By Jeff Sanford
Toronto, Ontario -- January 6, 2018 -- This week in the Autonomous Report, Blackberry is making a comeback, Tesla can’t quite meet their promises and much, much more.
Blackberry just announced a deal with Chinese tech giant Baidu to see that the company uses BlackBerry software for the automated vehicle (AV) systems it is designing.
The announcement sent shares in Blackberry up almost ten percent in one day. Blackberry, of course, became a household name when it developed highly secure mobile communication devices. Politicians and corporate executives long favoured the devices for their solid security. But the company managed to lose that market to competitors, and the brand is no longer as visible as it once was. Investors seemed to lose interest.
Few noticed that the company has been working on another strategy. Blackberry developed a software platform known as QNX, which has been adopted by major automakers and installed on millions of cars. The system manages the rapidly expanding number of digital functions in vehicles. Now Baidu wants to work Blackberry’s software into an open-source self-driving platform, Apollo. This is big for Blackberry.
Baidu is a massive Internet company. It operates the world’s second largest search engine and was the first Chinese tech company to be included in the Nasdaq 100 stock index. Some call it the Google of China. And like Google, the company is working on AI and self-driving cars.
A general manager of Baidu’s intelligent driving division was quoted saying, "By integrating the BlackBerry QNX OS with the Apollo platform, we will enable carmakers to leap from prototype to production systems.” Within the technology sector it is suddenly being said that the automotive industry is one of the fastest-growing segments. Automakers are racing to add more features for building self-driving cars, and it appears Blackberry is going to be in the thick of that.
Technology analyst from CIBC Capital Markets said in the story that self-driving features will be on all cars in the next few years. He was quoted as saying, "The opportunity is global, it is for a very large market and I think it is a very solid win for BlackBerry."
As Blackberry’s fortunes revive, Ottawa is expected to reap some benefits. A report from Ottawa’s business journal recently considered the possibility of the sleepy government city becoming a hotbed for AV development. The hype around AVs reached a boiling point this past year, and Ottawa was included in several major announcements from companies involved in this newly-emerging sector.
Blackberry launched an AV Innovation Centre in the city. Ford announced it will spend $338-million on a new research and engineering centre. That deal represents the first time one of the big three U.S. automakers has set up shop in the region. The municipality claims to have hosted the first live demonstration of an AV on public streets in Canada, though a Toronto program can challenge that claim. Though, the Ottawa event was unique in that the AV was interacting with “live city infrastructure.”
Nokia is also said to be in line to use the city’s new AV test tracks. All in, the Ottawa Business Journal has now dubbed the city Canada's AV capital. Waterloo, Toronto and Stratford will likely take issue with that. Each of these cities are also hosting projects and testing related to AVs.
Regardless of the city crowned Queen of the Canadian AV sector, it seems there is going to be much business in the years to come. One statistic included in the news report suggests that the global autonomous vehicles market is expected to grow at a, “... compound annual growth rate of 39.6 percent from 2017 to 2027, reaching $126.8 billion by 2027.” That is an absolutely massive rate of growth.
Another recent article about Ottawa and its quest to become an AV utopia contains some interesting points. According to a Reuters report, “... the City of Ottawa is adopting technology that allows vehicle-to-infrastructure communication. This includes dedicated short-range communications technology that allows cars and stoplights to communicate with each other. Cars will know whether they are at a red or green light by talking to stoplights via high-speed, Wi-Fi bay stations located on nearby rooftops.”
Overall Ontario seems to be in the fore in terms of leading the AV movement. The budget handed down in 2017 by the Government of Ontario includes a provision for $80 million to be spent on AV research. The budget also includes the creation of an Autonomous Vehicle Innovation Network designed to help the “... province's transportation systems and infrastructure adapt to AV technology.” So far three companies have applied for a license from the government of Ontario to test AVs on public roads.
Has Elon Musk lost his bet? It was not long ago that the CEO of Tesla predicted one of his electric cars would be the first to drive across America without a driver, which he stated would happen by the end of 2017.
Now that we’re into a new year, it seems the poster boy for technological entrepreneurship has failed to deliver on yet another promise. The loss of this bet is not entirely Musk’s fault. The government did step in and provide some rules regarding the company’s ability to offer a self-driving mode on its cars. Tesla can download that function to existing cars. Owners are charged a fairly hefty price for the update. But the system does allow the car to make use of the sensors to drive autonomously.
Many Tesla owners began posting videos of their car driving while they climbed into the backseat. A couple of tragic accidents quelled the early euphoria. Musk was subsequently criticized for not waiting until LIDAR devices can be included on the car. LIDAR is considered a much more robust method for achieving true AV status, rather than simply relying on small sensors used in ADAS systems, which is what Tesla was doing.
Musk took flack from other auto executives for pushing too hard to get a self-driving mode into his cars based on simple sensors. The subtext was that Musk had again been too aggressive in his goals, putting some drivers at risk. It seems the criticism struck home. Musk has stopped talking about the imminent arrival of a self-driving mode on the Tesla. He certainly has not mentioned the bet he made that a Tesla would drive “hands free” from New York to Los Angeles by the end of 2017.
Perhaps Musk is more focused on a nearer set of challenges that have popped as of late. In July of this year, Musk predicted Tesla would be making 20,000 Model 3s a month by December. But in the past three months, it has built only 2,425. Manufacturing glitches have held up production. It is also said that huge majority of the cars that are coming off the line have defects (like 90 percent of them). So, what was supposed to be the roll out of the company’s mass market-targeted vehicle has not gone as smoothly as hoped. As a source in a recent news report put it, "This is par for the course for Tesla and Elon Musk, whose history of stating goals and forecasts and not meeting them is pretty well established.” The source added, “That the Model 3 is moving slowly is not a surprise. Most independent experts found the production rates he was forecasting were pretty unlikely."
Tesla planned to achieve profitability through Model 3. But the company continues to report losses, and may even have to float more shares to bring in cash. Stock in Tesla spiked last year. But as worries that the holdings of existing shareholders will be diluted by more share offerings as the company fails to generate real revenue has seen the stock pull back in terms of price since its peak a couple months ago.
Nissan’s new tech
Nissan has announced a weird new bit of AV tech. It is not clear whether the company is serious, or whether a recent press release is simply an attempt to generate some interest in the AV prospects at the company. Whatever the case, the new technology is out there.
It was reported last week in popular publication TechCrunch that Nissan’s latest research project is 'brain-to-vehicle' (aka 'B2V') technology that could see, “...your next car anticipating your driving reactions before you can even translate them into a turn of the wheel or applying the brake.” The company is apparently working on a neural interface that will, “... not only improve reaction times, but also manage cabin comforts based on signals it takes from your brain…”
Nissan claims it will be showing off the tech at the upcoming Consumer Electronics Show (CES). The event is a big date on the calendar of anyone in the technology sector. It is interesting to see auto companies becoming a bigger presence at an event that is typically dominated by companies like Apple and Microsoft.
According to the news report, “The automaker shared a look at its B2V tech ahead of the show, demonstrating how it improves reaction times by around 0.2 to 0.5 seconds, which, while a seemingly small period of time, could actually make a big difference on the road. Anticipating things like braking, applying the accelerator, or turns, Nissan could develop great advanced driver assistance (ADAS) features, or it could help bridge the gap between semi-autonomous and autonomous vehicles more safely.
Nissan could also help with non-driving functions. The company wants to be able to detect discomfort from a driver, which could change the way the vehicle drives in order to fit the driver's expectations—and potentially use augmented reality to change what the driver sees to make the driving environment more amenable to safe conduct on the road.” Presumably, at some point, collision repair centres are going to have to have a dedicated in-house technology repair guy on staff.
The Wall Street Journal recently published a story covering a recent deal between Google’s self-driving car unit Waymo and a small insurance start-up called Trov. One of the big questions around AVs is the insurance one. How will this work? If humans are no longer driving the car, they cannot really be held responsible for an accident. That would be the car's fault. Many are discussing the idea that personal liability insurance for drivers is a product that will soon be relegated to the dustbin of history. Drivers love the idea. Insurers must be petrified, considering the vast revenues that auto liability brings in.
The Wall Street Journal story seems to suggest (as many have predicted) that future auto insurance will be written against the manufacturer of the car. Payouts will be smaller because AVs will get in fewer accidents. But there will still be collisions, hail damage, broken windows and doors dented by shopping carts. And that stuff is going to have to be paid for.
The Waymo-Trov deal is a hint to where the industry is going. According to the story, the Trov will automatically insure Waymo passengers for “... any damaged property, lost items and trip-related medical expenses. The coverage will reportedly come with the purchase of a ride, requiring no additional sign-up from riders.” In fact, according to the Wall Street Journal, passengers will not even know Trov is the company providing coverage. The Journal also reports that Trov’s policies will be underwritten by massive reinsurer Munich Re AG (which invested $45 million into Trov earlier this year). According to the Journal, “...with autonomous cars threatening to slash the price of car insurance premiums, there is clearly a market for more agile start ups to challenge behemoths like State Farm, Allstate and Progressive.”