A virtual window into the future of mobility

Few places outside Silicon Valley have seen the explosion in mobility startup activity that Israel has. EcoMotion Week is a signature event held in Tel Aviv that brings people throughout the mobility ecosystem together to share ideas and promote innovation. Because of the coronavirus pandemic, EcoMotion went virtual this year. Automotive News assisted in hosting the event. Here are some highlights.

COVID-19's effect on the auto industry is not expected to end with the restart of production. Experts expect the virus to play a longer-term role in the industry's ongoing transformation — well beyond new health and safety protocols for plants and offices.

John Absmeier, chief technology officer at suburban Detroit seating supplier Lear Corp., predicts more consolidation in the industry.

"Dependent on how long and deep this down cycle goes, we'll see consolidation happening," Absmeier said in a virtual panel discussion. "There's already some happening, both with small companies and large companies and in between. But the automotive industry in general is a very capital-intensive business, and liquidity becomes challenging when we're not producing cars and generating revenue.

"Because capital is less available for smaller tech companies, there's also chance for consolidation in the startup world," Absmeier added. "I actually think that's a good thing. It creates some focus and also prioritizes what are the technologies and the areas that can have an impact near term."

As even the largest auto companies remain strapped for cash during the pandemic, Dragos Maciuca, executive technical director of Ford Motor Co.'s research and innovation center in Palo Alto, Calif., said he expects the crisis to weed out some of the newer or weaker companies.

"I fully expect that, out of the 80 lidar companies, by the end of this, we are going to have at most 40, and even that is probably optimistic," Maciuca said.

To Absmeier and Maciuca, this isn't an entirely negative trend for the industry.

"It's exactly events like this where some of the best companies have been formed," Maciuca added.

— Alexa St. John

Shared and public transit have already taken a big hit from COVID-19 as consumers seek to avoid crowded spaces where their chance of infection is higher.

Nikolai Ardey, executive director of Volkswagen Group Innovation, said he has already seen consumer demands for 'cocooning,' or interest in individually owned vehicles, surge amid COVID-induced health concerns.

"We have observed, at first, a renaissance of individual mobility," Ardey told Automotive News Publisher Jason Stein in an interview.

Others in the industry agree.

"Longer term, public transport is facing ... the challenge that people may not want to take public transportation," said Daniel Ramot, CEO of Via, a company that operates on-demand, app-based passenger shuttles and provides public transit digital infrastructure. "There's definitely some headwinds around getting people back onto public transport," he said.

But that's not to say that smaller forms of shared mobility won't make a quicker comeback post-COVID, said Lear's Chief Technology Officer John Absmeier.

"One school of thought is that people aren't going to use shared mobility; they're going to opt for personally owned cars, where they can control the cleanliness and the hygiene in their own space, which I think is true if you can afford it," Absmeier said. "The counterargument is that people who are normally using buses and subways might move up the stack into shared mobility, when they can get in a car with one or two or three other people as opposed to a bus with 25 or 50 other people."

— Alexa St. John

While automakers' appetite for autonomous cars may be on the decline, there may be hope for their bigger cousins, self-driving trucks. And for at least one major automaker, the best place to begin deploying them is the U.S.

"We have a clear focus of driving autonomous trucks on interstate freeways in the United States. Why that? The business case is attractive, and furthermore, the market is ready," Fridtjof Stein, senior researcher at Germany's Daimler Trucks, said during an EcoMotion panel on the truck market.

Stein cited various reasons the U.S. would make an ideal launch pad, including a reported shortage of truck drivers. Daimler's vision is to establish a network of logistics hubs, then operate trucks in autonomous mode on interstates between them. Last-mile transportation would be handled by humans.

The German automaker stepped up its efforts in 2019 by acquiring a majority stake in AV tech company Torc Robotics. The partners have been testing trucks equipped with Level 4 automation on public roads near Torc's headquarters in Blacksburg, Va., and they plan to expand testing. Each truck carries an engineer and a safety driver, something that's unlikely to change anytime soon.

"The huge challenge is to remove, at one point, the safety driver from these trucks, and this is an incredible revolution, an incredible jump, an incredible risk," Stein said. "Basically, you can expect to see the first of these autonomous trucks having a steering wheel — but perhaps not an entertainment system."

— Leslie J. Allen

The coronavirus may have accelerated a shift in car sales from brick-and-mortar dealerships to online. Venture capitalists are seeking opportunities to accelerate those trends.

Members of an EcoMotion panel on the investment outlook for 2020 all highlighted the car-buying experience as fertile territory.

"We are seeing a lot of deal flow, deals with digital tools for dealerships and better targeting of customers," said Talia Rafaeli, investment director at Porsche Ventures. "We're seeing a lot of AI for direct targeting, conversion methodologies and, 'How do we focus on the digital platform and sell more cars that way?' "

Dealers should no longer think of applying a one-size-fits-all sales strategy, the panel said. Instead, there should be a growing differentiation depending on model and target customers.

Consumers seeking luxury models may have a greater desire to touch and test drive their vehicles. Those seeking utilitarian econoboxes, on the other hand, might prefer to transfer as much of the buying experience online as possible.

"That's the consumer juxtaposition," said Chris Thomas, co-founder and partner at Assembly Ventures in Detroit.

While the virus may have hastened a necessity for online tools and online experiences, Niels Becker, head of mergers and acquisitions and venture capital at Continental, foresees a more gradual drift toward online sales and that traditional dealerships will still have a prominent role for a generation.

"There's still an emotional thing about buying a car, and therefore a lot of people still like going to the dealer lot," he said. "I think there will remain a use case for dealerships. At the same time, the younger generation would like to customize their cars online, and there may be a good model for other ways of distributing cars."

— Pete Bigelow

Short-term fallout from coronavirus-related disruptions should not distract executives from long-term trends.

That's the message from Karl-Thomas Neumann, former CEO at Continental, Opel and Volkswagen China who joined the board of Israeli tech startup Cartica AI in December. He understands the urge to scale back on mobility investments and return focus to traditional, core business. Nonetheless, he has harsh words for companies that actually pursue that strategy.

"If the industry does that, it's totally wrong," he said. Long-term trends toward electrification, autonomy, shared mobility and software-related services will gather momentum following COVID-19, he says, and those who curtail investment now will fall further behind.

"On the other side, it's a huge opportunity because you can rethink what you did," Neumann said.

"On the subject of car-sharing, many OEMs are moving out of that because they didn't figure out how to make money. Maybe they need to do it differently."

— Pete Bigelow