CES 2023: Electronics show returns to realism after self-driving bubble bursts


The BMW i Vision Dee (Digital Emotional Experience) concept car shares the stage with cars representing Herbie the Love Bug, and KITT from the television show Knight Rider during a BMW keynote address at CES 2023, in Las Vegas, Nevada, on Jan 4, 2023. After the high-profile collapse of Argo AI in October, the former self-driving unit of Ford Motor Co and Volkswagen AG, the coin of the realm at this year’s CES is profit, not potential. — Reuters

The age of adventure is being replaced by the realm of reality in the automotive displays at the annual Consumer Electronics Show in Las Vegas, once a fantastical flight of fancy that promised a Jetson’s lifestyle was just around the corner.

But now when the show opens Jan 5, CES will spotlight transportation technologies that are here and now, like autonomous tractors and electric cars. After the high-profile collapse of Argo AI in October, the former self-driving unit of Ford Motor Co and Volkswagen AG, the coin of the realm at this year’s CES is profit, not potential. Car companies and startups alike will show technologies they expect will provide a return on investment in the near-term, not in some hazy tomorrow that may never come.

The show still will be packed with products trying to provide pizazz. At least 274 auto and mobility exhibitors will cover more than 400,000 square feet – equal to seven football fields – a 70% increase in floor space from last year’s pandemic-depressed levels, according to the Consumer Technology Association that puts on the show.

But practicality and profit will be the buzz words at a more sober CES.

“There’s no question that there’s been a shift,” Gary Shapiro, president of the CTA, said in an interview. “The Biden administration has focused more on electric vehicles than they have on autonomous.”

And the transportation exhibitors are doing the same. There will be an electric Ram pickup truck concept from Stellantis NV that is set to take on Ford’s F-150 Lightning, Rivian’s R1T and Tesla Inc’s forthcoming CyberTruck. Electric truck startup Lordstown Motors will show its Endurance plug-in pickup. BMW will show off a digital services concept car. General Motors Co, Mercedes-Benz and Volvo also are scheduled to tout new EVs.

As for autonomy, instead of robot rides aimed at taking us anywhere, the star of the show is likely to be John Deere’s self-driving tractor that promises to lighten the load on farmers by tilling the fields until the cows come home.

“It’s sexy realism,” Gary Silberg, a global partner and head of the automotive practice for consultant KPMG. “There are great toys out there and it’s going to be awesome, but we’ve got to be real about how we’re going to use them.”

Pushing the pragmatism is the mountain of money automakers have committed to take on Tesla in the emerging electric vehicle market. KPMG estimates global automakers are making a half-trillion-dollar bet on electric vehicles. With that kind of money on the line, there’s not much appetite for pouring billions into autonomous vehicles every year with little hope of a return any time soon.

“People are realising that the market for large-scale adoption of AVs is still quite a few years away because the technology is just not mature enough,” Sam Abuelsamid, principal analyst of e-mobility with consultant Guidehouse Insights. “The profits are almost certainly not going to be there in this decade.”

Auto executives are even paring back expectations on electric vehicles after confronting the reality of battery shortages and soaring raw material costs.

A new survey from KPMG of 900 global auto executives found they now expect just over one-third of global auto sales to be electric by 2030, down from nearly two-thirds a year earlier. And one-third of automotive leaders don’t see autonomous vehicles being commercially available this decade.

With only so much money to spend, auto executives are putting resources into EVs at the expense of AVs. Some 64% of US auto executives said they are very or extremely likely to sell off non-strategic parts of their business over the next few years to help pay for EV investments.

“When we asked these same questions last year, it was all rainbows and butterflies,” KPMG’s Silberg said. “But now it’s no longer theoretical and you see this realism.”

Private money also is getting real. The days of dazzling deep-pocketed venture capitalists with your whiz-bang display at CES are over, Abuelsamid said.

“We’re beyond the stage where there’s easy VC money to be had,” he said. “The investment community has decided ‘we’re not going to put any more money into’” self-driving cars “‘because we don’t see it as a near-term growth business’.”

Quicker return

Carmakers have begun redeploying the capital they spent on self-driving research into automated features that promise a quicker return. After taking a US$2.7bil (RM11.84bil) writedown on the shutdown of Argo, Ford is shifting its focus to semi-autonomous features, such as its Blue Cruise hands-free driving system that car buyers are showing a willingness to pay for right now.

The automakers “are asking, ‘Where can we make profits?’” Abuelsamid said. With systems that allow drivers to take their hands off the wheel on the highway, “they know they can sell that and the cost to develop it is much more modest” than full self-driving cars.

Carmakers are now turning inward and trying to revolutionise the cockpit with technology drivers can download to their car’s modem. Automakers are looking to offer an a la carte menu of features such as horsepower upgrades and dashboard gaming systems. They say such features could generate double-digit margins.

Stellantis and ecommerce giant Amazon.com Inc will each have displays at CES showing how connected cars will transform the in-vehicle experience. Volvo and chipmaker Qualcomm Inc will jointly show how they are revolutionising the cockpit with infotainment and safety systems.

Many of the changes coming to car interiors started out as technology tested on full self-driving car prototypes, such as sensors that detect occupants in a vehicle.

“The big step,” Abuelsamid said, “is that a lot of the technologies we’ve been seeing at the show over the years are now migrating into areas that are becoming actual products that will launch over the next couple years.” – Bloomberg

Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Tech News

US TikTok content creators warn followers to find them on Instagram, YouTube
Drones offer an unparalleled�view of the biggest wildfire risks
Teaching a robot surgery through videos
'Sexting' scam: Criminals impersonate cops in US to steal money from dating app users
FBI releases tips for customers to avoid scams when holiday shopping
Thirty years of PlayStation: How Nintendo's snub created a gaming giant
US AI task force co-chair asks FERC to support co-located data centers - letter
Super Micro Computer gets extension to file delayed annual report
Palantir, Anduril sign partnership for AI training in defense
US regulator places Google Payment under supervision, company sues

Others Also Read