In the past few years autonomous vehicles (AVs) have become ‘the new kid on the block’ when it comes to new automotive technology. But it’s not long since electric vehicles (EVs) enjoyed that cachet. As we see the EV market finally taking shape, whilst the less mature AV market hits the infamous ‘trough of disillusionment‘ from Gartner’s Hype Curve, let’s ask ourselves what AVs can learn from EVs in order to accelerate their adoption and avoid some of the pitfalls.
This month marks ten years since one of this country’s pioneers of electric vehicles, Modec, went into administration. The UK’s first vehicle start-up since before WW1, Modec designed and manufactured the first purpose-built electric urban delivery vehicle and its success would have had a major impact on emissions around the world. Was the company just ahead of its time? Or were there other reasons for its failure? If they had been avoided, would we have been in a better position now?
Fast forward ten years and we now have a new company on the scene, Arrival, which has developed an electric truck which looks very similar to the Modec. Also based in the UK, it is seen as a rising star, set to succeed where Modec failed, because of a very different set of circumstances.
Spot the difference !
So what distinguishes Arrival from Modec? Here are my top 7 factors which appear to be ‘make or break’ for EVs and are likely to be the same for AVs:
Founded in 2015 by Denis Sverdlov (a Russian business man who sold his last company in 2012 for $1.5 billion), Arrival has recently secured ‘Unicorn’ status via a massive investment of €100m from Hyundai and Kia. By comparison, Modec was modestly funded by its founder, Lord Borwick (a UK businessman and landowner), who needed a much quicker return on investment than turned out to be possible. Modec also lacked multi-million pound external investment.
Thanks to the level of private and external investment, Arrival has been able to spend much more time and money on R&D than Modec ever did, so the technology will be well tried and tested before the product reaches the end customer.
Lesson for AVs: Make sure large scale, long-term investment is in place. This isn’t a quick win game.
2. Government support
There are still concerns, as with Modec, over battery life and availability but these days the government is putting resources into developing a sustainable supply chain. In fact, we are now seeing a world of difference in terms of government support. The Office for Electric Vehicles (OLEV), which didn’t exist when Modec launched, has now rolled out several market incentives, including the plug-in car and van grants, which kick-started the market and encouraged a robust supply chain to develop in the UK.
Lesson for AVs: Significant government support is essential to de-risk research & development endeavours and to incentivise early adopters to buy new technology. The Centre for Connected & Autonomous Vehicles are the essential OLEV equivalent, but much more support and investment are required in the coming years before AVs can become a reality in the UK.
3. Industry standards, regulation and technology
Technology has clearly developed in the past decade, as has the skill base required to design and manufacture EVs. Coupled with this, standards have evolved (albeit arguably far too slowly) which give the industry a sense of direction and give customers something to trust. Finally, regulation was already in place to allow EVs to operate freely, which was one less barrier to success.
Lesson for AVs: Technology needs to develop, obviously. But don’t be fooled – this can be the ‘relatively easy’ part compared to standards and regulation, which require input from many more parties and can take many more years to get right. Until AV-specific standards and regulation are developed, the mass adoption of AVs will remain a pipe-dream.
For any vehicle system to operate, infrastructure needs to be in place to support it. Whilst petrol stations are a common sight, it has taken years for EV charging infrastructure to be installed and this area of the market is still far from mature. Nonetheless, there is a base level of understanding about infrastructure requirements and how EVs can operate, which helps Arrival overcome one barrier which Modec had to face alone.
Lesson for AVs: AVs will require more infrastructure in order to operate than EVs – road signs, cameras, sensors, data processing and many other AV-specific infrastructure requirements will all have to be in place before AVs and AV services can be launched.
5. Customers and large scale orders
At the end of January 2020, Arrival proudly announced that it had secured further investment and an order from global logistics giant, UPS, for 10,000 vehicles to be delivered by the end of 2024. Modec generated lots of interest and set up several trials with potential buyers but was never able to land any orders of this magnitude.
Lesson for AVs: Focus on fleets. Large scale fleets. Early adopters are key to the introduction of new technology and for the rapid scale-up which is required. So why would we waste time talking to millions of individual consumers, all of who have different needs, when we could concentrate on fleet operators and have more focussed conversations about how the new technology can work for them?
6. Global pressures
Another factor which we can’t ignore is the global economic situation, which is very different now from the years following the 2008 financial crash when Modec was struggling to make its case and investment in low emission technologies took a back seat.
Lesson for AVs: World events undoubtedly play a part in the adoption of new trends and technologies. The AV market needs to stay alert to pressures which will support or hold back their deployment. As mentioned above, this is where the long-term investment view becomes essential.
7. Public acceptance
Last, but most certainly not least, is public acceptance. When Modec launched its electric van in 2007, the natural response to the phrase ‘electric vehicle’ was “oh, do you mean a milk float?”, whereas today, that response is most likely to be “oh, do you mean a Tesla?”. Thank you to Elon Musk for making EVs desirable. Thank you to all the efforts by marketeers, government and campaigners over the years for educating the public about EVs and helping to reduce barriers to adoption. Thank you to initiatives like the EV experience centre in Milton Keynes, which offers the most powerful public education tool: an opportunity for ‘bums on seats’. In addition, there is currently greater social awareness and pressure: people are actively choosing low emission modes of transport and effectively boycotting non-sustainable options, boosted by activists like Greta Thunberg. This combination results in a powerful force which drives EV adoption.
Lesson for AVs: Educate the public BEFORE you want to launch a new product. Otherwise you’ll be left wondering where the stampede was on the day of your grand unveiling. Unless the masses understand how AVs will make their life better, they will naturally only focus on how AVs could make their life worse. The AV industry and government need to get on the front foot. The longer we leave it, the harder it will be to convey all of the benefits of AVs. We need the ‘Elon Musk of AVs’ to make them cool, an experience centre to get bums on seats and a progressive public education campaign backed by government and industry.
I hope this potted history of the make or break factors for an electric delivery van help illustrate what the AV world needs to get right, in order to avoid the same mistakes.
And where are we now with AVs? Sadly, I fear we are hitting the ‘trough of disillusionment’ with AVs in the UK. After a few years of excitement, big promises and ambitious research projects, the reality of bringing AVs to market is starting to bite. Well known vehicle manufacturers and service providers have pulled out of trials which aimed to deliver AV passenger services. And in a way it’s easy to see why – some or all of the 7 factors listed above aren’t yet in place.
There will inevitably be a cooling-off in the market for a while now, whilst those UK companies which are already involved in AV regroup, take stock and plan their way forward. Whilst this may feel like a step backwards, I hope we can treat it as a healthy step forwards – by using the next few years to do the ground work and ensure the 7 essential building blocks are in place. If we get that right, then ten years from now we could well see a new AV Unicorn born in the UK.