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Upgrade to a self-driving car in two years

Volvo XC40

Weekly analysis, news and randomness from the future of transportation.

What if you could pay for your car like you pay for your phone? One monthly fee that covers hardware, operating costs and insurance, and after two years, you could trade it in for the latest and greatest model?

Volvo is offering just that with the introduction of the XC40 compact crossover and will eventually roll it out to other vehicles in its lineup. Former TrueCar CEO Scott Painter's startup, Fair, offers a similar model of flexible ownership, but for used cars.

The auto industry is betting that this type of straightforward, commitment-free ownership will be incredibly appealing to younger customers. And it could be a huge boon for dealers, too, because it will bring customers in and out of showrooms more frequently and will pave the way toward fully self-driving cars.

As connected and automated-driving technologies improve, customers will have more opportunities to try the latest innovations, taking gradual steps toward what will eventually be a completely new type of vehicle.

For example, if drivers buy a vehicle today, they would still be in control of most driving capabilities. Their next car, five years later, might handle most driving functions. That's a pretty significant change.

But, if they were on a two-year payment plan and could upgrade in the middle of that cycle, it's likely they would interact with semiautonomous cars, making a jump to more advanced automation much less daunting.

How consumers pay for cars is becoming a key piece in the future mobility puzzle, especially in terms of future revenue for automakers. However, it could also be looked at as a way to experiment with consumer acceptance and demand and to teach drivers how to handle new technologies. A flexible ownership model takes a big step in that direction.

— Katie Burke

Photo credit: Bloomberg

What you need to know

Google gets around The search giant has become a prominent player in the autonomous driving space with its Waymo subsidiary. Now, it's wading deeper into the ride-hailing wars, with reported talks to invest up to $1 billion in Lyft. Sources tell Axios that the investment would be viewed as a rebuke to Uber, which Google initially invested in before the relationship turned acrimonious over a high-drama trade-secret lawsuit.

Court documents filed as part of the suit revealed last week that Google has poured at least $1.1 billion into its self-driving efforts — a bargain if you consider much of it has been developed in-house and is intended to scale to a production level. Other updates from the suit include a potential snafu for former Otto employees looking to reap the total rewards from the Uber acquisition and Waymo's asking price of $2.6 billion to cover the damages from Uber's alleged theft.

Despite what seems like an endless feud with Uber, Waymo has been playing nice with other companies, announcing an ongoing collaboration with Intel this week.

Is Tesla subject to the laws of gravity after all? One financial analyst firm is telling clients to avoid the electric-vehicle maker's stock, as it predicts an upcoming stock-price correction based off Tesla's poor financial performance. A corrected version of the note, which initially calculated the wrong number of the outstanding shares, places an even lower price target on Tesla stock.

However, news of Tesla developing its own chip, in collaboration with semiconductor company AMD, for automated driving could be a bright spot for investors rooting for the automaker's vertical integration efforts.

2019 Audi A8

Autonomous plans Bentley will introduce Level 3 self-driving technology — cars that can drive themselves with humans still monitoring the system — within two years. Audi will have a Level 3 autonomous car with its 2019 A8. Volkswagen is optimistic about fully autonomous buses by 2021, and General Motors' automated driving unit, Cruise, would like to get there sooner by expanding its internal ride-hailing fleet. BMW is tired of waiting around for carmakers to jump into its industrywide collaborative r&d experiment. Oh, yeah, and these former Apple engineers have a new lidar startup.

Electric fever has taken hold Governments from France to China are experimenting with how to force the transition to electric cars, and the Renault-Nissan Alliance is taking them seriously. The alliance is planning to produce 12 new electric models by 2022 and make EVs 30 percent of its overall output. Tesla's chief technology officer said the company is making its Supercharger stations more convenient, though long-range Model 3 owners may be visiting them less frequently than initially thought.

Ford's patent for a retractable table -- complete with an airbag -- for use in self-driving cars. Photo credit: United States Patent and Trademark Office

Fragments

The funky patents that carmakers hope will keep them innovative.

Uber knows it screwed up with this embarrassingly sexist promotional campaign.

Google artificial intelligence chief to Musk: Chill out about the robot apocalypse.

The godfather of Google's self-driving initiative shows off his other pet project at TechCrunch's Disrupt conference.

Photo credit: Reuters

Someone in the U.S. Virgin Islands knows who to call in case of emergency.

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You can reach Katie Burke at kburke@crain.com
Tags: Mobility

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