The Next Gatekeepers of the Automotive Industry
The way cars will be manufactured and operated will lead to unprecedented control by their creators over features and the lifespan of vehicles. How wisely will brands use this power? This is episode 8 of our series.
There are many things that we don’t like in consumer electronics right now: low repairability, rapid obsolescence, hazardous upgrades that conflict with the notion of backward compatibility, or apps that eat computing power faster than we can afford it.
Some will argue that this is the price to pay for constant technical progress for our phones and personal computers. Maybe. But this assertion is based on the fact that “customers” are a monolithic block, covered by a carefully arranged product line. It also assumes that the renewal cycle of a product must be the same for all segments of users. But nothing can be further from the truth, particularly for cars. There is little in common between a Bay Area driver who might not go beyond the three-year lease of a sedan and a farmer in the Central Valley who will log 300,000 miles in an F-150. And some consumers may lose out on getting value from their vehicles if certain practices are adopted.
Here are some points to look out for, as the merger of the tech and automotive worlds in the next five to ten years change how you get the most out of what’s in your driveway, and not always for the better.
1 . A new breed of tech carmakers
The biggest uncertainty is how the market will split between legacy carmakers (GM, Ford, VW, Stellantis, Toyota…) and the newcomers. The underlying question being: how will the former adapt to new ways of making and commercializing vehicles?
The number of new players is on a steep rise. They are smart, agile, unencumbered with the burden of the past and some of them are flush with funding. Here is a shortlist of the most significant brands with their valuation:
This list should be completed by Tesla, which is no longer a startup but not a legacy carmaker either, and Apple, whose real intentions are still unknown but who might well disrupt the disruptors. (Read episode 7 of the series, The AppleCar Culture.
From a pure hardware perspective, starting from a blank slate will favor modular design and more automated factories while legacy automakers will buckle under the weight of huge assembly lines, most of them still dedicated to combustion engine vehicles, unionized workers, and above all, ossified management hierarchies in which obedience to the technostructure is rewarded more than risk-taking. The new companies will bring something new that will impact not just the way of doing business, but their relationship to their customers.
2 . Bringing tech habits
New players will be tech companies more than they will be car companies. From an engineering, commercial, corporate culture perspective, they will have little to do with the prevailing automotive culture and that will make all the difference.
But these newcomers might very well build on the bad habits of the tech sector.
For one, brands will push for a complete integration of software and hardware — Apple being the ultimate model in that field. Making sure the OS of the car is perfectly in sync with the key components will be essential to the overall performance of the vehicle. But it will also allow tight control over the car, its performance, as well as its longevity, critical elements of how we currently think about buying a vehicle. Be ready for the concept of “controlled obsolescence” in which all sorts of software will be used as a means to decide when it is time to switch for a new model.
3 . Extending the forbid-to-repair concept
We have experienced this in tech already with the fight between OEMs and advocates of the “right to repair,” a movement that is taking off worldwide, for economic as well as ecological reasons.
As we look into how it comes into play for cars, there are three ways the manufacturer of a tech item can prevent third-party repairs or even servicing:
- Intellectual property enforcement
- Physical hardware access prevention
- Making the software locking the hardware.
Let me explain quickly.
IP enforcement is the easiest way; basically, it involves stating that manuals and schematics are proprietary, and therefore forbidden from being shared online, for instance. The software can be submitted to the same restrictions, like the infamous John Deere case in which mechanically skilled farmers were prevented from accessing the software of their tractor (read this Bloomberg story). Incidentally, this blatant abuse turned out to be a boost for the right-to-repair movement.
Hardware access prevention is quite obvious as well. It ranges from the introduction of special screws (to which companies like iFixit have responded swiftly by providing the right tool), to glued, soldered components that are impossible to remove without breaking the hardware, or even more simply, non-standard cables that prevent access to the diagnostic port, like in the John Deere case. Apple is second to none in this field, perpetuating an obscene throwaway culture candy-coated with neat videos and communication extolling their green posture (a note in passing: a lack of further investigation into this is a major journalistic failure).
Hardware locking through software remains the most efficient method of preventing third-party repair. An OS can be programmed to detect if a non-original part has been inserted into a phone or a computer and then brick the whole device. Even more radical, if you tamper with a Tesla outside of certain boundaries, the car will be blacklisted and prevented from further software upgrades or even worse, excluded from the brand’s Supercharger™ network.
In due fairness, there are good reasons for these practices. Apple or Tesla-certified repairs will, in most cases, be better executed than in a third party shop. And there are performance and design issues. A fully integrated System-on-a-Chip (SoC) like the Apple M1 processor which blends on the same piece of silicon elements that were previously separated and replaceable is far better than anything before it in terms of speed, consumption, thermal dissipation. The quest for performances pushes inexorably for less accessible hardware.
So does the customer win in the end? Yes, but as long as he can afford it. (When you raise the right-to-repair issue in some tech circles, you are often met with a derogatory “look, if you can’t afford it, don’t buy it”). In other words, we should accept the rip-off of brand-only servicing. Fine.
The fact is, many users would certainly be ready to give up a few millimeters of sleekness on their MacBook in exchange for being able to safely change the battery or swap the SSD. There’s a balance, which is, unfortunately, leaning against the user (the latest 24” iMac yielded a paltry repairability score of 2/10, and the 2020 16” MacBookPro gets 1/10, according to iFixit, the guardian angel of repairability).
In a string of PR stunts, OEMs have publicized some anecdotal efforts towards better repairability of their products. That was the case for Microsoft which first issued a blatantly disposable laptop and Apple with its Apple Authorized Service Provider Program. But the AASP is nearly comical given its restrictions, like limiting the service of the iPhone to batteries and screens or asking the repair shop to accept Apple’s unannounced audits in the five years after it leaves the program (read this Vice story). No wonder why the program is not exactly a success. This discussion of repairability looks like a digression but is to signal what lies ahead for technology-focused cars.
4 . Next-gen cars won’t be yours, in any way
With more control in their sight, two reasons will justify a tighter grip on the automobile market by the next generation of OEMs.
The first one will be the safety argument. No manufacturer will take the risk of allowing anyone to tamper with vital parts of the car such as the engine, batteries, braking, or steering system. That is understandable and acceptable, as long as the OEMs maintain a decent price differential between what an independent repair shop would charge vs. the billing of the OEMs maintenance network. If the gap is too wide, it could open the way to parallel markets for cheap spare parts and hacked software. Many will pay a few hundred bucks to “crack” their EVs and have access to inexpensive parts in order to avoid the car equivalent of Apple’s repair apparatus. And that will lead to a greater risk, not only for the owner of the car but to everyone else.
The other factor might come to pass further down the road (pun intended). Less than ten years from now, cars won’t be owned by the end-user any more. They will be leased, rented, charged by the mile, or paid for by any other number of schemes. That’s the “Car-as-a-Service” concept, and we will look at it in a later episode of the series.
5. The case for a preemptive regulation
Ensuring reasonable access to long-lasting repairs and upgrades for the cars — and preventing the emergence of hazardous parallel markets — will be a critical challenge for the regulators in the United States and in Europe. This will require a new set of competencies that have yet to be developed. Due to insufficient funding, which leads to a lack of technical skills, regulators — especially in Europe — are too often confined to a repressive form regulation with fines and levies, as opposed to a preemptive kind-of regulation in which a public authority would, for once, address a problem before it’s too late. This change requires a political will and a serious increase in funding that I don’t see coming either in the United States or in Europe.
In a next episode of the Future of Cars series, we will be talking about the delicate co-existence of the remnant inventory of cars (which will last several years) and the new mobility.
— frederic.filloux@mondaynote.com
Previous episodes of our Future of Car series:
01: The car, reinvented. From scratch.
02: Your next car will be electric
03: How Tesla cracked the code of automobile innovation
04: The Global Race for Battery Supply
05: Code on Wheels
06: EVs: The Manufacturing Revolution
07: The AppleCar Culture
