CAR SPECIAL .........How Nissan Is Preparing for a Future of Self-driving Cars

How Nissan Is Preparing for a Future of Self-driving Cars

Nissan Future Lab's Megan Neese discusses a future of transportation that's autonomous, electrified and connected.

In a future where self-driving vehicles may be the norm, will fewer people want to buy a car? Japanese automaker Nissan is looking ahead to this and other scenarios in the future of transportation — and it is doing research on products to position itself well going forward.

Knowledge@Wharton caught up with Megan Neese, senior manager of the Nissan Future Lab, to talk about her group’s goals and projects. She also recently spoke at the ‘Digital Disruption and Empowered End-users’ conference hosted by Wharton’s Mack Institute for Innovation Management.

An edited transcript of the conversation follows.

Knowledge@Wharton: What is the Nissan Future Lab?

Megan Neese: We are a cross-functional team, and our goals are to prepare for a future that’s more electrified, autonomous, and connected. That means figuring out different business models, different experiments, different future consumer needs that we need to be addressing.

Knowledge@Wharton: Is this owned by Nissan? Or is this a joint venture with another firm?

Neese: It’s actually recently moved from part of Nissan Motor to the Nissan-Renault Alliance. We work for the Nissan brand, Renault brand, Infiniti brand, Datsun brand, basically all the different brands in the Nissan-Renault Alliance portfolio. It’s project-by-project, and company-by-company as far as the impact of whatever we’re studying and who it’s for.

Knowledge@Wharton: What projects are you working on right now?

Neese: We’ve been looking at the future of cities and how the shape and way that we live in cities is changing. We believe that, as we live differently or move differently, we might need different types of products. We’ve been studying products that aren’t as large as typical cars for a little while now. We have an experiment up in the city of San Francisco as a partnership with Scoot Networks where we’ve brought in a new mobility concept — a tandem, two-by-two-seated four-wheel vehicle that’s larger than a moped, smaller than a car — and trying to understand that space. Do people in cities that are moving differently need a different type of product for that behavior?

Knowledge@Wharton: These are meant for travel just within the city? Or it also can take the freeway?

Neese: In the U.S., it can only go to 25 miles per hour as the speed limit, just because of the type of product it is — a neighborhood electric vehicle. In other countries, this vehicle can go on the freeway, but in the U.S., it’s really intended to be looked at in the system of a city. In a place like San Francisco, where you may want to be able to bike home but it’s very hilly, having motorized transportation that’s safer and larger than a bike and may be more weather-resistant [and without having to deal with traffic and parking issues] could be an interesting alternative. [Scoot lets users pick up vehicles at one station and leave it at another station, just like bikes.]

Knowledge@Wharton: How does this mobility concept fit in with Nissan’s overall business goals?

Neese: That right there is the nature of what Future Lab does. What we’re always trying to figure out is, “What are the different opportunities that we could tackle as an automotive manufacturer, and which types of opportunities make sense for our business?”

In the Scoot Networks example, we’re able to study the business case of a new type of service. We’re able to study the business case of a new type of partnership where we would be providing products to a different service provider. We’re able to look at a new type of product altogether that currently, we don’t offer in the U.S. market.

There’s a number of different things that we’re studying with just this one example or experiment. But what we’ll take back to our executives is exactly that. We’ll look at what are the different things we’ve learned for our business and what does this mean that we should be preparing for? Should we start building services like this?

[We’re even learning] little things like, in order to get that vehicle to work with Scoot’s software, we had to build an API so that the software can actually speak to the vehicle and know where the vehicle is. That type of software-hardware integration is something that, maybe in the future, we should plan for in more vehicles. … It’s little learnings like that that can help inform new product development and product planning for the future across different regions and brands. That is really what we’re after.

Knowledge@Wharton: Can you tell me more about your driverless car initiatives?

Neese: We have an autonomous vehicle group in Silicon Valley, as part of the Nissan Research Center. The leader of that group is Maarten Sierhuis, and he has been working for a long time on autonomous vehicles. … [As part of this work, Nissan explored various technologies including one in which] you clap your hands and chairs can self-park themselves under a conference table. These are little experiments in how autonomous comes to life, from a technical standpoint.

From Future Labs’ perspective, we’re much more interested in that from a consumer point of view. We’re trying to understand, ‘how will autonomous effect people’s everyday lives?’ Does it change how you get groceries or when you get groceries? Maybe your deliveries only come at night. Maybe there’s a totally different need for the type of vehicle you would drive versus the type of vehicle that would be autonomous — or both, or some combination. What we really study is trying to scenario-plan. What are those different futures from a user’s perspective, and what does autonomous as a technology potentially do to impact their daily lives and their mobility needs?

Knowledge@Wharton: I don’t think I’ve ever heard of a scenario where the autonomous vehicle will act like a driverless delivery van.

Neese: That’s exactly the type of thing that we explore and envision. What are those modes or models of that vehicle? I think right now, a lot of the discussion is about the technology tests that are out there on the road. Things that you’d see companies testing and working on. Can it change lanes? Can it stop? Can it go? What are the technical requirements of this? But what we’re really interested in is, how does it change why you go somewhere or when you go there? A lot of the reasons that we get into cars today may be fundamentally different if that technology is autonomous.

Knowledge@Wharton: What do you think are some of the limitations of autonomous vehicles, particularly in the areas of security and risk?

Neese: It’s a new horizon; it’s a new technology. So, like any new technology, it requires studying and development and prototyping, and getting a sense of time on the road. Just like any other product that we would test, it’s going through lots of testing. In our work, we’re really interested in what kinds of things it could do that we still can’t imagine. Those are things that are hard to necessarily prepare for. And that’s where I think experimentation becomes important and comes to life.

A lot of the work that we’ve been doing is in what we call “living labs,” which is a mix of market research and lean process development where we’ve been able to bring to life examples of the future — 10 or 15 people will try out a new product or a new service or a new software, in a limited and research-oriented way. So it’s not like you’re launching something. You’re doing a trial and you’re doing it with a small group of people that understand or know what they’re testing and why they’re testing it.

Knowledge@Wharton: What are some other innovative trends in transportation?

Neese: There’s a lot going on in the system of a city. We’re really interested in how infrastructure and urban planning change the shape and form of cities, and then how that impacts the car itself. Even if you look at something as simple as parking regulations. Parking is regulated at an architectural level. So a new building has to have a certain amount of parking spots and those parking spots are given a certain dimension. They have to be able to meet the normal requirements of the type of vehicle based on size. When we look at cities that are dealing with big issues of density, congestion and growth – for example, the Bay Area is an enormous metropolitan area — allowing enough people to live in … a large, vibrant, equitable community means urban planning is starting to make and develop different types of regulations and different types of buildings for that future.

You’re starting to see, in the Bay Area in particular, initiatives towards meeting new CO2 targets where they’re building more of higher-density apartment complexes right around the transit hubs so you can get on the train, and then go to your apartment, and then get to work. Those types of decisions don’t seem to have a lot of impact on mobility, but could fundamentally change, for example, the shape or size of a car.

If parking spot regulations change so that you could have a much smaller-footprint vehicle like the new mobility concept that we’re testing with Scoot, you could change how many of those products get sold or how adaptive new types of products are to this market.

What we’re interested in is also the form of cities, and how architects and urban planners are envisioning what cities may look in the future, and then trying to create products to meet that vision. The cities may be more walking oriented, or slow-speed oriented, or have a smaller footprint for parking. There’s whole new types of needs that are coming out of those decisions that I think we, as a car company, can prepare for and build products for in a different way than we are today.

Knowledge@Wharton: How do you deal with city regulations around your transportation innovations? And do you find that city officials are receptive to your ideas?

Neese: When we engage with cities, it’s always as a stakeholder in an innovation project. … In an example like the Scoot Networks project, where we’re working with a software company, a service company, the city, and a car company, they’re participating as an envisioner of what this future could be and what role regulation could play in building a new type of mobility for people.

 - Knowledge@Wharton