Article by Ben Selwin.
The lesson of Nokia
“We didn’t do anything wrong, but somehow, we lost.”
-Nokia CEO Stephen Elop
Before Apple’s iPhone came along and spoiled the party, Nokia reigned supreme. The Finnish phone maker began taking over the mobile phone world in the late 1990s and peaked with sales of over USD$51 billion in 2007.
Despite what Elop says, Nokia did plenty wrong. The company stubbornly stuck to its designs and operating systems even after the iPhone had changed everything. Nokia was a hardware company at heart, and it simultaneously underestimated the importance of software and overestimated the power of its brand. It died because it failed to innovate.
The electric and autonomous vehicle revolution
If we believe the more aggressive predictions, the days of Internal Combustion Engine (ICE) vehicles, and even the whole concept of car ownership are numbered. Commentators point to the inefficiencies, high costs and environmental toll of our current transportation industry as indicators that it is primed for disruption. While we may question the velocity of this change, the seeds of this disruption are already well underway, with electric vehicle (EV) adoption seeing a push in major auto markets, autonomous vehicles (AVs) undergoing early phases of road testing (including in Australia), and the share economy getting people used to the idea of using Transport as a Service (TaaS).
A recent study by think tank RethinkX predicts that within a decade AVs will meet regulatory approval in the U.S and that E-AVs will make up over 60% of U.S vehicle stock. This may seem a bold claim, but other major auto markets such as the UK, China, India and France have announced plans to phase out ICE vehicles totally by 2030-2040. The A-EV revolution is happening. How is Australia preparing for the future of transportation?
Is EV adoption lagging in Australia?
The short answer is yes. Looking purely at sales data, uptake of EVs has actually declined here. According to VFACTS figures (and including estimated Tesla sales), passenger EV sales peaked in 2015 with 1,771 sold. In 2016, that number dropped to 1,369, with 2017 estimates at around 1,100.
There are several reasons for this, and the most obvious one is cost. Unlike other countries that have actively promoted EV adoption through subsidies, the Australian Government has fallen behind. China, for example, began subsidizing its EV industry in 2009 and is now leading the world in EV adoption. The Australian Government has been a lot slower to accept that a top-down approach is necessary to get consumers to switch from ICE vehicles.
Aside from high EV prices, another obstacle is infrastructure. Since Australia is a big place and large swathes of it are unpopulated it is challenging to create the infrastructure required to support widespread EV adoption. While the country may be covered in petrol stations, they didn’t pop up overnight; it was an iterative process that took decades. Lifehacker recently surveyed Australian motorists’ attitudes to EVs and found that a comprehensive network of recharging stations is essential to having drivers go electric.
Although Australia is a laggard when it comes to EV adoption, the good news is that things are changing, with a range of measures taking place on both a national and state level to encourage EV uptake.
In September, the Australian Government announced a $100 million deal with Macquarie Leasing for cheaper finance to purchase EVs and plug-in hybrids. In the same month, Hobart City Council proposed that future large or multiple dwelling developments in Hobart could be required to contain EV charging points.
The following month, the Queensland Government updated its “The Future is Electric: Queensland’s Electric Strategy” featuring the Queensland Electric Super Highway. Once completed, the highway will be the world’s longest electric fast charging highway in a single state and motorists will be able to travel from the Gold Cost to Cairns or Brisbane to Toowoomba in an EV.
Another measure from the Federal Government was introduced in early December when Climate Change and Sustainability Minister Shane Rattenbury signed a memorandum of understanding (MOU) with Mayors and Ministers from the Australia Capital Territory (ACT), South Australia, City of Adelaide, City of Hobart and the Electric Vehicle Council of Australia.
“Australia has been regrettably slow in its uptake of electric vehicles,” said Rattenbury. “This MOU seeks to turn this around, and will allow jurisdictions such as the ACT and South Australia to take advantage of their joint purchasing power, and to cooperate on other initiatives such as planning recharging points across jurisdictions.”
Changes aren’t limited to state or federal government initiatives. Private auto club NRMA has announced that as part of its Social Dividend Investment Strategy it will establish Australia’s largest EV fast-charging network which will be suitable for a range of EVs and free for NRMA members. NRMA claims that when the $10 million network is completed it will developer at least 40 chargers which will double the size of the current NSW and ACT network and cover 95% of NRMA member road trips.
Support for AVs is rising but there is work to do
There are signs of life in the introduction of AVs to Australia with South Australia establishing itself as an early leader in AV adoption. Last year, Adelaide began rollout out 40 new EV charging stations and is now has trials planned for self-driving shuttles that travel to and from the airport and around Flinders University.
Western Australia has also seen some activity in the AV space. In November it was announced that the Western Australia Government has partnered with the Royal Automobile Club (RAC) and the French company behind navigation technology NAVYA to bring several driverless cars to the state for testing next year. With this initiative underway, Perth will soon become the first Australian city and one of the first places in the world to trial Uber-style on-demand driverless cars capable of picking up passengers.
Meanwhile, The New South Wales Government announced late last year that is has opened a formal expression of interest process to better understand AVs prepare for trials in mid-2018. New South Wales is specifically investigating the trial of on-demand AV services in regional areas.
Carmakers are also getting in on the action, with Mercedes-Benz bringing AVs to Australia with automated test drives on highways and around Melbourne.
Unlike some other markets, there are however some uniquely Australian technical difficulties facing AVs. “During the drive from Sydney to Melbourne we did regularly pass roadkill throughout the drive, which was noted by our engineers,” said a spokesperson for Mercedes-Benz. Kangaroos are apparently especially tricky to deal with because they hop rather than run across roads.
There is also a lot of red tape. In a recent conference, NSW Roads Minister Melinda Pavey, NRMA director Tim Trumper and other experts in the field discussed the legislative amendments that will be required to get AVs fully up and running in Australia.
“At last count, we’ve identified 150 pieces of legislation that will need amending to ensure automated vehicles can legally operate on our state’s roads,” Pavey said.
Along with the technical and legal issues there are psychological barriers that will need to be overcome before AV adoption becomes widespread. Some people still love the act of driving and for others, the concept of letting go of the wheel is incredibly daunting. As noted by Trumper, these fears will likely erode over time.
“If you think about when elevators went into buildings, they all had operators and people were terrified to be in an elevator without one” Trumper said. “Now we get into elevators 24-seven, and no one thinks about it, and there will be a time when cars and autonomy will feel like that.”
What this all means is that while Australia is still lagging when it comes to EV and AV adoption, the hopeful signs of progress from the Federal government, state governments, auto clubs, and carmakers should help prepare the country for an electric, automated and perhaps totally driverless future. We should hope they do – the last thing we want is to end up like Nokia: stubbornly holding on to the past, and failing in the process.
“I think [Nokia] is a reminder to everyone in business that you have to keep innovating and that to not innovate is to die,” said Apple CEO Tim Cook, commenting on the demise of the phone giant.
Cook’s advice is important for organisations and governments to keep in mind as the technology-driven world we live in continues to evolve at a breakneck pace.
Photo Credit: Mikes Photos from Pexels https://www.pexels.com/photo/alternative-auto-automobile-battery-110844/
Ben Selwyn | Account Director