YouSaid · the spoken record

Dr. Ferdinand Dudenhöffer

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26
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2015-10-12
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2015-10-12
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  1. “Got to be very careful when we talk the fleet versus new car sales because every year we are adding new cars with new features and there is a slower penetration process. But if we just talk about what new car sales look like, I think they will be more fuel efficient. We still rely heavily on the internal combustion engine. We believe 75%. There will be more electric power dim systems being available around about 25%. And we would have seen the broad introduction of plug-in hybrid systems. The fleet in 2025 should be ready for autonomous driving, particularly in the premium segment, with a broader penetration most likely occurring beyond 2025. And then finally, the cars in 2025 will be connected to the internet and starting to waive the internet of cars.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  2. “So, I don't expect this capability to change, but the trends we've just been discussing over the last 30 minutes will increase the challenge of leaderships of these companies beyond just the mere understanding of how to produce and sell a good car.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  3. “The industry's ability to change and adapt is actually the most surprising. When you go back in the middle of last decade, the automotive industry struggled with rising raw material prices. In Europe, we had a strong euro, which made exports less profitable. The US was sitting on overcapacity and on huge losses. We had prospects of punitive CO2 targets being introduced across the world. And this all against the backdrop of very low profitability. Fast forward eight years. Volumes have increased to 80 million from 60 million. The profit pool has almost doubled to $120 billion from $64 billion, and margins are at 6.2% on average versus 4.4 in 2007. So the automotive industry is a tough industry. And we tend to not be willing to pay for it. The industry is not very good in anticipating change, but the industry has a proven track record in actually adapting to change with obviously a timeline.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  4. “Just do a step back. I think that the self driving car will drive the biggest change. We talked about improving utilization. That's one aspect. If we know where we're going and what the traffic situation is, we could see much more efficient traffic flow management that could help manage congestion in cities. You could see how we could tax people based on how they use the roads much more efficiently and maybe more fairly. Infotainment is a related opportunity. So given that we are not driving Taka anymore, but we still are, as Dr. Secha said, the living space, what are we going to do? Are we going to serve the internet? Is there an opportunity there? Are we going to consume services in a different way? And the most profound impact could be on the insurance industry. So if the autonomous vehicle makes no errors and causes no traffic accidents, the insurance premium should come down. Or maybe the insurance business is going to change. Remember, a third of most insurance”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  5. “So, one thing your report talks about is the capturing of all this data from the cars and the way in which connected cars could generate changes in other industries. What are the sectors that could be the most impacted by the changes we've seen in how data is collected from cars and how they're moving and how they're performing?”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  6. “Yeah, that's why most people think that the next five years it's all about more fuel efficient cars to achieve these targets and then autonomous features will be the next product cycle where we really see the industry preparing these cars for a more autonomous world.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  7. “Technology companies operate in product cycles, probably measured in months. The car industry operates in a product cycle measured in years. And sort of that mindset is already giving an explanation about the different ambition levels, these two different companies show today. But also when you look at the balance sheets of the technology companies, they're much better in doubt, and so they can actually take that risk which it takes to go right to the technological frontier. A car company has to still maintain an existing business in an industry with very little returns on cost of capital, and therefore is more conducive to this gradual approach.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  8. “And now we are focusing more on active safety, utilizing technology to anticipate the risk of an accident and actually prevent the accident. You talked about lane departure warning systems or lane keeping assistance, automatic braking, distant control, all sort of sensory aspects of driving a car. But that only adds more weight to a car. And to counter that, we believe we're going to see an increased usage of lightweight material, so high tensile steel, aluminium, and even carbon fiber is going to find application in the car industry to lower the weight, to counter the increase of weight for the safety aspect and reduce it to meet or help meet the CO2 targets.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  9. “Safety adds cost and weight. Safer cars are heavier cars by definition. And in an era towards zero emission mobility, that's a challenge. So in the past, we focused on passive safety, i.e. protect the passengers once an accident has actually happened. And so we added sidebars, air brakes, reinforced the cabin. That all added weight.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  10. “Fundamentally, we believe people regard as where they are want mobility. And what we observe that particularly in emerging markets, when people's wealth levels rise above a certain level, mobility starts to accelerate. These levels are typically defined of GDP per capita around $10,000 to $20,000. So at these wealth levels, motorization and car ownership gains real momentum. So we forecast the global auto sales to increase from 80 million in 2015 to 100 million in 2020 and 120 million in 2025, driven largely by the developing markets. And if we just pick two, China and India, which, as you say, are in the center of this development, because most of the growth will be in emerging markets,”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  11. “Believe we should anticipate substantial progress in all these areas, particularly over the next decade. At the end, these technologies are still in their infancies and there is still much scope for improvement. So for battery technology, cost and range are the issue. For example, we believe that the cost of battery technology will halve over the next decade. This doesn't mean that electric vehicles' prices will fall dramatically. Initially, we expect manufacturers to extend vehicle ranges, which will make them more usable and broaden their appeal to the consumer. But we believe truly mass market electric vehicles with a 500 kilometer range and a battery weighed around eighty kilograms versus today two hundred to three hundred kilograms will not become a reality until around 2030.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  12. “Scenarios possibly either we see a broader collaboration amongst manufacturers on power drains which is 40% of the value add 40 to 50 percent of the value add of the industry or you see industry consolidation”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  13. “Yeah, it depends what you're looking at. So, the bulk will still go into the internal combustion engine. There's still 20-30% of efficiency gains possible. It is the most amazing development what has happened there over the last 10 years. But now we're focusing on thermal efficiencies, direct fuel injections, turbo downsizing, the cylinder management. So that is the core of the development. And then you add hybridization, electrification. Here it's still about the cost of the battery and it's still about the range of the battery. And then, as you point out, it's alternative fuels. Here mostly we talk about hydrogen fuels and there the reviewing infrastructure is a stumbling block which has to overcome. So as results, we see a proliferation of powdering technologies beyond that of the traditional internal combustion engine. And that should drive, in my opinion, the industry to pursue scale, to offer these alternative powertrains at a competitive cost point.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  14. “The 2021 targets will be 95 grams, and some regulators are contemplating to introduce a 2025 target of 72 grams. It's not been confirmed, but they're contemplating. Should this become reality, that means the new fleet vehicles would have to halve their CO2 emissions over the next decade. And given that they operate in product cycles of seven years, that's less than one and a half product cycles. That's a huge challenge. So furthermore, when we think about or look at how regulators are trying to regulate the move towards zero emission mobility, we look at California from 2018, they're going to incentivize low emission vehicles with faster refueling times. So they're basically pushing manufacturers to fast charging batteries or hydrogen fuel cells, which have faster refueling times. So all this means that there's more investment necessary for manufacturers into these different alternative.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  15. “Our emission regulations poses a huge challenge for the industry, but it's at the same time driving very interesting and really exciting new technologies. So just to frame the context of the challenge, in Europe, the 2015 targets ask the manufacturers to produce the fleet sales on average to have 130 gram of CO2 per kilometer.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  16. “At some point as well, so in a way the automobile concept today is a very poor capital allocation decision by households. You mentioned the millennials. A Nielsen survey recently found that And then finally, the cost of co-ownership is rising, particularly in emerging countries or developing countries. Take Shanghai, for instance, a nameplate costs $12,000, contrast this to California at sixty-nine dollars. Put this all together. This should lead to new car sharing concepts. Being a futurist for a moment, in a new mobility, car sharing services are grabbing the headlines at the moment, and I'm at daily user of one of them in London. So if a car was truly able to autonomously drive, I could use my own car, which could drive me to work, I could send it back and then my wife could use it. And if you take it a step further, on the way back it could make the capacity available to somebody else who wants to go just the opposite direction than I just did. And I could make some, I could earn some money. So autonomous driving capability, connectivity, I think provides the basis for new mobility concepts, which I'm certain will emerge over the next decade.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  17. “What we think the way we own and use in the automobile in the future will change and the millennials will be a significant driving force in this process. The automobile today is the most underutilized asset we purchase. On average we drive 12,000 miles with an average speed of 30 miles per hour. That means 400 hours in the car at less than 5% utilization.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  18. “These technologies have the potential to revolutionize the way we think about car ownership, and there's a lot of research, and you put it in your report about the way in which millennials think about car ownership very differently than the older generations. How might that change the way in which we think about owning a car?”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  19. “Won't be checking their smartphones or they have separate processor to check the smartphones. Autonomous driving should make driving so much safer. And finally, mobility options could be much more tailored to our individual needs. The autonomous vehicles of the future together with connectivity will yield innovative mobility concepts, particularly in urban centers.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  20. “To eight hundred hours surfing the internet and a thousand hours on the mobile phone. So autonomous driving could completely change how we're going to use this time and experiencing the time in the car. So fast forward to the extreme, Mercedes-Benz earlier the year at the CS in Las Vegas introduced their fully electric luxury in motion concept the F zero five car. And Dr. Secche, when he announced it, he made this point, which I think sums it up nicely. If you just focus on the technology of autonomous cars, you miss the point. The autonomous car is going to change how we use mobility in our society. And the car is growing, in his words, beyond the role of mere means of transport. It will ultimately become a mobile living space. Second point I want to highlight is autonomous drivers will be safer. Every year half a million people die in traffic accidents. More than 7 million get injured. Seven out of eight traffic accidents are caused by human error. Machines”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  21. “I think people will have time to get ready for the autonomous vehicle. I think the pitch is pretty compelling. Autonomous vehicles offer three big changes to today's automotive experience for the consumer. It's more convenient, it's safer, and it will offer ultimately better mobility. So if we take this in turns, Autonomy is driving will be more convenient. The world's urban population is expected to grow 50% to 6 billion people by 2050. By 2030 we expect the number of megacities, so cities with more than ten million inhabitants, to almost get to forty-eight cities worldwide from currently twenty-eight. As a result, traffic congestions is only getting worse, driving will be more complex and challenging. The economic loss is $100,000. That's estimated by official sources. On average, a driver in the developed world spends three hundred to four hundred hours in the car.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  22. “Regulatory frameworks in the US between state and federal, but then globally, you'll have to deal with cybersecurity. There is still the challenge for the consumer, for you and me, and the rest of the population to actually accept the value add of autonomous cars and ultimately be willing to pay for them.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  23. “Yes, so you have active safety features. As you say, automatic braking, lane departure systems. The next will add features which enable cars to drive and handle themselves on the highway. And further down the line, we'll have more complicated urban driving features and capabilities in the car. So autonomous driving is on its way. Google's timeline is very different to that of the auto industry. That's going to create an interesting tension. That should be not surprising because Google as a technology company is custom to operating in probably product cycles in months and the automotive industry thinks of product cycles in seven years. And that kind of philosophy and mindset is going to create a very productive tension in my mind. But irrespective of timelines and strategies, autonomous driving will also face some key challenges. With no human backup, the machine will have to be able to handle all possible driving scenarios. You still have to navigate the...”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  24. “On the side of revolution with a clear stated objective commitment to deliver to the market even in this decade a self-driving car, an autonomous self-driving car. If you contrast this with the automotive industry which is used to operate in a more gradual pace, so they are committed to gradually introduce autonomous driving features. For instance, automatic braking, lane departure, warning systems. The next will get features which enable the car to handle itself on the highway and then with more complicated urban driving capabilities further down the line.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  25. “A significant source of big data beyond the home and the workplace. All of this will not only start to shape mobility of the future, but also shape the global automotive industry of the future. That's why we talk about disruptive new era of the automotive age.”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT

  26. “Well, in the report, we highlight four key themes and seven powerful mega trends we believe we have a transformational mark on the global motive industry over the next decade. But at the core, we see three disruptive changes accelerating simultaneously over this period. One, zero emission mobility, the aggressive tightening of global emission standards. This will drive costly proliferation of alternative power drain technologies beyond internal combustion engines to hybrids, plug-in hybrids, electric and even fuel cell vehicles. Two, autonomous driving. This is reality already today. The next decade we see the diffusion of autonomous vehicles. This will shape how we utilize our cars and what we do whilst driving. And finally, connectivity. We talk a lot about the Internet of Things, but take autonomous vehicle and add connectivity, and you have the Internet of Cars with vehicle to vehicle connectivity. This will drive new mobility concepts like sharing, but also will be”

    2015-10-12 · Goldman Sachs Exchanges · Cars 2025 - What Will Drive You? · IDENTIFIED FROM THE TRANSCRIPT