Emissions, and connected and autonomous cars. Those are the key challenges and opportunities in the automotive business over the the next 10 years and longer. There are several
reasons for this, and one big one is that the developing countries are the growth markets, and are suffering the most from pollution, sclerotic roads, and booming auto sales. Anyone who has tried to
drive from one side to the other of, say, Manila, knows how that works. Autonomous cars would change a lot of that, and emissions technology might just make the air breathable there and in places like
Beijing.
Carlos Ghosn, chairman of the Renault Nissan Alliance, was on "Charlie Rose" on Nov. 26 talking smack about a lot about these issues from his aerie as the
leader of the fourth largest global automaker mashup. Ghosn has a dog in the electric-car acceptance fight: only Nissan and Tesla can claim that their halo cars are also electric. Nissan and Renault,
per Ghosn, sold some 200,000 electric cars worldwide last year. Those are tiny numbers for the Renault-Nissan alliance, whose cars and trucks account for two of every ten vehicles sold in the world.
But he also said Nissan is starting to see some profit from Leaf, do as much to production efficiencies and cost cutting as to sales. Ghosn said the barrier to higher sales is consumer acceptance, but
that resistance is a reflection of government and industry commitment to infrastructure, meaning charging stations.
How about the artificial change agent: government
regulations? Ghosn pointed right to the market with by far the greatest yearly sales volume, China, accounting for around 20 million vehicles per year (from two million per year a decade ago). By
contrast, the U.S. should see in the neighborhood of 16 million vehicles delivered this year. "China is moving toward strict emission standards, and that will force carmakers to transform part of
their offering to electric. In China, you can't expand a factory without agreeing to invest in new technology." That would be new technology that has a positive impact on climate. "That means electric
or plug-in [vehicles]."
Because of how widely emissions and fuel-efficiency regulations vary country by country, global automakers have no choice but to have several cards in
their powertrain decks: electric, diesel, hydrogen, plug-in, hybrid. "Car makers have to develop it all at the same time," said Ghosn. Nissan, he pointed out, is developing hydrogen fuel-cell tech
with Daimler AG. "Today in Europe, 60% of cars sold are diesel; in the U.S. and Japan it's less than 1%. And it's laws [that are] driving that mix in Europe. So it's not just consumer demand, it's
legislation."
Ghosn pointed out that while there is, on average, one car per individual in the U.S., and two people per car in Europe, the biggest change will be in emerging
markets where 10 people per car is quickly dropping toward two or three. And those countries will need big changes in roads and auto technology. "In some countries, infrastructure isn't moving at the
same speed as the car industry; that's why the connected car is important, because cars can talk to each other," and traffic jams ideally can be avoided.
The other keys to success
are pretty obvious: connected cars, which people are pretty much demanding now, and autonomous driving, where the driver can choose whether to turn off or on the capability. But it isn't something
that will happen all at once with a Google-esque car off the blocks. Rather, he said, it will a piece by piece, "by brick" innovation, where different technologies developed over the coming years will
be layered on, brick by brick, adding up to auto-pilot cars that can pretty much negotiate most driving circumstances without the driver having to continually watch the road: autonomous parking, the
car's ability to sense the car in front of it, and to stay in the lane it's in and navigate itself.