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At the June 2016 Paris Motor Show, one of the four major global auto exhibitions, Dieter Zetsche, CEO of Daimler AG, revealed the German automaker’s new strategy expressed by an acronym CASE. C stands for “connected,” meaning that the driver of a future car will be able to receive services from information networks by being connected with cloud computing networks; A for autonomous driving; S for “sharing and services” and E for electric vehicles.

These four letters brilliantly summarize a major revolution in the automobile industry from the viewpoint of carmakers. Connectivity is indispensable not only for improved safety, more comfortable driving, better drive management and more advanced car navigation, but also for autonomous driving and car sharing. The third letter, S, shows the industry’s readiness to adapt to a shift of preference on the part of consumers form ownership to utility of motor vehicles. Electric cars, as indicated by the fourth letter, contribute not only to reducing carbon dioxide emissions and running cost of vehicles but also to simplifying the self-driving system.

But autonomous driving, the most crucial of the four elements in the revolution, has not been fully achieved, at least as of today. The National Highway Traffic Safety Administration (NHTSA), an agency of the United States Department of Transportation, has defined the levels of autonomous driving as follows:

Level 0: No automation. The driver performs all driving tasks.

Level 1: Driver assistance. While the vehicle is controlled by the driver, one of the three driving functions — acceleration, steering and braking — is assisted by the system.

Level 2: Partial automation. Sensors, radar and cameras observe the driving environment and the system simultaneously carries out more than one of the three functions, although the driver must remain engaged with the driving task and monitor the environment at all times.

Level 3: Conditional automation. In a specific environment or traffic condition the system performs all the three functions. But in other conditions, the system requests the driver to take control of the vehicle.

Level 4: High automation. For example, the vehicle is capable of performing all the driving functions only on an expressway or only when the weather is normal and the driver does not have to do anything. But when the vehicle enters an ordinary road or when the weather changes, the system requests the driver to control the vehicle.

Level 5: Full automation. The vehicle is capable of performing all the driving functions under all conditions without requiring the presence of a driver.

At present, carmakers are marketing automobiles that have reached only Level 2. Since most of these cars require the driver to keep his or her hands on the steering wheel and to be always prepared to step on the accelerator or the brake pedal, they can hardly be called autonomous or self-driving vehicles. A more appropriate term should be a car with a driving assistance system.

Under Japan’s Road Traffic Law, cars of up to Level 2 are regarded as roadworthy on a public road. But driving a car of Level 3 or of a higher level on a public road violates the law at present. It makes sense to permit driving a car of up to Level 2 under the existing law since the driver is in control of such a vehicle. When it comes to cars of Level 3 or of a higher level, however, the control will be shifted from the driver to the autonomous driving system. Therefore it becomes imperative to revise the Road Traffic Law and to overhaul the automobile insurance system in preparation for the actual use of such vehicles.

Generally speaking, most technological innovations in the past were made to respond to society’s desires and demand that had existed beforehand. For instance, automobiles were meant to meet the universal human desire of traveling long distances quickly and comfortably. Hybrid cars responded to social demand for reducing carbon dioxide emissions.

As is obvious, in the competitive free market system, businesses concentrate on developing new products and services that will sell. It is the marketers’ mission to get ahead of what people want and of political and social changes in the world.

In the development of self-driving vehicles, technological innovations in the areas up to Levels 1 and 2 have been initiated by efforts to meet the social demand for improving driving safety and assisting the elderly and drivers with physical disabilities.

This scenario is hardly the case when it comes to autonomous driving at Level 3 and above. There are few people who would rather let the car do all the steering, accelerating and braking so that they can sit in the driver’s seat playing a game on a smartphone, reading a book, chatting with a co-passenger or napping. Furthermore, nobody would feel at ease with sleeping in a fully autonomous vehicle unless the self-driving system has built up an accident-free safety record over many years. However, the general consensus among the mass media seems to be that Level 4 automatic vehicles will be put on the market by 2025 at the latest.

In my opinion, autonomous vehicles of Level 3 and above are not demand-driven innovations but rather technology-push innovations. A big artificial intelligence boom has been created since the turn of the century. Through the application of AI, Google and other IT companies launched the development of software for autonomous driving, kicking off movement toward high-level autonomous driving. Presumably, these companies want to achieve total control of the fundamental software for a fully autonomous driving system, just as Microsoft’s Windows has dominated the operating system for personal computers and Google’s Android has monopolized the operating system for smartphones.

To forestall such an eventuality, automakers in the past several years have invested heavily in the development of autonomous vehicles and pushed collaboration with other members of the auto industry and IT firms. It also can be said that at present a war of aggression is being waged by members of the IT industry with the intention of placing the auto industry under their control.

Be that as it may, I don’t believe that there will be many people willing to spend large amounts of money on autonomous cars of Level 3 and above, which are products of technology-push innovations rather than consumer demand.

Takamitsu Sawa is vice director of the International Institute for Advanced Studies in Kizugawa, Kyoto Prefecture.

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