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Honda had an existing partnership with GM to develop fuel cells. The Detroit automaker has its Chevrolet Bolt EV in showrooms and has developed a battery pack t

Honda had an existing partnership with GM to develop fuel cells. The Detroit automaker has its Chevrolet Bolt EV in showrooms and has developed a battery pack that will be used in 20 new EVs globally by 2023. In June, the companies announced a deal that would have Honda using GM’s cells and battery pack. GM’s battery not only had good range, but by working together the two automakers figured they could lower costs. The thing about companies like Honda and GM -- they have a lot of momentum. That means they aren't likely to be on the forefront of innovation, but when they turn towards a new target, they will hit with massive resources and established global production capacity that a start-up can only dream of.

dsfyu404ed 8y ago
>The thing about companies like Honda and GM -- they have a lot of momentum. That means they aren't likely to be on the forefront of innovation, but when they turn towards a new target, they will hit with massive resources and established global production capacity that a start-up can only dream of. Exactly. It's the difference between a handful of dudes in a speedboat with some explosives and an aircraft carrier. Once the latter is aware of the former you can be reasonably assured who of will win. At most the former can hope to land a good sucker punch before the latter knows they're even fighting. The core competency of GM, Honda, etc. is building cars. Once they decide what kind of cars they want to build they will do a good job building them as they intend to build them. They don't make rookie mistakes, especially in the logistics of spinning up production lines to build what they want to build. They've re-tool their factories every time a new generation or a new model comes out. They know how to do it right the first time, knowledge that comes from experience.
- leesec 8y ago
  They are good at building cars, but I would argue they are not good at building tech. Self driving is a technology issue. If the tech superstars at Waymo/Apple/whoever aren't even close to solving it, why would the software people at GM/Honda be?
  - deleted 8y ago
    [deleted]
  - dsfyu404ed 8y ago
    "Hi, this Jane from the procurement department of GM North America. We might be interested in licensing your software. Please give me a call back so we can set up a meeting." They don't need to build tech. They can buy it. GM can write some pretty big checks. They flat out bought Cruise just to cover their butts. When I was an intern at a defense contractor ~1/10th the size of GM my cube was across from procurement. I think a lot of people here don't understand the kind of scale companies like this play at. Your problem isn't "how do we pay for this" it's "will anyone sell me all this all at once or sign a contract to provide it all over the timetable we want". You make bets on how many times around the earth the welding wire you'll buy next quarter will go. GM shipped ~10 million vehicles in 2017. That means they had to sign a contract with someone to supply approximately an Exxon Valdez worth of motor oil and another of ATF just for their factories.
    - fastball 8y ago
      Isn't that exactly what a deal is? This wouldn't be a loss for Waymo if everyone was licensing their software.
      - deleted 8y ago
        [deleted]
    - xiphias2 8y ago
      Waymo is far the best self driving tech and nobody has the money to buy it, as Alphabet is not selling (it's the first real diversification from ads revenue). GM is few years behind, but hopefully those few years are not enough for Waymo to create a monopoly.
      - jplayer01 8y ago
        GM really isn't far behind.
- fastbeef 8y ago
  >It's the difference between a handful of dudes in a speedboat with some explosives and an aircraft carrier. That’s uh... one helluva metaphor you got there.
  - stevenwoo 8y ago
    It's a somewhat infamous tactic used by a US leader in a war game simulation of war with a hypothetical mid east enemy (Iran of course), he used first a wave of cruise missiles, then a follow up attack of many small boats on suicide runs to overwhelm a carrier force (hypothetically) and won a two week planned exercise in one day, so the folks in charge re-ran the simulation and barred the tactics he used. https://en.wikipedia.org/wiki/Millennium_Challenge_2002 https://en.wikipedia.org/wiki/Millennium_Challenge_2002
    - hef19898 8y ago
      True that, if could with the pants down a carrier is nothing more than a big target. There is alo an example (no source, sorry) of a German sub surfacing next to a US carrier, within the inner defense ring, suring an exercise. But all that only works of the carrier is caught flat footed. To stay in the metaphor, the carrier "automotive industry" is no longer flat footed. Partol aircraft and choppers are deployed and the defenses are up. By the way, I like that image, fits the business world much bettwr than the proverbial tanker vessel for big co.
      - stevenwoo 8y ago
        Sweden produces short range diesel electric subs that were able to sink a US carrier in a similar war game so the US Navy leased one to learn how to adapt to the previously unknown weakness. IIRC China was making these kinds of subs but they have pretty short range, compared to most attack subs. https://www.popularmechanics.com/military/navy-ships/a19784775/gotland-class-sub-ronald-reagan-war-games/ https://www.popularmechanics.com/military/navy-ships/a197847...
    - bluGill 8y ago
      The point of a simulation is to find vulnerabilities. When something works the correct thing is to rerun it with the assumption that you have mitigated that attack to see what your next vulnerability is. You of course also make sure the mitigation actually happens. Lawyers run practice trials all the time, if their opponent in practice comes up with an argument they can't destroy on the spot they know where they need to focus.
- nostrademons 8y ago
  The thing is - self-driving cars fundamentally change the structure of the automobile market in a way that negates many of the advantages of existing automakers. Instead of private ownership of cars, they encourage ride-sharing services, because the car can pick up a different passenger on the return trip and no longer has to park. Instead of internal combustion engines, they encourage EVs, both because of the power-draw of the self-driving hardware and because refueling becomes the responsibility of the service, which can program them to return to base and not pick up any new passengers once they're getting low on charge. Instead of servicing being a huge pain that encourages buyers to put a premium on reliable cars, maintenance is handled by a centralized maintenance department full of professionals. Instead of family cars, they encourage small motorcycle-like "pods" sized for a single occupant (with a smaller number of family cars or trucks available for family trips). Already, that negates the advantages of consumer brand, reliability, dealer networks, internal combustion engines, ergonomics, and bodywork. There's not all that much left to the auto industry, once all that changes.
  - hef19898 8y ago
    Even if you are right with everything you predicted (some of it, all of it is doubtfull), that does not negate the core competencies of traditional car makers. You still need someone to buold cars -> existing car makers EVs are actually easier to built than EVs -> inceeasing the advantage they have on production Maintenance -> to be done locally, there is no way to centralize it on a full continent, car makers and their existing network are king Fleet management -> see above, plus existing fleet mgt serives, only real competition are large rental car companies Ride sharing -> acquisitions, mytaxi in the case of Mercendes, drivenow and car2go in the case of Mercedes and BMW, VW with an in-house solution Self-driving -> acquisition of the provider (GM and Cruise) or sourcing the tech, alternative is a partnership (Jaguar) Traditional car makers slept into these developments, a few years ago I would have bet a lot on disruptors in that industry. Now that changed, the only "tech" (as in software) companies that can compete are the likes of Google and maybe Uber as long as VC money doesn't run out. The same is true for certain smaller manufacturers of automobiles, but this market cleaning is gling on for while now so they are used to it. And let's fave it, the automotive sector is well entrenched in politics (Europe, Japan and the US, Chine, too) and money generally is not a rwal problem. So, yeah, now I would say Google / Wymo might become a major Tier one supplier. But hardly more.
- barrkel 8y ago
  FWIW, Honda builds more two-wheeled vehicles (scooters and motorcycles) than it does cars. About 19 million motorcycles a year vs about 5 million cars. Their core competency is probably engines, especially small engines. They make more engines than anyone else globally. (I agree with your point generally on momentum. Just saying because I was somewhat surprised to learn it.)

dsfyu404ed 8y ago

>The thing about companies like Honda and GM -- they have a lot of momentum. That means they aren't likely to be on the forefront of innovation, but when they turn towards a new target, they will hit with massive resources and established global production capacity that a start-up can only dream of. Exactly. It's the difference between a handful of dudes in a speedboat with some explosives and an aircraft carrier. Once the latter is aware of the former you can be reasonably assured who of will win. At most the former can hope to land a good sucker punch before the latter knows they're even fighting. The core competency of GM, Honda, etc. is building cars. Once they decide what kind of cars they want to build they will do a good job building them as they intend to build them. They don't make rookie mistakes, especially in the logistics of spinning up production lines to build what they want to build. They've re-tool their factories every time a new generation or a new model comes out. They know how to do it right the first time, knowledge that comes from experience.

leesec 8y ago
They are good at building cars, but I would argue they are not good at building tech. Self driving is a technology issue. If the tech superstars at Waymo/Apple/whoever aren't even close to solving it, why would the software people at GM/Honda be?
- deleted 8y ago
  [deleted]
- dsfyu404ed 8y ago
  "Hi, this Jane from the procurement department of GM North America. We might be interested in licensing your software. Please give me a call back so we can set up a meeting." They don't need to build tech. They can buy it. GM can write some pretty big checks. They flat out bought Cruise just to cover their butts. When I was an intern at a defense contractor ~1/10th the size of GM my cube was across from procurement. I think a lot of people here don't understand the kind of scale companies like this play at. Your problem isn't "how do we pay for this" it's "will anyone sell me all this all at once or sign a contract to provide it all over the timetable we want". You make bets on how many times around the earth the welding wire you'll buy next quarter will go. GM shipped ~10 million vehicles in 2017. That means they had to sign a contract with someone to supply approximately an Exxon Valdez worth of motor oil and another of ATF just for their factories.
  - fastball 8y ago
    Isn't that exactly what a deal is? This wouldn't be a loss for Waymo if everyone was licensing their software.
    - deleted 8y ago
      [deleted]
  - xiphias2 8y ago
    Waymo is far the best self driving tech and nobody has the money to buy it, as Alphabet is not selling (it's the first real diversification from ads revenue). GM is few years behind, but hopefully those few years are not enough for Waymo to create a monopoly.
    - jplayer01 8y ago
      GM really isn't far behind.
fastbeef 8y ago
>It's the difference between a handful of dudes in a speedboat with some explosives and an aircraft carrier. That’s uh... one helluva metaphor you got there.
- stevenwoo 8y ago
  It's a somewhat infamous tactic used by a US leader in a war game simulation of war with a hypothetical mid east enemy (Iran of course), he used first a wave of cruise missiles, then a follow up attack of many small boats on suicide runs to overwhelm a carrier force (hypothetically) and won a two week planned exercise in one day, so the folks in charge re-ran the simulation and barred the tactics he used. https://en.wikipedia.org/wiki/Millennium_Challenge_2002 https://en.wikipedia.org/wiki/Millennium_Challenge_2002
  - hef19898 8y ago
    True that, if could with the pants down a carrier is nothing more than a big target. There is alo an example (no source, sorry) of a German sub surfacing next to a US carrier, within the inner defense ring, suring an exercise. But all that only works of the carrier is caught flat footed. To stay in the metaphor, the carrier "automotive industry" is no longer flat footed. Partol aircraft and choppers are deployed and the defenses are up. By the way, I like that image, fits the business world much bettwr than the proverbial tanker vessel for big co.
    - stevenwoo 8y ago
      Sweden produces short range diesel electric subs that were able to sink a US carrier in a similar war game so the US Navy leased one to learn how to adapt to the previously unknown weakness. IIRC China was making these kinds of subs but they have pretty short range, compared to most attack subs. https://www.popularmechanics.com/military/navy-ships/a19784775/gotland-class-sub-ronald-reagan-war-games/ https://www.popularmechanics.com/military/navy-ships/a197847...
  - bluGill 8y ago
    The point of a simulation is to find vulnerabilities. When something works the correct thing is to rerun it with the assumption that you have mitigated that attack to see what your next vulnerability is. You of course also make sure the mitigation actually happens. Lawyers run practice trials all the time, if their opponent in practice comes up with an argument they can't destroy on the spot they know where they need to focus.
nostrademons 8y ago
The thing is - self-driving cars fundamentally change the structure of the automobile market in a way that negates many of the advantages of existing automakers. Instead of private ownership of cars, they encourage ride-sharing services, because the car can pick up a different passenger on the return trip and no longer has to park. Instead of internal combustion engines, they encourage EVs, both because of the power-draw of the self-driving hardware and because refueling becomes the responsibility of the service, which can program them to return to base and not pick up any new passengers once they're getting low on charge. Instead of servicing being a huge pain that encourages buyers to put a premium on reliable cars, maintenance is handled by a centralized maintenance department full of professionals. Instead of family cars, they encourage small motorcycle-like "pods" sized for a single occupant (with a smaller number of family cars or trucks available for family trips). Already, that negates the advantages of consumer brand, reliability, dealer networks, internal combustion engines, ergonomics, and bodywork. There's not all that much left to the auto industry, once all that changes.
- hef19898 8y ago
  Even if you are right with everything you predicted (some of it, all of it is doubtfull), that does not negate the core competencies of traditional car makers. You still need someone to buold cars -> existing car makers EVs are actually easier to built than EVs -> inceeasing the advantage they have on production Maintenance -> to be done locally, there is no way to centralize it on a full continent, car makers and their existing network are king Fleet management -> see above, plus existing fleet mgt serives, only real competition are large rental car companies Ride sharing -> acquisitions, mytaxi in the case of Mercendes, drivenow and car2go in the case of Mercedes and BMW, VW with an in-house solution Self-driving -> acquisition of the provider (GM and Cruise) or sourcing the tech, alternative is a partnership (Jaguar) Traditional car makers slept into these developments, a few years ago I would have bet a lot on disruptors in that industry. Now that changed, the only "tech" (as in software) companies that can compete are the likes of Google and maybe Uber as long as VC money doesn't run out. The same is true for certain smaller manufacturers of automobiles, but this market cleaning is gling on for while now so they are used to it. And let's fave it, the automotive sector is well entrenched in politics (Europe, Japan and the US, Chine, too) and money generally is not a rwal problem. So, yeah, now I would say Google / Wymo might become a major Tier one supplier. But hardly more.
barrkel 8y ago
FWIW, Honda builds more two-wheeled vehicles (scooters and motorcycles) than it does cars. About 19 million motorcycles a year vs about 5 million cars. Their core competency is probably engines, especially small engines. They make more engines than anyone else globally. (I agree with your point generally on momentum. Just saying because I was somewhat surprised to learn it.)