Volvo CEO: selling future self-driving cars to russians

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Volvo CEO: selling future self-driving cars to russians

Hakan Samuelsson, President and CEO of Volvo cars group, spoke to the XC90 at the media preview of the north American international auto show in Detroit. Sancya/ap

Interviewer: profits tripled in the first half of this year and sales are growing. What future challenges do you see?

HakanSamuelsson: we have a solid foundation, and now we really enter the next phase of the company’s development, from the first day of Paris – when we showed off our first new car. Now we need to launch these cars, and that’s what we’re starting now. Now I think we’ve done a good job on the XC90, but in other areas, especially in Russia, we have a much larger gap in terms of branding than other countries. Convincing Russian consumers that we have a very high quality product is a challenge for us.

Interviewer: why did you decide to visit Russia?

HS: I’ve never been here before, so I think it’s interesting to know what happened. We’ve had a tough time in Russia since the beginning of the crisis, and I’ve seen a downward trend. I hope this year we will begin to see slower declines.

Interviewer: so will you stay? You know, the justice movement leaves Russia, and then Honda leaves Russia, and I think your dealership is afraid that Volvo will leave.

HS: no, we’re sure to stay. This is the largest country in Europe, so if you want to be a global company, you have to be in Russia now. Leaving is not on our agenda. But when the currency drops to half of its original value, you have to try to save costs to survive.

Interviewer: can you help your dealer survive?

HS: they must follow our example: look at their costs and services. They have three very difficult years, but actively think of new and interesting cars coming in, and we can move on.

Interviewer: at the moment, Volvo has become the lead story in self-driving. You just announced a joint venture with Autoliv to develop autonomous driving software. Could you tell me something about the project?

HS: in order to make effective self-driving cars, we need to make the steering, braking and other systems redundant while ensuring safety. We’ve been working with Uber to develop such a car, and we made it a couple of weeks ago, so we’re going to share that cost and have a good base car. They will install their own software that can handle mobile people from A to B. We will use the same car and put in other autopilot software. I’ve heard that people in Moscow have been sitting in traffic for three hours, so I think they’d like to buy a car like this. Then they can host a video meeting or do whatever they want. Autopilot software requires a certain amount of knowledge. You need computer vision, sensors and radar to see the front of the car. Then you need another type of software to make a decision.

Interviewer: how much do you want to invest in the first stage?

HS: it remains to be seen, but we will invest 50/50. About 200 people will be employed in January/February.

Interviewer: so you’re going to have some Volvo engineers?

HS: we will also hire, but initially everyone who works with Volvo will work with the new company.

Interviewer: what are your expectations of the outcome?

HS: they will develop software for the next generation of active safety, which will be available in about two years from now (2019). Then fully autonomous driving software will be fully autonomous around 2021.

Interviewer: one of the main concerns at the moment is that all of these cameras and sensors work during the winter, when it snows or when it rains. This is very important for Russia. What do you think you should do?

HS: I think we have experience because we have automatic driving and automatic braking system. Of course, they have to work in the winter, and I think that’s a good question because it’s a big challenge. Other companies like Google have fully automated cars that can take you from zone A to area B. But if it snows, these cars won’t work. If it is dark or rainy, it will not be able to work, so they have other restrictions. It can take you from A to B, but…

Interviewer: only in California.

HS: only in such an environment, there is no rain or snow. So our autopilot can only work on the highway, but it has to work in the rain, in the sun or in the snow. The challenge of self-driving is to identify objects. You have to quickly build an exact model so that you need a very fast computer. There’s a lot to learn and you have to use a variety of computer and machine learning techniques. The young engineer is a very exciting challenge.

Interviewer: Volvo has also announced that you will take full responsibility for the accident of autonomous vehicles, but how will you achieve that? By insurance company or your technical guarantee?

HS: this is something to be sorted out. Their car needs legal insurance, but we should take responsibility for our autopilot, which is our responsibility if something goes wrong. Now more or less, if the braking system doesn’t work and the accident happens, the insurance company will come to us and we will take responsibility. The system and everything should work. But, of course, there is always the driver’s behavior and wakefulness that must be done in a normal manner as it is today.

Interviewer: another important key to autonomous driving is connectivity. Are you developing the technology too?

HS: that’s what I call smart cloud solutions. You have to communicate with other cars through the cloud. You need a view of the horizon.

Interviewer: ideally, it should be a global system like a mobile protocol, and all cars should communicate with each other.

HS: yes, there are a lot of initiatives, but it’s tricky. Volvo will have a cloud, all of our car connections. It’s the same with BMW. We just need to make sure that the cloud is communicating with the cloud so that we can actually use all of this information, and that’s going to happen.

Interviewer: so does this connection go through the cloud or through the car?

HS: it can also go directly through the car, but the most likely scenario is that it needs to be connected to the nearest antenna for very rapid communication. Bluetooth is not so reliable.

Interviewer: so your other goal is to make 1 million electric cars by 2025. Will the infrastructure of cities and countries be ready by then?

Hs: no one will invest, and if they don’t get the signal, there will be cars. That’s why we decided to say let’s be clear about our views on emissions and motor propulsion. Electric seems to be the best way, but we have a lot of problems with electrification. You go home at night and you have 50 kilometers of batteries in your car in the morning. When the batteries are empty and you continue, you are back to normal. It basically doesn’t require any quick charging infrastructure. In 2019, when our all-electric car comes out, they need to have a larger range, 400-500 kilometers.

Interviewer: which one is that?

HS: this is a decision, but not yet previewed. It’s going to be more than one car. The first, which will be launched in 2019, will require a fast charging infrastructure as scope expands. If you’re going to go skiing 700 kilometers, then you’re going to have to charge half the cost, which needs to be done in half an hour, which is acceptable and similar to filling. We need partners, but we can’t sit down until someone does. We have to give people a signal that we’re interested in taking out a million cars and others making similar promises, so now someone is investing in such a network.

Interviewer: so what do you generally think about the future of world mobility? Some cities support electric cars, others not?

HS: I think political support is important, but you can’t rely on this. If we build electric cars and they can only work through subsidies and incentives, then it won’t work. We must have affordable business solutions. It can’t be just a green car, and no one will pay for it. It has to be more things: twin engines, 400 horsepower, super performance and the possibility of charging. So it’s possible to sell. So the next step is to make it affordable. I think tesla is a good example. They don’t rely on subsidies. I don’t think we can sit down and complain about political support. We have to make electric cars.

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