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January 31, 2020 05:34 PM

GM envisions its AV as the next Model T

Hannah Lutz
Automotive News
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    The self-driving electric Cruise Origin sits low to the ground and has wide doors for easy entering and exiting.

    SAN FRANCISCO—What would transportation look like without the Model T?

    Cruise CEO Dan Ammann and his team pondered that question, and they envisioned a service that would get consumers around in a convenient, inexpensive and climate-friendly way.

    The result: "It's self-driven. It's all-electric. It's shared. And it's our answer to the question about what transportation system you'd build if you could start from scratch," said Ammann, former president of General Motors.

    Cruise, GM's self-driving unit, recently disclosed plans for a ride-hailing service and the Cruise Origin, a self-driving, electric shuttle that could help the company leapfrog Uber and Lyft.

    Those ride-hailing giants consistently have lost money, but once they master the puzzle of a network of self-driving vehicles without backup drivers, they say they'll be money makers. With GM as an owner and Honda as a major investor, Cruise could become a legitimate rival to Uber and Lyft in the race to commercialize AV ride-hailing.

    Still, each of the self-driving experimenters faces the same challenge: no federal regulatory framework. There's industrywide consensus that widespread AV use is further away than forecasters once thought because of the lack of regulation, along with technology and cost hurdles.

    Cruise's initial offering against Uber and Lyft would be its third-generation autonomous car.

    The Origin is distinct from the four generations of battery-electric vehicles Cruise built on the Chevrolet Bolt architecture. Those models look like a traditional car, although the fourth generation is missing manual controls, such as pedals and a steering wheel.

    The Origin looks more like a shuttle or bus than a passenger car, with two benches that face each other, no steering wheel, pedals or space for an operator. The doors slide open, rather than hinge outward, and the entry is low to the ground and three times larger than that of an average car to make room for passengers to enter and exit.

    Cruise says there will be no surprises when the vehicle arrives and no delay in ordering a ride. Because they're autonomous, the vehicles run around the clock—with breaks for charging and cleaning—and with a designated fleet, customers know what kind of vehicle they'll get.

    Much as Henry Ford's iconic Model T turned the gasoline-powered automobile into a mass-market product, the Cruise Origin aims to make mobility-as-a-service a compelling consumer option.

    After it launches the ride-hailing service, Cruise also will use the vehicles to deliver cargo.

    "We're going to maximize the utilization of it. We'll use it in every conceivable way we can," Ammann said.

    GM has not said when production will begin. But at least one forecaster expects the Origin to be built at GM's Detroit-Hamtramck Assembly starting in 2022. The plant will also build four other EVs in the next few years.

    Facing the competition

    As Lyft and Uber also venture into the AV world, Cruise's close ties to GM and Honda might give it a leg up. Although GM is a minority shareholder in Lyft, experts say the stake won't prohibit Cruise from starting its own ride-hailing business.

    "The relationships with Honda and with General Motors are key here," said Sam Abuelsamid, analyst at Navigant Research. "They own the company; (Cruise has) that close working relationship already with companies who know how to design, develop and support the vehicles."

    An Uber spokeswoman declined to comment, but in 2018, Uber partnered with Toyota Motor Corp. on a mobility service business and concept vehicle similar to the Origin.

    Lyft did not respond to a request for comment.

    Auto makers have decades of experience developing and improving the safety of their products. A vehicle failure can have dire consequences, which is much different from a mobile app malfunction.

    "You have to have a very different mindset in how you approach the design, the validation of the system, to really demonstrate that this is ready for production," Abuelsamid said.

    When GM acquired Cruise Automation in 2016, the tech company took on that safety mindset. Cruise's vehicles have to meet GM's safety requirements.

    In addition to seat belts, the Origin will have airbags that come down from the ceiling, Abuelsamid said.

    Ammann said that Cruise will own its fleet, but to consumers, it will look just like Uber and Lyft: a ride-hailing service with an app.

    But Mike Ramsey, an analyst at Gartner, doesn't see auto makers being the long-term operators of ride-hailing services. "It doesn't work that way in any industry. No one builds it and operates it. There are too many opposing-force dynamics. Eventually, operators will be separate," Ramsey said.

    Cruise hasn't announced a launch date for the Origin or the ride-hailing service, but if Cruise goes to market before Uber and Lyft's AV models, the buzz likely will create a natural draw to Cruise, said Jessica Caldwell, executive director of insights at Edmunds. But in terms of ride-hailing alone, "Uber is the Xerox of the space," she said.

    So if all three come to the market with an AV solution within a similar time frame, there may not be a clear winner, she said.

    "The hurdle will be proving that this is a safe way to travel," she added.

    Awaiting regulations

    Self-driving technology industrywide continues to advance, even without a federal regulatory framework.

    Most AV companies, along with Cruise, haven't announced launch dates for their self-driving vehicles. They are working on AV technology in the interim to be ready whenever NHTSA outlines the regulation around it.

    Ammann said the Origin needs "super-human" performance, which it hasn't yet achieved. To start, Cruise will test the Origin on private campuses.

    "The regulation issue is a problem for everyone and has to be settled at the federal level," said Ramsey. "The biggest issue is determining who does what. It's hard for states when they don't know what feds are going to do. It's a big barrier."

    In the meantime, it helps companies avoid rushing to market before the technology is ready, he said. Effectively, the regulatory delay "gives them some breathing room," Ramsey said.

    Lower costs

    The Origin's driveline was designed with GM's next-generation EVs, Ammann said.

    "We're really focused on getting the costs down. One of the ways we can do that is by piggybacking on millions of units of GM volume," he said. "By building this in the way we are, it allows us to be at an ultra-low cost where we can deliver them and make money at the same time."

    Cruise has focused on optimizing cost by taking out parts and technology unnecessary for a driverless, point-to-point commuting system. The Origin can reach highway speed, but "it doesn't need to have 150 mph top speed or a 0 to 60 time in three seconds," Ammann said. "We put the money in where it matters for the customer, and we take it out where it doesn't."

    Producing the Origin costs half as much as building a high-end electric SUV, such as the Tesla Model X, Cruise officials said.

    Ammann did not disclose what consumers would pay for the Cruise ride-hailing service, but he said the price point would entice consumers to use

    Cruise over the options they have today.

    "We all know that ride-share today is several dollars a mile. The personal-car ownership is a dollar a mile, depending on where you live.

    Our goal is to deliver something that can beat all of that," he said.

    A low price point and a better customer experience are essential to take Cruise's service to scale, Ammann said. Today's cars sit idle 95 percent of the time and rarely get to 150,000 miles, Ammann said. The Origin will be in motion most of the time and have a life span of more than a million miles, Ammann said.

    "All told, the average San Franciscan household driving themselves or using ride-sharing, will, on average, see up to $5,000 back in their pocket every year," he said. "At the same time, we'll have fewer cars clogging our roads, fewer cars piled up in our parking lots and fewer cars going to the scrap heap."

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