The auto industry is in flux. Not chaos, not mayhem, but flux. Change. The reason? According to Scott Keogh, President of Audi, USA, it's because of three fundamental technologies that are coming to the car: connectivity, batteries, and autonomy. When looked at respectively, the implementation of each of these fundamental technologies is more difficult than the other. Most drivers understand connectivtity at a high level because they have access to smartphones. Batteries, are a different story. They're expensive, heavy, and, as of this writing, can present significant infrastructure challenges. The nuts and bolts of autonomy are harder to implement than the first two-- by a mile. And while autonomy means pretty much the same thing to everyone, it's the middle ground-- the assistive technologies that can hold subtle and perhaps confusing differences for both onlookers and consumers.
At the high end, Audi offers recently developed technologies like adaptive cruise control and blind spot monitoring. Competitors like Tesla disallow the piecemeal approach to autonomous features, instead opting for an all-encompassing solution like "Autopilot," which combines the previously mentioned Audi technologies with others that allow for semi-autonomous driving. In an age where millions of Millennials care little for understanding the details of the technology they use, opting to choose devices that "just work," I wondered why the two approaches were so different. Deos Silicon Valley's approach represent something new and different in the space that the traditional automakers can't see or don't appreciate? Or is there something else at work here?
The fact is, that Tesla's not the first to bundle a series of in-demand techs together. As Keogh points out, what were once considered disparate features (Bluetooth audio, smartphone integration, navigation) has all come together in Audi's Connect system is virtually unchanged from the entry level A3 all the way through to the A8. Keogh breaks it down:
"I'm going to touch on three things: pricing complexity and buyer... Let's go to the Connect system. I think that's an example in my mind that's a universal want and a universal desire which is why we have basically the same package as you work your way from A3 and work your way up to a Q7 and everything else. But if you go to something like adaptive cruise, which has a great penetration on the A6 and A8, but if you go to an A3 that's a $34,000.00 car, there's no way you're gonna get those kind of penetration levels on that thing, which is why from a marketing point of view, I think you do have to have different offerings because you have to different products going to different buyers, different customers. But if you look at Tesla, truth be told, it's the 4th car [they've developed], which is a nice thing, the average transaction price is $110-$115,000.00 and the average household income is $500,000.00. That's a good place. It's a nice, homogenous place where you can do a big bundling operation like you have since you're buyers are the same and everything's lined up. But for instance it's a whole different world to go from an A3 to that, which is why we do what we do...you homogenize to the extent possible. People want maps, they want connectivity, they want smartphones, it's a universal."
Where some see complexity, other see options. Options that make your car yours alone- in terms of affordability, and usability, etc. We'll have to see if Tesla offers Autopilot on its cup coming vehicle, the Model 3. If Keogh is right, the spread in the customer demographic may well change the way Musk and Co. need to market their newest device.
One more thing struck out as interesting during the conversation: the use of the word "pilot". For the Audi crew, the term autopilot seemed reserved for the type of functionality that would allow a driver to let go teh wheel and look away from the road-- decidedly NOT what Tesla is offering with their use of Autopilot, which assists the driver in various important ways but still requires direct control and road attention.
With a similar demographic at the high end, we'll see which strategy wins out, or, whether each of these auto companies will move their tech and marketing toward the middle, as cars like the E-tron consolidate an audience while cars like the Model 3 stratify it.