without errors, crashes, or breaches – certainly not to the level
of accuracy and security required with self-driving vehicles. It
is one thing when such issues occur with phones, computers,
or a connected refrigerator; it is quite another altogether when
such issues occur with an automobile or a fleet of millions of
automobiles, especially automobiles with autonomous/self-
driving features that can jeopardize the safety of the drivers,
their passengers, and those around them. And these concerns
critical in a world with V2V and V2X
ogy, where an error or a virus in one vehicle can expose the
entire driving public to catastrophic failures.
In this context, security must come first, and vehicles must
be designed and repaired with security as a non-negotiable
requirement. Indeed, we agree with the Department of
Transportation (DOT) and the National Highway Traffic
Safety Administration (NHTSA) that autonomous-enabled
vehicles require that automobiles and the auto industry be
held to the same safety and security standards as the aviation
Automakers must design vehicles with that high
standard in mind, and automakers and regulators alike must
remember that standardwhen balancing convenience and cost
savings against safety.
Despite the potential for profound changes outlined above,
we do not believe autonomy alone will have any substantial
effect on vehicle sales or ownership. There is no simple, linear
relationship between the fact that a car can operate without a
driver and consumers’ need for, and demand for, personally-
owned transportation. Whether the car is driver-operated or
autonomous, consumers will still have unique and personal
needs that can only be filled by owning their own vehicles.
To be sure, full autonomy will provide tremendous benefits to
many with limited transportation options today, such as the
elderly or disabled. It will also likely fill a niche in certain urban
and other markets that may reduce personal car ownership de-
mand to a limited degree. Overall, however, it is unlikely that
personal ownership demand will decrease materially. Dealers
share in the excitement about the safety and efficiency promise
of autonomous vehicles. It is clear that they are coming. It is
also clear that whatever changes may come, consumers’ need
for a local dealership will increase, and it is also likely that the
relationship and reliance between dealers and their manufac-
turer partners will also increase.
Franchised dealers sell more EVs today than auto manu-
facturers sell directly.
While there has been a tremendous
resurgence in interest in EVs, EVs themselves are not new.
And, as noted above, any suggestion that franchised auto
dealers would be unable or unwilling to sell EVs is completely
unfounded and, for some, merely self-serving. Dealers are
merchants and are agnostic about the propulsion systems of the
vehicles they sell; they want to, and will, sell what consumers
want (and what the manufacturers make). This is evidenced
by the fact that dealers currently sell many more EVs than any
manufacturer selling directly and will continue to do so to the
extent that customers demand those products. To date, EVs
have been niche products. Although sales are beginning to
accelerate, their ultimate success or failure will be determined
by the market. If these vehicles meet the needs and/or desires
of consumers at an affordable price point, now or in the future,
consumers will seek them out and dealers will be there to ef-
fectively sell them.
The market penetration of ridesharing has no relationship
totheprovisionsof state franchise laws.
The concept of ride-
sharing itself is also not new. Indeed, car sharing companies
have been operating in the U.S. for nearly 100 years.
various options, including rental cars, public transportation,
taxicabs, and shuttles, have existed in full form for decades. To
be sure, fully autonomous vehicles may change the econom-
ics and scope of ridesharing and make these concepts more
efficient. However, the effect this may have on private vehicle
ownershipwill bemoremuted than some predictions suggest.
“V2V” refers to “Vehicle to Vehicle” communications; “V2X” refers to “Vehicle to Everything” communications.
playbooks/79314200/ (noting that “[DOT Secretary] Foxx, who
oversees 12 agencies, including NHTSA and the FAA, made it clear in December he wanted automakers to borrow from the aviation playbook”). The aviation industry does
not conduct software updates over the air, but only via a secure physical connection performed by an FAA trained technician.
While some of the battery technologies may be relatively new, the electric car certainly is not. In both 1899 and 1900, the all-electric Columbia captured the annual sales
crown and more than 38% of all vehicles sold in 1900 were electric. See alsohttp://energy.gov/articles/history-electric-car
(“Introduced more than 100 years ago, electric
cars are seeing a rise in popularity today for many of the same reasons they were first popular.”)
There is also no direct connection between EVs and autonomous vehicles or ridesharing. The development and adoption of autonomous technology will proceed indepen-
dently of EVs. While there may be a case for a model utilizing fully autonomous electric vehicles in combination with fleet ownership as a way to overcome the range limitation
problems inherent in today’s EVs (because a fleet of autonomous EVs can be recharged remotely, with another EV in the fleet always at the ready), that is purely a business
case that should not affect policy decisions and will be irrelevant to the vast majority of consumers, who are generally agnostic about power train options. (Mr. Diamond
confirmed this consumer powertrain indifference during panel four when he stated that “most people don’t care if they fill that up on gasoline, diesel, biofuel, natural gas,
electricity, fuel cell. They just don’t care. That is I think what we’ve discovered, for the most part.” TR. IV; 3.)
(Noting that the company was founded in 1918).
See, e.g., 2016 Boston Consulting Group (BCG) study predicting “that car-sharing will cost the industry just 550,000 vehicle sales worldwide in 2021, a year in which global
auto sales are expected to approach 100 million vehicles.”(http://www.cnbc.com/2016/02/23/car-sharing-impact-will-be-limited-despite-a-jump-in-shared-
ups-bcg-says.html (citing the BCG study).
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