How Mercedes Plans to Recapture Its Early Lead in Robo-Cars
How Mercedes Plans to Recapture Its Early Lead in
Robo-Cars
Carmaker races Google, Apple, Ford for $83 billion market
CEO Zetsche admits ‘fun’ driving is becoming the
exception
by Elisabeth Behrmann June 4, 2017, 8:00 PM PDT
Three decades ago, an experimental Mercedes-Benz van
managed to steer, brake and accelerate on its own. But after the technology was
refined enough to put an S-Class sedan through its paces on a highway around
Paris in 1994, it was largely set aside as commercially unviable.
Now, the prospect of autonomous vehicles is threatening
to upend the auto industry, and instead of an enviable head start, Mercedes is
just part of the pack in the race to roll out robo-cars. That’s a thorn in the
side for Dieter Zetsche, head of the storied brand and chief executive officer
of parent Daimler AG.
Zetsche, who started in the industrial giant’s research
division in 1976, is spurring Daimler to regain that edge. In 2015, he unveiled
the futuristic self-driving F 015 concept car and prodded developers by moving
forward targets for introducing the technology several times in recent years,
he said in an interview. Positioning Mercedes for the self-driving era could
prove a crucial last act for the 64-year-old Zetsche, whose contract runs until
2019.
“It’s very, very important to be one of the first with self-driving
cars, because the technology is threatening to overturn carmakers’ core
business,” said Jan Burgard, the head of Beryll Strategy Advisors, a
Munich-based automotive consulting firm. “To be among the first means to be in
a much better position to assess the threat, and in particular shape future
development.”
‘Around the Corner’
For the crowded field of competitors, ranging from
traditional carmakers to cash-rich newcomers from Silicon Valley, the lure is
clear. The emergence of autonomous vehicles marks the biggest potential change
to personal transport since cars replaced the horse and buggy, and that
disruption may grow into a market worth $83 billion by 2025, consulting firm
Frost & Sullivan estimates. Zetsche says the changes could come sooner
rather than later.
“Having a car drive by itself under certain conditions
is, figuratively speaking, just around the corner,” said Zetsche, who was
Mercedes’ top development engineer at the time of the Paris self-driving test.
While bad weather and hilly terrain are obstacles in some places, “getting
around Madrid in a self-driving car under normal circumstances is a realistic
scenario by the turn of the decade.”
In an industry dominated by model cycles that generally
last seven years, Zetsche is accelerating development. Last year, he set up a
skunkworks unit where hundreds of engineers collaborate on electric,
self-driving cars as well as alternatives to the personal car such as
ride-sharing and robo-taxis. Instead of the traditional bureaucracy, executives
are on call to speed decision making.
Startup Accelerator
The icon of German engineering, which takes credit for
inventing the car, also set up an accelerator for startups last year to
identify and develop promising technologies, a departure from its past mindset
when ideas from the outside were more likely to be scoffed at. The new approach
appears to be helping, with the automaker moving up the roll-out of 10 electric
cars by three years to 2022.
Zetsche, Daimler CEO since 2006, knows what it’s like to
fall behind, and to catch up. Mercedes lost the luxury-car sales lead to BMW in
2005 as Daimler’s ill-fated acquisition of Chrysler distracted management.
Mercedes only reclaimed the top spot last year after an overhaul of the
once-stodgy brand, with Zetsche spearheading racier new models like the GT
sports car and stylish compacts such as the CLA sedan. Net income hit a record
9.9 billion euros ($11 billion) last year, and the shares have climbed more
than 50 percent over his tenure.
Still, that comeback was in the traditional auto
business, while keeping Mercedes up to speed in the future is a tougher
challenge. Deep-pocketed technology companies like Apple Inc. and Google parent
Alphabet Inc., which has set up mobility unit Waymo, are angling to get in.
Among customary competitors, Ford Motor Co. has staked out
an early lead in development and plans to deliver market-ready autonomous cars
as early as 2020, while BMW AG aims to introduce the self-driving iNext as its
new flagship in 2021, according to Anirudh Venkitaraman, an analyst at Frost
& Sullivan.
Tesla Inc. has already made waves with its Autopilot
feature, which boasts “full self-driving capability at a safety level
substantially greater than that of a human driver.” And while Mercedes has
trotted out the show cars like the futuristic F 015 and offers semi-autonomous
features, such as emergency braking, which emerged out of the testing in the
1990s, it has yet to set a target for when a fully robotic vehicle will go on
sale.
Daily Tests
Daimler’s race to catch up is largely being run out of
research centers in California and in Boeblingen, near its headquarters in
Stuttgart. Christian Weiss, the head of autonomous driving, and Thao Dang, who
leads the systems integration team, oversee daily tests on five V-Class vans,
pushing them to the limit. The vehicles, packed with computer gear and sporting
four sensors visible as yellow domes on the outside, search out tough traffic
situations during rush hour.
“The truth for any self-driving vehicle is on the
street,” Weiss said during a demonstration that showed how the cars learn to
act safely even with incomplete information. “We don’t need to go far around
here to find challenging situations” in the congested, winding roads around
Germany’s motor city.
Daimler has also stepped up partnerships, joining forces
in April with Robert Bosch GmbH, the world’s biggest automotive supplier, to
bring driverless taxis to the road by 2023. It’s also cooperating with Uber
Technologies Inc. to include Daimler’s self-driving vehicles in its
ride-hailing network in the future. Mercedes’s own robo-cars will have a
distinct styling, according to Zetsche, who has reluctantly accepted that this
is the future.
“I was reticent for a while about the idea of not having
a steering wheel and the driver giving up control, not because I’m ‘old school’
but because it’s fun to drive,” he said. “Unfortunately, with ever-increasing
traffic congestion having fun while driving is becoming the exception.”
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