Why BMW needs to own its customer experience from start to finish

For the last few years now, BMW has wrestled with the question of what it’ll mean to be a luxury car manufacturer in the age of electric cars, autonomous driving and rapidly changing — and increasing — customer expectations. What, after all, makes something the “ultimate driving machine” when the driver eventually stops driving?

For BMW, the answer is a renewed focus on technology and the in-car experience it enables, without forgetting its heritage in performance cars. To discuss the state of the company’s transformation, not just in terms of its cars but also its business model, I sat down with BMW’s outspoken VP of Digital Products and Services Dieter May shortly after the company unveiled the latest version of its in-car operating system.

“We build digital products and services that are meant to help us differentiate our core product, the car and generate revenue,” May said. “But these digital services also provide us with channels and touch points that allow us to now have a direct relationship with the customer on the sales side and talk to the customer directly.”

In the car industry, however, the sales channel has traditionally been the dealership. That’s where you buy the car and that’s where you get it serviced. It’s the dealer who knows (ideally) who you are and what you want. The manufacturer’s role in this model is to build the car, maybe build a bit of a central online presence with a configurator so customers can get some idea of the car’s price — and get out of the way.

That’s not the future that May envisions, though. And neither is it one where the big tech companies like Apple and Google own the driver and the user experience.

“As we’re building the digital products in the car, we are also building out the car as a channel and touchpoint at the same time,” May noted. “We’ll have our app, a personal assistant etc. and with that, we can create a user profile and provide that to our sales teams. Today, virtually every car manufacturer can’t talk directly to the customers because the customer belongs to the dealer, and because the different business units, like after sales, financial services, etc., aren’t unified and all try to talk to the customer separately.”

So for BMW, digital experiences in the car are one thing — and you can expect to hear a bit more about this in the coming weeks and months — but the company is looking beyond this and how it can use this transformation to also create new business opportunities that go beyond maybe selling an in-car Spotify subscription for a few dollars. But what gets May most excited about this is the prospect of being able to talk to the customer throughout the ownership lifecycle. “That’s the cool part, because it allows me to keep the product ‘car’ fresh throughout the lifecycle and manage it like a device,” he said.

The move that May is hinting at here means that BMW wants to not just focus on selling cars but to create a model where it can extract some revenue from users throughout the car’s life. As an example, May noted that BMW may sell you a Mini with a charging package and, in addition, it’ll sell you a flat-rate subscription to charge it. “There are so many opportunities here, but you have to play it smart, both before somebody buys the car and after the sale.

If BMW wants to own the customer, though, that means dealerships have to change. “The dealers will have to grow into a different role over time,” May acknowledged. “We expect and hope that just as we will share data with the dealer, the dealers will share their data with us. A small piece of a larger cake is still better than nothing.”

Customers will still come to the dealer for their service needs, so BMW isn’t cutting them out completely, but the company definitely wants to own a larger part of the relationship with the customer. And at the end of the day, it’s the dealer who represents the manufacturer, whether that’s taking somebody on a test drive or helping the customer take delivery of a car.

“What’s most important for us — and everybody is talking about autonomous driving and electric vehicles and so on — but if we don’t become a customer-centric company, then we are destined to fail. The number of digital elements in our customers’ lives and in the car continues to increase, and if we don’t understand that, we’ve got a problem.”

As for its current in-car systems, May told me that BMW now has more than three million registered users for its ConnectedDrive system, but what’s maybe more important is that the number of user interactions is increasing significantly faster than that. What’s interesting to hear is that the way BMW thinks about these users is pretty much in line with any consumer internet company. The team tracks monthly, weekly and daily active users, for example, and is working to increase those engagement numbers with every update.

One problem car manufacturers have long suffered from is that cars stick around far longer than smartphones, and that the in-car technology can quickly seem out of date. Because it is betting on a connected car that is always connected to the cloud, BMW (and, to be fair, many of its competitors) is now able to update the in-car software. That’s true for new head units, but not necessarily for older ones, and fragmentation remains an issue — though with a standardized model for both BMW and its Mini brand, that’ll likely be less of a problem for newer cars than for those that launched two or three years ago.

“In the car industry, a lot of people think that everything has to be backward-compatible reaching back 20 years, but my take is that we have to be more like smartphone vendors,” said May.

Taking a page from the software industry, the BMW team often launches new features that are akin to minimal viable products. That’s not necessarily something the luxury car buyer is used to, of course, but it does allow the company to test new features and expand on them as they gain traction.

The next concrete step for BMW in this journey is to feature an interactive personal assistant in the car that knows about the customer. May believes this will drive a lot of usage. Although the exact details remain to be seen, the BMW team hinted that we’ll learn more in the fall.

Tesla drops $35,000 price from Model 3 page—insists plans haven’t changed

The release of the Model 3 was supposed to be the moment when Tesla finally made a car that was affordable for the masses.

“In terms of price, it’ll be $35,000,” Musk said at the March 2016 Model 3 announcement event. “And I want to emphasize that even if you buy no options at all, this will still be an amazing car.”

For the last two years, Tesla’s page for the Model 3 has touted a starting price of $35,000. “Model 3 achieves up to 310 miles of range while starting at only $35,000 before incentives,” the page read on Thursday morning.

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Uber lays off 100 safety drivers as it scales back self-driving tests

Uber is laying off its safety drivers in Pittsburgh and San Francisco—about 100 people in total. It’s the latest sign that Uber is scaling back its testing operations as it tries to move beyond the March crash that killed a pedestrian in Tempe, Arizona.

Uber’s testing operations have been suspended nationwide since that fatality. It already laid off its safety drivers in the Phoenix metropolitan area—previously the company’s most significant testing location. And the company decided not to renew its permit to test self-driving cars in California.

But Uber says it’s still aiming to resume testing in the Pittsburgh area. While about 100 Uber safety drivers are officially being laid off, Uber expects many of them to apply for 55 newly created “mission specialist” jobs doing similar work. Previously, Uber had separate teams testing on public roads and on private test tracks. Now, Uber wants a single team of drivers to perform testing in both cases and to provide them with additional training to better aid Uber engineers in improving the company’s self-driving software.

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Tesla sold 200,000 cars in the US, so the $7,500 tax credit is going away

Well folks, it’s official: Tesla has now sold and delivered more than 200,000 electric vehicles here in the US. That’s an important milestone for the EV maker, because it means that the $7,500 IRS tax credit that buyers have been eligible for will soon be a thing of the past.

Speculation that Tesla had hit the 200,000 mark for US sales has been rampant, particularly in the wake of the company’s recent statement regarding production numbers. In the second quarter of 2018, it says it produced 53,339 vehicles, a 55 percent increase over Q1 2018. That big increase was in large part down to the company finally finding its feet with regards to the Model 3 production lines. More than half its Q2 output (28,571 cars) were Model 3s; the remainder were Model S and Model X EVs.

However, it was unclear at the time of Tesla’s announcement just how many of those cars were actually bound for US customers. In the past, Tesla has often focused one month a quarter on delivering vehicles to countries outside of the US, and it was thought likely that the company was doing everything possible to ensure it didn’t break the 200,000 US sales mark before the end of Q2. But on Thursday morning the company updated the page on its website dealing with EV incentives in light of reaching this milestone.

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An experiment in people-moving: Transit agency buys electric double-decker bus

On Thursday, a Los Angeles county transit agency purchased the first all-electric double-decker bus in North America. The bus will be made with batteries from electric bus designer Proterra, and the carriage of the bus will be designed by Alexander Dennis, the company that supplies double-decker buses in London, Hong Kong, Auckland, Singapore, Toronto, Ottawa, Seattle, and Mexico City.

Buses are prime candidates for electrification: their diesel counterparts are considerably polluting, and buses travel extremely predictable routes at relatively low overall speeds, so range anxiety can be eliminated with route planning and heavier, more powerful batteries. Proterra has been making electric bus batteries for years, and the company recently broke a record for electric buses by traveling 1,101.2 miles on a single charge.

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All SUV, all of the time: The Range Rover Sport reviewed

If you’re going to buy a luxury SUV, why not buy it from the company that has been manufacturing them for six decades or so? That’s the value proposition behind the insanely expensive $360,000 Range Rover SV Coupe we encountered last month. And the same can be said about the rest of the Range Rover lineup. We know what we’re doing, we know what you want in a luxury SUV, so why bother looking at any of the johnny-come-latelies? I’m no ad man, but if I were writing ad copy for Jaguar Land Rover, that’s probably where I’d start.

That’s the vibe the Range Rover Sport gives off—quiet, luxurious confidence. For the 2018 model year, the Range Rover Sport takes what Land Rover does well and puts another level of spit and polish on it. The result: a solid but unspectacular ride for those with an itch for a midsize SUV and $70,000+ to spend.

The Range Rover Sport sits near the top of the Land Rover’s US lineup, above the Discovery, Velar, and Evoque. Pricing starts at $66,750 for the Range Rover Sport SE, which has a supercharged 3.0L V6 power plant capable of 340hp (253kW). Looking for more power? You can get a supercharged V8 that can crank out up to 575hp. The model we tested is the Range Rover Sport HSE TD6, which has a turbocharged V6 diesel that puts out 254hp (189kW) and an impressive 440lb-ft (597Nm) of torque—an impressive number that speaks to Land Rover’s roots making vehicles for serious off-roading. The diesel engine uses diesel exhaust fluid, which is injected into the exhaust to reduce NOx emissions.

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Tesla whistleblower tells SEC of alleged wrongdoing at Gigafactory

Martin Tripp, an ex-Tesla technician who has been sued by his former employer, has now filed a formal whistleblower tip to the Securities and Exchange Commission.

Tripp’s lawyer, Stuart Meissner, told Ars that his client is reiterating claims that the company has been allegedly dishonest with the public and with investors in statements regarding Model 3 production. Previously, Tripp told Ars that he wanted to reveal internal company waste and safety flaws in Tesla batteries that he claimed he observed while working at the company’s Gigafactory in Sparks, Nevada. The tip, known as a “TCR,” was filed late last Friday.

Meissner, who is not licensed to practice law in Nevada, is only representing Tripp as part of his whistleblowing complaint. Meissner said he would not be “releasing the actual information” contained in the TCR for now.

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Arcimoto raised $19 million to build “fun utility vehicles”—now what?

EUGENE, Ore.—It’s 2pm on a Saturday afternoon, and Eugene, Oregon is about to witness the (re)launch of its most serious entry in the electric mobility industry to date. Outside of Arcimoto’s new factory, located in the sliver of industrial space between the railroad tracks and the increasingly-hip Whiteaker neighborhood, parked cars are starting to line up. Heavily represented are Eugene’s automotive stalwarts: Volkswagen diesel wagons, Toyota hybrids, Subaru Outbacks, and a smattering of newer electric cars and quirky vehicles like the Isuzu Vehicross.

The crowd assembled to witness the delivery of Arcimoto’s first “Signature” line of three-wheeled “Fun Utility Vehicles” is as classically Eugene as the vehicles they drove here. Aging hippies brush shoulders with middle-aged public radio-supporters, and there’s also a mix of more mainstream families and a few younger alternative types—including one performatively circling the parking lot on a OneWheel. Any hope of assessing the prospects of Arcimoto’s quirky three-wheeled electric runabout based on the crowd in attendance faded as I realized that this same group could just as easily be on hand to check out the opening of a new microbrewery or outdoor wear store.

This left me back at the problem I was presented with when I accepted an Ars assignment to cover my hometown’s “automaker”—how do you judge a three-wheeled electric vehicle that straddles the recreational and practical markets, and is built by a company that has gone through seven previous iterations over its decade-long history? This problem is only amplified by the fact that even the version of the FUV I was recently given access to represents an early “Signature” build. Significant design iterations remain ahead. And even if there were a solid point of reference in the market for the Arcimoto FUV today, it would still be a moving target.

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