The German auto industry is comfortably a world leader. But a new world is airising, one in which cars drive themselves. In this new world, car accidents will be rare — currently 9 out of 10 are the fault of human error — as will traffic jams, since autonomous cars can let each other know which areas to avoid.
Rather than spending their mornings inching forward on the autobahn and searching for a parking space, commuters will read, work or even sleep in their cars, arriving at work as relaxed as someone who took the train, even if their destination is far from the nearest tracks. Matthew Avery, head of research at Thatcham, a vehicle safety consultancy, expects self-driving cars to be a common sight on the streets by 2025.
All of this innovation may knock Germany from atop the auto world, creating new competition for the German automotive industry and putting pressure on market shares and profits. Well-funded tech companies such as Intel and Google are pushing into the automotive space. “They will claim a large part of the lucrative value chain for themselves,” says Wolfgang Bernhart, an automotive expert with Roland Berger.
Auto companies must quickly shift their priorities or cooperate with high-tech partners if they want to become more than just part suppliers. The message has so far been reluctantly received in the C-suite. Volkswagen CEO Matthias Müller in 2015 called autonomous driving a hype.
The reluctance to embrace self-driving cars is strange, considering the power of German car companies: Domestic firms hold more than half of the 5,900 patents filed regarding autonomous cars. Bosch alone holds nearly 1,000 patents, nearly twice as many as the runner-up, Audi. Only Ford, GM, Toyota and Google made it into the top 10 list alongside the Germans.
The Germans are experts at adapting existing technologies to fit new opportunities. Tools such as lane departure assistance and collision avoidance are essential components of self-driving cars. “Like in a decathlon, autonomous driving requires you to master all of the disciplines, not just one or two of them,” says Bosch CEO Volkmar Denner. His company excels at stability control systems that prohibit a car from driving too fast around a curve and braking and steering systems that have already reduced rear-end collisions by 40 percent.
“It could be that the auto revolution makes much of the previous evolutionary progress redundant.”
Experts question whether it’s enough. “Patents aren’t always innovations,” says Stefan Bratzel, a professor at the Center for Automotive Management in Bergisch Gladbach. To translate invention into competitive advantage, companies must offer customers real value and be close to production readiness with at least one operational prototype, he says.
By that measure, the leaders look very different: Toyota, Nissan and Tesla lead the pack for autonomous driving, even though they hold fewer patents or, in the case of Tesla, partly make their technology public. Amid that dynamic development, no one can afford to rest on their successes. As many patents for autonomous cars were filed in 2016 as in all the previous years together; Ford alone filed four times as many as it did in 2015.
“The development departments of the auto industry are excellent at taking a proven technology and optimizing it further in little steps,” says Markus Wiederstein, a motor vehicle expert at consultancy PolarixPartner. But few people are prepared for such a radical change. The last upheaval of this size was more than a century ago, and now two are coming at once: autonomous driving and electric motors. “It could be that the auto revolution makes much of the previous evolutionary progress redundant,” he says.
In scenic Bavaria, the six-lane A9 highway is the first permanent test route for self-driving cars in Germany. Near its headquarters here, Audi has been testing a self-driving car, the A8, that can independently brake, steer and accelerate up to 60 kmh (37 mph), saving the driver the tediousness of stop-and-go traffic. (The car fits Level 3 in the five-step chart of autonomous driving below.)
For now, cars are still legally required to have a driver who can intervene at any time. “Technically, you could let the new A8 drive in a traffic jam or rush hour and do something else,” says Audi chief information officer Mattias Ulbrich.
But the difference between a system that works 99 percent of the time and a system that works 100 percent of the time is huge. That’s the bridge from Level 3 to Level 4, when the driver becomes just another accessory. Alongside the unprecedented computing power and many, many sensors required, truly autonomous driving requires artificial intelligence (AI). Self-learning algorithms that can drive a car are improved by actual practice, not from patent databases. So the real leaders in autonomous driving are the ones that have logged the most miles. Google division Waymo has been testing self-driving cars on public streets for seven years, banking more than 2 million miles, and it has the advantage of using parent Alphabet’s other AI research, covering everything from face recognition to robot movement.
Tesla is another company that makes up for what it lacks in patents with on-road experience. Competitors accuse the company of using its customers as unwitting beta testers, putting them into dangerous situations. But real strength in the autonomous market, and the ability to bring a self-driving car to market, can only be measured by evaluating patents and business strategy as well as on-road experience. A study from Navigant places GM and Ford at the front of the pack, with Daimler, Renault-Nissan, BMW, Waymo and Volkswagen as close contenders.
Stefan Hajek is an editor at WirtschaftsWoche, a sister publication of Handelsblatt Global. Grace Dobush adapted and contributed to this report. To contact the author: email@example.com