
HD: No, no — that’s not true. We also do that continuously, but you have to imagine, we are much more complex. We have a variety of supply chains, which makes us — and even the platform strategy — a little bit more vulnerable, but we also already did some redesigns. We are still probably a bit too slow. I agree.
NP: How do you think about the pace of investment in building the charging network there? I’m looking at the numbers here. You expect to have 1,800 fast charging stations and 10,000 chargers in America by the end of 2025. There are already 10,000 Tesla Superchargers. Is that fast enough?
HD: In some countries, we are already ahead of Tesla. That’s fast enough because it has to match the growth of the fleet. But you’re absolutely right: we can’t do all the investment out of our cash flows. We are partnering and we are also looking at some areas, for instance, batteries. Batteries are a much bigger concern for me because the investment there is still bigger than in charging. We will even consider IPOs, or allowing certain parties to participate in the growth, because there will be a lot of growth in the area of EV charging and batteries, and I’m sure that we will find investors to participate, but we can’t finance all of the necessary investment out of our cash flows.
NP: Every now and again, Elon Musk talks about opening Superchargers. We had the CEO of Polestar on, he says, “Yeah, they talk about it, but it’s never going to happen.” Do you think we’re going to see an actual push from the industry to standardize charging, especially fast charging?
HD: Aside from this proprietary network, which is quite established already worldwide, the rest is really usable industry-wide. When it comes to billing or charging, there are different standards and different price tags. Here in Europe, you can use every pole that is not Tesla. I think it’s a positive move from Tesla to consider opening up their network; Tesla has to decide on that. My perception is that the charging network actually is growing very, very fast. At least in Europe, I drove electric cars basically the whole year during 2021. I’ve driven about 15,000 kilometers. I was in Italy yesterday, I came back through Austria. It was only once that I had to wait on a charging pole. In the US, you can go from the West Coast to the East Coast without stopping. I think we overstate the issue — it’s growing really fast, and there’s so much investment going in. It’s not only auto: now everyone is investing in charging networks.
The utilities companies, the petrol companies — now they also are changing swiftly. Currently, for instance, we agreed with BP. They’re running the biggest refueling network in Germany. We will convert all the fuel stations into charging within a two-year time period. There’s a lot of investment going in, and I think it will be in line with the growth of EVs. The bigger constraint might be batteries.
Here’s Ford CEO Jim Farley.
NP: Tesla did something very bold with the Cybertruck, it is a triangle on wheels. It looks absolutely nuts. Some people are very taken with it.
It kind of feels like with the Mach-E, you entered a little bit of Tesla’s territory, sedans — you brought it up yourself. And with the Cybertruck they’re trying to bite a little bit of yours. How is that competition going?
JF: It’s all good. It’s all good for the customer.
That Mach-E and the Tesla Y, they are different customers. 70-plus percent of our customers for Mach-E — and we’re completely sold out — are new to Ford. It’s all good. That’s good for everyone. We’ll be in a competition of who does the most OTAs [over-the-air updates] that matter the most for customers.
And on pickup trucks, all I’ll say is there are lots of flavors of soda, but there’s only one Coke, and there’ll be lots of electric pickup trucks; there’s only one F-150.
NP: Do you ever think about just wilding out on Twitter to compete with Elon directly?
JF: Look, I have to tell you that I have nothing but respect for Tesla.
It was one of the most magical things that happened in our industry, to see a company so single-minded, so focused on simplicity, and really reinventing the customer experience. We’ve had some moments on Twitter actually around BlueCruise.
Ford’s a customer company. We’ve been in business for 118 years because we’re focused on customers, especially in these kind of iconic spaces like Mustang or Bronco or F-150. I admire companies that are like us who are focused on customers. And I think they’ve done a great job. It’s just that pickup truck customers are a little bit different.
At the end of the show we usually ask CEOs about what’s next: “What’s the next thing we can look forward to?” But I’m looking forward to cars without steering wheels. So I asked them.
NP: When do you think Volkswagen will sell a car without a steering wheel?
HD: Difficult to say. First thing will probably be the fleets we are running now together with Argo AI. We should get started in 2025 or 2026. Now, those will still have the steering wheel for getting the car back from certain locations, but towards 2030, we should be able to sell cars without a steering wheel for transport services. Now, for private use, most of those cars would probably still have a steering wheel in case of heavy weather conditions, for example — or let’s say you drive into a very remote area where the car is not able to handle it.
NP: How long until I can buy a car without a steering wheel?
AR: Probably I would say early 2030s, realistically. A couple of different observations here. … There’s a key distinction to that question of, when can you buy a car without a steering wheel? It’s not clear that people will actually be selling these cars without steering wheels.
NP: So, make the same prediction about steering wheels: In 2040, will most Jeeps have steering wheels in them?
CM: That’s a good question. I think in 2030, they will have steering wheels. In 2040, I still think we’re going to need steering wheels because Jeep is not a transportation brand. We’re not there to transport from A to Z. We’re here to provide pleasure, emotion, driving pleasure, fun to drive. And the steering wheel, whether it’s completely round or square or a different shape, or levers, is going to be very critical because the driver is going to be in charge. So, yeah, we will have a steering wheel, whether it’s the same shape or a different shape, we will. Pretty sure. No doubt.
wazup.