The Fuse

Plans for Auto Makers, Tech Companies Reinforce Link Between Autonomy & Electrification

by Matt Piotrowski | December 01, 2017

Two major news stories in the auto world recently indicate that deployment of autonomous vehicles (AVs) will be tightly linked with electrification. Uber is deepening its commitment to AVs in its deal with Volvo, while GM has laid out its long-term grand vision for autonomy.

Top officials at GM traveled to Silicon Valley this week to highlight its progress with autonomy and electrification and the synergies between the two. It’s clear from GM’s ambitions that the adoption of autonomy will increase the likelihood of electric vehicles becoming more mainstream. It announced in a call with investors Thursday that it plans a commercial launch of AVs used for ride-sharing at scale in dense urban areas by 2019. GM’s Cruise Automation unit is now testing autonomous Chevrolet Bolts in San Francisco, Detroit, and Phoenix. It plans to launch testing in New York City in 2018.

It’s clear from GM’s ambitions that the adoption of autonomy will increase the likelihood of electric vehicles becoming more mainstream.

Last month, CEO Mary Barra unveiled the company’s plans for a new fleet of all-electric vehicles and for sales of its EVs to reach one million per year by 2026. Investors have shown their approval of GM’s ambitions—the company’s stock is up by 25 percent since the end of last year.

On Thursday, GM showcased its autonomous, all-electric Bolts to investment analysts in San Francisco. The event signals that the company is urgently seeking to become a leader in the driverless space and that it has progressed rapidly in its plans to make AVs available for commercial use. Driverless electric cars are crucial for GM’s long-term plans as it attempts to move beyond being a traditional automaker to also include on-demand mobility services. GM said it will be able to driverless rides under $1 per mile by the middle of next decade, versus $2-$3 per mile for ride-hailing services now. This opens more opportunities to the company in terms of moving away from its traditional business of selling vehicles.

GM is not only competing with car makers such as Ford, Volkswagen, Toyota, and others in the race toward electrification and autonomy. It is also contending with tech firms such as Uber, Google, and Lyft.

Uber, Volvo strike a deal

Uber also made big news recently concerning electrification and autonomy. It announced an agreement with Volvo to buy 24,000 self-driving vehicles, moving the tech company a major step forward toward the commercialization of AVs. Uber will receive the Volvo XC90 AVs between 2019 and 2021. The coverage of the deal has mostly focused on Uber revamping its image after a string of scandals and the increasing partnerships between tech and auto companies. While those issues are indeed noteworthy, the fact that the vehicles will be plug-in electric hybrids is significant. This development shows the potential and likelihood of mass integration of AVs and EVs, significant for increasing efficiency and fuel diversity in the transportation sector.

Volvo has previously laid out its electrification plans, and the latest deal with Uber confirms the company’s commitment.

Volvo has previously laid out its electrification plans, and the latest deal with Uber confirms the company’s commitment. For Uber, the move toward autonomy reflects its desire to cut out the driver, the highest cost to the company, in its taxi-on-demand service. The deal is also notable for its scale. Currently, on a given weekday, almost 6,000 Uber and Lyft vehicles, or other Transportation Network Companies (TNCs), are on the road in San Francisco at peak time, accounting for 25 percent of the city’s trips in downtown areas. On a typical weekday, TNCs drive 570,000 miles, accounting for 20 percent of total VMT in the city limits. Uber’s new fleet of Volvos could theoretically meet all local travel needs, particularly since TNCs are full 80 percent of the time. See the breakdown of San Francisco’s travel data here in a report from the city’s transportation authority.

The latest developments from Uber and GM, and other firms in the self-driving race, indicate AVs are helping drive efficiency and accelerating the use of EVs. These trends indicate the environment is tilting toward the adoption of shared AVs in urban areas that will use electricity, bringing about fuel diversity.