Looking Out - The Podcast: Ep. 5
In this very special episode, Joe and Drew revisit Drew’s interview with the father of micromobility, Horace Dediu.
This isn’t the first time this interview’s gone to air. You may have heard it first time around on Drew’s other podcast, The Next Billion Seconds, or on Horace’s own Micromobility podcast.
It is, however, the first time we’ve sat down to discuss the many implications of what Horace shares for automotive design and strategy.
If you want to cut to our analysis, fast forward to these points:
what does it mean for the industry to make a worse car, and where might we start? (starting at 24m 57s) how does looking down versus looking out change how we think about designing for automobility? (starting at 50m) and just how screwed are the economics of automobiles in a heavily urbanised future? (starting at 1h 14m 57s)
But of course, we’d love you to listen to the whole thing!
Show produced by Chris Frith
Click ‘Read more’ for show links and the transcript
- Citroen Ami One - a worse but better car
- The Entrant’s Guide to Automotive Industry - Horace’s perspective on how the auto industry works and the update.
- Confessions of a Capital Junkie - Sergio Marchione’s pivotal white paper on the automotive industry
Note: This transcript is machine-generated and may contain some errors.
[00:00:00] Joe: Hi, it’s Joe Simpson here, one half of the Looking Out crew. Not that long ago, the other half, drew interviewed a chap by the name of Horace Dediu. For those of you not familiar with Horace’s work, he’s a technology industry analyst focused on the world’s most valuable company Apple. He’s also the father of the term micromobility.
The catch-all phrase you might have heard for anything small that helps us move around, but there’s not a car at this point. Wearing my industry hat, it would be very easy to write this guy off as many of us have as a tech industry arriviste, yet another person who thinks they have a smart idea about how to replace the car, but Horace is no arriviste to the auto industry.
He spent the better part of a decade peering under the hood to find out what he could about where the next disruptive innovation would come from. And as a petrol in the veins kind of car guy, he wanted to understand how the industry was gonna write its next chapter in response to the clear existential threats of declining sales and increasing environmental and political pressure.
But the big ideas that he found so-called case, that’s connectivity, autonomous drive, new ownership models and electrification, he reckoned would simply sustain the industry. They wouldn’t open up new markets, nor would they drive resurgent growth. They might at best simply arrest a decline. So, as you might imagine, I was pretty interested to hear what he had to say.
As someone who thinks deeply about where the automotive industry is going, I’m keen for any insight that might help me see a path forward. And there is just so much in what Horace has to say that we couldn’t not share it all with you. Now, this isn’t the first time this interview has been published. It’s also been shared through Drew’s other podcast, the Next Billion Cars.
But what we’ve done with this version is break it up with our reflections on what Horace has to say and what we think it means specifically for design and strategy within the automotive industry. This is a long old episode. It’s our longest yet so strap in, but we are really sure that you’ll find something, uh, perhaps many things of interest within it.
[00:03:02] Drew: Alright. Why don’t you start off by telling us, uh, what your name is, who you are, and your relationship to the term micromobility.
[00:03:10] Horace: My name’s Horace Dediu. Um, I am co-founder of micromobility Industries, also previously co-founder of Bond Mobility, founder of Asymco and podcaster of, uh, the critical path and a few other activities over the years.
The second part of the question, my relationship to micromobility. I, um, coined the term in the summer and spring of 2018 to describe what I thought was a missing idea, which was that non-automotive mobility options, specifically electric ones where divided into many categories and no one was seeing the entire picture.
So I, I thought it was appropriate that we should call this, um, alternate mobility something and micromobility popped in my head and. It was, um, it was something that I retrospectively thought was very, uh, similar to the micro computing era. Microcomputers didn’t have a name, and once they were named, they became much more obvious to everyone.
[00:04:20] Drew: For the benefit of our kind of future curious audience, how would you define micromobility? What does it encompass? [00:04:27] Horace: Because over time, actually when I’ve been asked this question, I’ve given different answers because the simplest way to put it is, is, is that it’s negative space in the sense that if you see a picture.
Um, and what you’re not seeing, or rather what you should be seeing is also what isn’t in the picture. Right? Um, and that’s kind of a negative definition. Like, like you could say, well, you could try to encompass everything. So let’s say that the picture you’re looking at is that of the Mona Lisa. And then you could say, well, Everything but the Mona Lisa is the background, the, the color, the lighting, the, you know, nuance, the, uh, you know, intentions even of, of the person painting.
Uh, you could just say that it’s non-automotive mobility, right? Uh, and non-automotive personal mobility. Meaning trying to move people as opposed to goods, traffic and, and cargo. Although micromobility is going to eventually be used there as well. If you look at history of mobility in general, auto mobility is regulated and is, is defined by law in many countries.
Um, micromobility is, um, everything that, uh, moves people singularly that isn’t a car.
[00:05:40] Drew: Right. It leaves open. I guess the opportunity for what I’ve heard you describe previously is kind of this, this cambrian explosion of, of new ways to move around.
[00:05:50] Horace: Indeed, indeed. And, and this is one of the things we are doing at Ride Review, Ride Review, we set up simply to catalog and allow users to find vehicles. But even that’s been a challenge to try to categorize all the vehicle types, how many wheels, how many configurations, right? It’s a very difficult, and it’s a moving target. Um, it suffices to say that, you know, everything from one wheel to six wheels is considered everything from Powered and Unpowered.
Um, obviously there’s, there’s a legacy. Unpowered, micromobility motorcycles are included. Microcars are, include. Golf carts are included. What Europeans call quadricycles are included. Right. Some Japanese forms of, uh, cars, which are called K cars might be included. Uh, most typically, yes, they are, but uh, there might be some exceptions.
It, it’s, it’s a very diverse group of product and vehicles. And, and on on top of that, the complexities that there, there are services a along with them, uh, which have become part of micromobility. So people would talk about shared versus owned. There are models for, uh, sensing and data. Uh, which are becoming businesses as well.
So there’s a, there’s so much activity, it’s very difficult to be singular about the definition.
[00:07:12] Drew: Understood. And it’s interesting that you touch on ride review there because I guess I sort of wear two hats in a way. My, my background is as, as a car designer, that’s what I trained in my interests these days very much lie in kind of the ethnography and the anthropology around how we get around and how that kind of affects our relationship with the world around us and, and the people within it. Mm-hmm. But just as a resource to kind of go and look through ride review and just see how rapidly this space is evolving is, is, is just really delightful.
Um, o o on a personal level. You, you mentioned that, you know, micromobility is kind of everything that, that automobility or, you know, like what we traditionally might think of as auto mobility is non, the idea of micromobility actually emerged from your study of the traditional automotive sector.
[00:08:08] Horace: Exactly, exactly. Because it’s negative space. I myself began my studying of the mobility space because I, I came from the mobile phone industry, so I, I spent a decade with Nokia. You know, I’ve seen the transition from and before that, by the way, I was in the computing world because I, I, I studied computer science and I worked in it, and I was very much steeped in all of the history and, and lore and, uh, and technology and techn, you know, details.
I, I have a computer engineering degree as well, so I, I, I really understood computers before I realized that they would be replaced mainly. By phones and that, that was a very important understanding because you, you, this is also right. Part of the logic of disruption is to understand what is the limitation of an existing technology and business model and, and form factor and everything else.
And everyone is obsessed, incredibly obsessed with optimization of that and do not see the something else coming along that, that, that suppplants it in, in. And the one that comes along is very much a David versus Goliath type of competition because that which comes along is extremely opposite in terms of capability, in terms of power, in terms of efficiency, in terms of everything that you thought was important.
And so when the automobile, so in order to understand this is a, this is point I don’t make often enough. But in order to understand micromobility super well, you have to understand automobility, in fact, and to understand auto mobility super well, you have to actually understand infrastructures, right?
You have to understand roads. I, I wrote a piece in 2015 called the Entrants Guide to the Automobile Industry. Um, it came to be also known as the 10 commandments of the automobile industry. And it got passed around even at places like Toyota. Yep. And one of those, uh, commandments was if you want to know the future of the car study roads right, it, it’s super important that, you know, you understand the dependencies that cars have.
In fact, if you were to add them, You’d see that the car is one of the most fragile things that we’ve ever invented. Yeah. Because it depends on so much and it depends on government. It, the, the government itself must grant 15 different types of licenses to exist. Right. Um, and then so it, it, it can disappear at the stroke of a pen.
It literally can. Yep. And you, you can destroy the automobile industry and the automobile society. By writing new laws about parking. Right? So this is one of the other tenants that came up later, much later, which was that as parking goes, so goes the car. In other words, you turn up the parking and the car goes up, you turn down the parking, the car go, goes down and it, in fact, it can go to zero as well.
And it’s entirely at the whim of whoever writes the regulations. So th this is why, you know, from a political point of view, you can imagine a future very easily imagine the future where the car just disappears completely.
[00:11:18] Drew: Which, you know, it’s fascinating cuz through things like the work that I do with, with my newsletter and podcast looking out, you know, I, I, I’ve been starting to talk about, I guess the systems level dependencies, right?
That car culture has, you know, and I know for a lot of the people, With whom I used to work in the automotive industry, that just, that just doesn’t occur to them.
[00:11:42] Horace: No, no, indeed. And it didn’t occur to the computer industry, um, insiders of which I was one. I mean, not to forget that we had before the personal computer, we had the mini computer, but before the mini computer, we had the mainframe computer, which, uh, which you know, was it self pre preceded by tabulating machines?
Um, everything that I b m invented. And, and so those, those folks did not see that the next generation of microprocessor would enable something that would completely disable their all of their work. So I don’t want to be just polemical about it in sort of apocalyptic, but I, I’m very conscious and I own, this is another thing people may not know very well.
I own 11 cars, right? I, I know cars extremely well. I’ve built, I’ve built my own electric car by converting a 1972 Volkswagen Beetle, which therefore meant I had to disassemble and reassemble it in all of its parts. I, I, I have, uh, you know, I have an engineering degree, electrical engineering, and so, you know, it was a fun puzzle to solve.
I had to source parts. Wow. I had to understand, you know, a number of things about suspension and, and battery weight and all these other chemistry issue. So I’m not shy about cars, and I’m not a tree hugger, I’m not an environmentalist for sure. The more you understand the car, the more you should understand its fragility, the more you should understand that if something else comes along, you should be embracing that vector of, of potential value as well as, as it’s, um, you know, asymmetry, as I call it, asymmetric competition is, is the, what the word Asymco means.
But the other thing I would, I would like to, you know, if your audience is an automotive one, um, the understanding of how the auto industry has evolved, I’ve studied very deeply. Yeah. I’ve studied it, uh, painfully, um, to understand. Yeah. Because I, I, you know, I, I know about the product, the production systems.
I know about the questions related to how important manufacturing is. To the, to the industry and, and how power flows through but also understanding, you know, the role of design. Yeah. The role of materials, the role, I visited many factories where I, I, it’s one of my hobbies.
I actually go visit factories and I visited many automotive factories. I visited, um, from Toyota to mm-hmm. Bm, bmw, uh, you know, looking at, at how the cars are made. But what I, what I would emphasize also, by the way, quantitatively understanding the size of the market, the value of the market, the number of jobs in the market, the, the I, I’ve looked at the, um, uh, uh, the databases that are available publicly, uh, from O oca, which is the organization of automotive manufacturers.
Um, and, and I know where they’re. I know culturally what that means if you’re an automa, uh, auto making nation. Sure. Um, so n n no. No. You know, I’m not an anti automobile person, but I have, I have to say that I’ve never seen anything as as exciting as micromobility. I, if you are a student of the car and you know the history of the Volkswagen, you know, the history of the Model t, you know, the history of Toyota, of Mahindra, India, no matter what, nothing I’ve ever seen compares to what micromobility is, the tornado that’s coming with that.
Um, both in terms of product, in terms of power, in terms of ability to serve billions of people, which is something the automobile industry has failed to do, failed miserably to do. We’ve had 120 plus years, we’ve had all these, you know, over a century. And yet there’s only about 1.2 billion drivers in the world today.
Um, 1.2 billion out of eight. If this was the phone industry, people would’ve given up long ago because it, it, it’s not catching on. That would’ve been the, the, the observation that is a smaller ecosystem than Apple has. Sort of, sort of like how many Apple users, and Apple is about 20% of the market as you know, it’s ability to serve.
Even with all of the energy and effort involved in automobile scaling, it hasn’t managed to solve this puzzle. And I think it, it goes back to this question of size and ultimately the, the inability to scale down, um, the, you know, the phone and the personal computer managed to reach everyone on the planet because they could scale down the automobile industry.
If anything, it had a momentary lapse where it scaled down during the 1950s with, with cars like the Fiat 500, uh, the mini two cv. Uh, but then it, it, it became obsessed with the Jainism. And now is in, um, in the death rows of, of being, um, what I call mega mobility. Yeah. gigantism and, and just hhorrible, horrible destruction of, of everything in, in, in Incredible.
[00:16:57] Drew: So when I first kind of got keyed into to, to micromobility, um, uh, when I was working at, at, at Geely, um, I was working for, for, for what they termed there, their new mobility startup, uh, Lincoln Co. Right. And I, and I went there to sort of help them establish a, a human-centered design capability.
Uh, which as you probably know is, is, is a far stranger concept in the automotive sector than anybody would on the outside would likely believe. Um, and I introduced kind of the idea of micromobility and, you know, sort of based on, on what I’d read of your work, kind of started thinking through this stuff as, as perhaps the future of, of, of how we might get around or one potential future of how we might get around.
And I think perfectly in line with, with Clay Christensen’s idea that, you know, disruptive innovations first kind of appear as toys to the incumbents. It was amazing, the extent to which I was kind of laughed out of. For talking about this stuff,
[00:18:02] Horace: Yeah, yeah, yeah,it’s so common.
[00:18:03] Drew: Yeah. Yeah. You’ve talked about one of the challenges for the automotive sector kind of being this, this gigantism, right, and I guess all of also the fragility of the system, which has been built up around the production of cars.
How else would you kind of define the challenge facing traditional automotive, uh, manufacturers? The, the challenge that’s posed by, by micromobility,
[00:18:26] Horace: What the industry’s experiencing is, is in many ways, natural, and it has happened. Over and over again. It’s almost, sometimes I put it that it, it, it’s, it’s, it would be, it would be surprising if it did not happen.
Um, right. Which is, which is the loss of humility, the, uh, inability.
[00:18:50] Drew: No, I, I, I hear you. I hear you. Yeah, I
[00:18:52] Horace: No, but it, it, it’s so true. It’s true in every individual’s, uh, uh, journey through life. It’s true of every company. It’s true of every, even every nation. Wh when you succeed, you necessarily build up, you build up a sense of pride and you build up a sense of achievement, um, and a knowledge base, if you will.
This is how we do things here. This is how it’s done. This, we know what the customer wants, and we’ve gained that through very painful lessons. So one isn’t easily willing to give it up, but there are, again, philosophers out there, including Asian. Ones from the ancient times, which brought us the notion of the beginner’s mind, right?
And that I don’t need to, you know , cite Western philosophy. I can cite Eastern philosophy, I can cite Middle Eastern philosophy, whichever, whichever part of the world you may live in, has a tradition of understanding that human nature goes through this cycle of, uh, loss of, uh, loss of innocence, um, again, of mastery, um, mm-hmm.
And, and a collapse of, of, of the, uh, due to hubris. It’s written in, in, uh, literature. It’s written in Bible, uh, and, and other scripture. So it’s not a, it’s not at all uncommon. And, um, and so the only point to be made is again, and those smart people who run these c. And I don’t use the term, you know, sarcastically, they are smart.
Um, the whole, whole theory of disruption is how great companies fail, how smart managers make bad decisions, right? It’s not at all about them being unintelligent, but the problem is that you, if you lose humility, if you, you, you cannot gain it back easily. The hero’s journey here is when a manager in a firm learns masters, something loses humility, but then is redeemed through a cathartic process of regaining that humility.
That last step is the most difficult one, and it’s almost never, never done. In fact, that’s one of the things about Steve Jobs that made him a superpower. Was that he was able to regain his humility due to years in the wilderness, which he experienced after being fired from the company that he founded.
So he started, apple, became super arrogant about it, got fired, and then, uh, restarted it effectively, you know, 15 years later. Now, that is so rare again, you have to have a person who’s like willing to sacrifice themselves over and over again because who the hell cares if you’ve, you’ve, even if you’ve been fired, you probably have enough money to go on and chill out the rest of your life, but he decided, no, he’s gonna go into the breach again, right?
So that, that is a very difficult thing for a human being to do. And I don’t even claim that I can do it, but I, I would say that it’s so rare that this is what is at the heart of this question of disruption is the ability to, to understand that when you are at the peak of your game, when you know when, when you’re the master of the universe, that you must humble yourself and say, I know nothing.
That is the most important decision you make. Um, the, every pope, there’s a great, you know, um, tradition, uh, the, when the Pope is sworn in, he’s told in the ceremony that, um, you too shall die soon. Or something to that effect. Do not think that you’re invincible. So anyway. Right. I, I digress. But the point is that spoken, by the way, I’ve spoken to Japanese companies who, I’ll name one of them, Honda.
Mm-hmm. Mm-hmm. Um, started out making motorcycles, actually, not even probably mopeds is what we would call them. Very small vehicles growing through the, the civic phase into an automaker, uh, establishing themselves as a very, you know, prestigious automaker even with, with a new brand Acura, et cetera. Right.
Unable, unable to do anything about micro mob mobility. Right. Enjoying the idea in an intellectual sense. Uh, you know, doing studies po possibly developing, uh, prototypes, cannot commit to it. You see, um, right. Bmw, great company that used to make motorcycles as well, actually still does, um, right. Doesn’t understand micromobility.
Um, now the old, now here’s the other thing. This is the other thing is that the, one of the other paradoxes of studying the auto industry is that everyone is absolutely excited about the future of the industry because of other things than micromobility. They’re excited about electrification, they’re excited about, right?
Uh, self-driving. They’re excited about, um, uh, communicating, uh, uh, technologies. Uh, they’re excited about sharing in other business models. This is, this is encapsulated in the, in an acronym case, C A S E. Yep. Communication, autonomy sharing and electric. And, uh, you know, the consultants are out there selling these ideas.
A lot of pundits out there discussing how this is so quote unquote disruptive. None of these are disruptive. They’re all sustaining right now. You might see a a little bit market share shift here and there. You might see some entrance coming in, as we see with electric, but none of these particularly asymmetric, in fact, they’re all launching huge vehicles.
They’re all launching super expensive vehicles. They’re all launching super powerful vehicles that go much faster than any legal limit is allowing them to do. And so they are appealing to the early adopters who are actually very wealthy individuals, right? This isn’t, this isn’t the movement to mobilize the next billion or the next 3 billion or the next 5 billion, which is what you actually should be thinking about.
Instead, they’re saying, let’s make a better car. And I’ve always said that one of the tenants of micromobility is, don’t give me a better car. Cars are good enough. Give me a worse car. Any innovator out there who says, Hey, Horace, I’ve got a great idea for a worse car. I’m all the ears
[00:24:59] Joe: So Drew, what do you think ho means by a worse car?
[00:25:07] Drew: I mean, it’s such a good question. Let, let me start off with what I think the industry’s definition currently of a worse car is. And I think, you know, I have to applaud Citroen. I think the Oli is a wonderful kind of re-imagining of, of what a, a city vehicle can be based on the industry’s current understanding and current way of, of, I guess, conceiving of what a car with is about.
That being. It’s still pretty big. It’s still pretty heavy. It still has a street presence that I would argue is far away from being a friendly presence within our cities. And it, it, it, it smacks to me of trying to take the current paradigm and de contenting it. Right? And we hear about de contenting a lot in the industry at the moment.
I mean, manufacturers having to decontent left, right and center because of the cost of the sensor suites that are going into cars because of the cost of development of EV drive trains. You look at, you know, the front seat experience that you get in a Skoda versus the rear seat experience these days. And.
You know, there’s just a world of difference in terms of the, the quality that, that you get to experience front and back. And although they’ve tried very hard to make the AAMI not look like it’s a dec contented product, ultimately that’s what it is. Uh, sorry. The Oli it it is, right. It’s, it’s, it’s a vehicle which has been designed within an existing paradigm, but had as much of the cost stripped out of it as possible.
And I wonder if that’s, Kind of the most generous place from which to start, and whether there isn’t another way of thinking about it, which is let’s not start with the existing paradigm and strip as much out as we can, but let’s start from someplace new. That allows us to build up with a different set of requirements, a different way of thinking about what joyful, lightweight automobility could be, right?
I guess this is about are you solving your own problems or are you choosing to solve a problem that needs to be solved? Uh, because I think that Oli’s lovely. I think it’s fantastic. I was very lucky to get an audience with it in Paris last year. of my friend and former colleague, or former, former kind of student colleague, PIAs, and he’s now kind of head of that area, Citroen.
Um, and it’s such a nice thing, but looking at it critically, not gonna help solve congestion, not in a city-like Paris. Paris. It’s not gonna help you when you need to park it. And although Citroen showed images of people sort of sitting on it parkour style like some kind of parked rock, it’s, it’s, nobody’s going to do
Nobody’s going to sit on somebody else’s car parked on the street. Somebody will shoot you or stab you, like, get off my car.
[00:28:52] Joe: Right? So you have to then question. What problem are you solving? And the problem that Citroen said they were solving was, cars have got too big. Cars have got too heavy, cars have got too expensive.
The batteries are getting too big. It’s time to stop this. He, they were kind of trying to answer the thing that hos talks about, about this sort of loss of humility. Stop it, getting bigger, heavier, faster, larger, heavier, more able to kill someone, more able to go even faster. And I really applaud them for that.
Lord knows that’s very hard to do in the industry right now. But then if we look at another product from Citroen, like the Ami, it feels like that is more what Horus is talking about because it’s solving some actual problems. Or you can see how it starts to solve some of the problems the car has caused.
Or when we look about getting outta the city. Right. And
[00:29:49] Drew: it is categorically a shit car, right? It is. It is. It is that worst product that he is talking about, you know? And if you haven’t seen it yet, listeners go and go and seek out the shot of the Ciran army that’s had an accident. Probably at 30 kilometers an hour in Monaco.
You know, there’s a, there’s a, there’s a photo of an Ami on its side having failed to navigate a bend in Monaco. But, you know, the critical thing is that accident probably happened at 30 kilometers an hour. So there’s a very high likelihood that the person that was in within that, that Ami walked away Scott free.
You know, they didn’t hit a telegraph pole. They didn’t hit a barrier. The thing simply toppled over and,
[00:30:39] Joe: and, and, because they were driving it like a hit
[00:30:43] Drew: because they were driving it like a tit. But I think this is, this is really what he’s talking about. And you know, there’s a, if you haven’t taken a look at the original Ami concept, please go and look it up.
Uh, we’ll put a link into the show notes because I think what you see with that original Ami is. Kind of a dedication to the craft and the styling and, and sort of the emotive substance for which the automotive industry is famed, but applied to a package, to an architecture, to a concept that is so radically smaller and so kind of radically lighter, uh, both in terms of, you know, its footprint and in terms of its content, but you don’t feel shortchanged by it.
It, it, it, it sort of has that smiles per mile character to it that Horas has spoken about elsewhere, which is really sort of the hallmark of what makes for a delightful micromobility product in a way that the Oli doesn’t, you know, the weird thing about the Oli is that in, in trying to make it smaller, in trying to, to reduce its footprint, SI’s design has actually ended up amping up the aggression.
It is actually quite an aggressive little beastie in a way that, you know, the Ami and certainly the Ami concept weren’t,
[00:32:32] Joe: it’s kind of an urban, it’s kind of an urban tank. Yeah, I mean, I, I, if I’m being unkind,
[00:32:39] Drew: yeah. I mean I’ve, I’ve often re referred to sort of these smaller urban vehicles, uh, so small urban SUVs as kind of urban escape hatches, that the kind of thing that you drive in spite of your environment rather than because of it.
And I think as we’ll hear later in the conversation, one of the central tenets of micromobility is about changing our relationship to the environment that we are moving through. It’s not something to be avoided, rather it’s something to be engaged with. And, and I just want to pick up on that point about humility.
I mean, I get why the industry is going through this. It’s. It’s an industry that, over the course of 120 years, has acquired an enormous amount of knowledge and a huge amount of skill in building product in a certain way. And I think fundamentally selling people on the idea that more is more and what Horas is proposing here really is about a reconnection with the idea that that, that less is more.
But it’s very, very hard to backtrack from that place of jism, which Horas will ultimately talk about to a place of saying, actually less is enough.
Coming up, Horace talks about the original Fiat 500 and why it’s the most perfect car ever made and why we won’t see its kind again, at least not from car makers. We also touch on that most intriguing of topics, the Apple car and why it’s probably not a great idea.
[00:34:33] Horace: But it’s, look at the Fiat 500. Totally. Uh, I’m writing a book on micromobility and there’s a chapter, I’m giving this away now, sorry. But, um, spoiler alert. Uh, there’s a chapter on the Fiat 500. Mm-hmm. The Fiat 500 is known by many as the greatest car ever made. Right. And I’m not making this up. I mean, this is top gear.
This is automotive royalty has decreed that the Fiat 500 s probably one of the best cars ever made. It’s also considered one of the sexiest cars ever made. It’s an unbelievable design. People sing praises to it. And I point to the fact that it came out at a time when, in the 1950s when Americans were building gigantic cars.
And, um, it was a, it was a, it was a design, uh, Trying to mobilize people, right? It mobilized Italy. Uh, the Fiat 600 mobilized Spain, Portugal, uh, went to the Eastern Europe in Yugoslavia and other places. So it, it, it real was really, uh, uh, a powerful product to kind of really bring more people to Automobility.
Uh, and it ran for decades and it was even replicated in the last 20 years with a facsimile. And so it became iconic. And I put it to the audience that the auto industry cannot today make a Fiat 500. The Fiat 500 of 1952 can no longer be created no matter how much money or resources you have available because it’s actually illegal.
And this is one, one of the questions that must come up then is, well, how did we as a society progress to such an extent that will we make affordable mobility for billions illegal?
[00:36:20] Drew: A and, and I guess this is, you know, this is a really interesting question. When you look at, um, electrification, right? As, as a technology and sort of the second and third order consequences of installing, you know, extremely heavy battery packs, uh, extremely resource intensive battery packs, um, you know, battery packs that are built, you know, with, with kind of morally dubious supply chains in some cases, uh, to these vehicles.
[00:36:53] Horace: Mm-hmm. Um, it actually kind of, it’s completely unnecessary qu quantities of battery. Right. Um, I, I find this one of the great paradoxes, this is why when I go through my thinking is, is like I make lists of paradoxes, right? I make lists of absurdities. Mm-hmm. And I, I, I, I revel and dwell on the comic nature of the situation. And yet most people don’t even know, recognize that these are comical or, or absurd. Um, and, and this is why I try to publish, uh, you know, these reductions to absurdity, which should get people to respond. Wait a minute. And it’s, it’s, to me, it’s telling to see the responses when you say, well, there’s no point to having 300 miles or 500 kilometer range in a car because you hardly ever go that far.
Right? And people begin to bend into all kinds of twisted logic to try to justify the absurd nature of one in 10,000 probability that you might actually need that. And then I would ask, well, if you do really need that, you, you know, you, you could say you need an airplane. Or you could say you need a right, a heavy truck to.
An entire house worth of contain content. It, it, it doesn’t make sense when you, when you go to, to such absurdity, but then somehow the market loves to go there. Loves to, you know, both the buyers and, and the sellers are trying to make sure that that product exists and make sure that the opposite does not exist.
And that, that’s why I think there’s an opportunity whenever you see this kind of mad rush into insa. You, you, you have to step back and say, well, that’s, that’s comforting.
[00:38:34] Drew: I’m just reflecting on, on a piece that I wrote a little while ago. Um, and it was either about, it was a, a University of Geneva study, uh, that was looking at, at kind of the ideal amount of range to, to cover kind of 95% of, of tasks that people wanted to carry out with their car.
You know, it was, they, they, they, they settled on the idea of about 250 kilometers. Right. I closed the article by saying, you know, for an industry that that has, has built itself on the idea that more is more and that less is a boar. It’s gonna be very interesting to see themselves, if they can contort themselves to the idea that less is enough.
[00:39:12] Horace: No, uh uh, this is why I’ve given up. I mean, I’ve, I’ve, I’ve thought about it since 2015, as I said in the, and I just, and, and I looked under every rock. I’ve looked and talked, talked to as many people as I could find, and it’s, it’s, it’s very, very, very hard. And you lose heart. And what, what’s been most heartbreaking is the companies that are entering the market today.
Mm-hmm. With great resources, great minds, great thinkers, companies like Tesla and BYD. Mm-hmm. And they are choosing, even though they have a clean sheet of paper, they’re choosing to do the opposite of what’s common sense. Right. And, uh, that, that implies that they’re studied the status quo to such a degree that they would rather go with status, you know, the con the normative behaviors, rather than asking themselves some fundamental principles.
And possibly they couldn’t ever get investors on board with these ideas of, of solving real problems. Um, meaning access and, and, and having mobility for all. Um, rather than, you know, the only things they could sell because again, they don’t, I know they don’t work in a vacuum. It’s not just the founders who might must make a decision on strategy.
They must do so with a business plan, with investors, uh, deep pockets and so on. Um, and there’s, there’s just a general consensus that if you start an auto in this, uh, an auto automotive company, then you, you have to have a superlative product that is way beyond the reach of, um, 99% of the people. Um, and the, and the argument you make is like, well, yeah, we’ll, we’ll, we’ll solve the problem at that end, you know, for the 1%, and then we’ll eventually go down the cost.
It’s like trickle down economics. Right, right. Well, this was indeed the, the model of the early auto industry. But, but let’s look at Tesla. Tesla’s 20 years old, right? Uh, and, and now, you know, the average cost of a Tesla is something above $60,000. Right? And it’s not at, like, even the 60,000 is the low end model, and that that is not a very well appointed model, um, in, in, you know, sort of traditional luxury.
But it, it’s, it’s extremely expensive because of all the battery involved and there’s a, a healthy margin. And that’s another thing, by the way, if, if you did have margin to play with, Why not, you know, work at breakeven and try to, try to iterate your product so that you can get it focused on the low end.
Right. Um, and, and you know, at least have a portfolio where you cover a bit more of the prices down to the, you know, from high to low as Apple does. Because, you know, even though they’re a premium product, they do have something entering the market at $300 or something like that, three 50, um, up to 1200.
But, but that’s not what’s happening. So, Maybe b y d is the only one. But anyway, we can quibble about this, but
[00:42:10] Drew: perhaps become sort of the litmus test of a post jobs apple. Right. You know, if, if Apple’s mobility, e efforts in mobility amount to something, um, to what kind of market are they directing those efforts?
You know, is it the it’s
[00:42:25] Horace: We could spend an hour on my, on my existing, because I’m also an Apple analyst and I’ve been, of course, I’ve been writing about Apple very long time, longer than I’ve been talking about micromobility. Um, so, but, but yes indeed. And, and this is another lens through which I can look and say, I can see exactly why Apple would not, it is finding difficulty in, in entering the auto market because, They’re finding it difficult to bring to bear the technologies they have in a way that moves a needle in any meaningful way they need, you know?
Right. One of the conditions they have is they have to make a significant contribution to the, to the, to the market. They have to move, uh, I, I use these words as move the needle, but in either discovering a new job to be done that the product can be hired for or attacking non-consumption, so finding people who are non-consumers of automobility and offering it to them, in which case, that’s a very difficult thing to do when you have a used car market.
Because right now, the, the, the other thing people don’t study very well is the under, you know, the fact that a, a car goes through four owners, at least the, the non-con consum, non-con consuming market is addressed today by used cars and the, the new jobs to be done. Market is like asking, okay, let’s say you are, you are in a saturated market.
What could you use a car for that you haven’t thought of yet? And that, that is the premise of self-driving is saying, well, let the car do the driving and I’ll use the car interior as personal, right? Private space where I can do other things than drive or be a passenger. I could be engaged in something else, but that’s just making the car into a cocoon that becomes, you know, uh, a miniature, uh, uh, uh, home or a miniature right, uh, study or something of that kind.
Right? So then it’s all interior discussion. You are all just talking about, well, how can I make so much, uh, of this, of this space? And what does improvement in that market look like? We’ll just make it bigger. So make it a, a minivan, then make it a, a van, then make it a, uh, an rv. So I did this analysis and I, I followed this logic and I said, the future, according to the incumbent logic today, is that we’re going to have autonomous recreational vehicles orbiting.
Urban areas, self-driven, um, waiting for their owner to sort of summon them and then they can go inside and enjoy, you know, as if they were at home, enjoy their living space, right? And those vehicles, which are orbiting, uh, urban areas are doing so because the government lets them, right? Otherwise they would be charging a real estate pricing for the fact that you’re having a mobile home, right?
Occupying public space indefinitely, consuming huge amounts of energy and space. And then economically that becomes, oh, it’s just a home, therefore we’re gonna charge 150,000 plus for it, right? That, that does not resolve into any kind of logic. Where we’re we giving affordable? Transportation to people. So you see, you know, it just, it just yet another reduction to an absurdity.
[00:45:44] Drew: So, so if we take kind of the, the, the, the flip side of that, dare I say it somewhat dystopian vision. Um, and, and we think about, uh, you and me perhaps as, as urban dwellers in the world of 2030. How, how does micromobility change the way we move around? How does it change the way our stuff moves around?
There are many, many analogies I can use, but I’m gonna pick one that I love the most. I think auto mobility increasingly is working towards a future where you are invited to look down, you’re invited to isolate yourself from other people in the world around you. Mm. Where you are in the cocoon, which, uh, makes the journey.
Not just un uh, more pleasant but invisible, and therefore, you, you, you, you, you go through a warm hole. You sort of like the, the, you know, hyperdrive or hyperloop or whatever you want to call it. It’s like you enter in one place and you merge at another place. It’s like what aviation has become. There’s no wonder of flight.
There’s no wonder of the universe. In fact, the miracle of looking out the window and seeing the world from 30,000 feet amongst the clouds that people dreamed of many, many centuries. No, it’s a tube. You, you, you inject yourself into and you are ejected out of a, at the end of your destination. That is the inevitable future of automobility.
Mm-hmm. micromobility is looking up and micromobility is an exercise in the. Of everything that is seen outside the vehicle, right? And therefore, the journey is everything, the journey and the ambience. And, and you are no, no longer looking through a t TV screen as it was. You know, there was a great, uh, cult book in the 1970s called, um, Zen and the Art of Motorcycle Maintenance.
I know, well, he was called classic. And the author I once, one phrase struck me is like the author who was riding a motorcycle across the United States, said, sitting in a car is looking through the T television, looking at the television screen, whereas riding on a motorcycle is being there. Right? And he observed a very, you know, obvious thing for anyone who does actually attempt this, this, uh, writing through, through, through the countryside, it, it, it, you, you know, it hits you hard and it’s a difficult thing to endure, but then it also en enlightens you in ways that you can’t imagine.
In, in, in that sense. Then the dual, the, the, the distinction, the, the dichotomy between micromobility and automobility is that it, it one will eventually progress to this idea of, of the journey is to be avoided. The other one progresses towards the idea that the journey is, is to be enjoyed. But as a result, you know, you, you also, if it’s in an urban environment, you want to make the, the city itself better in order for that per journey to be more interesting.
And as a result, it, you know, the design, you know, if you are a designer, I put it to you this way, when you’re designing an automobile, it will become a question of designing a living space. Mm-hmm. Or, or again, uh, um, a cocoon. But to design an auto, uh, uh, a micromobility vehicle. Is to design everything that’s on the street, right?
And, and it’s no longer vehicular exercise. It’s a, it’s a community building exercise. And I find that absolutely fascinating because again, most people who are designers will say, well, I’m just gonna stick to my, my brief, I’ll, I’ll solve the problem here. What’s my design surface? I do, I have a big screen to work with, a small screen to work with.
Um, well, in, in case of auto mobility, you have no screen to work with. You might see it through a, a pair of augmented reality glasses, which I think will come and will be very attractive for mi uh, auto, uh, for micromobility. It will be completely useless for automobility. By the way, this is another paradox.
Um, but the idea of micromobility is that it actually, because it’s a heads up experience. So just to summarize, automobiles, heads down, micromobility heads up, right?
[00:50:10] Drew: Looking down versus looking up. Like this is, maybe we should say, looking out, Joe, let’s just kind of co-opt it and turn it into looking. There’s a, there’s a term look, looking, looking down versus looking out. I mean, the implications not just for how you design a vehicle, but how you think about a vehicle’s place within the world.
A really profound, how, how do you respond to this? As somebody who’s working at kind of the coal face of design strategy in the automotive industry, what, what does this distinction between looking down and looking up and out bring for you?
[00:50:53] Joe: I mean, there are so many places you can go with this, but hos talked about some really interesting things that cut a bit, almost too close to the bone.
He said, you know, The, you know, as a kind of vehicle designer, he said something like, you know, I’m gonna stick to my brief. And I’m like, okay, well I’m kind of trying to design this room and I’m kind of trying to design a cocoon. And I think when you start to unfurl this, you quickly get into a space of, ah-huh.
Yeah. This is why every car designer you speak to is obsessed with the idea of the Lounge on wheels. Um, this is why screens are getting bigger and bigger because there’s nothing else left to kind of innovate in or do differently other than the screen. This is why Google and Apple and everybody want to be in the car space, because it’s about making people look down, you know, forget about the troubles of the outside world and just look at our screen so we can sell you stuff, or more cat videos or, you whatever.
And for anybody who has or does ride a bike or even ride on a scooter or. In something that is kind of semi open, you understand how radically different your experience of the environment is. The same environment moving through that space on a bike compared to a car. What you smell, what you can hear, how vulnerable you feel, what you see, and notice the way that weather affects you and your mood.
How topography, you know, I, I for a long time have in cities first driven somewhere and then ended up going, no, I’m gonna like bike it now. And then been like, oh, this is a hill. I didn’t even clock that this was a hill and now I’m having to work really hard. You know, just sort of basic stuff like that.
You don’t even realize in a car when you’re changing topographical levels unless it’s a really obviously steep hill. And so to me, I think it’s fascinating to think of a future context where the brilliant minds I know that are roto designers, because one thing I, I, I don’t think horror challenges and I would definitely sort of support is most hard designers I know aren’t in it to make the world worse.
And they’re all smart people and they’re all trying to problem solve and fundamentally make the world a better place. Even if their idea of that is because they wanna make more beautiful objects that sit in it. But if you could apply that knowledge, intelligence, creativity, skill to designing a urban experience, which was about community and heads up and what was going on, I think this is a grandiose statement, but you are starting to solve some of the problems that are deeply affecting our society.
Or you’re starting to try to solve the problems that are deeply affecting our society. Well, you, you about
[00:53:57] Drew: you, you know, you’re definitely not. Starting from a position of making them worse, whether unintentionally, or, or, or, or, or otherwise.
[00:54:05] Joe: Yeah. So I found that that idea of, you know, looking down versus looking up or looking out actually quite profound.
And I think one of the things that was most profound about it was the idea that in the micromobility context, sort of, you know, kind of said and unsaid in what HARs said is you are not just designing in the bounds of a screen and increasingly when it comes to a car, it’s about the bounds of that screen and what that can do for you and how it connects you into another place and almost teleports you to kind of ignore the journey.
And I think it raises an existential question for the automotive industry. Do you want to become rendered as the Boeing or the Airbus of the future where I can’t remember whether the last plane I went on was a Boeing or an Airbus, and I’m a plane geek. So, right. You know, go figure or do you want to use and harness that skill and creativity to really solve problems?
[00:55:05] Drew: Well, you, you tap into something really interesting there, because of course we, you know, if you and I are familiar with it, the listeners may not be, but again, it’s something that we can post a link to in, in, in the show notes. Sergio, Sergio Marcionne’s white paper, right? Where he says that the fact that the automotive industry continues to invest untold billions in capital in trying to differentiate drive trains.
And we’re seeing this actually kind of encroach into the EV era as well. So it’s obvious that people haven’t really taken on birds board what Sergio was saying. But, you know, investing huge amounts of money and trying to differentiate on, on, on drivetrain when actually the only. That will ultimately matter to consumers is the experience that they have with the vehicle.
And what we are talking about here is an opportunity to dramatically expand the scope of that experience in ways that, for us as designers, should be utterly delightful to engage with. Be because it means we can move beyond kind of four wheels and a side profile. It, it, it, it means that we start to engage with the world as it really is, rather than trying to project some kind of fantasy vision upon it.
Because the reality is that, that that fantasy has been dead and gone for, for quite some time.
[00:56:36] Joe: And that’s really important because what we are effectively doing in the automotive industry now, we’re still selling fantasies. To a degree. We’re selling escapism, we’re selling protectionism. We’re selling almost like a a, a kind of a modern version of the American dream of a kind of lifestyle that you more often want to project through the vehicle than actually have or do.
And that’s what we’re very good at. But I think it’s really important, something you just said, which sort of struck me, Horace mentions in this interview something called the entrance guide to the automobile Industry. And I actually had a look at it and what struck me relative to what we’ve just been talking about is sort of is it calls like a 10 commandments and number eight is, for most motorists, congestion is a bigger problem than any deficiency in the vehicle.
So back to the context of better cars, we think people want better cars. They don’t, you know, being stuck in traffic or not being able to park is much bigger than any issue you might have with the vehicle you have bought. You know, however, sort of bigger feels
[00:57:43] Drew: a hundred percent. A hundred percent. And to, to kind of make this concrete, there’s an example that I, I love to, to kind of come back to, which shows I think the lack of contextual awareness that is required to imagine this new future.
But it’s the lack of contextual awareness, which can exist within OEMs at this point, as we are trying to work out what this future could be. Renault produced a series of easy concepts a few years back. Yes. Now I think the first one I saw was the EZ. You’re gonna have to help me out. It was the kind of the bus type thing that was Ava.
EZ-Go,EZ-Go. Yeah. So the EZ-Go right now, the easy go proposed an autonomous kind of shared solution, like a very, very small bus. So you would be traveling with other people whom you did not know in a vehicle that had the footprint of, of a large car. Now, what was fascinating about how this product was designed was that if anybody was going to roll into it with a wheelchair, they would be blocking access for anybody else trying to get in or out.
Number one. Number two, beyond the the nearest suggestion of how this vehicle would pull up to the curb that was built into the show stand in Geneva, there was no other. Presentation about how this vehicle was going to operate within an already built urban environment. There was no conversation about the infrastructure that would be required to make it work or who would be building that infrastructure even.
And I think this is where we start to get into, you know, it’s like a cross-disciplinary designer’s dream, because in order to make that kind of product work, it can’t be designed in isolation from. I mean, what already exists, right?
[01:00:01] Joe: Drew? This is a little bit of an issue close to my heart because some of the listeners will know, but most don’t. This is how I came to be where I was. I originally trained as an architect. I started to work in urban regeneration and planning. Got to the point where I was like, aha. So all this is just like what? We’re just gonna design cars. And I was like, but how are we actually gonna move people around? And then you’d speak to the transport planners and they’d have these neat little models of like, and the bus comes here and then all these people get out, and then it goes away and all the cars are over here.
And I’m like, yeah, but what are all the cars over here doing? And, and, and what, what about what happens when people just drive around trying to look for that parking? And they were, they’re like the perfect models. Don’t say that will happen. So I just kind of went with this, uh, proposal to the Royal College of Art going, I wanna look at what happens to the future of cars in urban environments and what kind of, you know, mobility we could have.
And they were like, oh, why don’t you come and do an an m fill in that or a PhD. And I was like, and then I’ve found myself arguably being part of the problem working in the industry, but through a very, as you know, are very circuitous and kind of interesting path, but this intersection where no, everyone designs in this vacuum.
The city planners don’t really understand how people use cars or want mobility and they just kind of design in this sort of box. And the, obviously most people designing a vehicle, designing in a box with no thought to what goes on beyond it. It’s, as you say, the future is almost about how do we, how do we work in this kind of cross-disciplinary way?
And I think some cities are really taking the lead here.
[01:01:37] Drew: Well, and, and, and this cuz I’m not done with the Renault EZ series yet because it, it brings me back to the second easy, which was the EZ-Ultimo, right. Which was Renault’s take on the Lounge on Wheels.
[01:01:53] Joe: Right. I know where you’re going with this.
[01:01:55] Drew: Yeah, good.
You know, kind of this hyper luxurious smoking room. You know, that, that’s kind of how I remember it in my head.
[01:02:04] Joe: It was six over six meters long and just over a meter high.
[01:02:08] Drew: Right. So just imagine that in your heads. People like six meters long and about a meter high. Beautiful design. Absolutely beautiful sort of aesthetically with this tessellated glass exterior.
And I remember standing in the crowd watching the design chief of Reno, who I believe at the time was Lauren Van den Acker. Still is watching, trying to both talk to the television crew as he backed himself into the waiting lounge chair in the back of the easy Ultimo and whacking his head, stumbling sideways and almost falling flat on his ass.
Because here’s the thing, the proportion of a living room, the proportion of a lounge is not six meters long and one meter high. You know, lounges are tall. They are fundamentally an unsexy shape when it comes to automotive design, and it just smacked again of this almost ignorance of the reality of the future that we want to design.
So it should be pretty clear by now that a future in which micromobility plays a much larger role in how we get around is going to look pretty different. And for all of us working in the automotive design space, it asks some pretty fundamental questions about the role we play, the skills we need, and the ways in which we need to break out of the studio and engage much more deeply with the rhythms and flows of our cities and communities.
But what about all that infrastructure we’ve already built just for the car? Surely that’s gonna keep us investing in the way things have been. And surely there’s a whole heap of value to be derived for automotive OEMs from the ex-urban trips that are particularly unsuited to micromobility. Well, by now, it shouldn’t surprise you to learn that Horas has views on these critical topics too.
You’ve, you’ve kind of already touched on it a, a couple of times in the, in the conversation there was first, the first, there was sort of this idea of, you know, micromobility is sort of the negative space.
It’s the space that isn’t kind of currently legislated. Right. You also in, in this idea of kind of looking in versus looking out or looking down versus looking up that it, it actually becomes about the space around the vehicle just as much as it is about kind of the, the, the fit between the rider and the vehicle itself, that that becomes a design consideration.
One of the big themes for this season of the next billion cars is kind of about, well, it’s around the systems level changes required to, to kind of enable new technologies to take hold beyond sort of this philosophical shift around design and, and perhaps the, the legislative environment. What else needs to change in order for micromobility to, to, to, to thrive and, and well survive and, and thrive and it’s gonna survive.
[01:05:33] Horace: I think, yeah, the trillion dollar question is one of infrastructures, right? Which is why I also spend so much time thinking about infrastructures. Even in the early days, I, I, I came across a book, which was very instrumental to my thinking was, it’s called, it’s Out of Print now, but it’s, it’s, um, by a gentleman named, uh, he’s a professor I think at Yale called, um, Arnold Gruber.
He, he wrote a book called The Rise and Fall of Infrastructures. He, he was, uh, I think it was written in the early nineties. Um, and the, the book, you know, uses the S-curve, uh, mathematical model to show the rise. Of infrastructures, but also the fact that they fall in a similar way had to be replaced by something else.
And that historically we’ve had multiple transportation infrastructures, uh, starting with, uh, well, ancient roads, then became canals, then came, um, railroads, then came more modern roads and pa in parallel. We’ve also had a network of, of, uh, harbors and, and ports. And so, so there’s a, there’s, if you look at the global questions related to mobility, The vehicle is interesting, but it actually is entirely dependent on these very, very grand, uh, projects that need to be, uh, implemented with, with, uh, uh, effectively with the government and even international cooperation.
Christensen Logic also shows that the vehicle comes first. It induces demand for infrastructure. The infrastructure is built, which causes the vehicle in a sort of feedback loop to get stronger. Mm-hmm. And, and so iterating and in the, in, you know, so it’s not a single, uh, A implies B, it’s sort of A implies.
B implies A, and so it, it, it, it continues to, to, to evolve. And that’s why it’s, it’s strengthened by this, you know, by this, um, uh, synergy, this, this, uh, symbiosis. But it, it, it also is broken at some point through the introduction of an alternative. And this is why it’s, it’s very difficult for us. Uh, you know, fish in a sea to imagine, uh, an an environment without water.
Um, and, but indeed, you know, and this is one of the questions of the book, is like, what is the periodicity? In other words, how fast do these things change? How long do they last? Um, does the socioeconomic order determine anything about them? So is it important that you have, you know, free market economics or does it, does it not?
Um, so there’s a lot of these profound questions related to infrastructures I, I find very interesting because, um, it, it, it, it, it gives one hope that the fact that there is a periodicity, that there is a cyclicality where, and that infrastructures do, um, uh, fall as well as that, that cadence is there historically. And so that gives one hope that it’s possible to, to rebuild the world according to micromobility as opposed to automobility. And that means that roads and infrastructure so have been, you know, in European terms, we, we’ve seen the, the car enter into a, a non-automotive, um, Emilio and environment and, and be absorbed in some way, you know?
Right. Uh, give or take. But, and, and, and so there, there’s, there’s potential for that to be undone. Um, and, and that’s summarized to me in a sort of a more profound business logic, um, business, uh, term I should say, which is the, the notion of sunk cost. Right. And a sunk cost is when you, you realize that. All that effort you put in, all that money you put in, um, to something that is no longer, uh, viable in the future, you should ignore that, that cost, it shouldn’t weigh on your decision making.
In other words, we’ve spent 50, let’s say 50 trillion on building an automotive infrastructure. And somebody comes along and says, Hey, I have something better that doesn’t need any of that. You shouldn’t go around saying, yeah, but we’ve spent 50 trillion we shouldn’t give up on, on, on that old infrastructure.
When our, my argument is that is a sun cost by definition, you should indeed ignore it because what’s coming next is much better and you’re holding yourself back by sticking with the old. Um, and the only difference between sort of like everybody agreeing and disagreeing or disagreeing with this is that, is that maybe not everyone agrees that the next thing is better.
But as soon as you have a plurality, a plurality, if not a majority of people who say, oh, the next thing is better, then the old will just, nobody will really care as like, we don’t fight today over the need to preserve canals or railway lines, or, or, or, you know, maybe some people do for nostalgic reasons, for, for, you know, for efficiency reasons.
But mostly the world’s moved on beyond the 19th and, and even 18th centuries. And as far as infrastructures are concerned, I mean, do we still care for sailing boats? Um, um, only for recreational use. We, we know, um, though they are wonderful, but, but this is the, this is the essence of the matter. So my, my appeal is, is to people to understand that what, what is possible today with micromobility is indeed so much better, so much more, um, powerful for, for everyone.
That we should actually say that. Yeah, let’s ignore all that sun cost, all that, uh, infrastructure we built for automobility, because that’s holding us back right now. And, and that’s one of the most difficult things to argue with, uh, people who say, uh, we, we can’t give up the old, uh, they, they’re just so attached to it emotionally, but not, I think logical.
[01:11:39] Drew: You talk about, uh, micromobility primarily, uh, in terms of its impact on urban environments, right? How do we address kind of the, the interurban movement of, of people and stuff?
[01:11:52] Horace: There are the, the current kind of armored vehicles that we use, that we consider as cars, uh, which are armored because they need to withstand the collisions, right?
And they need to withstand collisions because they’re tended, they tend to go fast or they’re allowed to go fast. Um, so this sort of, uh, the, the armored concept of, of, of, of mobility may still have purpose into, you know, in, in, in, in these longer journeys. And I do segment by trip distance, meaning that I think about what’s suitable at short distances should be different than what’s suitable at long distances.
And that we should have multiple vehicles for multiple distance types, not just like we have multiple sizes of computers, right? So we have wearable computers and we have pocket computers, and we have, um, uh, computers in our bags, and then we have computers, uh, that are not movable at all. Um, and, and so we, we’ve got gotten accustomed to not, you know, and, uh, and I remember early days, people who had powerful desktop computers said, there’s no way a laptop could replace what I, what I use, right?
Um, and then the laptop user said, there’s no way a handheld device can replace what I use. So now we’re at that point where, but we, we have multiple, so I’m speaking to you now on a, on a, on a laptop computer, which suits me very well, but I also have happen to have a phone in the watch. Um, so I think the future is going to be segmented where for long distances there’ll be large vehicles and for short distances there will be small vehicles and, um, and, and so the vast majority of trips are short and therefore we just reach for the, for the convenient product that fits the short trip.
Of course, you can use the large one. I could be carrying my laptop around and making all my phone calls with it and all my social media and all my photographs with it. I just, I think that’s a bad idea, right? And everyone agrees, but we don’t yet agree that it’s a bad idea to drive a very large vehicle with a lot of armor plate with a lot.
Range and capacity and power for short trips. We somehow are accustomed to this notion. So my, my that, that’s a long answer. The short answer is there will be a spectrum of vehicles available and will hire the right one for the right job. I do believe, like, you know, uh, urban environments will, will be just like we have tractors and we have trucks and farm vehicles used on farms, and that’s perfectly normal.
We don’t, we don’t object to the fact that sometimes a combined harvester is blocking the road in front of us because we understand that the farmer needs to move it from field to field. Um, but we are facing a future where every urban driver is going to drive a combined harvester, right? And that, that’s just absurd.
So my, my, my, um, my argument is, is suddenly when I presented to auto executives, I said, look at the market for distances. Look at the market for trips. If you do, you’ll see there’s short, medium, along possibly more defined, more, more, uh, refined than that. But understand that what is small is more than half of the distance traveled.
And as a result, you will have your cars, but they’ll probably be half as many needed as there are today. Right. And you will probably also be hired for jobs and journeys, which are the least valuable journeys that people make. Meaning that the dollar per kilometer in the urban area is far more like, you know, a taxi ride in the city is very expensive because at the end of it, you are more likely to make some money.
You know, there’s dollars at the end of the journey. And so my argument to the automotive industry is that you are basically going to be an ex-urban, rural product for people who don’t make very much money. And if so, you should adjust your thinking
[01:15:57] Drew: So, you know, Horace is very clear. You know, the industry needs to adjust its thinking, but adjust its thinking. From what? Like how, how, from your perspective does the industry currently think about the value that it derives from a vehicle and how might that change?
[01:16:19] Joe: This one really stopped me in my tracks because I think about this question of value a lot, but I hadn’t thought about it in this way.
But let’s look at this in really simple brass tax terms right now, if you are an OEM and you make a car that you sell for, or that’s not complicated, but you sell it to an NSO or a dealer or whatever, for 50,000 euros sake of argument, you’ll be doing quite well to make kind of 10% gross margin on that.
[01:16:55] Drew: So that’s 5,000 euros. You’re making 5,000 euros on a 50 K car.
[01:17:00] Joe: Let’s be generous and say you’re making 20%. Alright? You’re making, you’re making 10,000 euros, which I, no one, no one is making 20%, you know? Right. So even if you are making 20%, you’re making 10,000 euros on that. That’s broadly all you’re gonna make on that car.
Yes. You might make a bit on the profit of selling parts throughout the life. You have a kind of parts business and yeah, you’re gonna make a bit on the finance probably of, you know, the kind of, the sort of your finance arm and selling finance. But let’s say for the sake of argument, because you know, no one is making 20%, let’s say you’re making 10,000 euros and that car, let’s say it lasts 15 years.
So you’ve invested all this money and effort and materials and people hours and you’ve got 10,000 euros out of it. Ho’s argument is quite stark because ho’s argument to me says, alright, let’s say that in its lifetime that car can drive 200,000 kilometers. That’s the life, average life of the car. If you can monetize those kilometers rather than just the car at point of sale into the market, and let’s say conservatively you can monetize each kilometer for a Euro and being very conservative, you are gonna make 200,000 Euros.
Over the lifetime of that vehicle, and let’s knock off the theoretical 50,000 you’ve put in to actually build the car in the first place, which you don’t, because obviously there’s the profit in that and the cost of building it is different, but you’ve made as the producer or you know of that car as a sort of service of miles, 150,000 euros over its lifetime versus the 10,000 euros you’ve made from it in the current system.
Now, that is a pretty stark way of thinking about it, but the industry is stuck in model A and it doesn’t believe, I don’t think that it can move to point B. And I think what you can see with a lot of entrant like Uber, and what I imagine people like Apple are trying to do, is to work out how to make model B work.
[01:19:43] Drew: I would contend that Horus goes a little bit further than that to say that actually the highest value miles that people travel, not drive, but travel, are actually within the urban centers of the world. Right. And if we start to consider for a fact that we’ve passed 50% of the world’s population living in urban centers already, we’re on track by some estimates to hit a third by some estimates, to hit three quarters of the world’s population living in urban centers.
By the end of the century, the highest value kilometers or miles that anybody travels will be within those urban centers, right? Urban centers that if we take the European. Example are becoming increasingly hostile to cars. To cars. If we take the Chinese example, have no way in hell of accommodating a fully car’d up society and they’re already, this simply isn’t space.
[01:20:56] Joe: And they’re already restraining it. You know, how much does getting a plate cost? If you need a plate for a new vehicle in Shanghai, it’s right. You know, go and look it up. It’s scary. It’s, it’s, this is why the ev thing is happening there because green plates are, you know, sort of at the moment, you know, a lot cheaper, right?
But it’s not gonna last very long.
[01:21:22] Drew: A and because again, you’ll ultimately just get to a density where cars are, are, are, are fundamentally snarling up the cities and, and, and livability and, and, and mobility actually goes down rather than goes up. And so what hos is saying that, If you want to continue to recoup or if you want to be in a position in which you can recoup a buck or two bucks per mile traveled, then the current product with which you are hoping to do that, Mr.Car Maker or Mrs. Car Maker is probably not the car.
[01:22:03] Joe: I think it, this ties into so many of the other arguments that Horas has made through this conversation. The notion of sunk cost. The idea of, you know, what comes with being an auto maker and an auto making nation and, you know, this sort of the infrastructure that vehicles drive on.
And then the, you know, the sort of the ultimate fragility and, and what you’re talking about with cities becoming more hostile to the car is the sort of start of what we can see of the, you know, the fragility. Of this kind of ecosystem of supporting car. And I think, you know, I can imagine quite a lot of people, myself included, would count this argument by saying, the thing is people are really prepared to pay through the nos for the idea of convenience.
So what this argument isn’t considering is the convenience that the car has brought. We are kind of happy to have allowed this batshit situation where, you know, you spend a shit ton of money to get only maybe half an hour and hours with a value a day that is exclusive to you from your car. But what cities are doing, the way the world is evolving, is suggesting that that convenience is being eroded because it will be more difficult, more expensive, less nice.
To use Keep Park, own a car in an urban environment. And I, I really hope that the automakers of the world are really trying to look at and understand how they might solve this problem. Because I think there’s a very big tendency just be like, oh, well there isn’t an answer. We’re all doomed. It’s either our model or, or none. And I think what’s really interesting about this whole conversation with Hara is that he’s trying, I feel in a kind of sometimes quite gentle way to hold up, guys.
There’s a massive opportunity over here and you just need to change your perspective on it and just step back from the system that you’ve got, which you’re just cranking the handle on and say, okay, but. What problems do we need to solve and how do we actually make a book or have a sustainable business model, which might come from that alternative model and solving those problems.
[01:24:38] Drew: And, and, and here’s the thing, like I’m, you know, I’m, I’m very pro this idea, but I, I, I don’t imagine for a second that it’s gonna happen overnight. No, of course it’s not. You know, we have, we have the whole of the 20th century pretty much in terms of having developed a cultural affinity for the car and the convenience that it offers.
But, you know, I was in Texas recently, I was in Austin for South by Southwest. And on, on the one hand I saw the massive, like, quite literally massive challenges that. That market faces in terms of working towards right size vehicles. You know, you’ve seen the photo Joe of me parking my feet at 500 e next to a lift lifted Chevy SIL Silverado.
I mean the, the Chevy could have swallowed the 500 e hole. It was absolutely absurd. I’ve, I also witnessed while I was there, at least three accidents where vehicles of that type had run into people on ESCOs. Right. Really? And you know, oh God, yeah. Emergency services at the street, you know, at the curbside, like trying to revive people.
It was absolutely horrific. And yet, and yet, you know, we’re seeing communities like cul-de-sac being developed in North America, which is, you know, a, a car-free urban environment. We’re seeing communities like the joinery in Charlotte, in North Carolina starting to be developed. You know, it’s an 83 unit parking free residential environment.
It we’re seeing California repeal kind of mandatory parking minimums around new developments. So even in that country that gave birth to the idea of CAR as freedom, we’re starting to see that shift. And as you say, the opportunity here is huge. Like it’s absolutely massive, but it demands a fundamental shift in the way we who are in or associated with.
The automotive industry. Think about what personal mobility is and, and can be and should be.
[01:26:51] Joe: And you know, I, I think you made a really interesting, I, my last point on this would be you, you made a really interesting point about, about speed, and I think people listening to this, probably like me working in the auto industry, I don’t think we need to be fearful that our jobs are gonna disappear overnight.
Um, evolution in this ho kind of remarks. It, it’s kind of, it’s slow at the same time. I’m also thinking, and as I listened to Horus sort of thinking Yeah. You know, I met a guy called Dan Sturgess for the first time, nearly 20 years ago. Dan has broadly been saying what Horas is saying for quite a long time, and Dan was the kind of, is the godfather of the kind of, what was the gem?
N e v, it’s like the kind of golf scout cart scooter and, and kind of, you know, I first met him riding a segue and Dan’s ideas seemed so out there and wild, and I think a lot of people thought he was a crank, you know, 20 years ago. And yet the ideas and everything he’s saying about right-sizing vehicles and you know, sort of, you know, what you need to kind of travel two kilometers down the road is basically what Horas is saying.
And it’s starting to happen. And we’re, as you’ve just pointed out, we’re seeing it, starting to see it in the US and as regulation based around things like climate. Come to bear. And as we have, I think even, you know, hate to mention it, but AI plays a role here. I think we see acceleration of some of these things and I think, you know, to people listening, I would be like, I’m really curious as to how do we treat that as an opportunity rather than a threat.
Let’s think about this as opportunity rather than a threat. This is an and situation for now. Not an awe, you know, we’re not saying cars are dead and useless overnight.
[01:28:45] Drew: Yeah, yeah, yeah, yeah. Well, on that note, why don’t we hand it back to, to Horrace to wrap up.
Right, right. Um, wow, that, um, that was just superb. I, I can’t thank you enough.
It, it’s, it’s just been the most incredible delight to, to, to have this conversation with you today. Oh, please,
[01:29:16] Horace: come on. I, I, I have no, it’s, no, no objection to anyone speaking about this. I’m, I’m perfectly comfortable with everyone. Uh, but, and by the way, I mean, it, it might seem paradoxical that I am a car enthusiast in a way, but I’m, and the same way, like my wife is a horse enthusiast, right.
I mean, I, I, I, I, I love the things, but they’re, they’re, to me, a passion almost. Painful because it, it’s kind of, of a, of a bygone era. Well,
[01:29:49] Drew: and I, I, I wanted to give you a reflection on that because when I was 12 years old, um, I begged my father, we, so I come from Australia. We were on a trip in, in Germany, and I begged my father to take me to Mercedes, uh, Sindelfingen plant.
And there I saw the W one 40 series Mercedes S class being built. And it changed me, uh, you know, I became an industrial designer. Off the back of that, I became a car designer. I actually own a W one 40 now for my sins. Wanna Oh, you do. My god. You, it’s, well, you, and it’s a v12. You want, you wanna talk about difficult cars?
[01:30:20] Horace: Well, okay, wait a minute. Look, there’s a CN thing and means something to me as well. Oh, um, well, come on. Um, it’s formative as well. My life began because I was born in Romania, but I, I, my family immigrated, uh, to, to when I was only nine years old. And I had not even been in a car when I was nine years old.
Right. I had, I grew up, we grew up in Romania without an auto automobiles. The only ones that were available were these copies of a, of a Dacia were copies of a Renault. Right. But even they were out of reach for us. And the first ride I had was in the Mercedes in Germany. And, um, it, it would’ve been an equivalent of an S class, but it was a 1970s.
And, um, and then my, the first car I ever bought with my own money, uh, was a Mercedes 190 E.
[01:31:11] Drew: result, I’ve owned one of those two.
[01:31:14] Horace: I still have it. I still have it. It’s a 1992. Yep. And, um, I’m never gonna sell it. And it, um, it’s in storage and, um, and, and I’ve owned many Mercedes since. And so when I picked up the one 90, I actually had the European delivery.
And, uh, this was an option available back then, right? Where you flew to Europe and then you went to the factory, and of course it was, you went ton,
[01:31:43] Drew: you went to Sindelfingen.
[01:31:44] Horace: Yep. And the, the horror of it though was that it was a holiday when I arrived, and then the, the plant was not open. Oh, no. But, um, I, I, I got the pick.I picked it up at the factory. They, they, you know, me and my parents actually, we, all of us together flew out there and I drove it all around Europe and had it shipped back to the United States where it still resides today, but I’m thinking to bring it back to Europe. Um, I’ve done them with more than one car.
Um, and, and, and so I don’t get rid of cars. I keep them forever, which is one of the reasons I ended up accumulating so many. But, um, yeah, and, and, and, and so I, yeah, I mean, it is a long story and I can explain myself, I think. But my son, weirdly, who’s now 17, He’s obsessed with cars too, right? And, um, more so than I was because I didn’t follow career in automotive.
I followed it in en engineering and electrical engineering. But, um, but I went back to it later in life when I thought, Hey, this is kind of fun. Like, I would watch with my son programs like wheeler dealers or top gear and, and, and he was so excited about this industry. I, I, I began to be more and.
Encouraging him because, you know, I, I, it was his passion. So part of it actually had to do with my son really becoming, uh, a car enthusiast at an early age that I encouraged him and, and, um, and so he’s the one who became obsessed about Saabs. And so we ended up, um, doing restorations in a few. And then, um, um, you know, I, I transitioned, I went to electric as well, but I said, you know, I built my own mostly because at the time when it, it was 2014 15 when I was curious about the future of the auto industry, I said, I found out that you can, you can actually convert old cars, right?
And I said, well, how hard is it making an electric car? My assumption was that it’s not as hard as making an internal combustion car, because I know how hard that. Right. Um, and you don’t have to deal with so many of these, um, issues with, with the transmissions and, and, and, you know, uh, oil and pressures and, and heat and vibrations and all these other problems, which I knew cause uh, engineers a huge headache.
And so that’s why I went through this process of building my own to, to I guess really understand, of course, as, as an amateur would. But, but, um, at that moment I also didn’t, you know, one of the thesis was out there that, that Tesla was going to take over the, the industry and, um, you, you know, the theory of disruption suggests otherwise.
So I, I, I wanted to confirm or deny that hypothesis. And, and so that’s another long story. And I’ve, I’ve been, I’ve been very much. In the wilderness on that thesis of Tesla not being Yeah. Uh, um, you know, um, the revolutionary company that everyone claims. Um, and I have yet to change my mind. So anyway,
[01:34:43] Drew: cause nobody, nobody wants to admit it.
But ultimately at the end of the day, it’s a relatively trivial, it’s a relatively trivial shift. Um,
[01:34:53] Horace: it is in the way the word we use is sustaining because the idea is that you are making a better car, right? And yet it’s, it’s worse on one dimension, it’s the range. Right? But that’s getting better and it’s, it’s adequate.
The, the, the problem is that I, I don’t see any automaker looking at an electric car and then saying, do you know, this takes less people to. It takes less parts to make. It’s got fewer, you know, complexity. It’s much better performance. We can hard charge more money. Yes. It’s harder to source some of the parts.
Right? But we can get over that cuz we’re all about supply chain anyway. Right. So I don’t see any automaker looking at electric drive and a, apart from, again, the supply question, looking at it and say, I better run the hell up the opposite way and never ever touch this technology again. Yeah. Because that’s, it’s, it, it, it makes a better car and that, that’s why I found it difficult, the, to suggest that, you know, the incumbents would not respond to Tesla in, in, in, uh, in kind.
Um, of course they did. And, and that, that, that’s, yes. It’s, it’s taking long and this is why everybody who’s in tech is so impatient. It’s like, well obviously he, you know, they won five years. It’s been five years, it’s over. Well, I also know that the auto industry moves much more slowly. Sure. And there’s, there’s an, the incumbents are having a lot of patience and have a lot of sales that can sustain them long term.
[01:36:22] Drew: thank you so, so much. I mean, this was just a delight.
[01:36:33] Joe: Once upon a time, the car was a byword for personal freedom. It liberated millions of people to pursue both economic opportunities and good times with their friends and families. In fact, it is one of the most significant cultural objects that humans have ever produced. And in wealthy countries, we’ve built our way of life and our cities around cars.
But that freedom has come with enormous financial. Social and environmental costs, ones that a growing number of people are unwilling or unable to pay. What micromobility officers is not a panacea. It won’t replace the car overnight, nor will it replace it entirely, but there’s a really compelling case for human scaled and humane vehicles to play a much greater role in helping us move around cities.
The opportunity, as we’ve discussed at length here is huge. Billions of customers currently don’t have mobility mobilized trillions of kilometers, decarbonized, and a potential path to a more equitable and sustainable future. For us in the automotive industry. Well, we’d be mad if we didn’t take it seriously.
Looking out, the podcast was written and presented by Joe Simpson and Drew Smith with Sound and Production by Chris Frith. If you like this show, hit the subscribe button and if you know someone who might like it too, please share it with them. Four more about the topics in our show. Visit our website lookingout.io where you can sign up for the Looking Out newsletter.
This is Joe Simpson and thank you for listening.
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