Technology / How the auto industry is moving slowly through the gears

How the auto industry is moving slowly through the gears

An eventual switch to electric vehicles and driverless cars looks inevitable, so why aren’t they here yet? Now car companies are gradually realising that it’s not just cars they need to think differently about, but also the issues and infrastructure surrounding them if real change is to occur.

We’ve been hearing for years about how everyone will soon be driving out of their garage in an electric car, possibly even by one that drives itself. But the auto industry is starting to wake up to the fact that changing the habits of a lifetime is a more wide-ranging challenge than simply producing a car that runs off a different type of fuel.

“There is a fundamental change in our industry at the moment,” Francisco Carranza Sierra, managing director of Energy Services at Renault Nissan told Business Reporter at the FUTR M2020 Summit. “Traditionally, car companies essentially focused on the product, which is the car – building great cars and distributing them through dealers. Now we realise that for 100 per cent electric mobility to become real, we need to face challenges which are beyond the car.”

The automotive sector was a spotlight at the FUTR M2020 Summit, which focuses on shifting trends across industries. Car manufacturers have been slowly attempting to steer the huge industry towards electric vehicles for some years now to meet carbon emission objectives and adapt to changes in demand, but it hasn’t been easy.

Carranza Sierra believes this is largely down to manufacturers continuing to focus, as they always have, on what they see as the singular product – the car itself – without giving enough thought to the surrounding infrastructure that also needs to change. “To build the future of our company on electrification, we have to go beyond the car and prepare the entire system around the car for that future we want to have,” he explains.

For electric vehicles to be able to run efficiently, for example, there needs to be a dedicated electrical grid system that the cars can connect to and charge from. To get to this level requires a period of change, Carranza Sierra believes, “a period of timing in which we need to progress together with the energy companies”, as he describes it. Stakeholders will also need to be reassured about the the safety and reliability of the system if it is to get off the ground. 

Another problem, points out Carranza Sierra, is that because each country has its own regulatory frameworks, products and services must be tailored to each. “It is not like we do a local certification in the car industry and you can sell in other countries all over Europe,” he says. “Here even in Europe, we have to go country by country, do the certification and validate the product and the services for the specific country. It requires much more energy and effort to launch.” 

Such wholesale change is never easy, of course – particularly in such a large sector long used to doing things in a particular way. “We are part of a very large organisation,” Carranza Sierra says. “It is very traditional in the way it operates. There is a bit of change management in what we do. 

“Every step is complex because we need to put together people who have been working in the car industry for many years and get them involved now in solar panels, batteries for homes, applications for the customers to see the energy flows and so on.

“There are many different things pushing the organisation out of the zone of comfort. The great thing is everybody in the company understands that we have to go there. This is the future for our customers and for us.”

But Carranza Sierra thinks these hurdles will eventually be overcome, and that by 2030 there will be “a world where 100 per cent mobility is electric – a world in which electricity is coming from renewable resources, everything is connected, everything is digital, everything is under a sharing economy structure.

“We are heading to a world in which everything needs to be sustainable, everything needs to be fast and everything needs to be customer focused. This is what the world is going to be by 2030.”

The trigger that will bring everything to fruition, says Carranza Sierra, is the internet of things. “We are connecting all of these small systems to a larger vehicle system,” he says. “We think that the energy system of the future is going to be entirely virtual – it is going to be composed of many generation systems. It is not just a big power plant. It is solar systems and wind systems that are going to be distributed all over the country.

The trigger that will bring everything to fruition, says Carranza Sierra, is the internet of things. “We are connecting all of these small systems to a larger vehicle system,” he says. “We think that the energy system of the future is going to be entirely virtual – it is going to be composed of many generation systems. It is not just a big power plant. It is solar systems and wind systems that are going to be distributed all over the country.

“There will be millions and millions of them. All of them need to be synchronised in some way. The entire country needs to be run in a smarter way. Everything has to be part of a larger system.

“We are going to have more mobility services, more digital content, more connected vehicles and more data that is coming from the car to provide new services to the people and more automation.”

Closely following on the heels of the electric revolution will be, despite recent hiccups, autonomous vehicles. Renault Nissan is working on its own driverless car. “We have a very clear ambition on that,” says Carranza Sierra. “Our objective for the Renault Nissan Group is to start demonstrating the feasibility of what we call the Robot Taxi.

“On the technology side it is feasible, but there are many challenges on the customer acceptance and regulatory framework. We believe that in three, four, or five years we are going to be able to solve most of them.”

He also sees big investment by automobile manufacturers in car-sharing companies, as younger generations have less interest in owning cars early on in life. “They prefer to spend money doing something else,” he says. “We need to adjust to what the customer is asking for. When you are young, you don’t have a lot of money, so probably instead of buying a car you are going to use more and more car-sharing services.”

Carranza Sierra is keen to point out that, despite the march of progress, cars – and car ownership – as we know them aren’t going away any time soon. “At some point in time you might get married, get two children, a dog, have a house in the countryside,” he says. “You need a car of your own at some time in your life, [so] owning a car will remain at a central point for mobility for quite a long time.”


Originally published in Business Reporter Online: June 2018