Autonomous driving a “long, long way off”, says Volvo

Volvo’s global chief Jim Rowan is banking on competencies in artificial intelligence and machine learning rather than autonomous vehicle (AV) technologies to drive the value of Volvo as a company.

Contrary to Volkswagen – which hopes to launch a fully autonomous ride-hailing service in Germany by 2025 and make self-driving vehicles available to purchase by 2030, starting with commercials – the Chinese-Swedish car-maker says legislation will continue to prevent the widespread use of fully autonomous (Level 5) vehicles for the foreseeable future.

Speaking during a recent visit to Australia, the Volvo Car CEO categorised true autonomous driving (AD) as a “long, long way off”, even if he believes some jurisdictions may clear the way for modest AD take-up in the medium term.

“This big myth is that there’s five different levels of autonomy, in my opinion. You’ve got two levels of autonomy: one is your hands on the steering wheel and one is your hands off the steering wheel,” the plain-speaking Scot began.

“The technology for full autonomous is there already... [But] Does the regulation allow that?  No. So, I think regulation will be the barrier towards full adoption of full AD.”

Rowan said the use of AVs outside designated sections of highway, which is already happening in some parts of Europe, China and the US, remains many years away.

“Designated routes from the airport to downtown. You’re going to find, probably, that will be the first place that full AD is allowed – almost like a taxi service,” he said.

“You know, you jump in, there’s no driver and off you go, or you can take your hands off yourself and use your own [car’s] AD system.

“But driving inside a city when there’s schools and there’s roadworks and there’s a lot of change every day, I think that’s a long, long way off,” he stated. 

This realistic view of the benefits of AD has changed the value the tech delivers to car companies, says Rowan.

“It’s [AD] no longer driving share value because the markets have realised it and the investors have realised... So, you don’t get a multiple on your stock [price] any longer if you say ‘I’ve got full AD’.

“They’re like ‘Mmm, you might have, but legislation’s not going allow it, so we’re not going to give you a premium on your stock because you’ve got that’,” Rowan commented.

Volvo’s global chief says the software that drives AD and driver aids [ADAS] nonetheless remains a core competence of Volvo – and a competitive advantage.

“We write our own software for the ADAS and the AD stack. We’re in complete control of that. We don’t rely on anybody else. And the way we’re building that software stack is that we can keep developing ADAS, all the way up to full AD.”

Volvo’s self-sufficiency in software development across a range of automotive applications will help drive the company’s value in the future, Rowan stated.

Indeed, he’s passionate that core tech competency and differentiation will be the engine room of car company value moving forward.

When quizzed by carsales on what would drive auto company shareholder value in the decades to come, Rowan was clear.

“It’s going to be differentiation on the tech, for sure,” he stated.

“My firm belief is that the car companies who get this right in the next two or three years, that make the right investments – the right build versus buy investments (because there’s so much new technology getting pulled into this industry simultaneously) – should be[come] some of the biggest [most valuable] technology companies on the planet in the next decade.

“We saw that happen as you ran through the [growth of] Silicon Valley... Some of those companies became some of the biggest and most valuable companies on the planet because they had invested in new technology. The same thing [applies to car companies]...

“It’s going to rely on your competency around machine learning and AI, algorithmic programming and then whatever else is coming next.

“That drives differentiation and allows you to build a war chest of IP that protects you and your differentiation and that you may choose to licence in order to have a revenue stream that helps to build your profit line,” Rowan opined.

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