by Wallace Wyss –

Elon Musk and Jeff Bezos certainly are larger than life titans of industry with both working and leading in more arenas than just electric vehicles. Today we focus on electric driverless vehicles.

Elon Musk

We should not be surprised by anything Tesla head Elon Musk does because he announced his plans four years ago on a Tesla website entitled Musk Master Plan, Part Deux. These quotes are from 2016 but it seems like he’s achieving the goals, with only a couple areas where there’s going to be some public push back.

Why did he go electric? He envisioned the possibility that the world running out of fossil fuels means civilization will collapse. When he started, the dramatic increase in atmospheric and oceanic carbon levels wasn’t as bad as it is now. Almost as if he had a crystal ball, climate change is occurring much faster than anyone thought it would, hence Musk says “the faster we achieve sustainability, the better.”

He’s big on solar. And way back he wanted “to create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world.” His dream is to have each house with his own brand of battery pack and a Tesla in the driveway using that energy.

What’s a little scary to me, being the son of a UAW worker, is his plan to scale up production volume by designing “the machine that makes the machine” making the factory itself a product.

But solar is only part of his empire. He is becoming the world’s leading electric car maker. Then there’s two other areas where we’ve seen glimpses of his master plan. One is heavy-duty semi-trucks and the other is high passenger-density urban transport. If he can prove himself in those areas, he will become more of a force in business than he already is. He predicted in 2016 “Tesla Semis will deliver a substantial reduction in the cost of cargo transport, while increasing safety.”

One thorn in his plan is to have solar on the roof of the trucks, well, if it’s only on the cab roof, that wouldn’t be enough power to do much more than power the air conditioner. But trailers are switched all the time so there would initially only be solar on trailers that are going all the way to the destination with the Tesla tractor. And I think that since trailers are much longer than cars the nationwide chain of Tesla re-charging stations will have to have new parking places big enough for tractor trailers. He will need a chain of recharging stations to supply the trucks on all the major routes.

An area where Elon Musk and Jeff Bezos will go head to head is smaller buses. Musk wants these small buses to be autonomous. In 2016 he said he wanted these small buses to “take people all the way to their destination. Fixed summon buttons at existing bus stops would serve those who don’t have a phone.”

But the key to motivating fleet operators is being able to send the drivers home. Permanently. The logjam in 50 states is what is stopping Musk, not the technology. Musk sees an end for human drivers but sees out-dated laws as the barrier, writing on his website “There will still be a significant time gap, varying widely by jurisdiction, before true self-driving is approved by regulators.”

So now Teslas have “partial autonomy” which he claims “when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability.” Note his little digs at the go-slow legislators and the accident lawyers.

The Stats are on a quandary on whether to green light autonomous long haul trucks. They want the zero emissions. But there have been accidents with Tesla cars, fatal accidents, that occurred when the cars were on Autopilot.

On his website he said you can summon your Tesla from “pretty much anywhere” (once the laws are changed). He says “Once it picks you up, you will be able to sleep, read or do anything else en-route to your destination.” I think the first part is already happening but it’s illegal to not have a driver behind the wheel once under way.

PUT THE RENTAL CAR COMPANIES OUT OF BUSINESS?

He even predicts Teslas could make money for owners, being sort of like driverless competitors to Uber and Lyft, by being part of what he calls a “shared fleet” where your car can make money for you. He describes it: “Just by tapping a button on the Tesla phone app …. it (can) generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not.”

Basically he is describing something like Air B&B where you offer your apartment, condo or house to temporary users. An impediment to Musk might be when Tesla owners who loan their cars out for this find out they will have to pay income taxes on monies generated. And who knows how they will treat your car–dirtying it up? Not many Tesla owners want some stranger to drive/flog their car. With that idea Musk reveals he looks upon Tesla more as an appliance like a toaster. Sure you would rent out your toaster to a stranger.

It might be a little worrisome for taxi companies when he added “In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are.”

So while I can laugh at some of his predictions that didn’t come true, he has had success with Space X, a freight program that flies astronauts to outer space. Not bad for a side gig. Basically, it seems that the Musk Master Plan, Part Deux is proceeding at a rapid pace with only the regulators impeding it.

Jeff Bezos

The Amazon Approach – slide into electric vehicles with delivery trucks.

You would think Jeff Bezos, running Amazon, would be happy selling books and everything else, making the USPO look dowdy. But no, he now sees Elon Musk and Jeff Bezos as competitors and is entering the electric vehicle field wise through delivery trucks. This is evidenced by his investment in Rivian, a new vehicle maker but with some experienced management. Rivian already had hundreds of millions invested in it by companies like General Motors, so even though they haven’t produced anything before they’ve got the money and experienced hands on deck.

And Bezos needs trucks. The irony of the pandemic lock down is that while Amazon deliveries are up, their costs are double, so the electric delivery van market is going to be a real test of whether you can cut costs compared to internal combustion. If they do cut costs over diesel, then Amazon will probably be inspired to back electric cars as well as delivery vans. Handily Rivin also has car designs ready. About one third of all deliveries in the big cities are made by truck. And city fathers are hearing a lot of complaints about diesel engine smoke and noise. Who’s going to complain about a silent delivery vehicle that makes only a soft purr? Nobody.

Of course he could use van chassis formerly designed for internal combustion and switch them over, but that is the long way around. It’s better to have from-the-ground-up designed vans with what is called a “skateboard” platform. Once he has all the trucks Amazon needs, he can sell the rest of the platforms to companies that install a body and interior to meet specific needs.

And electric powered delivery vans are only the beginning. Right now Amazon breaks even on delivery costs, but the big money saved will come when Bezos can go to what’s called Level 5 full autonomy i.e. driverless. Reaching that level of capability will move a lot of companies that are standing on the sidelines dithering into a buying mode because though switching to electrical power will eliminate diesel fuel and diesel mechanics (who likely average $45,000 a year), and having a fleet that doesn’t need drivers will be the real money saver. They can work those trucks day and night, on weekends and holidays, and guess what, no overtime.

Unfortunately, just like Musk, Bezos is stymied by the fact that no state allows companies to have driverless delivery vans. Again there will have to be that reckoning in court, is the public willing to accept limited liability in exchange for clean air?

Just as with every new technology there will be the anti-technology gathering to impede them. Even Elon Musk and Jeff Bezos get permission to run vehicles at Level 5 (no human “safety” driver) there will be a close eye on accidents by “anti” groups. There’s already a measurable body count on Teslas with human drivers having accidents, at least three fatalities in hitting trailers of tractor trailers which the Tesla version of radar didn’t “see”, and the first Level 5 cars on the road will be watched carefully.

I’m predicting one of the first fatalities with Level 5 will go all the way to the Supreme Court to determine liability and if the decision forbids Level 5, the whole forward momentum will stop. And as far as the lower levels (we are in Level 2 now with Tesla and Cadillac leading in allowing the car to drive itself in some situations).

COMPATIBLE POWER SOURCES

Somewhere along the line it seems that Elon Musk and Jeff Bezos will have to compromise and have plugs that can be used by either brand. What good will it do either if they can’t plug in at the others charging stations?

Bezos could stumble if he brings out Amazon-branded cars against Tesla’s proven cars. His best bet will be to adapt an existing car, just as Musk did, by buying a complete car from Lotus (for Tesla’s first car) and switching a design originally designed for internal combustion to electrical power. That gave him time to design, engineer and manufacture his own designs.

A guy like Bezos, whose stock has increased in value as much as 12 billion in one day and is the richest man in the world, could reach out and buy some start-up company like Karma that already has car designs, and for the first round just switch nameplates and platforms. Or pump more money into Rivian who already have one car design, a pickup truck. In two years he could have all new models.

In sum, it’s not the technology that’s stopping this wholesale transformation. Oh there’s some technical roadblocks, like few places to re-charge semis in large parts of the country. But the big roadblock is allowing truck fleet owners to go to Level 5–driverless mode. That’s where the money is. Bezos’ success in trucks might impel him to take on Musk in cars.

Another genius move by Musk was to hire the designer who did the Pontiac Solstice, a sexy looking car, and have him design all the cars he makes. Bezos would have to do likewise–get a young designer with lots of potential and have him go at it, with no expenses spared.

Bezos might be banking that a couple of Musk’s side gigs, like Space X and The Boring Co. (digging tunnels for underground roads) will distract Musk enough. But Bezos has his distractions too such as his own rocket ship company, a film company and, oh yes, the Washington Post where he runs editorials that have made the man in the White House his enemy.

What about government support? That’s another shoe yet to drop. In a Republican administration, there’s no talk of canceling internal combustion but if a Democrat wins the November election that might open the door and once a more environmental-friendly government mandates things like common plugs for chargers, charging stations for semis, and all government-bought cars being electric. Things could happen very very fast.

One thorn in both the sides of Elon Musk and Jeff Bezos is that the auto industry in the U.S. are up against a dictatorship: communist China. China has at least five electric car companies and a higher penetration of electric cars than the woefully small 4% electrics have in the US. They could be supplying the rest of the world with electric cars while we are still fighting over whether Level 5 should be allowed to take the road in the U.S.

And so it is. The technology is moving faster than public acceptance but it’s a race we are already losing even with super nerds like Elon Musk and Jeff Bezos sluggin’ it out for dominance.

 

 

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THE AUTHOR: Wallace Wyss is the co-host of KUCR’s “Autotalk” show broadcast each Thursday on 88.3 FM KUCR FM Riverside, CA.