In today’s Exponential Investor…
- Elon’s reply gets me thinking
- Death or death?
- Stocks in a $9 trillion industry
When is a bus not a bus?
When it’s a street sign, of course!
You should be.
You’re also not the only one confused here…
On Monday as I awoke and decided to have a swift flick through my endless Twitter stream I came across something interesting from Elon Musk.
He was replying to a Tweet from a person who was questioning the “intelligence” of their Tesla’s autonomous features.
Here’s the tweet and Musk’s reply.
Source: @electricfuture5 on Twitter
This got me thinking and it clicked where the real opportunity might lie with these kinds of autonomous systems.
The death paradox
There’s a favourite scenario that people like to talk about when it comes to self-driving car technology. It typically goes a little something like this…
If you’re in a self-driving car and all of a sudden some kids step out onto the road from behind a bus, and it’s faced with two options, continue on and run down the kids, or swerve, crash and kill you instead – what does it decide?
That’s the gist of the argument.
In a dilemma where both outcomes equal certain death either for those outside the car, or those inside the car, what does an “intelligent” system decide?
Does it assess the age of the people involved, killing off the oldest. Does it factor in socioeconomic factors and erase those whom it decides won’t be as productive in society?
Well the answer is simple.
It never gets into that situation to begin with.
You see that line of argument is superficial in its understanding of the technology used in autonomous systems. In addition to radar, LIDAR, visual and audio sensors it also will use thermal imaging and mesh networks linked to other smart systems.
Hence before the car gets within 500 metres of those kids, it’s already anticipating their movements. As the car gets to within 200 metres and those kids are still heading in the same trajectory, the autonomous system will know the likelihood of them stepping on to the road is high, and prepares the vehicle as such.
By the time those kids are on the street, the car is already stopped, waiting for them to safely cross. No one, inside or outside the car is any the wiser.
However, that’s the end game with these systems. In the meantime there’s a process of development that needs to take place.
That’s why when we talk about autonomous systems they’re stepped out in levels from Level 0 – no autonomous systems to Level 1, 2, 3, 4 and Level 5 full driving autonomy.
At level 5 cars won’t even need steering wheels or pedals.
However as Elon Musk clearly points out, they will need something else… software updates.
The thing that struck me about the response from Musk was the clear delineation between the “old architecture” and the new.
This is effectively saying that new updates and software doesn’t necessarily apply to new vehicles.
Another way of thinking about it would be trying to run the latest version of Android on an old Nokia WAP-enabled 3G phone. In other words… “computer says no”.
This raises the question, how do car manufacturers future-proof their autonomous cars for the necessary software updates as software becomes more complex and requires “new architecture” to function correctly?
If we end up with level 5 autonomy, then ten years after that when there are more advanced and complex operating systems for those cars, who and how does the new updates function on the old architecture?
$9 trillion by 2030
My take on it is this forces the hand in regard to maintenance and ongoing servicing. Whilst the car itself with new powertrains become less of a maintenance burden, the digital maintenance and servicing becomes even more important.
All the things that slow down, clog up and cause your devices today to underperform are all the things that will cause the car of tomorrow to underperform.
If Tesla can improve the range of its cars with a simple over-the-air software update, then surely the range can be lowered as users load the cars systems with different apps, downloads, files, user installs, and just general digital junk.
I’d even go so far to say car makers might even “do an Apple” and effectively brick their older models with new software updates to force the hand of the consumer to upgrade to the new model.
It does also lend itself to the new operating model for car companies where purchasers no longer buy cars for ownership, they merely subscribe to them, or a number of them for use on demand.
That business model becomes even more relevant when you’re looking at fully autonomous systems because you can then effectively call a car on demand and have it at your doorstep as and when is needed.
The auto industry one of the most fascinating areas of investment for my mind because of the radical change that it’s going through. There’s this huge shift to new “greener” driving and powertrains.
Then there’s the ongoing development and integration of autonomous systems and advanced driver assistance technologies.
Each of these massive technology shifts is jam packed with exciting companies and stock opportunities for investors.
When you add them all together and the idea of a whole new business model for them to adapt to around how people actually own or subscribe to ownership – it’s an industry that’s ripe for newcomers, incumbents to radically change operations and for small exciting technology pioneers to take a chunk of what’s projected to be almost $9 trillion in size by 2030.
That’s massive opportunity and one in which I seen there being huge, radical ways to invest.
Editor, Exponential Investor