Is this the end of the car manufacturing industry?
Sometimes in a near future…
It’s nearly time for you to get to the station to catch up your commute to work. You open the “MyVehicle” app and select the button that says: “Lift to the station”. A confirmation message displays that your vehicle will be available outside in 5 minutes, including your vehicle details (mainly vehicle id and colour).
Five minutes later you get out and indeed your vehicle is outside, waiting. You touch your phone on the vehicle scanner and the vehicle self-drives to the station. The vehicle is fully electric, has no driver and has a permanent camera that records and streams in real time the feed of your commute to the private company that runs the vehicle fleet.
Once at destination, you “touch out” with your phone and off you go.
A similar scenario occurs on your way back from work. Three stations before your final destination you open the “MyVehicle” app and select the button that says: “From station back home”. A message similar to the previous one appears informing that there is already a vehicle ready with id and colour. You spot the vehicle and “touch in” with your phone. At the same time, you see 3 other commuters jumping in as well.
The commute goes like a breeze…On your way home, the vehicle stops three times to leave the other passengers to their respective locations and it drops you at home.
It’s the week-end. You want to take the family to that National Trust castle a couple dozen miles from your place. Again, you use the “MyVehicle” app, this time entering the place you intend to visit (either by name and real time search or postcode). Like always, you receive a confirmation message that a vehicle will be available and ready outside in 5 minutes.
The vehicle self-drives to the destination. You and your family have a delightful day and using “MyVehicle” app you order a vehicle that takes you back home.
On your way back you’re happy because you realise that this service costs you only £50/month and you can have unlimited rides. You are also happy because the company running “MyVehicle” allows you to book a vehicle dedicated to you for the whole day at just £5/day, including going abroad.
What will make us buy a car in future?
At the time of writing, Tesla is leading the electric car industry with Model III becoming soon available. People today are buying Tesla because the company produces eco-friendly cars with a long range and which technologically are ahead of the competition. One has only to try a Model S to appreciate how beautiful their cars are.
What motivates people to buy a particular brand?
Consumers are also buying other car brands. Some are motivated by cost, others by pure vanity, others by the sheer pleasure of driving. Consumers typically Mercedes-Benz is they like luxury or BMW if they prefer the sportiness and driving “feel”. Another bracket includes those buying a Ferrari, Lamborghini, Porsche, Aston Martin and so on. These are the ones either motivated by the sheer pleasure of driving, vanity or a bit of both. Then there are those buying the Hyundai, Toyota, Honda, Subaru, Volkswagen, Skoda and so on. These are probably motivated by cost and so on.
If you imagine a word where one can have a car at any time for £50/month where the car is self-driven, secure because of live feed (if someone leaves the car dirty or damaged or misbehaves they’d be automatically charged as they’ve registered their bank details with the company running the business) why would one bother buying a car? The only ones left would be those buying a car for the sheer pleasure of driving or because they want to show off. However, in a future where all cars will be self-driven, this might not be possible, so the sheer pleasure of driving would be taken away. Maybe people would want to buy their own self-driven, electric car, to have their own “privacy” space.
In this case though, manufacturers that today are differentiating themselves based on the driving experience (e.g. Mercedes, BMW, Audi and so on) would loose the competitive factor and they would need to resort to something else. The only way they could differentiate themselves from the competition would be in the luxury, comfort and services provided by their vehicle. However, companies like BMW are who they are because they have an history starting in the motoring industry. If their differentiating factor today is about the particular feeling they give to drivers, once that has been taken away, these companies will either need to re-invent themselves or disappear.
This will also be the case for Tesla. In a world where everyone has access to self-driven electric vehicles, Tesla won’t be different from other car manufacturers. However in this case Tesla will probably be fine as they would have achieved their mission.
So the question is: will we still have the current car manufacturers in future? If so, how will they go about differentiating themselves from other vendors in a world of self-driven, electric cars?