A report by New York-based consultancy firm Alix Partners reckons that the globe's car makers are looking down the barrel of some seriously uncomfortable investment choices as car-making moves towards an autonomous, electric future.
The report has come up with a new motor industry acronym, CASE, which stands for connected, autonomous, shared and electric, and is descriptive of the cars that will have to be designed, engineered and built for future buyers.
For the past few years the big worry for the car industry was that so-called "millennials" – those people born in the 1980s s and 1990s – just weren't interested in buying cars. There was relief when, in the past year or so, it turned out that they were interested but they just had to wait for the global economy to recover sufficiently that they could, en masse, afford to.
The concern now is not that “millennials” aren’t interested in buying and using cars but that they’re interested in buying and using cars that the car industry doesn’t currently make.
Shared cars. Electric cars. Cars that are as much an extension of the wifi-connected space in houses and apartments as they are a mode of transport.
Cars, in other words, rather more like the self-driving, on-demand electric vehicles currently being worked on by Google and, apparently, Apple.
It’s the huge investment needed to develop rivals to these systems that is looming for car makers. VW, for instance, currently spends about 10 per cent of its overall revenues on R&D, making it one of the biggest-spending companies in the world on research and development.
Even that, though, isn’t enough yet – the investment in the necessary technologies needed for Cars 2.0 will be bigger again, and yet investment in existing and near-future technology will have to be kept up to bridge the gap between what we drive now and what we drive (or what drives us) then.
"It's a constant challenge," said Mark Wakefield, a managing director at AlixPartners, speaking to Automotive News. "It's not just 'how do we get the money?' It's 'are we committing to the right path'?"
It’s Betamax versus VHS all over again, but with the stakes now in the trillions of dollars.
