Europe may fall behind in self-driving cars

Johann Jungwirth is visibly frustrated. In Hanover to present the latest iteration of the SElf-DRIving Car, or Sedric, Volkswagen Group's chief digital officer knows the industry is locked in a battle with tech companies for leadership in autonomous driving. The former Apple engineer fears European regulations are hampering efforts to bring to market the battery-powered concept, which management has already decided will move into series production.

"My goal is to be in the first U.S. cities with driverless cars in 2021," Jungwirth said. After that comes a planned rollout in China, Singapore and Middle Eastern cities such as Dubai. "And then comes Europe. We would love to [come earlier] since it’s our home market, but the legislation just isn’t there."

Every year 1.25 million people die and as many as 50 million are injured in road traffic accidents worldwide, according to United Nations statistics. Every year children, the elderly or the physically challenged have little or no access to individual mobility. And every year half a million metric tons of CO2 emissions in Germany alone could be saved by eliminating the endless search for a parking space, which studies show account for up to 30 percent of inner city traffic.

And every year hundreds of thousands of tons of carbon dioxide are emitted into the atmosphere from constant traffic jams and endless searches for parking places. VW’s Sedric and others like it could change that. Vehicles legally permitted to operate without any driver behind the wheel would revolutionize transport.

The friendly looking Sedric, built off the same MEB electric architecture as VW’s I.D. Neo, can comfortably seat four despite a wheelbase that is virtually identical to the brand’s Up minicar. This is possible because engineers removed the cockpit, steering wheel and pedals, resulting in a so-called Level 5 fully autonomous vehicle.

Once self-driving cars are in constant motion, picking up and dropping off passengers at work, Jungwirth believes parking in cities will no longer be a chronic problem. In addition, valuable downtown real estate could be reclaimed and parking garages could be transformed into office buildings or apartments to accommodate a growing urban population.

California preferred

But automakers looking to test models such as the Sedric in small scale pilot operations prefer California over Europe – at least initially. Many automakers already have teams of engineers based around Silicon Valley, the population is tech-savvy and open to innovation, the streets are much wider, weather conditions are usually ideal, and the state government supports them.

By comparison, one major roadblock in Europe is the United Nations Economic Commission for Europe, a standards-setting body responsible for regulating both the homologation and use of motor vehicles. Here no consensus among the roughly 60 countries participating has been reached over the rollout of driverless cars as regulators focus on more gradual innovations on the immediate horizon.

Virtually the entire continent is governed by the UN’s Vienna Convention on Road Traffic. This largely restricts the use of driverless cars on public roads to very limited testing scenarios and legalizing their commercial operation is years away from becoming reality.

"We really have a competitive disadvantage because of the UNECE," said Jungwirth, who worries that those late to the market might end up fighting over the scraps left behind. "The winner could take it all."

Responding to the criticism, the UNECE has recently introduced a procedure that allows companies to apply for a special exemption for a vehicle such as the Sedric. This is subject to debate among UNECE member states, however, meaning the outcome of negotiations is uncertain and at least a four-fifth’s majority would need to vote in favor.

By comparison, neither the U.S. nor China have aligned their laws on road traffic or type approval with UNECE regulations. This allows them to respond faster to technological advances, but also creates a patchwork of different regulatory environments for automakers.

"Progress must not stop at national borders,” argued Daimler board member Renata Jungo Bruengger. “Legislation must keep up with technical progress otherwise paramount innovations for automated and autonomous driving cannot be brought to the road."

Fearing cash-rich tech companies can capitalize on their expertise in artificial intelligence and machine learning, most major automakers are spending heavily to keep pace.

Renault unveiled its EZ-GO concept in Geneva that could form the basis for a driverless car fleet. Daimler plans to pilot a highly autonomous car fleet in California in the second half of next year. Rival BMW looks to test in China and has formed its own consortium around Intel and Mobileye.

All are hoping to bring the technology to market sometime early next decade. Between both tech and auto companies, AlixPartners estimates some 56 billion euros will be invested this year, up nearly tenfold from 2015.

In the lead, however, is industry pioneer Waymo, a spinoff from Google, which has already racked up 7 million miles of testing on public roads since it started nine years ago.

Ironically, Waymo can thank VW for its birth. Google founders Larry Page and Sergey Brin first became interested in driverless cars after learning about a robotic car race funded by the U.S. Defense Department. They hired many of the Stanford University scientists who worked on the Volkswagen Stanley, which won the Defense Advanced Research Projects Agency (DARPA) Grand Challenge in 2005, including Sebastian Thrun, the original brains behind Waymo.

Now ready to launch its own branded mobility service starting this year in Arizona and California, Waymo is looking to branch out. With an eye toward Europe, it already demonstrated its prototype Chrysler Pacifica in Italy in early June during an investor day held by industrial partner Fiat Chrysler Automobiles.

“There are differences in the regulatory and policy environment that are really important, very different from what we’re facing in the U.S., but there is also an opportunity for us to experiment here in Europe,” Waymo CEO John Krafcik told the Automotive News Europe Congress in Turin.

Oddly enough Waymo is hopeful that VW and its peers don’t fall too far behind. “Real world miles are super important, but they pale in importance to the well over 5 billion miles we’ve accumulating in simulation,” said Krafcik, who has 25,000 cars operating in a digital world. “In simulation we can make situations that are much more challenging than we typically find in the real world.”

To narrow Waymo’s lead, Volkswagen has nonetheless enlisted the help of Aurora, a start-up founded by Thrun’s protege, Chris Urmson. Together with Tesla Autopilot father Sterling Anderson and robotics expert Drew Bagnell, the three are among the top minds in the field.

Volkswagen may have one clear advantage, though. Neither Waymo nor its partner, FCA, has a purpose-built driverless car on the horizon. Public acceptance of the technology is important, and here the perception of security could be a key competitive advantage.

With its sturdy, monolithic appearance and tree trunk-like body pillars, the Sedric gives occupants the feeling they are safely ensconced in a vehicle impervious to damage. Waymo meanwhile has to make do with a bulky laser scanner on the roof, which Krafcik says assures passengers concerns through an outward symbol of the vehicle’s intelligence.

Unsurprisingly, the Waymo CEO downplayed the need for cars such as Sedric that need to master all situations. “We’re pretty skeptical on Level 5,” he said, before adding “It will take decades and I don’t even think it’s necessary.”

Jungwirth disagrees. “The technology is almost ready. I would love to see the legislation support us,” he said. “Testing is fine, but what we need is commercial operation in order to scale up.”