It’s the job of historians with help from news organizations to accurately report and then re-assess events years after they occur. The later revisions and nuanced interpretations occur as more documents, memoirs and perspectives emerge. My observations as editor of AutoInformed is 20-20 in past occurrences, and that offers a clearer insight into tomorrow.
We do this with a wry awareness that AutoInformed conducts its education in public. Here’s a deeper perspective to the coming year, from autonomous vehicles, to global warming, to driving high on weed, to trade and tariffs.
Last year we noted* in Global Warming – More than Hot Air that it would continue to be a significant factor in the regulation of the auto industry. President Trumps’ – “global warming is a Chinese hoax” – posture is irrelevant. The state of California, beset by smog, forest fires and mud slides, reduces emissions through a series of actions and advances in technology over decades – supported by court decisions that it has the right to do so in cases brought against California by automakers. Shareholders and governments are demanding action. (Significant Stories, Trends of 2017. And 2018? and More Significant Stories, Trends of 2017. And 2018?). It continues in 2019 with more states embracing the techniques.
Global warming remains a huge factor in the running of any mobility business whose management must comply with a significant rise in regulations that are arguably the greatest challenge to the future of the wealth-creating and job-creating industry. (CARB, 21 Attorneys Generals, Oakland, Los Angeles, San Francisco, New York Demand Trump Stop Clean Air Act Gutting)
Yet Republicans claim they are all for states’ rights on certain issues, but not for cleaner air when a state wants to do that for the health of its residents. Saner minds now advocate for more mass transit, cleaner, more fuel-efficient cars and zero emission vehicles, low-carbon fuels, renewable energy, waste diversion from landfills, water conservation, improvements to energy efficiency in homes and businesses. A so-called a *Cap-and-Trade Program that sells the ability to pollute now and pay more later. (California, Quebec Results on Joint Cap-And-Trade Auction )
Air pollution and CO2 regulations issues are partly behind the push by automakers to establish autonomous vehicles. It’s ironic that this is an urban planner’s dream – mass transit that the rider – not the government – completely pays for. The ultimate size of the market is unknown – currently EVs are less than 3% of global sales of 90 million vehicles – but to meet the regulations, pure electric and ultimately hydrogen fuel-cell vehicles appear to be attractive solutions.
Can it be that more than 33 million autonomous vehicles will be sold globally in 2040? This is a substantial increase from the 51,000 units forecast for the first year of “significant volume in 2021,” according to a vehicle sales forecast from a respected business information source, IHS Markit, late in 2017. (see SAE Autonomous Driving Levels for definitions) In their view “rapid convergence of autonomous driving and mobility services such as ride-hailing (services using online-platforms to connect passengers and local drivers using their personal vehicles) are the main reasons for early deployment and growth. This year we will see if the market continues to move in that direction. We are betting yes, but not as rapidly as some forecasts.
Consider the threat of say Apple or Google with virtually unlimited financial resources. They could take large chunks of the market away from established automakers in the blink of an engineer’s eye. Here, Tesla is but a warning of an unexpected disruption to the ruling class of luxury makers. It effects were limited since it was a car company that couldn’t build cars and wasn’t smart enough to buy an automaker that could run a production line to meet demand.
Add the traditional automakers’ insatiable need for capital to fund the ruinously expensive development costs involved and you could see a shakeout not unlike what happened to the industry at the turn of the 20th century. That’s the reason for alliances and cooperative agreements among previously competitive automakers. They need to prepare computerized and connected cars on steroids with the processing power unknown to NASA, which took us safely to the moon and back. (see California Proposes Strict Greenhouse Gases, Fuel Economy Rules for 2030 and The Proposed Plan for Achieving California’s 2030 Greenhouse Gas Target.)
Mobility-as-a-Service will first bring this technology to the masses before individual ownership of autonomous vehicles enters the highways. Automated airport shuttles, campus conveyance at large universities and the like. Since Michigan is college football obsessed, here’s one for the home teams: How about off-site parking with driverless quiet shuttles humming around Ann Arbor or Lansing on game days? (New Michigan Transportation Projects Increase Mobility, First Autonomous XC90 Built Today by Volvo, Volvo Delivers Autonomous Driving XC90 in 2017, Autonomous Vehicles to Cut Auto Insurance Biz 71% By 2050, Significant Legal Implications with Autonomous Vehicles)
Trade and Tariffs
As noted last year, trade regulations or barriers, and tariffs in a global industry remain significant challenges. Last summer dozens of employees from Toyota’s 10 U.S. assembly plants were in Washington, D.C., opposing the Administration’s threat to impose a 25% tariff on imported vehicles and parts. They were part of a growing movement of opposition to Trump’s job destroying trade plans. They were joined by U.S. production workers from other international automakers. To draw attention to the automakers’ U.S.-built vehicles, a caravan of cars and trucks circled the Capitol during a Commerce Department hearing examining whether auto imports are a “threat to national security.” According to an auto industry trade group the tariffs will cost consumers $83 billion initially. (Auto Workers Oppose Trump Tariffs that Would Destroy Jobs)
General Motors also said that if President Trump added another round of tariffs, the move could compound the hurt, leading to “less investment, fewer jobs and lower wages” for its employees. The U.S.’s largest automaker said that the president’s threat to impose tariffs on imports of cars and car parts — along with previous penalties — could drive vehicle prices up by thousands of dollars each. The “hardest hit” cars, General Motors said in comments submitted to the Commerce Department, are likely to be the ones bought by consumers who can least afford an increase. Demand would suffer and production would slow, all of which “could lead to a smaller G.M.”
Privacy, Hacking and the Connected Autonomous Car
In this bold new world of connected cars there are several privacy and security issues lurking. Who owns your data and how much are they selling and manipulating you? No-one can buy a cell phone without agreeing to the service providers policy that is written in dense legalese that obscures what is happening. In Europe it’s different – the customer owns their data. Then there’s the malevolent use of data.
With a growing public debate over Facebook’s use of personal data as a backdrop, a new Pew Research Center survey of its users finds that most do not know the social media platform lists their interests for advertisers, and half are uncomfortable with these lists. The study comes at a time when the FTC is reportedly considering fines of millions upon millions of dollars for Facebook privacy violations – and that’s against existing weak laws. Google at $22 million currently holds the record for illegal privacy actions. The French data protection authority CNIL fined Google €50 million ($57 million) that would repeat if Google does not change how it sends targeted ads. CNIL says that Google has multiple ways to use personal data to target ads — forbidden under GDPR. (See Cambridge Analytica on the egregious political use of Facebook data to disrupt a society or a legally elected government.)
Then consider the unknown, but near certain wide Russian interference in U.S. elections. Roughly half of users say they are not comfortable when they see how Facebook categorizes them, while a share believe their political leanings are not described appropriately. Overall, the array of your info information can cover demographics, social networks used and relationships, political leanings, life events, food preferences, hobbies, entertainment interests and the digital devices you use.
Talk about a threat to U.S. security where little is being done in Washington – know that hacking could kill you.
As hackers become more familiar with the components of connected vehicles, tools to attack connected vehicles or bicycles are easily found and cheap to buy. Thieves in Winnipeg used a $5 device, says consultancy Upstream Security, they bought over the internet to unlock a car using an electromagnetic pulse, stealing insurance papers that were left inside. While this hack, arguably, had limited damage, think how a device like this could be used on a fleet or even for a targeted attack on valuable documents. These kinds of attacks are real-world threats which are driven by real criminals. Once they breach a network or vehicles, the result will not be a written report from watchdog services like Upstream.
Complex hybrid data centers are increasingly causing security issues for Smart Mobility. In February 2018, hackers broke into a Tesla-owned Amazon cloud account and used it to ‘mine’ cryptocurrency. The breach also exposed proprietary data for the electric carmaker. This was possible because Tesla left credentials for an Amazon Web Services (AWS) account open to the public Internet, according to Upstream Security. The scheme potentially exposed an Amazon simple storage service, also known as an S3 bucket which held Tesla telemetry, mapping, and vehicle servicing data.
Upstream says that 21.4% of the attacks on connected vehicles are server attacks, and the majority are Black hat – that is launched by criminals with malicious intent. The term ‘server’ covers many incidents, including Telematics command and control servers, Smart Mobility application services and breached web servers such as the websites of automakers. It also covers databases that hold vehicle, customer, code and driver data. This information could be held by a 3rd party public cloud vendor, or on a private cloud. These attacks are remote, and long-range, meaning attackers do not need to be in any kind of proximity to the car to access data.
One attack on Porsche Japan illustrates the gravity of this threat and how wide the impact of a single hack can be. In February 2018, the email addresses of thousands of Porsche Japan customers were compromised after a cyber-attack on a contractor’s data servers. The personal information of 28,700 Porsche customers in Japan were exposed.
In many privacy cases, it can be difficult for stakeholders to even recognize that these breaches are happening. In September 2017, after an unsecured Amazon S3 server was uncovered by researchers, the SVR car tracking service admitted that a cache containing half a million records was left publicly accessible for an unknown amount of time. Email addresses, passwords, user vehicle data and IMEI numbers of GPS devices were all unprotected, as a result of weak third-party security that was more than two decades out of date.
Connected car ecosystems are dynamic environments that often change and are subject to continuous updates and improvements, meaning blind spots and gaps in security are common. The infamous Jeep Cherokee case was implemented by security researchers, as are many other high-profile cases. This could have people believe that most attacks are White hat – and without malicious intent. However, the data say differently. It’s another area that cries out for effective government regulations in AutoInformed’s view. (Facebook Users Unaware the Social Media Site Categorizes Their Interests and Political Leanings for Sales Use, )
Legalized Marijuana and Safety
The growing legalization of marijuana begs the question of safety on our roads. Everyone should know that driving under the influence is not only dangerous, but illegal. Close to Detroit, according to a recent Ipsos study commissioned by the Canadian Automobile Association South Central Ontario, 48% of current cannabis users have driven while high. Both alcohol and cannabis affect attention span, judgment, motor skills, reaction time, decision-making and coordination.
Driving under the influence of marijuana is illegal in all 50 states and D.C., but determining impairment is tough. Unlike alcohol, the amount of marijuana present in a person’s body doesn’t consistently relate to impairment. THC, or Tetrahydrocannabinol, is the primary psychoactive component of cannabis. A positive test for THC and its active metabolite doesn’t mean the driver was impaired at the time of the crash. Habitual users of marijuana may have positive blood tests for THC days or weeks after using the drug. Marijuana is still an illegal controlled substance under federal law. (In the Weeds – Driving Under the Influence of Cannabis)
Product Might Be Key, But Automotive Leadership Matters
The biggest story we missed – and it’s no comfort that so did everyone else – was the ongoing Carlos Ghosn matter. We recently published an exclusive and speculative story by his speechwriter John Harris about what went wrong (Was 2008 the Year When Carlos Ghosn Went Rogue? Ghosn’s Former Speechwriter on What He Did for Nissan – And What That Did to Him). This is an ongoing story with elements of corporate greed, national and racial attitudes, wildly disparate justice systems and big money. We covered it from the beginning and there’s no end in sight. (Predictably – So-Called Tokyo “Court” Secretly Prolongs Detention of Carlos Ghosn By 10 Days According to TV Asahi, Japanese Scrooges Run Amok as Carlos Ghosn Re-Arrested. Christmas Locked Up for the Gaijin!, Renault Board Investigation Backs Ghosn. Governance Measures Stay in Place. Compensation Controversy Ongoing, Ghosn, Kelly and Nissan Motor Corp. Indicted for Violating The Japan Financial Instruments and Exchange Act, Nissan Board Deletes Carlos Ghosn as Chairman and Director, Carlos Ghosn Given Temporary Reprieve by Renault Board, Nissan Chairman Carlos Ghosn Arrested and About to be Sacked by Board for Financial Misconduct. Renault-Nissan-Mitsubishi Alliance Position Threatened, Ghosn Defends Mitsubishi Bailout in Face of Criticism)
Cap-and-trade is a market based regulation that is designed to reduce greenhouse gases (GHGs) from multiple sources. Cap-and-trade sets a firm limit or cap on GHGs and minimize the compliance costs of achieving AB 32 goals. The cap will decline approximately 3% each year beginning in 2013 when it went into effect.
Trading, of course, creates incentives to reduce GHGs below allowable levels through investments in clean technologies. With a carbon market, a price on carbon is established for GHGs. Market forces spur technological innovation and investments in clean energy. Cap-and-trade is an environmentally effective and economically efficient response to climate change, per supporters.