Wunderwaffen: The Myth of Secret German Automotive Technology for the 21st Century

My talks on the state of development of autonomous and electric cars – which currently keep me pretty busy traveling in Europe and the U.S. – can be quite unsettling – and honestly, that’s what they are designed to do. I notice it when the audience is moving on their chairs, or some murmurs are coming from the room, or when I see the pale faces of some when they see their understanding of the automotive future being shattered fact by fact.

Here is a video from one of my talks that I have given over a hundred times in that or a slightly modified form to expert audiences from the automotive industry (in German).

Electric Vehicles

An example of a video that reliably creates unrest in the audience is one that highlights the misery of electric mobility in Europe. This video published by the Chinese car manufacturer BYD has a drone flying over a delivery of several hundred electric buses to the city of Shenzhen. The dramatic background music just supports the impact. Those buses are clogging the nearby highway and fill the gigantic parking lot. In between the buses hundreds of electric taxis – ready for delivery – can be seen as well.

In December 2017 Shenzhen switched all 16,000+ Diesel buses to electric buses. In total China has 99 percent of all electric buses worldwide on their roads. That’s more than 380,000(!). And just to mention: Shenzhen also switches their 17,000 combustion engine taxis to electric taxis, and Beijing is currently replacing all of the 70,000 combustion engine taxis to electric taxis as well.

That’s the moment where the myth of German technology expertise starts cracking. The drawers, in which German car companies supposedly have all their blueprints for electric cars, just waiting for the market to mature, should be already pulled out open and action taken. But that’s barely happening. There are no battery factories; Germany gets its supply from Asian companies, and battery competence-wise the country has lost the connection, if we look at the recent battery breakthroughs that Tesla has realized. 100 dollars per kWh, only 2.8 percent Cobalt in the battery instead of 8 percent with the rest of the industry. That gives Tesla a massive cost advantage, given the fact that the Cobalt prices rose threefold in the past 18 months.

Autonomous Driving

Another slide that makes the color in their faces disappear is the one about the companies having a license for testing autonomous vehicles in California. 55 companies got one and they test with more than 1,000 vehicles. Most of the companies are unknown to my audiences. Jingchi? Pony.ai? boxbot? And all of them have one thousand vehicles on the road? Where are the cars in Germany?

Autonomous Cars.png
Companies with California license for autonomous vehicle testing

Those of us living in California or Arizona see those cars all the time. And you can barely miss them, as their strange contraptions – a.k.a. sensors – are eye-catching. And the cars drive millions of miles. Alone Waymo – the Google sister company – has just celebrated the milestone of 7 million miles in autonomous mode.

A comparison how good each technology is, can be seen in the Disengagement report 2017 – and it’s even more shocking. Mercedes, the pioneer of autonomous driving having started its first tests in the 1980s, is not only NOT a technology leader, the company apparently has not even the slightest chance to become one. The report shows that Mercedes is behind Waymo by a factor of 4,500. The gap is so large that you need to feel embarrassed for the company.

Disengagement Report.png
Disengagements of companies testing in 2017. Waymo vehicles on average drive 9,000 kilometers until the first handover of control to a human driver. Mercedes-Benz cars on average hand over every 2 kilometers.

Once the audience hears about Waymo’s announcements, to deploy 20,000 Waymo-Jaguars and 62,000 Waymo minivans on the roads within the next 2 years. Not for test purposes, but for a commercial operations with passengers and without(!) driver. And that is the final knock-out punch for the audience.

Mouth wide open, eyes dark. The consequences for their own automotive industry is becoming crystal clear, and the future is not looking good. When I then mention potential job losses simply by switching from internal combustion engine cars to electric vehicles, they almost lose it. One third of all jobs in the automotive industry are around the internal combustion engine. With a switch to electric vehicles, only 10 percent of those jobs would be required, as electric vehicles require much less parts and production is highly automated.. All in all we are talking about half a million to one and a half million jobs that will disappear within the next 5 to 10 years.

Jobs.png
Estimated job losses when switching from internal combustion engine vehicles (ICE) to electric vehicles. A third of all jobs in the automotive industry are around the internal combustion engine.

It’s not helping that Tesla’s Model 3 – according to German media and experts is suffering from supposedly ‘massive production problems‘ –  has taken the top place in market share in the U.S., ahead of Mercedes, Audi and BMW. That’s sensational, and means some dramatic next months for German car makers, especially as soon as the first Model 3 hit the European markets.

Wunderwaffen

The audiences’ reactions are interesting. There are those that agree, and who have noticed the same but haven’t had the data and facts. Then there are others who agree with many points, but have different opinions on the impact or the timeline. And that is absolutely fine with me. I do nothing else than create potential scenarios based on the facts and data that I have and the scenarios will certainly not unfold exatclt in that way, but probably many of them with good likelihood. I also often experience that while on the stage experts would follow their official corporate statements, but behind the stage they confirm my scenarios. One of them them just recently told me after our panel discussion that all the neighbors in his cottage district either have already bought an electric vehicle or are considering buying one.

And then there are those who don’t believe anything and report from their ‘friends’ working at German car companies and their efforts and secret tests and developments. German companies ‘are much further and are testing and developing.’ ‘Soon, they will launch something.’ But German car companies are ‘not as good in marketing as the American companies‘ and ‘don’t make that much noise.’ German car companies prefer ‘developing it quietly, but therefore they do it really really well.’ And generally speaking, don’t worry about German companies, because they ‘are very well prepared.’

Well, it’s not completely wrong and I am aware that German car manufacturers develop those technologies. They have more patents in autonomous driving than the Californian companies. And battery technology has been done in Germany for over 100 years, and Germany was the leader. I am also aware that many of those technologies developed in the U.S. and China are based on German technologies.

But those arguments sound more like desperately clinging to the Wunderwaffen that we hope to ‘see soon.’ Nobody has seen them so far, but they are almost here to be deployed and change our fate. How helpful are those patents, if they are just collecting dust in drawers, but are never applied and turned into products and services?

Such false promises have been fateful for the whole nation 70 years ago. Too late, too little, too immature. And here are some facts that proof that those magic technologies are vaporware.

Myth 1: Battery Competency

What exactly keeps German car makers from demonstrating their battery competency? That competency is derived from having this technology – battery electric vehicles – driving on the road under real conditions in the hands of customer, and thus collecting real experience that allow improving the batteries step by-step. Competency is not acquired by telling others that you have blueprints in drawers, only waiting until the ‘market is mature‘. Countries and companies that have that technology on the road are the ones I have mentioned before: from China and the U.S., but not Germany.

Since 2013 Tesla’s Model S has been on the market, and in five years not a single German manufacturer managed to launch a competitive car. Porsche Taycan, known so far as the Mission E, is the only car that shall start to compete with the Model S in 2019. On paper the Porsche Taycan looks pretty good, but Tesla hasn’t been sleeping behind the wheel, as we saw with the demonstration of the Roadster.

Myth 2: Invisible Autonomous Cars

The same is true for autonomous cars. To develop such a technology, you cannot just rely on testing the car on test track or in the laboratory. At some point in time those cars have to hit the roads in the real world, driving in real cities and interact with real traffic. The world is too complex that you can simulate them in the laboratory. Even the predictable and common traffic situations on highways, country roads, and streets filled with other cars, bicyclists, and pedestrians are showing high complexity that increases exponentially. And in real life one encounters situations that even in your wildest dreams you would not be able to imagine, like the elderly lady in an electric wheelchair and a broomstick in her hands driving in the middle of the road in circles chasing a duck. Unbelievable? Well here is the video proof shown by former Google development lead Chris Urmson.

Exactly that is the reason why massive tests in the real world are necessary. And Californian companies have been doing that for years. That’s why we can see so many vehicles on the roads and of course they experience smaller collisions, and unfortunately also one tragic fatal crash.

If German manufacturers were really massively progressing with their developments as they keep telling us, then it would have been impossible NOT to see massive car fleets testing on German roads. Also the public would have been invited to participate, helping the companies better understand the needs to of customers and how they use autonomous cars. And city administrators and traffic safety agencies would have been invited as well to work together on infrastructure programs and the impact on traffic in general.

But that isn’t happening. We don’t see the cars. There is to public beta testing. And the discussions around the impact sound more like doomsday scenarios – keyword: crashes with autonomous cars (grandmother here, baby there, or the three that kills the passenger) – than an informed exchange of thoughts. Occasionally we may see a test vehicle, but that’s not sufficient to talk about wide ranging tests with fleets.

And don’t come wit the excuse that those test vehicles are difficult to notice because the technology is so well integrated in the car that layperson would not be able to recognize them. If German car companies had such a miniaturized secret technology, that California is not aware off, that would be talk of the town. Fact is that today’s state of technology on Lidars and other sensors is still pretty bulky and eye-catching. Such a technology is easily recognizable even for non-experts.

German companies regularly embarrass themselves with such technologies. Just remember this year’s CES, where Mercedes showcased an autonomous Smart that – wait for it – was remotely controlled. And that three years after Mercedes showcased at the CES 2015 a concept of an autonomous cars that – wait for it – was remotely controlled. And that all, while four or five other companies used their real autonomous cars to shuttle conference attendees from the hotel to the conference center.

Conclusion

The facts, figures, and experience in the public debunk that claims of those soon-to-be-coming Wundertechnologies of German manufacturers. They are nothing else than vaporware. There is nothing. They don’t have it. And whatever is coming, is coming too late, with too little ambition, and is lacking.

Germany, the Silicon Valley of the 19th century, where all the big companies like Siemens, Mercedes-Benz, Bosch, BMW orr VW, started, became – as Christoph Keese, author of Silicon Germany, said – the “technology museum of the 20th century.

Afterword

Occasionally I am being asked, if I am glad (or have Schadenfreude) about those developments. My response is always that as a European in California I could take a position of ‘no-need-to-care.’ California is doing good. My region is doing well, when the Tesla factory, which is 10 minutes from where I live, is booming; when the 55 companies that are testing autonomous vehicles, are progressing. As a European, whose relatives and friends live in Europe and even work in some of those companies affected from those changes, I am not indifferent.

That’s why I see my talks and books as a way to shake up and help telling people how those areas are changing and how we can avoid to become roadkill, and instead actively participate and lead. But the times of appeasement is long over, and that’s why my candid style aimed to shake up may be unusual at those conferences.

If you are interest in my up and coming talks and travels, feel free to check out the list. I am always open for requests about talks and workshops.

This article has also been published in German.

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