Pandemic alters carmakers' driverless plans. Here's how
Detroit — The coronavirus pandemic is proving to be yet another obstacle for the self-driving and ride-sharing movement, delaying the widely touted arrival of next-generation automotive technology.
Ford Motor Co. is postponing for a year the commercial deployment of its autonomous vehicles. Waymo LLC, the self-driving unit of Google parent Alphabet Inc., had to temporarily suspend its on-road testing and its ride-hailing offerings in Arizona. Uber Advanced Technologies Group recently announced layoffs of 3,500, citing the pandemic. And General Motors Co. is shutting down Maven, the car-sharing service that debuted in 2016 as the wave of the future.
With demand for car-sharing and ride-sharing diminishing sharply in the age of social-distancing and other forms of vigilant hygiene, companies are shifting their focus to using driverless vehicles to deliver goods before they ferry people — a reversal of a robo-taxi future envisioned just a few years ago, courtesy of the virus that causes COVID-19.
Expensive electrification programs that have yet to create revenue for automakers, however, continue despite automakers losing billions with auto plants closed for eight weeks and many dealerships unable to sell vehicles with stay-at-home orders in place during the pandemic. Still, the prevailing industry consensus holds that electric vehicles must be an option for consumers, and electrified powertrains are the foundation of self-driving vehicles and future mobility technologies.
"Electrification is clearly going to be the priority," said Sam Abuelsamid, principal analyst for Washington-based Guidehouse Insights, a global management consultancy. "It has to be the priority. For regulatory reasons, they need it for Europe and for China, in particular, and to a lesser degree, North America."
It's also a product line that's a lot closer to delivering profit than automated technology. There have been some small commercial deployments of autonomous vehicles by Waymo and others. Abuelsamid previously predicted thousands would be deployed globally by about 2023 and millions by 2025. Guidehouse now forecasts about 300,000 will be deployed by 2025 and 13 million by 2030.
"The reality is that the technology is still not ready," he said. "Electric-vehicle technology is ready."
Ford, which has partnered with Argo AI on self-driving technology, recently said it would delay the launch of its commercial self-driving services to 2022 instead of next year because of COVID-19's impact on changing customer behaviors. Argo's autonomous fleet has restarted on-road testing in Pittsburgh, one of six cities where it tests, after a temporary pause during the pandemic.
While Ford has "always planned on building and launching services to move people and goods," the automaker is now seeing "a big shift toward package delivery based on the pandemic. This could also impact our go-to-market strategy," Ford Autonomous Vehicle spokesman Dan Pierce said. Ford is still planning to invest more than $4 billion through 2023 on its self-driving business.
Doubts for 'shared mobility'
Doug Parks, GM global product development and purchasing chief, said at the 2020 Car of the Future Virtual Symposium that the COVID crisis might push people away from ride-sharing. But in addition to ride-sharing, the Cruise Origin autonomous shuttle could also be utilized for package delivery, which could accelerate after the crisis. The Origin is an electric self-driving shuttle developed by GM's autonomous subsidiary, Cruise LLC, in partnership with Honda Motor Co.
"We are going to see a lot of these companies shift away from robo-taxis in the near term to goods delivery," Abuelsamid said. "There’s more demand for it, and also it’s an easier problem to solve. In the post-pandemic era, there’s going to be some reluctance to use shared mobility."
Waymo restarted its Arizona testing operations on May 11, and the self-driving unit progressively plans to get back to serving customers with its Waymo One ride-hailing services.
While GM's Cruise has laid off employees, GM has said the pandemic will cause little to no impact on certain programs including the Cruise Origin. Cruise has not confirmed publicly when the Origin will hit roads, and it also has yet to set a new deployment launch date for its autonomous Bolt EVs.
COVID-19 is changing how people perceive mass transit. And that shapes how GM will develop vehicles like the Origin, which is designed to transport many people, GM CEO Mary Barra said during a web conference hosted by the Massachusetts Institute of Technology: "How do we ensure that it's got the right level of cleanliness or (is) disinfected person to person? I think that is all things we can work on, but it doesn't deter at all our vision and our drive to create this vision."
Amid the pandemic, Cruise had paused its on-road testing until it started using its autonomous fleet of vehicles to deliver food to those in need in San Francisco.
"I’m very pleased with the progress that they are making from a technology perspective at Cruise," Barra told investors during a first-quarter earnings call. "We are continuing to hit milestone after milestone there, so I’m very positive about what’s happening at Cruise. I see huge opportunity, and so our commitment … is unwavering."
In April, GM confirmed it would end its Maven car-sharing service after suspending it at the start of the COVID-19 outbreak. GM reviewed the business during the suspension and decided to shift its resources to areas with greater potential for profit and growth. The business had been struggling before the pandemic, in large part because car-sharing failed to resonate with users the way ride-sharing did.
Maven last year exited eight cities that didn't produce the demand needed to sustain the service. Ford Motor Credit Co. last fall announced it was selling its vehicle subscription service Canvas to a California-based car-rental app, Fair. And Ford Motor Co. ended its shuttle service, Chariot, last year.
Meanwhile, Zipcar, a car-sharing network operating in select cities, including Detroit, launched earlier this month "Instant Access," which enables new members to access a car with a smartphone and drive within minutes of joining, according to the company.
Even though some electric-vehicle programs have seen delays, GM consistently has said its programs, including the GMC Hummer EV and Cadillac Lyriq EV, will see little to no delays from the COVID-19 pandemic. The Hummer, slated to debut in fall 2021, will be built at a repurposed Detroit-Hamtramck Assembly Plant. GM remains committed to its autonomous program with subsidiary Cruise LLC to move people and packages around in electric autonomous vehicles.
"Our strategy is an all-electric future," said Ken Morris, GM's vice president electric and autonomous vehicles. "We want zero congestion, zero emissions and zero crashes. You can’t work on everything when the revenue is different ... you do have to decide: What are we going to put our focus on? And we are going full-speed ahead on the electric and autonomous vehicles programs."
The Detroit News previously reported there would be delays on refresh launches of the light-duty Chevrolet Silverado and GMC Sierra trucks, the GMC Terrain SUV as well as Chevrolet Equinox and Traverse SUVs, Bolt electric car and Camaro sports car. A future variant of the Chevrolet Corvette that was not slotted for 2020 also will be delayed.
Despite a delay in the refresh program of the Bolt EV because plants had been down since mid-March, GM hasn't delayed other electric vehicle programs it's publicly announced. The automaker plans to have 20 electric vehicles worldwide by 2023, and it still plans to deliver on that goal.
"We haven’t changed any of our plans," Morris added. "We are basically doing everything we possibly can to make sure that (we) meet or beat that timing. We would like to get them out even earlier, so we are working with full intensity."
Before the pandemic, GM hosted an EV Day to show the company's electric-vehicle products and its new battery technology that expands its battery range and lowers the cost, top concerns among potential buyers. GM is moving forward with the construction of a battery-cell manufacturing plant in northeast Ohio in a joint venture with partner LG Chem. The plant is slated to come online in early 2022.
GM's Barra used the event in early March to say the automaker plans to spend $20 billion on electric and autonomous vehicle development through 2025. It hasn't retreated from its commitment to that investment, Morris said, despite gas prices below $2 during the pandemic. Automakers stress cheaper gas prices matter less to consumers weighing the longer-term lower cost of owning an electric vehicle: the vehicles don't require gas and come with fewer parts, translating to less maintenance over the vehicle's lifetime.
Ford also is sticking to its more than $11.5 billion-plus investment in electric vehicle programs through 2022, though the automaker and Plymouth-based electric vehicle startup Rivian Automotive LLC have canceled plans to develop a new electric SUV for the Lincoln luxury brand because of the current environment created by COVID-19 outbreak. Lincoln still plans to deliver an electric vehicle, and Ford and Rivian remain committed in their partnership.
Ford plans to launch its electric Mustang Mach-E and a hybrid F-150 pickup later this year. An electric Ford Transit van is slated for 2022. The Dearborn automaker has also said it will deliver an electric F-150 in a few years, though it hasn't given an exact release date.
FCA 'on track'
Increasing regulatory requirements, particularly in Europe, are driving Fiat Chrysler Automobiles NV’s efforts to continue electrifying its portfolio, CEO Mike Manley recently told investors: “In Europe, on the passenger-car side, we are absolutely on track.
“At this moment in time, I foresee no issues this year on passenger cars because we delayed projects that did not include those vehicles that contribute heavily to our compliance. … There may be a week slippage here and there but largely on track to what we thought.”
Those include the battery-electric Fiat 500 city car, plug-in hybrid Jeep Renegade and Compass SUVs and several electric Maserati vehicles currently in development. In its commercial business, however, the Fiat Ducato electric van, which was scheduled to launch this year, is facing delays.
Whatever the short-term dip in electric vehicle releases might be, there's a positive long-term trajectory for them, said Lea Malloy, associate vice president for research and development at Cox Automotive Mobility.
"What's driving that is the consumer is starting to get a taste for what's compelling about the EV," she said. "The environmental benefits are hard to miss when you see clear skies ... so that, in combination with EVs (that) are more fun to drive and have lower cost profiles, it's sort of, in my mind, a no-brainer."
As consumer interest in electric vehicles grows and automakers amp their strategic responses, would-be customers are showing signs they're satisfied for now with the present level of assisted driving, Malloy said: "They are not really demanding this completely automated experience."
Staff Writer Breana Noble contributed.