Derek Kerton is founder and chairman of the Autotech Council. Since 2012, Autotech Council meets every month in Silicon Valley with the mission of discovering startups, new technologies, and relevant innovation. Autotech Council members are carmakers, T1s, investors and mobility companies committed to working with new companies, investing in new technologies, and partnering with startups pushing innovation in mobility, computing, sensors, materials, AI, UI, connectivity, energy and more.
How big is the AutoTech industry in Silicon Valley?
Kerton: The automotive industry in Silicon Valley is actually surprisingly big. It wasn’t like this 20 years ago, but by 2010, the technologies developed in the Valley started to be more and more relevant to cars. Streaming media, Infotainment, connected car apps – suddenly features of cars were starting to look a bit like cell phones. And that’s just inside the cabin. ADAS (Automated Driver Assistance Systems) in cars was getting smarter and smarter, and carmakers had the need for more powerful silicon, new and better sensors, AI software, visual processing chips, and more. With this increased relevance of Silicon Valley to vehicles, the big brand carmakers and many leading automotive vendors and T1s started locating field offices in the Bay Area to scout, partner, invest, and co-develop with VC-funded engineers and the big chip makers like Intel. Today, dozens of the globe’s legacy carmakers have offices here, along with a number of aspiring carmakers, and a rich community of start-ups that are either exclusively targeting the mobility sector, or at least have it as one of their main target markets.
Is Silicon Valley still a draw for startups the way it was pre-pandemic?
Kerton: Well, the concept of working from anywhere has been advanced these past years, so lots of startups have engineers and staff located further afield, but no matter where a startup is based, they will most likely spend some time in Silicon Valley because their VCs, their tech partners and many of their future customers are here. In fact, in Autotech Council’s Startup Review meetings which we’ve held monthly for over 10 years, startups generally come 40% from California, 30% from the rest of North America, and 30% from Europe and Asia, and this hasn’t changed much over the pandemic period. Still, Covid knocked us all back, and I wouldn’t say we’re back to pre-pandemic life, but we’re close. Face to face contact may not be needed for day-to-day collaboration among colleagues, but it still is critical for business development. In particular, the first contacts we do at Autotech Council.
Have you seen a change in the appetite of local governments to participate in AV testing?
Kerton: Yes. At first, different regions were competing to draw in the self-driving car companies. They hoped to build out their tech competence and tax-base with this promising new tech, so they made it easier for companies to test our autonomous vehicles in their jurisdiction. I’m not seeing that end, but as the efforts to reach full self-driving drag on, the enthusiasm is down a bit. The bigger change I see is with respect to safety. After a woman was killed by an Uber in self-driving mode a couple of years ago, things were tightened up. Now, governments have more requirements, and are actually enforcing them. For example, the California government just suspended the test permit of one well-known self-driving startup, Pony.ai. It turns out that Pony’s safety drivers, who watch over the car when it self-drives, didn’t meet the required standards.
What changes does the Autotech Council see over the next few years?
Kerton: As a group in Silicon Valley that introduces the automotive industry to over 200 startups and new technologies every year, I figure I’m a pretty lucky guy! I’m kind of in the catbird seat for seeing cool new mobility technology before it gets rolled out into cars a few years later. So, here’s some of what I’m seeing:
1. Electrification is a tidal wave. There is a massive shift to EVs, which opens up a very wide door for startups and innovators. Motor technologies, high-power switching, conductors, design. There hasn’t been an automotive revolution like this since the assembly line. Then, there’s innovations in batteries. New materials for different batteries, charging solutions, battery swap solutions.
2. Self-driving technology is progressing. But what I expect to see is not a sudden change, where someday in the future, instantly we have many self-driving cars on our roads, the way EVs suddenly emerged. Instead, I see a slower transition, where ADAS features keep getting better, increasing safety and comfort. And an important thing here is, finally, some of these features make the roads safer for pedestrians and others, not just the car’s occupants. We’ll see these Level 2 solutions--think of Super Cruise, Tesla Autopilot, and such speed-and-lane-keepers--improve and handle more and more situations. Humans won’t stop driving these cars suddenly, but bit by bit, we’ll be asked to do less and less.
3. Sensor technology is moving very fast. Lidar, which are laser sensors, are very precise and are getting cheaper. Cameras are already cheap, and can leverage Moore’s law on processors and iterations of software to better “understand” the world they see, and thus handle it better. Radar and ultrasound sensors help provide redundancy in different conditions. Meanwhile, sound sensors are being proposed that make the cars smarter about things like ambulance sirens, crashes, squealing brakes, etc.
4. We’re seeing new models of ownership. Do you own your car, or share one? Do you own your car, but lease your battery? How do you insure your car--by the year, or by the mile? If a car is self-driving, why own one? When it can drive other people around all day, does sharing make more sense?
5. Big data and analytics are crossing from the tech sector to the cars. Cars generate a lot of data. This can be used by the carmakers, marketers, and by cities and planners.
6. And electrification goes beyond the car. It enables all kinds of micromobility like scooters and bikes. But even that sector is exploding, because with a small battery and motor, bikes are no longer limited to what a human can move, so we’re seeing more passenger bikes, more cargo bikes, more delivery, and enterprise use of bikes.
I’m not gonna lie to you; this stuff excites me a lot! Put it all together, and you can see it underwriting a change in urban design and lifestyles. And those changes are towards less pollution, greater safety, convenience, and comfort. And the simplicity of electric propulsion means it ultimately will cost less and be more accessible.
Editor’s Note: Autotech Council is holding its June 28 meeting from 8:30 am to 12:30 p.m. at Sensors Converge at the McEnery Convention Center in San Jose. It is open to non-members and registration is online.