The gap between carmaker and customer is closing

Cars are already lasting longer than ever and, at the same time, they increasingly run on software code. Moreover, vehicle capabilities can be fine tuned, enhanced, and new features designed and added by carmakers and other parties after the car has been purchased.

Features and performance updated remotely significantly extend the window for the manufacturers, dealers or suppliers to offer new services to consumers beyond the point of sale. Law professor Bryant Walker Smith of the University of South Carolina has given a lot of thought to the implications of what he calls the increasing proximity between carmakers and both their products and their customers.

As a lawyer, Smith focuses in part on the extensive liability implications of this new paradigm in which a product is continually renewed and refreshed until decommissioning, deepening and lengthening the relationship between the manufacturer and the consumer. Setting liability aside for the moment, this proximity promises new benefits to consumers, and, for real, new market opportunities that might make the change of paradigm and the attendant liability worth it.

In his Georgetown Law Journal article Proximity-Driven Liability Smith explains that Tesla was the first vehicle manufacturer to offer over-the-air (OTA) updates and makes the case for how this type of alteration to a vehicle could be the norm in the future. Certain vehicle features or driving functions could be restricted, or enhanced, at certain times of day or in specific weather conditions, and cars intermittently upgraded by OTA software patches. The potential scenarios include software enabling, for example, exciting speed and handling on mountain roads, or the capability to safely follow vehicles extremely closely in traffic – much closer than rival manufacturers. These raise the prospect of new on-going sources of revenue and suppliers, including carmakers, offering software, marketing, leases and contracts that create close engagement with consumers that last for already long the lifecycle of the vehicle.

Smith describes each OTA update that the service model is built on as analogous to a virtual recall and he wonders how the manufacturers and their suppliers can include the price of risk of unknown future services into the product’s initial selling price, as “point of sale carries over into post-sale duty”.

The data that flows in the other direction, from the end user/s to the carmaker, creates another issue to consider in light of the new long-term engagement between provider and consumer. Even if the vehicle data is collective, and not individualised, it offers an opportunity for acquiring knowledge about use, be it in the form of patterns, or in the form of information about individual behaviour.

Smith delves into the tricky relationship between “acquisition of data, analysis and actual knowledge”. It would seem that anyone, regulators or corporations, with knowledge resulting from analysis of consumer or vehicle data might then have a responsibility to act on that knowledge in order to protect consumers’ or the public’s safety – any knowledge that could be a market opportunity will also be a liability.

In future, a vehicle’s performance may be judged by new, and evolving, “tribal knowledge” about customisation and temporary capabilities. These could be geared to an entire market but one divided into increasingly smaller slices.

However, will software enabling these possibilities be a benefit to the public and an exciting business opportunity, or turn out to be an excessively daunting liability as carmakers learn, and acknowledge, how it is used or misused?

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