Each year, tech junkies flock to Las Vegas and the Consumer Electronic Show (CES).  The world’s largest consumer tech show had more than 4,300 exhibitors, over 1,200 startups, and was visited by about 135,000 attendees over four days.  AI dominated the show with products ranging from binoculars that identify the birds you are viewing to glasses that project accurate closed captions of conversations that are only visible to the wearer, and what interested us most, EVs and automated vehicles. 

At CES, major car manufacturers like Ford and GM were absent, however Honda, Volkswagen, Hyundai, BMW, Mercedes, and Mitsubishi were among the most well-known names to debut concept cars and new technologies. There were also some surprise entries into the market like LG with their concept car LG Alpha-able.  Their concept car was on display to show what their idea of future mobility will look like.  With the automotive industry rapidly shifting towards electrification and automated driving, it will be interesting to see who else enters the fray. 

Last week, partner and founder, Mike Nelson attended CES and here is some of the technology that caught his attention.

Goodyear

• BMW to use Amazon cloud technology to build its autonomous driving features for new EVs (CNBC, September 5, 2023)

  BMW is turning to Amazon’s cloud computing technology to support ADAS features in a new line of EVs—the Neue Klasse range—set to launch in 2025. BMW also will incorporate Qualcomm’s Snapdragon Ride platform for its ADAS starting in 2025. BMW’s partnerships stands in contrast to other recently-announced collaborations between Polestar and Mobileye, for example, as well as reports that certain automakers may be looking to license Tesla’s FSD technology rather than develop their own ADAS.  

  As this article notes, “ADAS will require large amounts of data processing as the software relies on hardware sets, including cameras and semiconductors. … That’s where Amazon Web Services, or AWS, comes in. BMW will store and process lots of data in Amazon’s cloud servers.” In addition, “[d]eveloping these features in the cloud will allow BMW to update the software quicker and train new AI models that will carry out increasingly complex autonomous driving functions.”

• Do driverless cars feel safe? New study shows gradual introduction needed to build comfort among all road users (Science Daily, August 30, 2023)

  A new study by researchers at the University of British Columbia suggests that some consumers are not yet ready to wholeheartedly embrace self-driving vehicles (SDVs) and “will need a period of gradual transition before adoption.” The study, conducted by the Research on Active Transportation Lab (REACT), reveals “mixed perceptions of automated vehicles, particularly their effects on pedestrian comfort and safety.”

  Specifically, the study engaged 1,133 participants from across British Columbia and targeted their perception of the interaction between SDVs and pedestrians at public crosswalks. Interestingly, four out of 10 participants (41%) felt that pedestrians were exposed to increased safety risks in SDV interactions as opposed to human driven vehicles. Additionally, among those surveyed, 55% supported the use of shared SDVs, such as taxis or shuttles, on public roadways, while only 48% favored the use of privately owned SDVs in similar situations. Ninety-two per cent of those surveyed, however, agreed that SDVs should be clearly identified and accompanied by a human monitor during all times of operation.

  Based on the above findings, the researchers proposed “a gradual introduction of SDVs on city streets, combined with “robust public education campaigns to build familiarity and emphasize the potential benefits of self-driving cars.”

  “At this critical point in the introduction of automated vehicles, it is essential to understand and consider their effects on everyone who shares city streets—especially pedestrians,” said Dr. Alex Bigazzi, associate professor of civil engineering at UBC and REACT principal investigator.

• Lucid CEO has a plan to end Americans’ range anxiety (ABC News, September 3, 2023)

  Lucid’s CEO and industry veteran Peter Rawlinson, who previously engineered cars for Tesla, Lotus and Jaguar, recently sat down with ABC News to discuss how his new venture, Lucid Motors, hopes to revolutionize the EV industry from the ground up.

  Rawlinson explained how Lucid is overcoming one of the biggest hurdles to electrification—i.e., range anxiety—while transforming the way motorists drive with the Lucid Air, a sleek and futuristic EV that can travel an industry-leading 516 miles on a single charge. With a current starting price tag of $82,400, however, Rawlinson acknowledged that affordability remains a challenge. Rawlinson said that Lucid is targeting a price of approximately $50,000 for future models, with the hope of developing “vehicle efficiency” technology that will facilitate mass production of profitable and affordable EVs. He added, “I am not here to build an expensive car that only rich people can afford.”

  Rawlinson believes that the key to affordable EVs and mainstream adoption is a combination of battery technology advancement and overnight AC (Level 2) charging infrastructure development that emphasizes reliable, slower charging over less reliable, super-fast charging for EV owners that do not have access to home charging. In sum, Rawlinson’s future vision is roadways dominated by more efficient EVs with smaller batteries electrified by a mature charging infrastructure capable of servicing all drivers.

• Backup driver of an autonomous Uber pleads guilty to endangerment in pedestrian death (NPR, July 28, 2023)

  In March 2018, Rafaela Vasquez tragically made the news as the backup driver in the first fatal collision involving an autonomous vehicle. The collision happened when the self-driving Uber (a Volvo SUV) in which Vasquez was riding as the backup driver collided with a pedestrian in a cross walk in Phoenix. Reports from the scene were that Vasquez was watching an episode of “The Voice” on her phone rather than watching the road; Vasquez claimed she didn’t see the pedestrian in the dark. Through her attorneys, she also clarified that she was looking at an Uber messaging program on her work phone, while the show was streaming on her personal phone on the passenger seat.

  Vasquez was charged with negligent homicide, but pleaded guilty to “an undesignated felony, meaning it could be reclassified as a misdemeanor if she completes probation.” In presenting the plea, her attorneys argued that she should be sentenced to six months of probation, arguing that Uber shares the blame. The Court ultimately sentenced her to three years of supervised probation.

  “Prosecutors previously declined to file criminal charges against Uber, as a corporation. The National Transportation Safety Board concluded Vasquez’s failure to monitor the road was the main cause of the crash.”  However, the NTSB also cited Uber’s “inadequate safety procedures” and its deactivation of the vehicle’s AEB system as contributing factors in the collision. “[T]he Uber system detected [the pedestrian] 5.6 seconds before the crash. But it failed to determine whether she was a bicyclist, pedestrian or unknown object, or that she was headed into the vehicle’s path, the board said.”

• California privacy regulator’s first case: Probing internet-connected cars (The Washington Post, August 1, 2023)

  A newly-formed California state agency charged with monitoring compliance with the state’s consumer data privacy laws is launching its first probe—and it is targeted at the data collection practices of connected vehicles.

  Under the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, the California Privacy Protection Agency (CPPA) is authorized to conduct such investigations to enforce state residents’ rights to know if and how their data is being collected and used. According to the CPPA’s executive director, Ashkan Soltani, “[m]odern vehicles are effectively connected computers on wheels. They’re able to collect a wealth of information via built-in apps, sensors, and cameras, which can monitor people both inside and near the vehicle. … Our Enforcement Division is making inquiries into the connected vehicle space to understand how these companies are complying with California law when they collect and use consumers’ data.”

  As noted in this article, similar investigations in Europe already have forced vehicle manufacturers to limit data collection and/or make additional disclosures at the point of collection.

• Waymo Ditches Autonomous Trucking to Focus on Ride-Hailing (Ford Authority, July 28, 2023)

  Waymo, a pioneer in the autonomous driving technology space, announced plans last week to move away from autonomous truck development to focus more prominently on its autonomous ride-hailing business.

  “Given the tremendous momentum and substantial commercial opportunity we’re seeing on the ride-hailing front, we’ve made the decision to focus our efforts and investment on ride-hailing,” the company said in a statement. “We’re iterating more quickly than ever on our technology by pushing forward state of the art AI/ML, and seeing significant business growth and rider demand in San Francisco, Phoenix, and Los Angeles.”

  Like Ford and others, Waymo appears to believe that robotaxis are a more commercially viable product, given the strict regulatory hurdles autonomous trucks must overcome, as well as the lack of optimal technology currently needed to safely and profitably deploy autonomous trucks on a widescale basis.

• Tesla CEO Elon Musk kicks off first Semi truck deliveries (CNBC, December 1, 2022)

  Tesla has finally started deliveries of its electric Semi truck, five years after first revealing its design. CEO Elon Musk made the announcement last week at Tesla’s Nevada production facility after apologizing “for the delay.” A representative of PepsiCo Frito Lay, the first recipient of the production Semi, also spoke at the event. Tesla did not specify how many units will be delivered to Pepsi, or to any other company (other high-profile customers reportedly waiting to receive delivery include Anheuser-Busch, Walmart, and UPS).

  Tesla’s Semi design is unique in that it has a central steering wheel and driver’s seat flanked by touch screens. The truck also is expected to have a faster charging system and greater range than competitors.

  As noted in this article as well as Electrek’s coverage of last week’s announcement (more below), no mention was made of “driverless” features on the Semi, despite Musk’s prior commitment to “a driverless trucking future.” Instead, in his remarks, Musk focused on the positive environmental impact of electric long-haul vehicles, as contrasted with traditional semis that “represent a large portion of harmful vehicle emissions because of their size, weight, and the fact they are driven around the clock.”

• Tesla didn’t say a word about Tesla Semi being equipped with Autopilot/Self-Driving (Electrek, December 3, 2022)

  When the Tesla Semi concept was announced in 2017, Tesla claimed its long-haul EV would be equipped with Autopilot and would be able to operate in an “autonomous convoy mode” to follow other semis on the highway. Yet discussion of the Semi’s autonomous capabilities was conspicuously absent from the fanfare around last week’s delivery announcement, even though pictures of the production vehicle clearly show cameras consistent with Tesla’s Autopilot/FSD hardware suite.

  According to this take from Electrek’s Editor-in-Chief (and Tesla expert) Fred Lambert, Tesla may be trying to downplay the Semi’s autonomous capabilities given the scrutiny the automaker’s Autopilot and FSD technology is facing from lawmakers, regulators, and litigants. But Tesla’s approach to the Semi roll-out also may simply reflect a smart business decision. Lambert posits that Tesla may be trying to avoid the fate of global shipping company Maersk, which encountered significant backlash from thousands of angry dockworkers in the Port of Los Angeles after announcing it would introduce driverless cargo carriers—a move that could potentially put those dockworkers out of a job. Concerns around the impact of automation on U.S. workers remains a hot button topic, and the trucking industry may be acutely sensitive to this looming threat as automation promises to reform the industry. For the Tesla Semi to commercially succeed in the short term, Lambert says, Tesla needs truck drivers to embrace the vehicle. “That might be more difficult to achieve if you talk about eventually replacing them with features already existing inside the electric truck.”

• Sirius XM flaw could’ve let hackers remotely unlock and start cars (The Verge, December 3, 2022)

More car hacking!

Earlier this year, we were able to remotely unlock, start, locate, flash, and honk any remotely connected Honda, Nissan, Infiniti, and Acura vehicles, completely unauthorized, knowing only the VIN number of the car.

Here's how we found it, and how it works: pic.twitter.com/ul3A4sT47k

— Sam Curry (@samwcyo) November 30, 2022

• Tesla extends FSD access to “anyone in North America who requests it” (TechCrunch, November 24, 2022)

  Elon Musk made a surprise Thanksgiving Eve announcement by tweeting that FSD Beta would be made available “to anyone in North America who requests it from their car screen.” While Tesla’s driver assist features and packages have gone through several iterations, the “full self-driving” option currently is an $15,000 upgrade to the standard Autopilot, and includes “features like assisted steering on highways and city streets, smart vehicle summoning, automatic parking and recognizing and reacting to traffic lights and stop signs.” As the name implies, the software remains in the beta-testing phase, although Tesla engineers recently announced that Tesla has increased FSD simulations to 2 million per week.

  Not only does it remain in beta, FSD has increasingly been the target of regulatory scrutiny and litigation. So why is Musk making it broadly available? One reason may be to save face, as he has repeatedly promised Tesla could and would achieve full self-driving by year end. A related reason suggested by the author here is to “give Tesla’s supercomputer Dojo more data to work with” in furtherance of the goal of driverless operation. Yet another is “to ease investor worries and accrue some more revenue.”

  The full implications of this broad release remain to be seen. Not surprisingly, the move is drawing criticism, including from Ford Communications Director Mike Levine who tweeted that Tesla is “taking $15,000 from your wallet for a product that’s stuck at Level 2.” Read the responses to both Musk and Levine’s tweets for additional takes from both sides..

• Connected Cars & AI Solve Many Highway Traffic Congestion Issues (CleanTechnica, November 27, 2022)

  Congestion Impacts Reduction via CAV-in-the-loop Lagrangian Energy Smoothing, known more simply as “CIRCLES,” is a research program involving various U.S. universities and the Tennessee DOT along with Toyota, GM, and Nissan. CIRCLES seeks to “reduce instabilities in traffic flow, called ‘phantom jams,’ that cause congestion and waste energy” by leveraging AI and connected car technology. In recent experiments, CIRCLES researchers demonstrated that introducing automated technologies that allow cars to communicate and work together to develop a traffic plan can reduce phantom jams and other congestion issues and increase fuel efficiency by significant margins. A video showing the experiment results can be viewed here, and another take on the research project from Insurance Journal can be found here.

• Tesla now detects Autopilot cheating devices (Electrek, November 25, 2022)

  Videos explaining the various “hacks” Tesla drivers have employed to defeat their vehicle’s “hands on wheel” detection system have been making the rounds for years. “It can be as simple as jamming a water bottle in the steering wheel to apply some pressure to some custom-made devices to trick Autopilot’s driver monitoring system.” (NHTSA put an end to the latter.) But Tesla driving analytics company Teslascope recently discovered that Tesla has updated its FSD software to detect these hacks and force disengagement if a defeat device is detected. “Tesla has also been increasingly using its cabin-facing camera to monitor driver attention, and it has been known to send driver warnings when their gaze is not on the road.”

As vehicle connectivity becomes more prevalent, OEMs are increasingly migrating to a business model where consumers may own the wheels, engine, and seats in their new cars, but not the critical software that operates them.  Because software “ownership” is directly related to profitability and control of key vehicle features, it is no surprise that an ownership battleground of sorts has emerged between OEMs and their customers. 

Although Tesla has garnered most of the headlines over the add-on costs associated with utilizing its vehicle software, other OEMs are dipping their toes into this relatively new revenue stream.  For example, BMW recently offered customers in South Korea the option of activating their seat heaters, heated steering wheel, and other comfort features via a subscription service model apparently premised on the concept that BMW “owns” the software needed to activate and operate these features.  According to a recent Jalopnik article, these are the features and the prices BMW charges to use them in South Korea:

• Heated seats – $18 a month, $176 for a year, $283 for 3 years, or $406 for permanent access.

• Heated steering wheel – $10 a month, $161 for three years, or $222 for permanent access.

• Automatic high beams – $8 a month, $84 for a year, $122 for three years or $183 for unlimited use.

• Apple CarPlay – permanent access will cost $304.

• Engine sounds played through the stereo – $137 for unlimited use.

BMW has not yet attempted to roll out such subscription services to U.S. customers, but the Jalpnik article cautioned that the South Korean model may be “a preview of the slow march into a money-grab dystopia of having your car’s features locked behind software you have to pay to activate.”  In fact, Stellantis, the world’s fourth largest OEM, recently told investors it plans to rake in $22.5 billion in incremental annual revenue from software services and subscriptions by 2030.  This prognostication is in line with what other OEMs are expecting as well.

Due to its frontier connectivity technology, Tesla appears to be the current industry leader in maximizing profits through recurrent software charges, particularly when one of its cars is traded in or changes ownership.  For example, some Tesla batteries are software-limited and upgrades that unlock greater capacity can be removed by Tesla once the car is sold.   Additionally, Tesla has expressly announced that its vaunted Full Self Driving (FSD) suite, which currently costs $15,000, is non-transferable and will only work for as long as you own the car.  The legal argument is that only the software license was purchased, which pursuant to its terms and conditions expires when the buyer transfers ownership of the car.  Simply put, vehicle software—just like your copy of Microsoft Office—it is merely “licensed” to the driver on a temporary basis and on terms dictated by the OEM. A Tesla owner doesn’t actually buy FSD, only the right to use it.

While the script is still being written, it is clear that the traditional concept of vehicle ownership and its accompanying accoutrements may become iconoclastic in a relatively short time.  New vehicle owners will increasingly be able to operate the components of the vehicle they own only through the utilization of licensed software, so long as they pay subscription or license fees to the OEM and don’t violate any of the terms and conditions of their non-transferable license agreements.   

In addition to turning notions of vehicle ownership and consumer expectations upside down, the development of “hybrid” or shared vehicle ownership between OEMs and vehicle purchasers is fraught with potentially challenging legal issues.  For example, who has an insurable interest in these costly software activated features?  How should vehicle owners be compensated by insurers for costly software activated features in the event of a total loss?  Should the value of costly software activated features be factored into the threshold value insurers use to determine whether a vehicle should be deemed a total loss?  At present, all of these questions and the legal issues surrounding them are in flux.  We will continue to monitor this evolving area of the law and will provide updates as to any new developments as they unfold. 

Copyright Nelson Niehaus LLC

The opinions expressed in this blog are those of the author(s) and do not necessarily reflect the views of the Firm, its clients, or any of its or their respective affiliates. This blog post is for general information purposes and is not intended to be and should not be taken as legal advice.

September 21, 2022