Even though my last name is Ford, you should not expect any insider knowledge here. Everything I am writing about today is about “Liberation Day” and the possible consequences on the industry’s innovation.
It should be remembered that we have a “gotcha” with the +1 14 policy being developed by the FCC, which will dramatically change the support systems and enabling backward compatibility. I suspect it will be a large problem to fix.
First, let’s look at the landscape. Back in the 1990s, the U.S. auto industry was in need of support and the White House put quotas and how many vehicles auto manufacturers were allowed to import into the country. This created pent up demand for foreign vehicles, particularly from Japan, at the time, and the result was that those foreign makers set up manufacturing plants in the U.S., mostly in the Southeastern states.
This is the list of auto makers in the US.
- General Motors (GM) – Chevrolet, GMC, Cadillac, Buick
- Ford Motor Company – Ford, Lincoln
- Stellantis (formerly Fiat Chrysler Automobiles) – Chrysler, Dodge, Jeep, Ram
- Tesla, Inc. – Tesla, including CyberTruck.
- Rivian Automotive, Inc. – R1T, R1S SUV and electric delivery vans
- Lucid Motors – Lucid Air Sedan
- Toyota Motor Corporation – Toyota, Lexus, and a JV with Mazda
- Honda Motor Company – Acura and Honda
- Nissan Motor Company – Infinity and Nissan
- Hyundai Motor Company – Genesis and Hyundai
- Kia Motors – Kia
- Volkswagen Group – Makes the Atlas, Atlas Cross Sport, and ID 4 in the US
- BMW Group – BMW
- Mercedes-Benz Group – Makes many models here and exports from here
If you intend to buy a car, these companies may have less tariff sticker shock.
Most of these plants are assembly plants where components are sourced from around the world. Thanks to President’s Trumps first term negotiations with Canada and Mexico, many components are now produced in these two countries as favored nations. Based on the rhetoric, it may be that the components are going to be part of the tariffs as well, which may level the playing field for imports.
What does this mean for the innovation that auto manufacturers are pursuing? Here are known innovators in the auto industry.
- Hyundai Motor Company (South Korea): Invests in V2X for enhanced vehicle connectivity and safety.
- General Motors (U.S.): Demonstrates automated driving and V2X capabilities.
- Toyota (Japan): Collaborates on V2X technology integration in vehicles.
- Ford (U.S.): Develops C-V2X technology to improve vehicle communication.
According to Ford Authority, Ford was awarded a patent in January for its C-V2X solution.
In China, Ford has been utilizing cellular-based vehicle-to-everything technology? (C-V2X) technology for years now, in which vehicles use wireless communication tech to “talk” and “listen” to other C-2VX equipped vehicles, people, and traffic management infrastructure. The purpose of this technology is to reduce traffic congestion, and it can even help drivers avoid having to stop at red lights by maintaining a certain speed range, too. Ford has also been planning to deploy this same V2X technology in its future vehicles for some time now, as evidenced by this patent that was filed last June.
The question now is, will V2X solutions be covered in the price of the car, or will they have to be paid for in other (perhaps hidden) ways? The lessons of OnStar is that most people reject the idea of monthly or annual fees on a vehicle they just bought.
To continue the innovation, we need innovation on cost recovery. Mind you, there are larger business plans that come into play here. For example, car maintenance and repair are becoming a larger revenue stream at dealerships. You may have also noticed that the independent car repair “service stations” are dwindling down. It could be that the V2X capabilities get bundled into car maintenance plans. It could also be part of a reduction in your insurance premium that the car sales associate will be the point of sale. (This assumes the insurance company covers the cost recovery, which may be useful to them when accidents happen, and the added documentation can be used as evidence in court.) Then again, the wireless operator could also possibly step in and bundle the package, bringing back the triple/quadruple play.
On the other hand, maybe innovation is more associated with direct communication.
My car warns when I am close to an object when backing up and will put on the brakes if I don’t. It also has a series of graphical warnings about how close I am to obstacles in the front. This is all done internally.
The C-V2X specifications include direct communication, which I am assuming is a reduced cost or priced like a private network solution.
I think the case is compelling for car buyers to want V2X to enhance safety, reduce accidents, improve fuel consumption. I also see the value in traffic management for highways and congested cities. However, given the tariffs and other policies being implemented I think the best the industry can hope for is a neutral position (pun intended).
Edited by
Erik Linask
