Despite the imminent rise of the robot-taxi, car makers can expect rising global demand over the coming decades, even if “dramatic” changes to the industry mean fewer people actually own their cars, Renault’s head of electric vehicles said.
The full emergence of driverless cabs after 2025, along with electrification, smart travel apps and the growth of car sharing, may slow demand in advanced economies such as the United States and Europe, said Gilles Normand, the French company’s senior vice president for electric vehicles.
Any decline in richer countries will be offset by growing sales in emerging economies he said. India is close to overtaking Germany in terms of market size, he said.
But even as technology majors such as Alphabet and nuTonomy develop autonomous vehicle software and sensor systems, they are avoiding making cars in high volume, a complex manufacturing process that traditional car makers have already mastered.
Technology companies are used to high margin and low capital intensity, not the high capital costs seen in the car sector, Mr Normand said.
“When they start to make the maths they’ll understand that this is a very competitive industry, there is a lot of product liability already,” he said. “We think we won’t be one against the other but are more likely to co-operate.”
Indeed, Alphabet’s Waymo self-driving car unit has already partnered traditional car makers and the chief executive John Krafcik likes to say he is in the business of building a better driver, not a better vehicle.
“The industry is going to evolve more in the next 10 years than in the last century,” Mr Normand said. “Mobility tomorrow will evolve to something where we move from owning a car to more buying a service.” Electric vehicles still represent only a tiny share of global vehicle sales but are growing quickly and going to become more widely used as prices for the batteries continue to decline.
Car hailing and sharing, spurred by companies like Uber Technologies, are set to expand. By 2030, 95 percent of US passenger miles will be made via this “transport as a service” model, with fleets of self-driving electric vehicles that are not owned by individuals and can be ordered on demand, according to a report last week by the research company RethinkX. As shared cars will be used more than individually owned ones, fewer will be needed.
“It doesn’t mean it will happen in every country at the same speed because obviously there are a lot of regulations,” said Mr Normand. The car maker is based in the Paris suburb of Boulogne-Billancourt and Nissan Motor owns a 15 per cent stake. Its Nissan Leaf was the second-best selling electric vehicle in 2016, while the Zoe model was the eighth-best selling, according to Bloomberg New Energy Finance.
This year, the Renault-Nissan alliance partnered Transdev in a research effort to develop electric, driverless vehicles. They want to develop a system that lets people book rides and helps operators to manage self-driving fleets.
“You still need the same amount of cars, but you have less cars being used in parking lots and you can reduce parking lots and you have more friendly space in cities, but this is going to be long term,” Mr Normand said.
* Bloomberg
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