GM works to fulfill bold tech promises

Nora Naughton
The Detroit News

General Motors Co. may be pulling toward the front in the self-driving car marathon, but the 109-year-old automaker still has a lot to prove.

The Detroit automaker showed some Motor City mettle in Silicon Valley this year, establishing itself as an innovator of autonomous technology in a way its hometown competitors at Ford Motor Co. and Fiat Chrysler Automobiles NV haven’t yet. GM promises a not-so-distant future in which it sells a million electric vehicles worldwide per year while chauffeuring passengers in driverless taxis in dense urban areas.

But promising and delivering are two very different things. Despite impressive financial performance in recent years, GM remains burdened with a long history of breaking promises and consuming vast amounts of capital before its collapse into bankruptcy eight years ago.

“When I talk about exciting technology, it’s not just about what’s going to be here in two, three, four, five, 10 years — it’s what’s going to be here in two months and what we’ll be launching next year,” CEO Mary Barra said at an Automotive Press Association event this week. “We’re working hard to demonstrate to people that we’re innovative, responsible — I think that’s very important — and I guess transformative.”

Competitor Tesla Inc. still appears to be struggling with delivering on its promises, but without much consequence on Wall Street. Forgiveness from investors, consumers, dealers and even the United Auto Workers might not come so easily for GM as it attempts to shed its legacy as a slow-moving dinosaur and join the ranks of youthfully nimble Silicon Valley players.

“If GM says ‘Here’s our fleet’ and it doesn’t work, that could be risky for them,” said Mike Ramsey, an automotive analyst for Gartner Inc. technology research company. “GM’s aggressiveness has been motivating others, but they run a risk of hurting themselves if they put technology out and it doesn’t work.”

GM showed off its self-driving technology to analysts and technology reporters ahead of an investor day last month, garnering mixed reviews. Its autonomous test Chevrolet Bolt was bested by double-parked cars and even a taco truck when the Bolt waited for more than a minute as construction workers ordered lunch, according to Reuters.

“To a certain degree, GM is guilty of being too dismissive of everyone else’s technology,” Ramsey said, referring to the way the Detroit automaker’s bravado irks GM’s competitors at Waymo. Alphabet Inc.’s self-driving spinoff put its self-driving cars on the busy streets of San Francisco more than two years ago.

Waymo’s specially equipped Chrysler Pacificas appear to handle the challenge with a bit more ease than GM’s all-electric Bolt test cars. The Detroit automaker’s autonomous cars have been involved in a majority of the reported self-driving accidents on California roads this year, according to the California Department of Motor Vehicles data base.

In accident and media reports, GM contends its self-driving Bolts were not at fault. That’s a change from 2016, when Google, Waymo’s predecessor company in the Alphabet family, dominated the self-driving accident reports, representing the speed at which this technology can improve.

Waymo points to the 3.5 million autonomous miles it has logged on public roads in 20 cities since 2009, while GM — like other automakers — prefers to focus on the number of complex maneuvers each of its self-driving cars racks up. Cruise Automation, the self-driving tech company GM acquired in 2016, estimates its fleet of 180 Bolts will cover roughly a million miles per month by early next year.

By this comparison, GM is still in the research-and-development phase of self-driving implementation, Ramsey said. But even if GM misses a few self-imposed deadlines, it will get a certain amount of credit just for trying.

“GM is willing to say ‘We’re going to do the hard thing, and we’re going to deliver it earlier than you might expect,’ ” Ramsey said. “They’re not making excuses anymore.”

Kyle Vogt, CEO of Cruise Automation, called a mass deployment of self-driving cars “one of the most difficult challenges of the century” at an investor event in its home city of San Francisco last month. GM President Dan Ammann promised fleets of self-driving cars in major cities by 2019 at that same event.

It’s an about-face for a company that just three years ago was embroiled in crisis, recalling some 30 million cars with faulty ignition switches connected to 124 deaths. In less than a decade the carmaker has rebounded from the brink of collapse to become an automotive favorite on Wall Street.

After years of lackluster performance, GM shares reached an all-time high of $42.15 on Oct. 2 after Barra announced an ambitious plan to introduce 20 new electric cars by 2023 as it moves toward a future in which none of its vehicles are powered by gasoline. That record was beat several times later that month, peaking at nearly $45 a share in late October.

All of this didn’t happen overnight. Besides the acquisition of Cruise Automation, GM invested $500 million in ride-sharing company Lyft Inc., which is working with the automaker to create self-driving fleets.

GM also has strong leadership in Barra, Ramsey said. She is not afraid to publicly set lofty short-term goals in an industry known for moving at a glacial pace.

For all of this progress, a spot at the front of the self-driving pack now might mean little in a few years. Historically, automakers have delegated development of complex systems — such as fuel systems — to major automotive suppliers. If autonomous technology is to surpass fuel systems in terms of complexity, it’s likely those systems will eventually come from suppliers, said Eric Noble, president of Los Angeles consulting firm CarLab.

“It’s important that GM is doing its own R&D right now, and they’re definitely a big player,” Noble said. “But does that give them a sustainable competitive advantage? No, it’s not a guarantee at all.”

But going it alone gives GM speed in this space.

“We think the fastest way to move forward is to be all together,” Barra said. “We’re working in some cases with suppliers, and in some cases we’re looking at the critical technology we need to own. It’s a very measured approach of how we’re working on AVs, but speed is critical.”

One developer of autonomous software, however, thinks the rush to the road will only hurt the industry going forward.

“There is a psychological issue here,” said Micha Risling, head of Valens Automotive, an Israeli developer of automotive chip technology. “Every time there is an accident, all of those drivers who believe no one can drive better than they can will say, ‘Of course this will never happen.’ That is something that is very difficult to fight.”