Lease Models Could Boost Autonomous Adoption, Says Continental

Renting autonomous features and functions when you want them could be the way to accelerate acceptance and affordability of driverless technology.

This is the opinion of Ralph Lauxmann head of autonomous technology at Continental who believes the current air of realism gusting through the autonomous technology industry can have a positive effect on developer’s business models. Speaking exclusively to TU-Automotive at the 2019 Frankfurt Motor Show (IAA) Lauxmann, said: “We have seen a reduction in the euphoria around the technology. I think that’s exactly what we need to gain the right focus and the right speed for the technology in the cars.

He said the pace of development in the vehicles has yet to be matched by that of the infrastructure they will have to depend upon. Lauxmann said: “Because, combined with the technology in the cars, we need the development of the technology for the infrastructure which is, from my point of view, the main challenge. We need all the sensors, all the ECU and other technologies in the cars and we need the same things in the infrastructure with the right level of connectivity between the two to have the possibility of a safer and more efficient traffic situation than we have today.”

However, an area the industry can address itself could see the spawning of new business models based on the leasing approach where consumers can select autonomous functions as an when they want or need them. In this way, a vehicle user facing a long highway journey that requires them to perform certain tasks while traveling, could activate the car’s driverless function for a certain portion of the trip. Lauxmann explained: “This use case scenario is where it is a privately owned car but it is a leased one. You have the technology on board but you don’t pay for the technology while you are buying the car. Perhaps you will have a contract with a service supplier so that you can activate the functions in the car by paying a certain amount of money. They can then use the technology that is already built into the cars.

“If we think in these ways with new business ideas, then I think the introduction of autonomous driving modes in those privately owned cars could see a faster take-up than if the consumer has to pay for the technology as they have to today in the traditional business model. This is where we have to change things.”

He added that accepting the costs of the technology required for full autonomy will see the technology plotting a course to the applications that can bear this cost. Lauxmann said: “I distinguish between the use case when a fleet is handling autonomous driving cars or if the cars are privately owned. In the case of the fleet, there is a real business case to consider because if they can extend the driving time of a truck or you can run the people movers for robo-taxis 24/7 with the labor doing the maintenance and not sitting in the car, then the business case allows the bringing in of very expensive technology.”

Here realism has to be applied when contemplating the time scale of mass adoption of the technology in the consumer end of the market, said Lauxmann. “We have to have a reasonable price or otherwise the consumers will not buy them. This is the model with most new technologies – when we start out, we have low volumes and the technology is super expensive. When we have higher volumes, we reach a breakeven point and then can drive down the cost while we are producing a certain number of the sensors and ECUs we can reuse the software of the safety mechanisms to make savings in production. From that point on, it should be possible for the privately owned cars to use this technology because they will then be affordable.”

His company is currently exploring the potential of commercial fleet autonomy in several markets around the world. He said:  “The first step to autonomous driving will come with the fleets. That is why we are engaged in having such a good relationship with places like Singapore, some Chinese districts and we talk about harbor areas where we go for automation not only for people transportation but all for goods.

“In rural areas it’s much easier to conduct autonomous research and trials than in the super busy inner city areas. If you could imagine we could handle the traffic situation in Paris in the next five or 10 years with autonomous cars and go for mixed traffic between bicycles, cars, pedestrians… that is not the picture we are realistically working towards.”

Also agriculture is a rich source of autonomous data collection and experimentation for Continental where projects can be run in an almost laboratory environment away from the hurly-burly of crowded city streets. Lauxmann said:  “When we work with companies with harvesters or tractors with autonomous technology we use already existing technology but, for example, to make it reliable we put in two radar sensors instead of just one. This gives an add-on in reliability and also in function because you have the ability to cover a wider range. So, it’s less a try-out of the technology but technology itself moving the parameters of what we know a little bit. In this way, we have one plus one but it’s not two but really three.”

The autonomous technology even draws on the examples of the early development of the automobile including a digital version of the ‘man with a flag’. Lauxmann explained: “The agricultural industry is a super playground. For example, we are working on the connectivity between a drone and a harvester. The drone can observe the area in front of the harvester to ensure there are no animals or obstacles that can damage the forks in the harvester. That kind of communication in real time, observing and interpreting its pictures from the drone is something we had not done before so it’s a real technological challenge.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_