If you want to know more about the car business than you ever thought possible, talk to Carla Bailo, CEO of The Center for Automotive Research (CAR). Bailo reveals what is happening with automotive and mobility today and in the future.
She has decades-long experience in the automotive industry, including vice president for automotive at SAE, 25 years in research at Nissan North America and ten years at General Motors.
While at Nissan, Bailo influenced other executives with ‘car’ in their names: Carlos Tavares, chief executive officer (CEO) of Stellantis and Carlos Ghosn, former Nissan Chairman. She was in on the early brainstorming sessions for the Nissan LEAF, way before mainstream automakers considered electrification.
CAR is a non-profit independent research organisation in Ann Arbor, Michigan, that analyses business and technology emerging in the future.
“We are a tight small agile group of smart people that can research anything that touches on the automotive or mobility industries. I like working with intelligent people. It makes me smarter,” says Bailo.
Who is Buying Cars and Why?
Car buyers have become very savvy and do their research.
With the average income in the U.S. at about $68,000 and the average price of the car at $40,000, buyers are not making emotional car decisions. Consumers are doing a lot of research, says Bailo. CAR also sees people look at the ease of operations when making car-buying decisions.
The people currently buying cars have high disposable incomes, are buying trucks to pull trailers, RVs for recreation, safety and travel.
“The cocooning continues. We’re not seeing a huge demand yet for other types of vehicles now,” says Bailo.
How Can We Get More EVs on the Road?
Many factors contribute to selling EVs – if it is the only car, if there are forms of mass transit and how far people usually travel. For example, in Europe, if the destination is eight hours away by car, most people take a plane. In Michigan, they will drive there. Electric vehicles should be sized for different customers, says Bailo.
She adds there has to be changes made to encourage electric vehicle adoption in perception and infrastructure. There needs to education to understand EVs.
“We need to offset the cost of the EVs technology-wise,” says Bailo, “In the U.S. right now, we cannot self-supply the batteries.”
Bailo predicts, however, “The future of automotive is going to be 100% electric. Electrification is coming in two ways. Not just for the electric vehicles themselves but the focus on ESG (Environmental, Social and Governance) investing for shareholders.”
Future vehicles will be the right size with the right propulsion – from large trucks right down to small human pods or robots or even drones for the delivery. You have to have the right size vehicle for the correct purpose, says Bailo.
We have to find new technology and make new policies for new technology to get the maximum effect.
Bailo explains how the automotive chip shortage happened. Automotive production stopped due to the pandemic. The supply chain had a risk assessment. There were people at home who needed their smart things, smart appliances, Wi-Fi for working at home.
The semiconductor makers chose to make more chips for consumer electronics. “You need stay fat. We did not expect sales to come back so quickly,” says Bailo.
She adds, “We had a SAAR (Seasonally Adjusted Annual Rate) of $18 million that we have not seen in years.”
What is the Future of Cities and Mobility?
Cities are not doing a great job of adapting to new micro-mobility options.
“Urban planning is all screwed up,” says Bailo about how cities are dealing with new forms of mobility, e-bikes and bicycles.
”We have to have the correct infrastructure for vehicles to coexist,” says Bailo, “The pandemic showed us new ways how to have multiple types of vehicles to coexist.”
She gives the example of the city of San Francisco. The city removed the parking spaces from roads, limited the car lanes and made the roads more accessible for pedestrians during the pandemic.
What is Next for the Automotive industry?
Bailo suggests what needs to change in the automotive industry in the future.
“We have to keep challenging ourselves. We have to learn from our mistakes. We can’t keep doing the same thing over and over again, like putting in more roads that fill up with cars and then build more roads. We have to find new technology and make new policies for new technology to get the maximum effect,” she concludes.