DE LA VEGA ON LEADERSHIP
HOW THE INDUSTRY OF AUTOMOTIVE IS CHANGING In the early 20th century the automobile industry changed the American landscape and way of life.
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ar ownership fueled Americans’ spirit of independence and made the American dream possible. New roads were built. Suburban life was born. Gas stations popped up. Family vacations with stops at the new motels and drive-through restaurants became popular. Related industries such as steel, petroleum, and rubber flourished. Millions of jobs were created. Now in the 21st century, the automobile industry is embarking on a massive transformation that is likely to change the American way of life once again. It’s very exciting. And it all begins with the electric vehicle (EV).
The future of the car is electric
Electric vehicles have been around for a while but penetration is still relatively low. However, technology is advancing rapidly, especially in the area of electric car batteries. Car manufacturers are realizing that the future of the car is electric. Just as an example, in a single announcement in March, GM revealed it is working on 10 new EVs, all equipped with 400-mile-range batteries. Battery range is the distance that the car can travel without requiring a battery recharge. A 400-mile battery should appease most consumer concerns over not being able to drive long distances. But it’s battery life—that is, how many times can the battery be recharged before it begins to degrade—that will change the dynamics of car ownership. Progress is being made to extend battery life also, including tests of batteries that promise a 1-million mile lifespan. A 1-million-mile battery may not be a major selling point for individual electric vehicle buyers; they probably don’t plan to own a car that long anyway. But it’s a major consideration for rideshare companies. They are building their electric-vehicle fleets and preparing for the time when autonomous vehicles will receive regulatory approval to operate. And that may not be so far off. Uber recently received approval by the California Department of Motor Vehicles to test autonomous vehicles on public roads. Which takes me to the next point: autonomous vehicles. Cars are getting increasingly sophisticated. Today, they can warn you about oncoming vehicles. They can stop when they detect an obstruction ahead of you. They park themselves. As more advancements like these are introduced cars will become increasingly smarter and more autonomous.
James Arbib and Tony Seba, authors of Rethinking Transportation 2020-2030, argue that the convergence of these forces will make way for a new disruptive business model that can completely change the way we move about. In other words, they believe that at some point in the near future, people will find ridesharing services easier and more economical than owning an asset that sits idle 95% of the time. “By 2030, within 10 years of regulatory approval of autonomous vehicles, 95% of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals, in a new business model we call ‘transport-as-a-service’ (TaaS),” they say. If that scenario comes true, how will the urban landscape and way of life change? Will there be a need for as much parking as we have today? In fact, will the family home even need a two-car garage? How will today’s children, once they become adults, get to work?
Making it possible
You can play with possible scenarios, but before any of them becomes a reality, one thing must happen: electric autonomous vehicles must be proven to be safe to drive on public roads. New technologies always raise concerns, and these must be addressed in full. Manufacturers, regulators, and stakeholders must work together to arrive at solutions that make everyone feel comfortable and safe. Fortunately, the auto industry has a track record of improving safety over the years by introducing seat belts, air bags, and rearview cameras, to name a few. I believe this is going to be one of the most dramatic industry transformations we’re going to see in our lifetime. Hispanic leaders in the automobile industry, including those featured in this issue, will play a part in this history-making transformation as the internal-combustion engine car evolves to an electric vehicle powered by a long-lasting, rechargeable battery. And, in the process, these leaders and their colleagues will Now here is what may be one of the most significant impacts to the American change the American landscape and way of life. way of life as electric vehicles, improved car batteries, and ridesharing become Ralph more popular.
Getting around in the 21st century
Ralph de la Vega is the former vice-chairman of AT&T Inc. He is the author of the best-selling book “Obstacles Welcome: Turn Adversity to Advantage in Business and Life.” He is also a LinkedIn Influencer, posting regularly on leadership and innovation. 6 LATINO LEADERS MARCH / APRIL 2020
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