Show notes
EP001 - Welcome to the Future of Vehicles http://www.vehicle2.getspiffy.com Episode 1 is primarily news-focused, with a concrete definition of what we will refer to as the “Vehicle 2.0 framework”; recorded on March 8th, 2019. Scot discusses a variety of topics, including: Defining “connectivity”, “changing ownership models”, “electrification”, and “automation” Several OEMs and even countries have announced plans to move to 100% EV by timeframes like 2025/2030 LIDAR and the levels of autonomy Lyft files for an IPO -- read the S1 here -- and what that can mean for the future of vehicle ownership Daimler AG and BMW AG announce jointly-owned car-sharing and ride-hailing business called SHARE NOW China’s leading EV car company in sBYD - just announced they sold 43k in the first 2 months of 2019 - up 175% y/y Waymo continues to lead the autonomous vehicle push, but CEO John Krafcik continues to temper expectations Waymo to start selling LIDAR technology in stand-alone format If you enjoyed this episode, please write us a review on iTunes! The four pillars of Vehicle 2.0 are electrification, connectivity, autonomy, and changing ownership models. In the Vehicle 2.0 Podcast, we will look at the future of the auto industry through guest expert interviews, deep dives into specific topics, news coverage, and hot takes with instant analysis on what the latest breaking news means for today and in time to come. This episode was produced and sound engineered by Jackson Balling, and hosted by Scot Wingo. Transcript: Scot: [01:00] Welcome to the Vehicle 2.0 podcast. This is our first episode and it's being recorded Friday, March 8th, 2019 to kick off the podcast, we're going to catch everyone up on some breaking industry news. But first, we want to take a minute and walk everyone through the vehicle 2.0 framework and some of the terminology that we'll be covering on this podcast in the coming weeks and months and hopefully years. As we talk about future car, there's gonna be a lot of new vocabulary and we will make sure everyone has this reference podcast to go back to so I won't have to cover it every single time. Scot: [01:32] Let's kick it off by looking at the vehicle 2.0 framework. There's four pillars to the framework. The first is connectivity. Most new cars are include a connection to the Internet and then also that enables a lot of cool in cabin functionality. And then also interesting conductivity of the car. I don't want to say too much about that because one of our episodes coming up here soon is going to feature the CEO of Smartcar and we're going to talk about that one a lot. Scot: [02:00] The second pillar is ownership. Car ownership is changing in dramatic ways. There's a lot of innovative companies. We all are familiar with the ride-sharing companies, Lyft, an Uber. And then we have a lot of new models out there, their subscription models. Uh, there's micro rentals, and a lot of things like that. So some of the companies we'll talk about, our Turo, Fair Getaround, and companies like that. A lot of people are also familiar with Zipcar. The third pillar is electrification or electric vehicles or EVs as we commonly refer to it in the industry. You'll hear another acronym that we hear a lot as we talk about this topic is ICE or internal combustion engines. Scot: [02:41] We have hybrids, plug-in hybrids. So all those are kind of in this topic of an electrical vehicle. One of the industry trends here is many of the car makers, uh, which we call OEMs, uh, and even countries have announced plans to really get to 100% EV and timeframes like 2025, 20, 30. So it's still early days in the cycle. But as we look at the larger green movement, um, and, and taking care of our environment and climate concerns, EVs are a top topic there. The fourth and final pillar is autonomy or autonomous vehicles or AVs. Uh, it's easy to confuse AVs and EVs. So EVs or electric vehicles AAVs are autonomous right now. None of the AVs are EVs, but down the road, I think we'll have AVs that are EVs. So I say all this. So you guys get used to hearing and saying, Eh, yourselves, this terminology. Scot: [03:38] A big thing that you'll hear about when we talk about autonomous vehicles is LIDAR and that's essentially, it's like radar with light. Um, so it's a shooting out a beam of light. These vehicles are able to build a 3D map of their environment and use that to navigate. Lidar is an acronym that stands for light detection and ranging. So we're going to be talking a lot on this podcast, not only about autonomous vehicles or AVs, but also LIDAR. Uh, another thing that comes up a lot when you talk about autonomous vehicles is there are several quote unquote levels of autonomy out there. Um, and uh, so this was first proposed, I believe by the Society of automotive engineers and then as now been adopted by the national highway traffic safety admin or the NHTSA. So, so the level started zero and they go up to five. Scot: [04:30] And I'll just briefly walk you through those levels. Zero is essentially no autonomy. The control, the human, the driver controls everything. Um, including the steering, the brakes, the throttle, the power. Uh, it's what we've been doing all along. You have some assistance from things like cruise control, uh, and now some cars are having light radar, uh, but generally that the human is 100% in control. Level one takes us up with a driver assistance. Uh, and that means most levels are controlled. Most pieces are controlled by the driver, but a specific function, one function like steering or accelerating is down, done automatically by the car. So some of the kind of advanced cruise control systems fall into level one. Then we move up to level two and level two, at least one driver assistance system of both steering and acceleration, uh, is automated. So here the driver is disengaging from physically operating the vehicle and but does not take hands off the steering wheel, hands off the steering wheel or foot off the pedals at the same time. Scot: [05:34] Level three, you're now, uh, the vehicle is driving and accelerating on its own with a driver, an interruption. So the driver is still engaged and can take over at any time and frequently the vehicle will detect when it's gotten into this situation and say, Hey, I need you to take over. Um, and this is called level three. This is kind of where Tesla is right now. Uh, with their, their autonomous vehicles. They are by far the largest manufacturer out there with this, uh, ab type functionality and they're at level three. Then we step up to level four. And this is called fully autonomous. And, uh, the definition is they're designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip. Um, this, uh, so this is close to full autonomy that the one layer that's out there is it does allow for very specific domains. Scot: [06:32] So, for example, if a truck went from a highway from one location to another, maybe in a specified lane, that's level four, because you've put some constraints around that, uh, the constraints being either a lane, a designated lane, or you're on a highway, you're not going, you know, do a complete ride journey. And that's level five. Level five is full autonomy anywhere, any place in the environment, uh, the driver can kind of essentially disengaging a spin around and play cards, uh, whatever, take a nap, uh, et cetera. So, so those are, we'll, we'll probably be referring to those over the life of the podcast and I just wanted to get that definitionally out there. We'll refer back to it here in episode one when appropriate. Uh, another interesting debate we're going to explore on the show is I talked about LIDAR. So some of the more advanced companies, uh, out there, uh, I have obviously used light are the one that seems to be ahead is Waymo and then you have Uber, etc. Scot: [07:32] Um, and you know, they're definitely kind of full-on having the vehicle build a 3D map of its world and navigate that and understand everything going on. the, uh, the counter-story to that a w which is kind of the minority point is, you know, as humans when we drive, we don't have LIDAR, we essentially have, our eyes are effectively two cameras that are offset to give us a 3D view of the world that we then make a lot of inferences about. And that's how we drive. Um, so this is the system that Tesla uses and a couple of the other vendors out there, uh, are, are using this. Um, so it's going to be interesting to kind of see who wins that debate because obviously if you can use cameras, it's much less expensive and complicated than using LIDARs. So, so, you know, right now the one, you know, I think the Tesla folks would argue they're ahead because they've got many more vehicles out there actually driving a at level three with cameras than the LIDAR guys do. Scot: [08:30] So, so that's going to be something we'll talk a lot about on the show. Another area that's interesting, kind of outside of this vehicle 2.0 framework is the lifecycle of the car. So there's a lot of trends, uh, in addition to vehicle two o that, that are also changing how we buy, sell, ensure finance and maintain vehicles. Uh, this is an area near and dear to our hearts here at spiffy because you know, we believe the whole maintenance of part of the lifecycle is, is not optimized for today's consumer. Um, the other day I rarely watch linear TV, but I was watching I think a basketball game and uh, you know, I haven't seen a commercial in a long time and every commercial on TV I was shocked was for Carvana and vroom. Those are two examples of companies that are really turning the auto industry on its head as far as how you buy a vehicle. Scot: [09:19] So what they're doing is the vehicles coming to you. You have an online shopping like experience. They've gotten rid of the test drive by bringing the vehicle to you and giving you a return policy. So we hope to have in future episodes, uh, several companies in, in analysts looking at this part of the market as well. So the goal of this podcast is really to take you, the listener on a journey with us because we're learning a lot about this as well. And we want to explore this vehicle to a framework. Um, we want to understand what's going on, when did the best minds in the industry think it's going to happen, uh, and then how are these changing ownership models, uh, and the way that you, you buy, sell and maintain and insure cars. How is all that adding up and what's it mean for the future of automobiles? Scot: [10:06] So with all that foundational kind of definitions and, and the frameworks in place, let's pivot and look at some of the big news items that have come out so far this year. Uh, I think the biggest news item, uh, to come out this year so far and the vehicle to 2.0 world is the lift IPO. So, uh, this is pretty exciting. So Lyft has filed for an initial public offering. Uh, and uh, during the Obama presidency, he put in place what's called the jobs act. The jobs act allows you to file an IPO confidentially, uh, and then, uh, reveal the IPO after you've had decided you are going to go public and you've had your communications with sec prior to that, everything was transparent. Um, which is, you know, the downside of that is many times you would want to test the waters of the market and then pull the IPO without getting a black eye. Scot: [10:56] And you couldn't do that. So this, this allows you to have confidential communications with the sec and get everything done. So, um, a little background on me, I took my last company, ChannelAdvisor public, so I've got a lot of experience with this whole IPO process. What the one thing that you need to know is when you file to go public, the SEC, the Securities Exchange Commission, they want the consumer that that could be buying the, you know, the public investor. They want them to understand everything about your company. So they make you really kind of create this pretty comprehensive document that's called an S1. And we've lived, we've linked it to the Lyft S1 in the show notes. And I strongly recommend, if you are interested in this topic, which you by definition are because you're listening to this, uh, take a peek at that. Scot: [11:44] Now. It's kind of daunting. So, um, the weird thing about the IPO process is because there's so many lawyers and lawsuits out there, taking a public is a very risky proposition. It's very easy for people to sue you and say you misled them. So you end up with this kind of weird thing in theS1 where you have this 250-page document where you're trying to convince people to buy your company and own equity in it. But essentially the first third of it is essentially you telling everyone how your business is terrible. So, uh, just because what you want to do is really lead and make sure everyone knows all the risk factors, all the things that can go wrong, uh, et cetera. Then after you get that out of the way, you have this kind of 20 or 30 part, uh, page part and it's Kinda like, you know, it's like a sandwich, right? Scot: [12:32] So you've got this kind of wasted, this kind of exterior part that you have to kind of slog through. And then you get to the really juicy middle part there about the business and that's called the management discussion and analysis. So for the lift IPO, this section is really, really a fascinating. Uh, it starts on page 76, uh, if you want to pull up the pdf we've put out there in the show notes and I think it's a must-read for everyone. Uh, even, I'm going to kind of say in the, not only the vehicle world, but the e-commerce world too, because essentially Lyft is a marketplace, um, between drivers and riders. I'm and, and it's really fascinating how they talk about that. And I found there was, there was a lot of connective tissue to my previous e-commerce world. So, um, uh, another interesting output of this as the news kind of ramps up around the IPO. Scot: [13:20] What happens is a lot of reporters start reading this one, right? And their natural inclination is, this is terrible. Oh, you know, why would anyone ever invest in this company? Because again, the first 100 pages are about how Lyft is a terrible business. Um, so I saw several articles come out that, you know, Lyft is $1 billion business, but as hemorrhaging cash and we'll never get profitable. Um, and you know, lift in there and in the risk factors, you list all these things that could potentially go wrong. Um, so, uh, I would, uh, I would recommend everyone listening not believed that hype. Uh, it's just part of this process and I think people are misreading it. So I want to spend time today walking you through the positives. So here's some of the highlights. Lyft has 1.9 million drivers. I think that's, that's pretty amazing that, you know, there's effectively 2 million people. Scot: [14:10] Uh, that just on the lift system, um, that are, are getting, uh, you know, part-time or even full-time employment from this marketplace. And they have 31 million riders, Lyft’s revenue in 2018 was $2.2 billion. So this is a multibillion-dollar business that has been created from ride-sharing very, very rapidly. Um, a couple of other trends. So, so, uh, I'm not going to spend the whole podcast on this, but there were kind of, in the spirit of this podcast I wanted to tease out a Lyft does kind of add some, some meat on the bones around some of the trends I've already introduced here with the vehicle 2.0 framework.…
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