Every week, together with Electric Vehicle (EV) specialist and Innovation Origins columnist Auke Hoekstra, we look at what has caught his attention in current affairs or what he has encountered when it comes to making our Earth more sustainable.

Volkswagen CEO Herbert Diess said last week that things had to change at the German car manufacturer. “If we carry on as we are now, things could become very difficult.” Diess makes the comparison with Nokia that, as market leader in the mobile industry, did not make the shift towards smartphones quickly enough and went bankrupt as a result.

Diess wants to save Volkswagen from this fate. That’s why the company must change from a traditional car manufacturer into a manufacturer of connected devices. In his speech he mentions Tesla as a leading example of a company that has understood this, according to the CEO.

Auke: “Diess indicates that he is serious and is brave enough to say so. Actually, the VW chief says that the leadership must change, otherwise Volkswagen will cease to exist. Those are firm statements. Tesla is the new kid on the block, a bit like Apple when it came up with the iPhone when Nokia was the market leader. Nokia was blind to the changes in function of the phone. Diess now sees that happening with Volkswagen as well and that’s why the alarm bells are ringing.”

Read Diess’ full speech here

“It’s a shame they’re only just figuring this out now.”

“Actually, it’s too bad he’s only now seeing this. For fifteen years all kinds of people have been proclaiming loud and clear that the role of the car is changing. For example, Maarten Steinbuch has set up an automotive faculty at Eindhoven University of Technology that fits in very well with the digitization that Diess is now addressing. It’s not just about electrification, but also about computer science. According to Steinbuch, the car is becoming a kind of iPad on wheels. It’s impossible to imagine cars without software and it will eventually become more important than the electric motor.”

Currently, Volkswagen only develops thirty percent of the software for their cars, with plans to increase it to sixty percent by 2025, according to Diesss. Last year VW started the Car.software department with five hundred employees and this year is expanding the team to five thousand. The expectation is that around 7 billion euros will be invested in software development.

“And rightly so,” says Auke as he adjusts his car’s GPS. “You can’t update your software if it’s not yours. You have no insight into the release process and have to discuss everything with other parties. Even if it’s just small parts. That concept is also out of date, isn’t it? Smartphone manufacturers all come up with their own software updates. Diess now has to do the same.”

“It’s impossible to imagine modern cars without software.”

Tesla already showed how important software is for cars in 2018. At that time, the American consumer organization Consumer Reports (CR) was testing the Tesla Model 3 and was not particularly enthusiastic about the car’s braking behavior. “Elon Musk took that into consideration, of course, and they started talking and a few days later, the Tesla team came up with an overnight update. It was a world of difference. CR tested again after that update and then they were satisfied.

Apart from the software, the electric motor is still a long way from being fully developed. “In traditional internal combustion engines, about sixty percent of developments are between the steering wheel and the accelerator. The positioning of the engine makes much less of a difference with an EV. With electric motors we are now at the same point as the internal combustion engine was in the beginning. At that time it was also necessary to fully consider how gas-powered cars could be used in the best possible way. That’s the nerdy part that we’re going to figure out in NEON, and I’m very excited about that. The optimization of the electric motor has only just begun. What works best for what? We don’t yet know exactly and that’s what we’re going to find out. It’s a new beginning, one in which a lot of development is still possible. It’s great to be at that new beginning.”

In addition to the digitization of the car, Auke thinks that the next storm is already approaching in the automotive industry: “VW now has to take a beating. Not only with digitization, but also with electrification. It is a very important signal that VW is now warning all the naysayers that something has to change.”

“I hope they’re listening now.”

“What I also find interesting is that Diess says hydrogen will play no role for the next ten years. They want to survive first. But the most important thing is that they understand that we handle cars differently. The era in which every family has a car for itself is coming to an end. In the future – which will still take some time – you will be able to arrange for self-propelled mobility in the blink of an eye. I hope they’ll listen to this right away, because they’re only starting to act very late – I hope not too late.”

The first steps in the direction where cars are no longer owned are already taking place: “When I get into my Tesla, it knows it’s me. Automatically the side mirrors, seat and steering wheel move to my preferences. You can also preset the driving style. It’s fun that a Tesla can accelerate very quickly, but it’s so abrupt that if you have someone sitting next to you, that person immediately becomes nauseous. You can adjust all that. The program makes sure that it doesn’t matter which device you drive. It still adapts to your preferences.”

“Urbanization is almost unstoppable”

Another phenomenon that contributes to the fact that people will see cars less as property is urbanization: “Policy makers and politicians have little influence on this, it’s just not physics yet. This trend is almost unstoppable. As a result, you see that cities are getting bogged down. The pressure to keep the car out of the city center is continually on the rise. City planners increasingly see car ownership as something anti-social, because you need space to put it. And space is scarce in a crowded city. Today’s cars have been developed with the idea that you can drive them all year round. Not only do you want to drive them to work, but you also need to have enough space to go on holiday with them.”

That model is no longer tenable when you see how crowded cities are. According to Auke, shared cars are the future: “There have been various simulations done in urban models. They show that in two-thirds of the cases, people do not need such a large car at all.  You only drag along empty space which in most cases is overkill. I think that in ten years’ time there will be luxury one-person cars that you can use in the city. Think about it: you need fewer cars, therefore you need less space for parking. And because you drive a smaller car, you can get closer to your destination. That’s not on many people’s radar yet, but this is the future.”

Read earlier reports by Electric Auke here