Can Silicon Valley Crack the Auto Industry Code? NXP Connects with Baidu, Rivian, DeepScale, Conti

Can Silicon Valley Crack the Auto Industry Code? NXP Connects with Baidu, Rivian, DeepScale, Conti


welcome thank you very much for coming after lunch I know we have a hard task because now your digestive system is working against us you we have to make a very interesting yeah so that you don’t fall asleep because your digestive system costs all the energy unfortunately we have one panelist who could not come hell am the only woman on the panel so imagine myself in other pierre and with the skirt unfortunately she was here yesterday we had this biggest dinner in the evening she was here so I’m not sure what has happened to her but let’s get started with that we have here a number of gentlemen on my on my panel and maybe we start with a little introduction my name is Mario Mario harder I’ve been living here in the Silicon Valley for 18 years I worked for a CP of a long time 15 years and for the past six years I’m a technology and trend researcher writing books and one book was the last driver license holder has already been born we’re talking about – no autonomous driving and electric driving and so on the book the English version comes out in October so I’m the moderator and we have here a number of gentlemen Emil Continental Leland from NXP been from helpmeet deep scale products Yves Sita from Arabian maybe give us two or three sentences what you do what your company does – tostada hello everyone thank you Mario I’m from Continental automotive you know it’s a tier 1 supplier one of the top three guys globally German company and in continental I am part of this organization called starter program Coface I am responsible for North America I’m based in San Jose here you know mainly looking for innovation from startup ecosystem that I can connect back with the company thank you my name is Leland key I’m with NXP I’m kind of the old Detroit establishment guy here so I’ve been in Detroit 30 years in the autumn motive industry so left that’s a pleasure to be here and then look forward to the discussion I’m Ben Landon on the head of product and business development for deep scale it is a start-up that’s based here in Mountain View we do efficient embedded deep learning for perception solutions so taking data off of sensors and extracting important insights for those for automated driving hello everyone my name is say to say Raman Gopal and I lead the connected card and digital experience team and Riven Riven is a pretty exciting company they launched the two vehicles towards the end of 2020 it’s an all-electric five seater pick up shop and seven seater SUV hi Tom driving harbour from PI to ESA so we’re dividing saw how much driving technology a full stack from the all the way including everything for that account dragon technology wonderful sort of heaven also on the panel so a few weeks ago I happen to be in the area of Mannheim and if you know man I’m was where Cowpens had his first factory when a lot a little bit about the history because I had lived in Heidelberg for three years what happened there was in eighty India 1880 s a woman could not manage her own money when she had parents Warren she was married and then I was this young lady first name was betta and she was an orphan a rich heir of her parents fortune and as she met this young dashing engineer who had this crazy idea of putting an engine on a horse carriage yeah I mean that is a really stupid idea right in 1886 right so she married him his name was Cole pence so she became better pants and he used her money she becoming the first venture capitalist in the automotive industry so to speak to to basically build proof of concept Motorola Aeons was the first one and there were a number of seneschal buyers coming to the factory to the little workshop but they were doubtful about that because they didn’t see the car running on public streets because this city of Mannheim didn’t give them a permit to test the comp public roads does it sound familiar wait okay so one day she went she was too frustrated she decided without telling her husband without telling the city from unharmed we just take the car take it to sons who were 13 and 14 years old and drive to a mother too poor time which is around 70 miles hundred twelve kilometers from there through the countryside and because it depends if he we have to describe her in today’s terms she was man this nerdy girl geek girl his engineering girl she would have probably in our times been an engineer fix the number of problems on the road she used her hairpin to clean the hose for the fuel she used her garden to isolate the spark plugs she gave feedback to her husband about the brake pedals that they’re not good enough that we probably need gears when we go up the hills because his son’s 13 and 14 miners had to push it up and she had to get some gasoline so where did he get gasoline 1886 yeah without gas stations yeah so luckily there was a pharmacy Envy sloth a few kilometers from there where she bought two liters of gas windows everything that they had half a gallon because it was used for cleaning stuff today his pharmacy is still in existence and has a big sign that it says first gas station in the world still go and visit that and then finally she arrived so so we have to tell it this criminal woman the first venture capitalist kick asked ass kicked basically the automotive industry today and somehow in 10 10 years later the suspense sold 600 cars per year sure when we look now at the transportation industry baculum none of the horse carriage makers made it into the industry maybe Studebakers one non-tilting 1806 1996 is from mid cars but almost nobody so somehow those are the motive pine is back then crack the code of the transportation industry and basically put them out of business that leads us to the first question that we have because this is the title can Silicon Valley crack the auto industry code what actually is the other industry code dead we’re trying to track from your perspective you miss up you know the future of the vehicle right you know the in pass it was a lot of what you know the hardware the mechatronics and now it’s the autonomous you know going from l2 and above you know all the way to l4 l5 and it’s a lot about you know hey I can sense the environment using my sensors which the traditional automotive all in combination with the help from the semiconductor they can really understand well but now I generate a lot of this data and I need to make sense using the data and you know who in the world knows how to handle data better than Valley and that’s I think that’s that’s where I think the valley comes in you know breaking that auto in district court of you know trying to do everything in-house versus trying to do outside the Mako system for me that’s what yeah he’s making the code yeah I think automotive I mean in my history used to all be all about horsepower and cupholders and now that’s obviously changing quite a bit and I think it’s in my view is really a transformative error that we’re entering and when you look at autonomous connectivity electrification mobility as a service I think that’s where the auto industry when you talk about cracking the code you know the code that they’re cracking is actually changing in terms what the expectations are from the consumers so those I mean those covered it pretty well yeah we have a we have a transition from hardware to software the automotive industry has not historically been all that strong not in just developing their own software because it’s only recently that lines of code have gone into vehicles they’ve certainly not wanted to source that software from the outside but I think it was the the early Tesla’s had more lines of code in them than f-16s it’s like I think north of a hundred million lines of code now for for cars that you can go out and buy today and that’s that’s clearly a task that’s not within the core competency or or even the feasibility for every company to go and own their own codebase that does that from end to end so I think on top of this transition from focus on mechatronics to these two to software based and data based solutions to these waves that we had from horsepower sells cars to know infotainment sells cars to know autonomy will sell cars through all of that you have to actually marry this all together with some outside capabilities that have just never been germane to the automotive industry yeah and I think everybody has sort of covered but the biggest emphasis that I would say is essentially the model that exists today in the automotive industry the model is essentially it’s a complex system to be put together which means you need hundreds and thousands of different components to be coming together and obviously everybody has seen the pain points in the different volumes when it comes to the actual manufacturing where took over 100 years or maybe 80 years for the manufacturing system to be where it is in terms of just-in-time delivery and all that but what it also means is there is in many ways an over-reliance on the tier once the tier 2’s those terminologies have come up simply because of the nature of how the beast is and the over-reliance similar to what been said on the tier ones and the tier twos in order for something to be done as part of your solution means that sometimes you make and give stepchild treatments to some of the more important aspects of your system which you don’t even realize infotainment is a very very typical example of something which is farmed out because you don’t want to know what’s happening there and you just hand out a certain set of specifications no offense to mites and Anil firm Continental but all the tier ones the OEMs find it much easier to put out the requirements which are stale by the time the product is actually out because it takes a while it’s three years two years before the product actually comes out now to break that so that essentially is two you need to crack that sort of behavior that sort of practice which is which is more habitual and to overcome that fear and to say why don’t we do that in-house and I think given in many ways has taken that approach and was very refreshing maybe it was because RG came out of school and he didn’t have any corporate experience it didn’t have any of the baggage of how this was done earlier and he just said oh this seems to be the logical way of doing it and to me when I came to reveal that was very refreshing because coming from a consumer electronics background where everything is much faster more agile and you want to always catch the very edge of the modern progressiveness and for that to be brought in very early means you have to bring a lot of that in-house software is absolutely the key to throw some more numbers here Google and all of its Internet services accounts to some two billion lines of code but so there’s a wonderful graphic on all these lines of code where the line up so you’ve got the human genome which is 3300 billion lines of code if at all there was lines of code for the human genome and then you have Google and then you have a mouse that’s the complexity and then you have car software which means we are for clean line comparing ourselves to organisms and the car is being compared compared to a complicated and sophisticated system like a human being so I think the key is essentially to understand that it’s not just the sheer number of lines or sheer volume of software but essentially how much of it you really want to bring in-house and add your sauce on top of it not be afraid to take that leap great I think the panelists give a really good explanation about what they think maybe I’ll give a you know a simple way to look at it so to answer the question you know can Silicon Valley really crack is the auto industry code actually I working on the autumn driving for the past 4 25 years so my thinking is I trade collaborations we should collaborate with others and English new at home driving come in actually it is a new high-tech technology entering with new sources to the thumbdrive to the automobile industry I was in Michigan back to in April attending a conference and talking to a lot of people who is from auto industry and only seeing you know they suddenly feel the automobile world is sexy again and so I thinking there’s this really key player to make this technology you know become alive again they need the AI technology is a high-tech company who is specializing their technology in software however in terms I think this new capability into it and another one is a traditional automobile car makers and they are still valid very pure ones OMS and then you also need a help from government the Karman have to make it less regulation to make sure there’s a friendly to make this entering this industry this wouldn’t Ashley we’re entering is a for transportation a matter for people humans that day to life we want to be a very responsible engineer and very responsible for the product we left so we make sure this one you know sometimes they can cost the type and the life so it’s very critical and the starting with the submission will our tongue training the early stage of the research fish lien what really want to bring this new capability to a younger outer and disability peoples and the people can get as a mobility to touch from point A to point B freely and they want to make sure they have life scarcer than the in the world wide to save the mankind but the two people died back in this technology and then we realized there’s how hard it is and there are so many things you have to be overcome so I think the best way is collaborating with each other so we can be able to work all together and by do is the only one actually has announced at least open platform Apollo so they would like to you know promoting the collaborations and then to join a to make an innovation happen sooner and a clicker okay so we not look at the news here in the past month what I read is that multiple Williams so they’re complaining how difficult it is to get talents you know is this telepsychic I like AI experts computer scientists data analysts roboticists into their organizations it may be even for those people all those talents career damaging actual to work for such an OEM because if you wait for month for intern YT to approve to install Apollo for example on your IT issued laptop you have a problem while your peers in startups Arabia and other companies already by having the code on the car now I know that by the lastest open-source platform and doing that is this the way in you’re going to look at that maybe the question should be different how can the other industry crack the Silicon Valley code is is this the chance that they have will this survive that should be pursued their own brain their own thing or collaborate what does it mean for the brain can you start hell with it okay I think I live I move down to the Silicon Valley in 2011 before that I will live a more than 10 years in up in Oregon and West Coast so a couple of things I think silicon is very unique in here number one we have good visors it’s a pacifier in the world and second we have people so people here is a diversified a talent pools from all different field of expertise and the learns third we have technology and there was pretty amazing you know from the PC world to the mobile world and now we look cycle is like outer world again and new technologies and the silicon is always sick of ideas of a pioneer from that and in terms of with am training for Apollo’s we in the CES there early in January in Las Vegas actually will make announcement of Apollo Enterprise as you mentioned when you’re trying to have deep collaboration with OEMs and theorized about joint development actually you need a tailor the development for their need so Apollo has the open platform was open to all the developers and partners we also have a specialized version to carpeting us the OEM the tier ones or some law for some larger corporation even garment that can be and the loan we’re working on this enterprise code so tailored for their particular need and for highlighting this github of it’s an open platform so people can use this one to validating if you are people T backing something is on the right path and also we can make sure you’re now starting from for example you’re bidding on a house we you don’t need to make a break but you can still build your house so we’re providing those kind of fundamental break of those foundations for everybody – starting from higher level and they can build together and also since we have less open platforms is easy to communicate because lot of times when you have certain power you want to see how good – is my Harvard characteristic can really improve the performance or can really bring some unique feature to that I’m driving now you have some code to validating to see if you see any of a thorough system if I tell you EP piece I sonars not everybody engineer understand what you’re talking about but I understand okay I have noticed engagement I can point in point B and in certain time and with you know smooth transitions those languages common language so those type things what Apollo platform can mean to other people to have as a whole system testing to bring us capability I think definitely I leave the housing prices and compensation aside as to what it is for Silicon Valley but there is definitely a sensor sort of belonging and camera G when it comes to Silicon Valley Fisher right it’s like you need the proper host of the proper setting for you to get the stuff done you want to be able to go to the gym to get your workout done no matter how many dumbbells and barbells you buy and keep it at home it’s possibly not the greatest motivation the gym is the place that you want to be at I think that’s how the Silicon Valley is – in many ways at least Peruvian it was strategic in order to find a home here in Silicon Valley in order to develop the two biggest sort of technological pieces we wanted to do which was the connected car digital experience and the autonomy and to our point it’s a it’s a broader expansion of this collaboration where there are certain things which cannot be achieved by this 10 20 30 40 100 people it just requires sort of this community setting Linux is a great example of follow all of that came together to allow a platform that is being used in millions and millions of devices today OpenStreetMap there’s a lot of crowdsourcing that happens with Google Maps and so on so there is definitely power in the numbers and there is definitely power in that sense of belonging and no matter how we dice the talent availability or not a non availability I think I think it’s just that mindset of the people here that allows us I mean that’s that’s why people are here despite the traffic and the weather is good but there are so many other sort of negative things which you sort of make peace with simply because you want to being that kind of a setting because you want to be in the home of the apples the Google’s the Facebook’s that then definitely drives sort of the transformation and not just these domains but everywhere else where there is a need for transformation yeah I mean I think it comes down to what have inherently become different mindsets and philosophies on how technology should be built and technology should be adopted and there’s you have to realize too the the auto industry while it is global industry is not a global entity right there are detroit-based there’s the u.s. big three there’s the European big three there’s Japan big three bit every one of those regions thinks completely differently about what the value proposition of a vehicle is how technology should be built and how technology should be adopted so you actually have what is essentially an exponential or a quadratically growing number of connections and nodes between adopters of this outsider of Silicon Valley that has to try to globally please all of these different automotive entities right and to sum it up to what is a fundamental difference though is Silicon Valley likes to think really big and figure out the details later the automotive industry likes to key in on all the details figure out every little penny every component of the bomb and then put those pieces together to see how it makes the hole and those are fundamentally clashing approaches to building technology and so there’s the reality is that there’s probably some happy medium where you meet in the middle and that allows you to build technology fast without breaking things probably to you know to kind of put a twist on the Silicon Valley move fast and break things term but also not have three four five year development cycles where by the time of cars on the road even something as simple as my new iPhone doesn’t charge properly in my car because the charging protocol changed by the time the wholly inspect this charger and by the time the car came on the road right so there’s a happy medium that fixes those problems yeah I think you know in Detroit and all the major car complexes around the world I mean it’s really a religion right so you go to Detroit and that’s all people think about and they feel they have ownership of it at the same time I think in this past four or five years there’s been a real realization that they know that they can’t do everything especially when it comes to the technology and you know we can’t compete with the weather for sure but I think you know you’ve also got a hundred years of experience in how to build vehicles you’ve got tremendous amount of knowledge on things like functional safety security reliability zero defects I mean the consumer industry compared the auto industry and I’ve been in both I mean I remember in the computer industry and we used to talk about 10,000 ppm and that was fine because three months later you can get a new device auto industry you’re buying these things for 15 years right so there’s a certain knowledge base that’s based upon history that the car company is bringing to bear they’ve also come to the realization that they can’t do it alone and that’s why you see the the Ford in the r goes the GM’s and the cruise is and all the partnerships that are going on so I think Ellen and set to you mentioned collaboration and to me that’s really the key to this whole thing is everyone’s got their relative strengths you know Silicon Valley can’t replicate and Tesla can’t replicate a hundred years of experience in building vehicles it and how to do and how to service them right I mean what happens when you get I mean it’s easy to build five thousand fifty thousand cars a year start building millions of cars a years with all the variations that your consumers want how you service those how you because that’s a big part of the equation right these guys on these cars for 15 years it breaks down they don’t want to wait a week for someone to come by and especially with electric vehicles you know Joe’s Garage Shop is not going to be able to fix that you need to have an established dealer base that’s out there that really knows how to get these vehicles the second most expensive thing someone buys back on the road and not sitting in a garage for a number years so to me it comes down to that you know everyone’s got their relative strengths don’t discount what also with all of what Detroit has and certainly don’t discount with silicon Dodge but I think together that’s the key you know a lot of great things was said right you know the way for me right and currently Silicon Valley has not yet broken the code they’re trying to break the code and you know where the fundamental thing here right currently we’re in the R&D phase we are trying to research and develop this whole autonomous track and the the main thing about in research and development right I’ve been this lot of risk and if you if you are able to you know succeed there’s a huge reward and that’s where you know the ecosystem here supports that kind of mentality and they call it like startup ecosystem or entrepreneurial thinking right you know that’s where the venture ecosystem kicks in and you know showing this big carrot to all this you know guys saying hey guys you know if you solve this problem there’s a huge multi-billion dollar you know price tag everything for you I think that motivates you know that big carrot motivate a lot of people and if you think about you know what even Google right you know hey that makes sense for startups what about big companies but you know that’s where even the Google kind of companies right they operate differently now compared to the rest of the corporations you know Google in it’s still a very college very university where you know entrepreneurial kind of mindset they have for their employees they propel that I think that drives a lot of innovation that’s one and you know on the collaboration right one element I would like to stress you know you know my background I’ve been a chip designer for the pasta years and the last ten years I was in the corporate side and the business side you know Valley is one location where right Janna you can find the the top-notch conferences for any topic that happens in Valley this is one place where all the greatest minds in the world they get together on a regular basis I think that access to having it and and the vehicle right it’s no longer just mechatronics and software it’s a combination of multi system and all the experts are coming here and that’s what makes Valley’s so special you know quickly having access to those people like you know within our I can go and meet someone or within you know a quick in the same time zones having those you know meeting conversations in a very friendly environment you know which do not happen right in if you’re in Directorate or Germany right before you can talk to someone you’re talking about hey NDA are you available are you you know even by the time you can find the two people are available takes away like in a weeks together I think those barriers do not happen here you know people are meeting in a lot of you know networking meetings you know a lot of such kind of meetups conferences and having new ideas emerge you know in coffee shops and I think that kind of ecosystem does not have is not as prevalent as in valley I think that’s what makes val is so special hmm if you a few months ago I visited a little startup in France France that builds autonomous shuttles there’s no driver seat in there there’s no steering wheel and after spending a few hours with him the guy mentioned one one fact I said you know out of our 220 employees only 20% of a driver’s license if you go to let’s say BMW yeah you go there because you love driving now they even call it the joy of driving that they have here so I’m wondering are you actually talking about the same code are they this new this new automotive industry this new automotive revolution that we see isn’t that actually creating a new code so IV not just crack you know you’re not just not cracking the code which is creating our new rules like it the automotive industry back then hundred 30 years ago did not crack the horse cold they cracked the way of how engines work so given the at fact if if this is something that you know you think if maybe so maybe not does the automotive industry actually have rolling that and how would they get over to that code help me already some ideas so what you’re here I am going towards writing is actually hey what is the mode of transportation you know is transportation in pass right and when they thought about you know from moving one one a place a to place B it was the harsh and then they thought about hey can the engine take me from place a to place B I think you know that Valley right – I think Valley is unique because you know people have in the early adopters this lot of people who love technology who want to try new things I think that’s brings you know because of the density of population or you know who are working a lot of next-generation technologies they want to be the first guys trying things you know take the case of Tesla right you know where which place in the US or in the world has the maximum number of vehicles that’s Valley in US alone right China it’s not just because you know that’s the best car it’s because they want to be on the latest tech not at all they want to rob the best technologies most efficient the error you know apart from the fact that people think sustainability and other things I think that what makes it different you know in terms of a hey can I think of new ways of transportation you know can I and it reduce it’s a combination of compromise between you know a comfort and you know luxury and people are willing to go more towards comfort I think that you know those early adopters probably you’ll find less in other places okay yeah so actually there’s a very interesting statistical study about it I think Mackenzie published a report on this is to study between the three different the continent the US and Europe and China Asia and they learned people’s willingness to try new technology I was actually born a grow up in Beijing China and Alan move overseas study in the graduate school went to University of Illinois at urbana-champaign I’ve been living in us for more than 23 years and so what I see is very interesting in the past 40 years China goes through a lot changes so the people they are used to changes doesn’t matter you’re older or younger people they’re really used to changes so later have a teaser study and China alone they have a 60% waiting to try new technologies because the two day their life is changing so they just were used to it and whenever anything come out as new they like to try and the second is you is actually us have a 30% to 40% range they are more waiting try new technologies and the most conservative people is Europe and they are there their lies lies open the to the new technology so I think as a change you now neces we always to be good but but a lot of times when Arab people pull their prospective and to make a change and together will make things better so the world is changing around us all the times so we have to adapt it and we have to embracing it and also will welcome it yeah there’s a tremendous amount of societal changes today right I mean kids today you hear it anecdotally they don’t want their license I mean they don’t need to drive to their friend’s house they can just get them up on their Xbox halo and communicate that way and and I think it’s also a on demand type of society right everyone wants everything so for me I look at the car industry I say yeah maybe we’re coming to some natural plateaus in regions especially developed regions like the US where there’s already 800 vehicles per thousand so there’s already a pretty significant penetration could that go up a little bit yeah but marginally but I think to me the bigger issue is about mobility and the need for mobility continues to and from the from the shipment of goods that you want you order it you want it three hours later I mean that has to be transported whether it’s a drone or autonomous vehicle or something so there’s a lot of things that are really driving the demand for mobility and I think you’re looking the car companies today they recognize that right they recognize that okay this is kind of a fixed level of vehicles perhaps but there’s mobility solutions so I think Ford announced sometime ago that they don’t see themselves as a car company they see themselves as a mobility solutions and that automatically brings them in to looking at you know car sharing things Etana street girls I think Ford actually invested in a scooter company so I think really when you look at Detroit and the car come is they’re really trying to broaden their definition beyond autos into mobility one is obviously what is the expectation of the consumers and what do they really need and the other one is what is it that the OEMs and the farc makers what do they want to do if Leonardo da Vinci was alive today he would want to OTA upgrade the Mona Lisa right because that’s the point I mean they the creators are never satisfied with their creation they’re constantly looking to sort of upgrade to add new features to do something better that’s true whether you’re sculpting something or that’s true whether you’ve done deliverable as a document it doesn’t matter I think the product requires constant refining what that means is it’s a similar story to what the iPhone was when Steve Jobs came out with the iPhone nobody wanted an iPhone but everybody embraced it everybody just we’re very happy with the feature sets they consumers never could have imagined what they wanted next I think in many ways I mean it goes both ways but on many accounts it’s equal responsibility on the product developers to be absolutely putting their thinking caps on and then saying what is it that we can really do in order to satisfy the needs whether they exist or not and in many ways Viviane has tried to do that where we’re going off to this adventure white space where today that does not exist a vehicle which can do a combination of efficiency utility as well as the performance and saying take the same vehicle to really commute but at the same time come weekends you can take it on an off-road adventure go skiing go hiking go mountain climbing and I think the bar to get access to that adventure there’s actually pretty low in everybody’s mind at least in my mind the bar was pretty high if I did want to go on an adventure I didn’t know where to start do I go off where are the hikes hike locations can I take my car do I need a 4×4 I think there’s a pretty high bar and everybody’s mind but that bar is actually lower I think in many ways Vivian is trying to put up these adventure vehicles and not just the vehicle themselves but also the accompanying digital ecosystem that will allow them to say the bar is actually much lower and then you can go out and explore and have that adventure and I think what most of this boils down to is that there’s buyer preference and there are organizational incentives that are primarily driven by profit in the private sector and those are not always going to be one-to-one and buyers preference is never doesn’t matter for what doesn’t matter for how simple of an offering never going to converge on a single solution that everybody is happy with right it could be something as simple as you know what what food D whether you like CDs or mp3s or vinyl right like look at the like people will argue vehemently about which of those they will they want to adopt right and that’s going to be true with with autonomous driving too so what it comes down to is there will always be a market for non autonomous vehicles as long as we are willing to offer that market but if there’s always a market for then why wouldn’t you always offer that market right so so I think we we can’t oversimplify it to the level of we give everybody this solution and the the Chinese adoption rate is faster for new technology the European is slower in the end that that doesn’t matter that much because in every country you’ll find a market for the product that you build as long as that product is you know suspect in a useful way and so we we have to look at where can we extract value where can we bring value so that we meet fundamental human wants and needs of get to point from point A to point B cheaper do it safer give me back the real estate that is my garage or that I don’t have to pay for parking in San Francisco right so so I there’s I mean a countless number of new investments and new companies going into thinking about these problems but realistically when it’s such a convoluted complex problem we’re eight near eight billion people ultimately need to be served it’s not going to work itself out and not going to converge on to a single type of solution any time understandably there’s still people buying horses today here right they’re just not using them only highways so that’s that’s a good thing so let’s open the floor for questions to the audience and here we have here Monica with a microphone gentleman over here question going by Silicon Valley those who’ve been here long enough on all his chips could really be used to grow apples peaches apricots then came here Packard IBM all the great hardware guys then we came defense industry Lockheed Martin aerospace Westinghouse Laurel we went to hardware guys SG a song most relevant or disappeared except for Apple they became Suffolk web guys Google Facebook all the such guys no good auto industry this is a great challenge for us because you can’t you know bad more Detroit you can see money billions also the past hundred years you’re huge capex we have crazy guy called enormous kinetic genius musk okay those hero in history here it’s used to be GM do me plan two years ago the Ford had big plant in Milpitas no bread mall so are you going to type the code yes we can if you’re not if you don’t become too arrogant cocky and compressing how the question what well here here is gentleman away yeah I think was and the question here is product interoperability meaning that today if I take my smartphone to China there’s no guarantee it will work there so I have to buy a new phone over there same thing and once I bought it over there there is no guarantee I will work here so will the auto industry the modern auto industry resolve that issue that basically I’ll get a compatible product it doesn’t matter which continent I want to use it maybe I’ve asked urgent would you see yourself buying a vehicle using it here and shipping it to China or anywhere else very unique user as long as governments are involved in setting the requirements you know you’re gonna have some some regional differences yeah well I mean more so than that it goes back to kind of the preferences that I was saying and not just preferences but needs to write different geographies have different needs and it’s not just how do I the user use my product in various different geographies I mean we’re we’re coming from the side of the producers of these products and Ford has over 5,000 SKUs of radio right because every region has different stations and there’s FM one FM two AM XM right all of these things and boxes that need to fit into tiny little cars that can fit on the one-way streets of Europe and boxes that fit into Ford f-150s right so it’s really more it’s less of a question to the user because the user doesn’t have a problem they buy the car that is right for them and and if there are mobility services at the time you’ll call the car that will come pick you up and hopefully you’ll even have the option of I want to call the car that has a bed in it because I want to go sleep on the ride or I want to call the car that has an office in it but for us as the provider and people who are in the audience to the providers of these solutions this is an immensely complex problem especially when you talk about how data-driven this feel is right now and that people are saying Tesla has this huge data advantage and look at way mo they’re they’re collecting all this data in Arizona and they have way more than everybody do you think their data driving around the streets of Chandler is gonna let them roll out autonomous driving service in Shanghai I don’t think it’s going to help that much there will be some learnings but by no means is it a repeatable process where you have one product that sells into every market so it’s an immensely complex change that happened in the American auto industry in America after the war we were the ones that broke it because we were the fastest-growing economy now we’re not so maybe the real question is in Silicon Valley crack the audience I mean just real quick I mean I fully agree with your observations there I mean you look at the biggest market for electric vehicles it’s in China and I and I would venture to say that the the the the largest full-scale rollout of a – you know or autonomous vehicles is going to be in China right they’ve already designated cities that are going to be set up for this thing so I mean certainly having a government that can can mandate these things really helps but but I agree with you and I think Helen had a great observation there’s about the the openness they are to change but absolutely I mean it’s the biggest mark today we all know that and they’re definitely driving it very very hard they want to be leaders and electrification they want to be leaders in autonomous vehicles so yeah very good point I know maybe from an American point of view I think I agree I think definitely China has been grew a lot that in the last decade you know UBS study recently highlighted that they grew by 15% you know that grow most of the automotive but you know for the next ten ten years it’s expected to grow at the same pace as the rest of the world you know 1.2 percent something like that that said you know definitely I think there’s a lot of Eevee activity in a lot of you know start you know in the autonomous space a lot of activity happening and you know yeah good point you know who will break the code first you know that the China are Valley I think you know at least from when I look at a lot of startup ecosystem we also look at you know China ecosystem – for me yes this lot of activity happening in China but compared to valley I think this is still less specifically not homicide [Music] actually around the arena you know the first question I was about globalization’s and they strengthened where was asked a really good question about you know so changing in China I won’t come in his comments as she was very right there’s a about from two thousand seven to two thousand seventeen those past ten years there are 90% global automotive growth is coming from China and CAGR is 16% the rice the world is one percent so that’s actually in as I said but as I said because the China is less developed in the past so Li have more of the families doesn’t never own a car now they become owning a car but in America is a very mature market we own a car and we maybe change a car because either I like a new car or I want you know new features or my car’s too old I have to buy a new one it happened to me as a change to a new car 12 two years ago my purest car I ride in more than 13 years I love my car and I said I can run I like it I have no complaint about it so there’s a uniqueness about our thumb driving so if you are travel kalapa Li you notice the people have a driving behaviors very differently you know I haven’t to e 0 e 0 and the Chinese have a one thing is in common they are requesting driving and but if you want you know in US where people very polite you know with a pedestrian nearby they even they all sudden realize that it was sudden stop and make sure they can bypass and they can drive again so he said it’s better from the behavior because a you Nicholas in different continent and Europe has its own you know and I heard you know fluids of load is now very straight and forward has many variety different signs and particular Minh so you have to have Germany so you have to try it and because of you Nicholas means a pump driving have to learn the local behavior people so you can fit into the local people driving behaviors and also be attacked to the local regulations if you just look at it even just from China China relatively because the country starting to the webmin in the past 40 years so they realized the standardization of the traffic sense and they kind of unified but not to exactly but at least the major seat here the traffic sense is unified if you travel you u.s. you notice different Michigan and UI and the Silicon Valley the traffic sound looks different such means if you develop her thumb driving you need to localize it that’s you know nice thing about you need to make many many different skills but good things do bring a lot out job opportunities so we have an engineer to work on it yeah so you need a local adaptation so this is very very true for thumb driving maybe maybe one point or about China too when you look at the number of people with the stem degrees in the government you come up to ninety percent of those people come from those fields when you look at us lawmakers in government and European governments you have much lower numbers here Germany for example has only one government member that is has a stem degree because the Chancellor herself in and that basically the entity for China it looks a little bit like automotive industry I it’s kind of an engineering problem that they adopting and attacking and going high-speed in there the Silicon Valley I think is also very much engineering driven that’s why the speed may be high in technology adoption but that could be one of those things let’s go to the last question then just to answer the the the question there don’t you think Tesla has kind of like cracked the auto industry code because I a Detroit guy you know and he works with GME and he told me that they everything Tesla does they basically follow and reverse engineer at their lab okay right so so you know I mean so it should be maybe you can can auto industry crack you know Tesla you know that I think you know I mean yeah yeah so what do you think amantha Tesla has definitely brought some some good innovation like OTA things like that that are being widely adopted but you know maybe it’s just because I’m old and Detroit that you know I I wait and see until you produce three three million vehicles a year and able to service those on an ongoing basis but clearly they brought the whole spirit of innovation they really jump started and kicked the guys into gear yeah I mean I for the record it’s not new that OEMs buy other OEMs cars and tear them down that’s been going on for decades so test Tesla is a viable teardown as well they want to figure out what’s going on in there but more importantly the reason I don’t think they’ve cracked the code as of yet like Leland said they’ve done some great things for the industry they’ve accelerated development cycles they’ve made people they made other companies realize that they need to move faster or else they will be left behind it goes without saying how much they’ve legitimized the the electric vehicle movement which is important on so many levels but they haven’t where they have not succeeded is that with all of these great technological things they’ve done they’ve yet to reinvent a business model they are an om that sells cars to people and as far as we can see they do it at a loss so right no fair no that’s not what I said Tesla is selling to people right in let’s let’s abstract away the distribution method cars are being sold to consumers Tesla sells to consumers GM Hyundai they all sell to consumers okay maybe it happens through dealers maybe it doesn’t the bottom line is that’s not a new business model that’s a unit economics driven business model if you were to crack it it would mean Tesla’s got 30% gross margin and other OEMs have subtenant if you were to crack it it’s we make revenue in other ways we make profits in other ways that are not through selling vehicles neither of those two are true yet so if they’re cracking it it’s still in the process of being correct so thank you I think you’re I think we’re a little bit biased here because some maybe a lot of Tesla’s here right I want to thank Helen said to Pam Leland and Emil also the tech guys for helping us with the audio more make of organizing it and you for your patience thank you very much [Applause]


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