Bloomberg: To Catch Up To Tesla, Big Auto Needs “Tricky Financial Stunt”

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Published on December 28th, 2018 |

by Matt Pressman

Bloomberg: To Catch Up To Tesla, Big Auto Needs “Tricky Financial Stunt”

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December 28th, 2018 by Matt Pressman

Originally published on EVANNEX.

As Tesla’s Model 3 continues to gain market share, legacy automakers face some daunting decisions. Bloomberg warns, “The future of the auto industry is going to look like the history of the cell phone … some of today’s dominant car companies will share the fate of a few former titans of the smartphone. Remember BlackBerry, Nokia, and Palm?”

Tesla’s current lineup (Photo by Zach Shahan for CleanTechnica)

“Who will be the winners in the electric car race? Who knows?” said Mike Ramsey, senior director of research at Gartner Inc. “The incumbents could be, or they could be cut out entirely.”

Unlike Tesla, legacy automakers are still dragging their feet when it comes to electric vehicles. Karl Brauer, executive publisher for Autotrader and Kelley Blue Book notes that automakers who ignore electric cars altogether could be “completely left behind. If you ignore it and act like the market is never going to be ready, then you’re setting yourself up for real trouble.”

Making the commitment to an all-electric future, Bloomberg notes, “Tesla Inc. appears to have that advantage … [meanwhile] non-Tesla options in electric vehicles such as the Nissan Leaf, Chevy Bolt, and BMW i3 aren’t selling particularly well.” Furthermore, Bloomberg New Energy Finance analyst Colin McKerracher forecasts, “There will be a very long tail of EV models that don’t sell especially well.”

BMW i3 vs. Tesla Model 3 (Photo by Zach Shahan for CleanTechnica)

There are other challenges too. According to Bloomberg, “for the next decade or so, old-school car executives will try to pull off a tricky financial stunt: driving returns with gasoline engines until their electric models have enough momentum to start keeping pace. They are essentially using an old technology to fund the transition to the next, and the timing is fraught. Jump to the electric drivetrain too soon and the whole works will grind to a halt; jump too late and lose the EV race.”

In contrast, more recent “startups such as Tesla, critically, don’t have to make this awkward jump … they don’t have to worry about feeding a legacy business as it slowly winds down.”

The Silicon Valley automaker has other key advantages too. “At Tesla, the sexy sedan is just the start. The company has thrived, in part, because it deals directly with consumers and allows everyone to build the exact car that they’d like to own. Tesla’s cars are also undergoing constant improvement with over-the-air software updates, essentially scrapping the whole concept of a model year,” reports Bloomberg.

This one. (Photo by Zach Shahan for CleanTechnica)

They literally do everything differently,” Ramsey says. Meanwhile, he contrasts that with incumbent manufacturers who “seem to be thinking of electric vehicles as just changing the powertrain. If there’s a big switch over to EVs, these companies may need to … change the entire way that they think about the market.”

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About the Author

Matt Pressman is all about Tesla. He’s a TSLA investor, pre-ordered the Model 3, and loves driving the family's Model S and Model X company cars. As co-founder of EVANNEX, a family business specializing in aftermarket Tesla accessories, he’s served as a contributor/editor of Electric Vehicle University (EVU) and the Owning Model S and Getting Ready for Model 3 books. He writes daily about Tesla and you can follow his work on the EVANNEX blog.

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No car keys? No problem. Hyundai rolls out fingerprint technology that makes keys obsolete

Source: Hyundai
Hyundai Smart Fingerprint technology

If you're prone to losing car keys, the latest-generation Hyundai Santa Fe just going on sale in China is for you.

It offers buyers the option of using a fingerprint detector that can open the vehicle and turn on its engine, rendering car keys as necessary as a landline. Touch one of the SUV's biometric sensors and it will even adjust such things as seat position and sideview mirrors to the settings preferred by individual drivers in its database.

The oldest known locks were found in the ruins of the ancient Syrian capital of Nineveh and date back thousands and thousands of years. Today, keys are an accessory to just about everything we do, giving us access to our homes, offices, gym lockers and, of course, our cars. For motorists, however, keys could soon go the way of the crank starter, rumble seat and running board.

It's already rare to find a car that still uses a conventional metal key. They've largely been replaced by wireless key fobs on all but a handful of base models. But manufacturers are looking at a variety of alternative technologies, much like those replacing traditional keys in homes and workplaces — and, of course, to unlock smartphones, where biometric sensors let users forget those complicated and often forgettable passcodes.

Volvo's key app

“Mobility needs are evolving and so are our customers' expectation to access cars in an uncomplicated way,” said Henrik Green, vice president of product strategy and vehicle line management at Volvo Car Group.

Volvo's S90 makes even a key fob an option, the big sedan otherwise relying on the owner's smartphone to serve as a key, at least as long as the motorist has downloaded the necessary app. Approach the car and it links up to the phone by Bluetooth, unlocking its doors when the motorist touches one of the handles.

BMW, meanwhile, uses a similar approach with the newly redesigned 2019 3 Series. In this case, however, it uses near-field communications, or NFC, technology, similar to what underlies smartphone-based financial transaction services like Apple Pay. The system can be shared with as many as five different drivers.

BMW isn't ready to abandon keys, or at least key fobs, entirely. The latest version of its flagship 7 Series sedan features an oversized key fob that incorporates a reconfigurable display that allows an owner to control a wide range of vehicle functions that couldn't be incorporated into a traditional fob with hard buttons.

The push to move away from conventional car keys comes at the same time automakers are loading up vehicles with all sorts of digitally controlled technologies. Wireless fobs, smartphone apps and biometric sensors can all tell the vehicle precisely which motorist is going to be driving, adjusting such things as seats, mirrors, climate control and even which radio station to tune to.

Defective switches

Smartphone apps are particularly useful for new battery-powered vehicles, allowing a driver to check how much range is left and, if it's plugged in, to control when the vehicle begins charging. Vehicles like the Nissan Leaf and Jaguar I-Pace also allow a motorist to remotely turn on the climate control while the vehicle is plugged in so that the cabin is comfy when it's time to drive off. That also has the advantage of requiring less range-sapping energy when the vehicle is unplugged.

There are other reasons why automakers want to abandon conventional keys, as General Motors learned earlier in the decade. A poor ignition switch design made it possible to inadvertently shut off the engine on a number of models. It didn't help, of course, that GM delayed fixing the problem for close to a decade. Ultimately, 2.4 million vehicles equipped with the defective switches were recalled. And, with more than 120 deaths connected to the problem, GM paid out more than $1 billion in fines and settlements to victims and their families.

Switching to digital keys offers a number of new opportunities for carmakers, car owners and even retailers. Last April, Amazon partnered up with General Motors and Volvo on a service that can allow it to place packages in the trunk of a vehicle, rather than leaving goods on a porch where they might get stolen. The service is available to Amazon Prime customers who have GM vehicles newer than 2015 and equipped with the GM OnStar or Volvo on Call telematics services.

Cloning signals

GM's car-sharing service, Maven, also makes use of the OnStar service to allow customers to open a vehicle they are renting without having to first get the key — which the owner stores inside in a locked box.

That's not to say that digital alternatives don't have their own problems. Several recent news reports have alleged that thieves have been able to make off with Tesla vehicles by cloning signals from their key fobs — something captured on video during one robbery in the U.K. Tesla has told media outlets that it isn't the only automaker that is vulnerable to these types of hacks into passive entry systems, and says it has rolled out a number of security enhancements to assist customers in decreasing the likelihood of such security breaches.

Some cybersecurity experts warn that even when they're not in use, digital key fob codes can be cloned, and some have suggested storing the devices in metal coffee cans, much like chipped credit cards can be stored inside special sleeves designed to prevent their code from being read and cloned by hackers.

“We think it is becoming the new way of stealing cars,” Roger Morris, a vice president at the National Insurance Crime Bureau, told The Wall Street Journal, after several vehicles were stolen in Houston two years ago, with video of one theft appearing to show how the thieves used cloned keys. “The public, law enforcement and the manufacturers need to be aware.”

There's also a cost issue. A motorist who needs a spare metal key can get one for a dollar or two at most hardware stores — unless it's a more secure key with a digital chip built in. But the price for a replacement wireless key fob can run anywhere from $200 up to more than $500 for one of the smart fobs used on the BMW 7 Series.

Alternative 'keys'

Despite such concerns, expect to see the industry to continue the shift to alternative “keys,” if for no other reason than convenience. Several Jaguar models, such as the E-Pace SUV, feature “activity keys,” little more than waterproof wristbands with built-in NFC chips. Someone who is going swimming or hiking, Jaguar says, doesn't have to carry and risk losing a conventional key or fob. Instead, they lock the regular fob in the car and wear the band. When it's time to open the vehicle up again they simply touch the activity key to a reader on the back logo.

Digital alternatives actually aren't entirely new. Various Ford designs for decades have allowed motorists to access the vehicle using a keypad on the car's center pillar. The motorist still has to keep a conventional key or fob hidden inside the vehicle, however, to start the engine. And similar keypads may be needed on future vehicles to make it possible for a motorist to get into a vehicle should their smartphone run out of battery life or other new systems fail.

Biometric sensors could make the process even easier, since there's no need to carry or wear anything. There are, however, other challenges. Hyundai had to make sure its fingerprint sensor could work under all weather conditions and not be foiled if the car was dirty – something that can be expected of an SUV. The automaker claims the system can distinguish one person's fingerprint from another with an error rate of about 1 in 50,000, which is along the lines of what Apple claims for its own touch-based system.

For the moment, Hyundai will be offering the fingerprint system only in China versions of the Santa Fe. But if it works as expected and generates strong consumer demand it can be expected to start offering the technology in other markets, as well.

Source: Hyundai
Hyundai Smart Fingerprint technology