GM’s CEO Mary Barra is leading the 108 year old car company through one of the biggest transformations in automotive history.
With autonomous cars on the horizon, she has made huge moves to bring the company into the future. In the last year alone under Barra’s leadership, the auto giant acquired Cruise Automation, invested $500 million in the ride-hailing company Lyft, and launched GM’s first long-range, all electric vehicle, dubbed the Bolt.
We recently had the chance to speak with GM’s CEO Mary Barra about what a self-driving future will look like and how GM is planning for it. The interview has been lightly edited for length and clarity, and broken into subsections by category.
GM’s plan for rolling out self-driving cars
GM’s first self-driving car for public use will be the all-electric Bolt and it will be available to the public in a shared setting on the Lyft network, Barra said.
“When we step back and look at this broadly, we see it all fits together: electric, autonomous, and sharing. People still need to get from point A to point B, and we believe autonomous will be a big part of it,” Barra said. “We will start from a shared perspective and expand from there. But I think we are a ways from walking into a dealership and walking out with an autonomous car,” Barra said.
Unlike some other companies developing the autonomous vehicles, GM has not yet shared a date as to when it plans to roll out its first pilot program for self-driving cars. But that doesn’t mean that the company isn’t aggressively planning for it.
The company is currently testing a total of 40 autonomous Bolts on the streets of San Francisco and Scottsdale, Arizona and investing heavily in developing its technology.
“We are testing and we are moving very quickly,” Barra said. “We are very much committed to autonomous and doing it safely and we are aggressively developing the technology, but we will put it out for the consumer when it meets all of our requirements.”
What Barra thinks of the competition’s pilot programs
Uber rolled out a pilot program for its self-driving cars in September in Pittsburgh, Volvo plans to launch cars with autonomous tech in 2017, and Ford aims to have its level four autonomous vehicles on the road in a pilot setting by 2021.
But these come with some caveats.
For example, Uber’s cars have test drivers and Ford’s will only operate in certain geographical locations in certain weather conditions.
“I think there are a lot of claims being made because it’s a new space, and I think when you look at a lot of them they are in controlled environments, and have safety drivers,” Barra said.
She added that other companies in this space are credible, but for GM, the focus is on getting the tech right before rolling it out to the public, Barra said.
“The technology is going to be ready when the technology is going to be ready. And that’s what we are focused on. We are putting all of our energy into getting the technology ready and getting it right, getting it into vehicles, and demonstrating it,” she said.
What GM is doing differently
A big part of getting the technology ready is making sure that the car is capable of safely operating in all kinds of situations. To do this, car companies drive their autonomous vehicles thousands of miles collecting data so that they can help them learn how to operate in certain conditions.
Many automakers and tech companies developing autonomous vehicles highlight how many miles their self-driving cars have driven, but Barra said that GM is focused on more than just collecting miles to improve the safety of its cars.
“A lot of the conversation has been about ‘Oh, we have this many miles,’ but it’s not as much about the miles as it is about the experiences that the car learns,” she said.
“I can go to the middle of Montana and rack up a lot of miles on open straight flat roads with no traffic. But one of the reasons we are in downtown San Francisco is because there’s not many other places that are as dynamic, dense, and congested so that we can make sure that the car has in its solution set all the different experiences…and can handle almost an infinite number of situations. So that is what we are focused on.”
The biggest impacts of autonomous cars
Autonomous vehicles will bring about huge changes when it comes to safety, congestion, and how we spend our time, Barra said.
In 2015 alone, there were over 34,000 traffic fatalities. But self-driving cars can “dramatically take that number down” because they take human error out of the equation, Barra said.
Barra said that autonomous vehicles will also have the potential to greatly reduce traffic in urban areas because they are always connected and sensing their environment helping them to choose the best route, thus helping traffic to flow smoothly.
With less congestion and no need to drive, people will also ultimately have more free time.
“I think from an individual perspective what you get back is time,” Barra said. “Time is almost a currency for many people and so we will be giving back that time and a new experience. So we are not only working on the technology, but we are also working on the experience in the vehicle.”
What’s more, autonomous cars will also open up new opportunities for people who are currently immobile, like the elderly or young children, to be able to travel on their own, Barra said.
How the experience will change once we are in a car and don’t have to worry about driving
The experience in self-driving cars will be tailored to meet the needs of customers, meaning there will be a more personal travel experience, Barra said.
“It will be very customer focused and customer driven. It will be about what they want to do in the vehicle,” Barra said. “Whether it’s a second office or entertainment, I think there is a lot of new opportunities when you have that person in the vehicle.”
Barra said new services will eventually be offered in its autonomous vehicles, which will open up new means of revenue for GM.
The biggest way autonomous cars will change the business model for GM
Barra said she sees autonomous vehicles as a new way for the GM to add to its current business model, not take away from it.
This is because the company plans to roll out its autonomous vehicles first in heavily populated cities, which is currently not a strong market for GM.
“Our strength is not necessarily in the dense urban environments like in New York or San Francisco or LA, so we see this as an additive opportunity for our business because the strength of our core business, specifically in the US, is in trucks and SUVs. And that is the area that we believe will be impacted last by autonomous because of use case and because of needs,” she said.
Owning a car in a big city like New York means high parking prices, driving in heavy traffic, and high insurance premiums. These pain points keep a lot of people away from buying a car in urban areas. However, many people in these major cities still use ride-sharing services like Lyft and Uber because they are convenient. Self-driving cars will only improve upon this ride-sharing experience and benefit GM, Barra said.
“Today, it’s done with ridesharing 1.0. But when we get to autonomous, you take a lot of those pain points and you do it more efficiently and more safely,” Barra said. “So we think the adoption will be in these dense urban areas and that it will complement our current business nicely. It will be additive and we can grow from these shared of miles.”
Where GM will be in 30 years
Personal car ownership is not going to die quickly because of self-driving cars, Barra said.
“I think we are a long way out from that. I think traditional ownership model will dominate for quite sometime and it will be driven by rational customers making decisions about what’s best for them,” Barra said. “If you look more broadly than the United States there are still whole markets that are emerging where you people are still looking for that freedom that mobility gives them and the ownership,” she said.
Barra said that there will be some cases, though, where certain developing cities skip over personal car ownership and jump to other solutions, like autonomous cars.
“But I still think there will be a tremendous market for the traditional owner driver model for a very long time and it will be driven by the consumer,” Barra said. “But I have a very hard time saying what it will look like in five years, much less 30 beyond that.”
It remains to be seen how self-driving cars will impact automotive production.
Some predict the demand for vehicles will decrease because people will give up their vehicles in favour of autonomous taxis. Others speculate that the demand for vehicles will go up because there will be a need for more autonomous cars on the road. Either way, GM sees opportunity.
Currently, personally owned cars are only used 6% of the time. However, because autonomous cars will be used in a ride-sharing setting, they will be used more frequently, thus meaning a higher turnover rate, Barra said.
What’s more, as automotive technology continues to evolve, Barra said that it’s likely people will want to upgrade their vehicles more frequently.
“I see a different model than today’s model, but one where, even if there are fewer vehicles, their life cycle is less, or the way they are serviced provides a different business,” she said.
“The nature may change, but I think there’s still a very strong business fundamental,” Barra said.
Barra added that one of the reasons GM is being so aggressive in developing the technology and getting it into the marketplace is because they see driverless vehicles as creating new business models on top of their core model of producing cars.
The biggest transformation Barra sees in the industry
“I think it’s pretty big. I’m on the record as saying we are in the midst of seeing more change in the next five years than we’ve seen in the last 50 years,” Barra said. “I haven’t thought about it as the most significant, but I would say it’s right up there when you look at how dramatically people will move because there have been a lot of evolutionary improvements.”
No evolution happens overnight, but Barra said that cars are changing more quickly than they have before thanks to new technologies.
“If you go back and sit in a vehicle that was manufactured, say 7 or 8 years ago, and then get in a vehicle that is rolling off our assembly line right now, they are more capable from a safety perspective, from a connectivity perspective, from a fuel efficiency perspective,” she said. “I mean, every single aspect of the vehicle is an order of magnitude better. And I think for the last couple of decades, it has been evolving.”
GM plans to dominate
“It’s very exciting for me personally. I have been at the company for 36 years and I know the deep technical talent that is across this company, so enabling this talent and empowering them to be able to lead this transformation is something that excites me everyday. It’s the power of the men and women at General Motors and their capability to redefine how people get from point A to point B,” Barra said. “That is exciting to me, that we are in a position to lead.”