Exclusive Interview with Richard Smallwood, CEO and President of Sumitomo Rubber North America

An Autonomous Vehicle Future

Richard Smallwood, CEO and President of Sumitomo Rubber North America, will be one of the key speakers at the upcoming Traction Summit Conference, which will be held in San Jose, California, Oct. 16-18.

The following Q&A conducted with Mr. Smallwood looks at the impact autonomous vehicles will have on society. In the interview, Mr. Smallwood sees massive positive changes due to the embrace of autonomous vehicles.

 

Q: You are bullish on the positive impact autonomous vehicles will have on society. Can you explain in a bit more detail how this will impact the United States and other regions of the world?

Richard Smallwood (RS): Safety: Nearly 1.3 million people worldwide die each year in vehicle-related accidents. Human error, such as distraction, under the influence, sleepy, reckless driving, and not driving appropriately for the conditions, accounts for approximately 90% of those accidents. If we can eliminate the human (error) we will be able to greatly reduce the number of accidents and deaths. AV (autonomous vehicle) technology won't be perfect, and there will invariably be accidents as a result, but it will quickly develop as humans gradually embrace the AV concept. We do have to be fair, though, and accept the reality that AVs will be held to a much higher standard than humans, and as such, there will be a great deal of negative press when an accident occurs.

Mobility: Millions of people who rely on others today for transportation will gain greater independence with AVs. Today, many people are confined to their homes due to age, infirmity, or economic circumstance and can only travel when they find someone kind enough to drive them. Their options have been expanded with the advent of Uber and Lyft, but they will be greatly enhanced once AVs become more prevalent. They will be able to go to the store, go to the doctor, or just get out of the house without being a burden to family or friends. Likewise, those that are immobile due to economic circumstances will find their opportunities greatly enhanced when they no longer must allocate scarce resources to buying, maintaining, and ensuring a vehicle that they will only use about 5% of the time. With AVs in a shared mobility platform, the cost of transportation drops considerably, and this will make it easier for those people to find work.

 

Q: The auto industry and the various industries that depend on transportation make up a significant portion of the U.S. economy. Obviously, as autonomous vehicles grow in popularity there will be some significant changes to that part of the business. What are some of the changes that will occur with the auto industry (parking garages, auto insurance companies, gas stations, etc.)

RS: Smaller Market Size: It is estimated that new car sales could drop by 40% once AVs become prevalent. There will likely also be a significant reduction in vehicle registrations once people move from owning one or more cars to sharing the ownership of a car. This reduction in total market size is why you see OEMs trying to evolve from new car manufacturers to “mobility providers.”

Parking Space is Reduced: More than 20% of urban space is dedicated to the parking of vehicles. A great deal of that space can be recaptured and rededicated to other purposes such as parks or other green space.

Insurance: This is likely the one that will become the most interesting issue to resolve. In a shared platform vehicle, it would likely be either the fleet owner or maybe even the vehicle manufacturer. In an individually owned vehicle, I could see where the owner would still have to buy coverage to protect against Acts of God, or other events outside the control of the vehicle or passenger. But if the accident is caused by the vehicle/software, does that fall in the hands of the producer.

Gas Station: Although I could be completely wrong, the probability is that AVs will become solely electronic vehicles, thereby seriously decreasing the need for a gas infrastructure. Electricity is the only power source that allows the AV to remain autonomous. It would be very difficult and unsafe for an AV to refuel with a combustible fuel such as gas, propane or diesel.

Professional Drivers: There are about 4 million professional drivers in the United States. That number will drastically reduce over time. My estimate is that we would begin seeing it first in taxi and chauffer services, then in terminal-to-terminal truck driving jobs.

 

Q: If I am employee of a company supplying parts to the auto industry, should I be in fear of losing my job?

RS: I would have a fall back plan depending on your age. History has shown that those jobs just don’t fade away forever; they simply shift to another industry or service. I would see this as a slow unwind, rather than a sudden collapse of an industry.

 

Q: What are some of the ancillary systems that you feel will accompany large scale embrace of autonomous vehicles?

RS: Data transmission systems will need to become more robust for AV to fully deliver. The vehicle will be gathering tremendous amounts of data and then sharing that data with other vehicles and perhaps some central collection point.

Perhaps 5G is powerful enough, but my guess is that it will require a step or two above that. Sensor technology and processing power will also be technologies that need to be brought along for the ride. Artificial Intelligence becomes a necessity for AVs to become practical, but I don’t know enough about that to say what it will need to look like. And lastly, data encryption or hack proofing technology becomes paramount in order to ensure safety and provide a sense of comfort to passengers.

 

Q: What role, if any, should federal or state governments take to maximize the positive benefits of an autonomous vehicle world?

RS: The Federal government must take the lead in setting standards and writing the laws. A patchwork system of standards and laws is not feasible for this system to work.

 

Q: There obviously are down sides that need to be considered. What do you see as some of the challenges that may crop up when confronted with more autonomy with vehicles? And what steps can be done to mitigate those as much as possible?

RS: Personal Privacy: Although personal privacy is largely an illusion today, it takes an even greater hit with AVs. The mythical “THEY” will know where you went, how long you were there, how you got there, and what you were talking about and to whom.

Freedom of Choice: In an AV, can you drive if you want? How fast can you go, and what route will you take? Will you have control of the car or are you just along for the ride?

Loss of Control: When you climb in the car and shut the door, have you given up all control on what will happen next to you? Can you get out any time you want, or will the car determine when you can get out? Since level 5 AVs won’t have any steering, braking, or accelerators, will you have any control over what the car is going to do? What happens if the car were to be hacked? Do you have any control over what happens next?

Loss of Driving Pleasure: Some people genuinely enjoy the driving experience. That is why they buy the Porsche, Ferrari, or Corvette. If the world goes AV, will humans still have the option of piloting their own car on the street, or will they be required to go to the track?

 

To learn more about how the auto industry will significantly alter the global economy, as well as hear more of Mr. Smallwood’s outlook, register to attend the annual Traction Summit Conference. To register, click here. https://www.tractionsummit.com/event-registrations