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Telecoms versus carmakers in race to get connected – Financial Times

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A fierce debate has gripped Europe’s automobile industry that will shape the future of all cars sold across the region: how to get internet-connected vehicles to “talk” to each other while travelling on the road.

It centres on two competing technologies that has broadly split the continent’s carmakers and telecoms providers into rival camps — and has even pitted two branches of the European Commission against each other.

“This could descend into trench warfare,” says one person familiar with the situation, which has become increasingly heated in recent months.

Carmakers largely favour a short range technology using a dedicated band of spectrum or radio frequencies for car-to-car communication. This vehicle-to-vehicle system, or V2V, will be ready for operation once network equipment is built, which could be carried out relatively quickly.

This layer of technology would allow cars to drive much closer together on the roads, synchronising braking to avoid accidents.

The telecoms companies, in contrast, are backing an open, long-range cellular system, which allows cars to share the airwaves with mobile phone signals. This will take longer to develop than V2V as it will have to wait for 5G, the next generation of mobile technology that is not expected to be rolled out globally until 2020.

“It is like the race between VHS and Betamax,” says another person involved in the negotiations, referring to the battle over video technologies in the 1980s, which was eventually won by VHS as it established itself as the standard system for recording and broadcasting films and television series.

The dangers of a protracted battle over the type of technology that should be used for connecting cars risks slowing the development of autonomous vehicles.

The European Commission is due to announce its formal decision on the type of technology it favours next year with some big groups in the car and telecoms industry, such as Vodafone and BMW, backing a “technology neutral” position that would allow the development of both systems.

However, this has not stopped the car and telecoms groups arguing over their favoured systems.

Tens of millions of euros, including public money, has already been spent developing the short-range WiFi based technology V2V, especially in the US where it has been widely tested.

Several carmakers, including Renault, Toyota, Hyundai and Volkswagen, as well as some component manufacturers are in favour of using V2V technology that also has the backing of various member states, including France, Sweden and the Netherlands, according to three people familiar with the situation.

Volkswagen, which last year made more cars globally than any other company, has announced it will push ahead with installing the technology in some of its cars from 2019.

Truckmakers are also backing the V2V WiFi option because of the role it plays in “platooning”. This is a partial autonomy system where a convoy of lorries synchronises their braking to travel much closer together, dramatically cutting fuel consumption by reducing air resistance.

Proponents of V2V point to the flaws of the cellular system, which must be connected to a telecoms network, making it unsuitable for actions that require an instant response from a vehicle.

“If you need to brake, you better know it in a millisecond,” says a person familiar with the technology. “You can’t have buffering on a braking system.”

The telecoms industry, however, say that a cellular system is potentially safer, calling it a 1,000m “safety bubble”, referring to its longer range. This, they insist, has big advantages over V2V. 

Proponents of the cellular system also point to the fact that while a shorter range system can detect a car has stopped suddenly in front of it, the longer range system would be able to determine an incident further up the road and react ahead of time. 

Some carmakers including BMW and Daimler-owned Mercedes-Benz stress the already tested V2V can be up and running more quickly than the cellular system.

In contrast, backers of the cellular system say it will provide a much cheaper and more effective way of connecting cars in the future, even if it less developed right now. 

The strongest argument for the cellular system, according to Analysys Mason analyst Tom Rebbeck, is that it can improve the overall transport system using its longer range by managing traffic lights and reducing congestion across a city rather than just be used for individual vehicles. 

In essence, with the cellular system, chips can be installed in road networks and traffic lights, so that cars can communicate with the world around them at much greater distances. This allows them to “see” conditions not visible with traditional cameras or sensors.

The GSMA, the telecoms trade body, said that the chips being developed for driverless cars represent “the gateway for the 5G era” that will move technology forwards from the 4G era that currently connects 23m cars on the road in Europe. 

The GSMA said that a proposal to back V2V would “seriously hinder” the deployment of the more advanced technology and “may lead to a lock-in of an ageing technology that is not future proof and is put in question by major automotive manufacturers”. 

However, some in both camps of the car and telecoms sectors see benefits in a “technology neutral” approach from regulators.

Consequently, telecoms companies including Vodafone and Telefónica have teamed up with car groups including Audi, BMW, Daimler, Ford and Jaguar Land Rover to push for this “technology neutral” approach to connectivity under the 5G Automotive Association chaired by Audi. 

A likely outcome is that all communications systems for connected cars will be interoperable, which would require companies developing 5G-based systems, such as the cellular long range version, to be able to interact with the older V2V technology.

However, this could pile on the costs as the two systems may need to be included in the same car to comply with the law and, according to engineers working on newer systems, slow down projects.

A drawn-out debate in Europe over the issue could also risk pushing the EU behind the US, where money has been pumped into developing V2V, in the setting of a regulation blueprint for connected and autonomous vehicles.

Philip Pfeffer, a partner at law firm Herbert Smith Freehills: “If the US sets the standard, there is a danger that Europe will be stuck with it.”

Waiting for the next generation

One of the main arguments against the European Commission backing the short range V2V system favoured by some carmakers as the standard for connected vehicles is that the continent could be left behind in the future once a more advanced system has been developed. 

In China, the country’s automotive trade body has produced a 450-page “road map” for standards related to all facets of connected car communications technology. This will be proposed in 2018 and will be refined and adopted by all of its carmakers between 2020 and 2025.

In North America, a huge amount of investment has gone into V2V technology over the past 15 years culminating in an enormous trial of “dedicated short-range communications” technology in Ann Arbor, Michigan, involving more than 3,000 vehicles in 2012. 

That trial, designed to give US automakers a lead in the push towards connected cars, was backed by the National Highway Traffic Safety Administration and more than $1bn worth of public and private funds has been poured into developing the system.

The US backed V2V last year when it said the standard could prevent 80 per cent of road accidents involving unimpaired drivers. General Motors this year launched the first V2V-equipped vehicle, the Cadillac CTS. 

But under Donald Trump’s US administration progress has slowed, raising the question over whether the government will push ahead with the programme.

The mandatory use of the older technology has also been questioned in the US as it prepares for the advent of 5G — the next generation in mobile technology. These questions also apply in Europe, which would not want to be stuck with outdated technology in a rapidly advancing world.

Nic Fildes

The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don’t copy articles from and redistribute by email or post to the web.

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