Host hype will only set false expectations with an undecided public, and thats when it comes to driverless cars. What did you mean . Guest ing thats exactly what i meant. Its quite straightforward. If you read a lot of the headlines, you see a lot of the proclamations that automotive executives are making and, look, in the automotive business were used to a lot of hype. And i think when it comes to everyday matters, a little bit of marketing hype is okay. When it comes to matters such as this, i think its a little bit disingenuous because words are flippantly thrown around. When so and so says autonomous, so and so says selfdriving. A consumer thinks i come out of my home, i hit a button, and that car will take me anywhere in america at any time under any conditions, and thats not the case. If you go to some of the tests that are being run in pittsburgh, the headline says fleet of Autonomous Cars roaming pittsburgh. It doesnt tell you theres two engineers in the car and theres at least four to five interruptions that are there. These things are fine. Its new technology, its emerging, its coming on. But if we overhype it and overstimulate it, the customers going to have an expectation, and when thats not met, theres going to be a lack of trust. And i think this is true with the consumer and also with the government. And, of course, the governments point of view if we start to see were making these proclamations that arent true or manifest themselves in the marketplace, youre going to have an issue. And, of course, what we want with this technology is we want the technology to match customer expectation aligned with government regulation, and then you have it. And the reason im sensitive to this is i think this is breathtakingly cool technology. I mean, when i entered this business in 1993, 1994, never could i have imagined in my wildest dreams as i have been the last seven or eight years inside a car thats blasting around a race track with no one behind the wheel, driving from stanford to las vegas, almost 600 miles fully i awe on autono. Its here. We just have to communicate and build the expectation of whats real, possibilities are and how long its going to take. My fear is overhype is well curtail its full potential. Simple as that. Host where is audi on the trail to fully Autonomous Cars . Guest i think a number of things. I think, first and foremost, we are a crazy, pioneering company, and on this aspect weve been that way. Audi didnt just wake up yesterday and decide to get into the autonomous business. It started in 2005 with stanford and an autonomous challenge which we won back then. It then led to 2009 where were racing in the desert, 2010, went up to pikes peak. Weve been around race tracks at high speeds, so its been a long effort. If you want to really look at where i see the world, it sits in two camps to try to dine it. There will be define it. There will be a camp that is continuing to it rate and bring more advanced technologies into the marketplace. So the society of automotive engineers, they look at this combination of assist to automation from 05. Zero has absolutely nothing on it. Level one is assist technologies. We have had these technologies on a car for probably 15 years, Adaptive Cruise systems, brake guard systems. Customers buy them. You know, if you look at our a6 and a7, 6070 of the cars we sell have these level one technologies on them. Now, we Just Launched six, seven, eight, nine months ago an a4 and a q7. This is level two. And there are other manufacturers that have level two as well. And our definition is you have all of those assist features, you have some beginnings of getting into autonomous features. And right now we call it traffic jam assist. Its intended for traffic jams. You still have to be piloting the the car, you still have to be sitting behind the wheel, and it lets you in the right circumstances take your hands off the wheel for approximately 15 seconds. So i admit this is just the start of the technology. But on the q7s which we sell, approximately 25 of the q7s, customers have this technology on them. And this, to me, is what the automotive business does. We bring technologies, we promote them to the consumer, and the consumer pays based on whether they see the value. Now, our next step is going to be a8 which will be coming potentially next year, and this will be whats called level three. And the simple definition of that is youre going to get the speeds up to approximately 35 be miles per hour, youre going to be allowed, in the right conditions, to have your hands off the wheel for dramatically longer than 15 seconds. This is what we call traffic jam pilot. Again, still below 35 mules per hour miles per hour, and this is where youre going to see what we call adaptation. The second phase is what ill call the kennedy lets go to the moon moonshot phase, and this is level five. Fully autonomous in almost all circumstances. In parallel fashion, we are also working on that as well. I think those applications would probably confine themselves to more of a restricted urban environment at least at the beginning, and thats the two worlds. Were going to continue to bring the consumer along on this technology. Level three, well be the first manufacturer with that in the a8 and also work on what we call the moon item shot, fully autonomous. No one behind the wheel, just someone getting around in this vehicle. We believe 100 in this technology which is why were so aggressively pursuing it. Host now, some Car Companies have said 2020, 2025 for a level five. Guest yeah. Host is that optimistic . Guest i think 2025 is too bad. I think 2020 could be optimistic. Again, what exactly theyre talking about usually has a lot of wiggle room in there. But in our minds, look, sometime in 2018 well bring level three. We think well be able to bring lets call it a level three plus which would allow higher speeds, that would probably come in a, you know, 2020, 21 window. You could see a space in 2025 where you have fully autonomous. But my definition of fully autonomous would be in a confined area. Lets name the city of San Francisco or the island of manhattan. I dont see 2025 anywhere in america anytime hit a button, i can go there. I think theres far too much complexity, mapping, a lot of roads in america, and on and on. But i think the important thing to look at and the way i view it is everyone is always pressing to what ill call the. 02 scenario or. 03 scenario. The truth of the matter is what people dont like about driving is congested areas in major city, rotting in traffic. Ands that is what we are attacking right off the bat. We see a lot of people that like to drive on open roads, like to cruise around their neighborhood, like to do those types of things, and thats why we feel this is the way to go. Lets address the major issues. And the major issues is traffic and what comes of traffic as we all know . Like all human endeavors, humans get bored, they get easily distracted, thats when they grab the phone, and thats when something bad happens. And the other thing i like to think about is, you know, you could drive a car to your commute an hour and 15 minutes each way, and for one hour, 14 minutes and 48 seconds, you can be dialed in, hand behind the wheel, dialed in. One second, onehalf second, one split second, you can look away, you can look at a phone, and you can pay with you and your familys lives. And why would we not be taking of these technologies that are there . We can bring them. We can mitigate that, and thats what were looking to do. Host you mentioned a revel two package on this a7, 2400 is the cost. Guest yep. Host are you recouping your investment at that cost, or is there a subsidy there . Guest you know, i think truth with told what happens in the automotive business is, obviously, you have a lot of high invest up front, and, of course, you get that back as youre able to scale it over a host of models. So right now on this car at 400, probably 2400, probably not. As the q7 morphs into an a5, here it covers 20,000 units, next year 100,000 units, so the answer is, yes. Its going to give you this competitive advantage, and then you scale the competitive advantage. But back to your original question, you can only scale the competitive advantage if the consumer wants the technology. So this is a bet were making. We believe the consumers do. So far they do and we feel good about it. The other thing i think is crucial though, and this is a nice advantage we have being in the luxury session isnt and being audi is we do command price premiums, we do command higher pricing. The type of people who purchase be our cars are highly educated. These are people who are affluent, and these are people who want the latest and greatest technology. So its a little bit easier for us being many our position with our demographic and the mindset. We are really a Creative Class brand, if you will. Audis mantra sort of hightech meets high design, so it works for us. A volumeoriented brand with a more prague pragmatic, strictly valueoriented customer, its going to be a little tougher, without a doubt. Host in nhtsas recent guidelines on Autonomous Vehicles as we go into that direction, data recording and sharing. Is that something that audi supports . Guest yeah, look, if you look at their latest guidelines, it was 116 pages and a lot of governmental kind of stuff in there. This is not a criticism, but its a hot to digest a lot to digest, so im going to zoom up at the higher level and, of course, like all government things, you like to pick out the things you agree with and like. So if i take the high level stuff, which i think was quite good. First and foremost, the government could have said lets stop this, and they did not. So we like that. The second thing they said is we want to get behind innovation, so we love that. The third thing thats crucial for us that they did write in there, it would be really helpful to get federal regulations aligned with independent state regulations on this issue because, of course, our desire, of course, is to launch one car with one technology set, with one regulation and sell that car throughout the 50 united states. And if you look at it right now, as you know, you have examples like new york that say you always have to have one hand on the wheel, for example. When we did our test in florida and did our state test in nevada and did our states in california, we had to get a distinct and different license for each one of these states. And be, of course, as youre a consumer, theres no way in the world you want to be driving a semiautonomous vehicle and have a different license for every state that you cross. The final piece of the puzzle has to do with the campaign and a little bit of america in general, lets say, is we do need to invest, no joke, in the infrastructure. In my strong opinion, the better the infrastructure, the greater leverageable advantage america can take in this technology. And we can position ourselves that this is the place where autonomous and piloted is coming to life. This will bring the new business models, the hightech jobs, all the things that we theoretically all want, republican or democrat. So we need well paved roads, well lit roads, well divided roads, labeled, marks, all the types of things Consumers Want which bring jobs and all that, but it also has the knockon effect of making it a more hospitable place for autonomous driving. I did see that in the 116 pages. Of course, there was a lot more details in there, but i think it is heading in the right direction. We do applaud and recognize what the government just did. Its moving forward on this, which is cool. Host you just spoke about infrastructure. Does that lend itself to connected cars . Guest obviously, it does as well because when you start to talk about infrastructure, you can give a more expansive definition of infrastructure. When you get to what youre saying, theres the hard infrastructure which is the road and the markings and all of that. But once you start to connect infrastructure be and a simplistic example, weve shown a technology, weve demonstrated a technology called traffic light online. Its a pretty slick piece of technology that in your mmi or instrument cluster, if you will, you can see the light, you can see when its going to turn red, when its going to turn green, how many seconds its going to take to do that. Now, this is simple type of stuff right now, but fast forward to where this could go, lets say its linked to your Autonomous Car. It can start to slow down the car knowing theres a red light pending. This can save fuel, it can also be much more efficient on traffic flow. Being someone from long island who grew up on the long island expressway, one brake tap whether it was due to looking at a phone or being distracted can spiral back to 70 cars. And youll get more traffic just from inefficient flow and brake tapping. All of that stuff could go away when you start to get to the infrastructure. I think the other future state and, again, were looking way out is the connect to not only the infrastructure in the city, but also from car to car. Not just audis, all cars. And imagine the level of intelligence that could come if all that information was put up into a cloud and then accessed where applicable . You want to talk about traffic reports, you get a traffic report from 400 million cars out there on the u. S. Roads. That would be one reice traffic report. Youd precise traffic report are. Again, it can get there, but thats a connected data world that can make things a lot smarter. Another example, and again its futuristic, but its there if you look at cities and you look at the issue with parking, think how bloody inefficient it is to go to park. You come in, you might have just passed a spot thats going to open. You circle around five decks of parking, burning fuel, wasting time, co2, then you come around, thats maybe taken. Then you go back up. If you get into a connected world, you know exactly where that parking spot is, youre going to go directly there. The other thing is get yourself out of the car. Youll get 3040 tighter parking in these things, more cars because you dont have to open doors and need all the gap for that. So there is a lot of opportunity with technology. So, again, im optimistic. Host whats going on in germany with autonomous conducted cars or connected . Guest i think very similar things. I think honestly what happened is a lot of the technology, particularly for audi and i think a lot of brands, you experienced it with uber in pittsburgh, people experienced it with the other manufacturers. A lot of the work is happening here because, frankly, a lot of the sensors, a lot of the chips, a lot of the companies in Silicon Valley, obviously, doing what Silicon Valley does brilliantly, they get a piece of technology, they invest, ask they move quickly. Develop, develop, develop. So its happening here. I think the rest of the world, obviously, has been catching wind of all of the demonstrations and press announcements, and now europe is starting to come onboard. I think they have a very similar thing as well. They have lots of, lets say, government regulations that were written some of them in the turn of the 20th century, some of them updated in the 1950s. This really needs a thorough looking at. And i think if you look at the european union, obviously, it gets more complicated, as you know, because the individual states. So as con so louised coso are suited and complex as it can be here, i would put america in the lead here. I think the second thing is the American Consumer is open to these types of thicks. Things. And hopefully, we get a government and i think we do that gets on board. I think theres an opportunity to blend this stuff and put america in the lead on something. But china is heading here as well. This is the holy grail. A lot of people are heading there. Host so is audi working with other Car Companies on this technology, or is this audicentric . Guest oh, this is audicentric. I think where we would work with the Car Companies is particularly on the regulations and infrastructure, because lets call that a common area where we all mutually agree that it needs to be there. Most of the technology were adopting on our own. The only one where we do have a partnership for the most part is a Mapping Company called here, and its jointly owned by bmw, audi and mercedes benz. And if you look at the digitized future, as you can imagine, extremely accurate maps are going to become the holy actually. And this is something for one company to invest in probably would have been a little bit too expensive to scale it up and make it work and then only scale it to one brand. So its where the three brands got together. I think there are examples that make sense and are smart, and i think if you look at a lot of the chip technology, certainly some of that is shared whether its coming from the invidias or mobile ayes of mobile eyes of the world. Right now were adopting this because this my mind this is going to be a competitive enterprise like the automotive business is. Someone is going to come into a showroom and say i want the best piloted or i Autonomous Car there is, who hases it . We want audi to be at the top of the list because i think these technologies are going to cause a little bit of a reset in the marketplace. People wants to buy a luxury car, someone could come this and say i want an Autonomous Car, and thats going to cause a reset. And if you dont have one, youre going to be off the list, and if you do have one, youre going to be on. Host you write Software Companies actively aim to fail fast. They experiment in the real world to work out kinks as they go. This makes sense for those developing a smartphone operating system, but fine tuning on the fly isnt feasible in the real world. Guest obviously, i wrote it, and obviously i agree with it. The automotive business sometimes gets a bum rap. People say its a little bureaucratic, its a little slow to advance and to move, but the truth be told, theres a lot of government regulation in the automotive business, which there should be, and the stakes are extremely high. Number one, we have peoples lives, we have peoples futures, we have peoples families, theyre moving in vehicles that are going 6570 miles per hour. Everything has to be right. And, actually, everything has to be right each and every time, all the time for a long time. And that sounds overstated, but its not. When you hit that brake on a car 15 years from now in the middle of iowa with 120,000 miles on the car, those brakes need to work. When a crash happens, those airbags need to go off 100 full stop. Now, if you just downloaded the latest ios software and your email jams up or you get a flash code, okay, reset, no problem, get it back to life. No problem. Theres no real, major lifealtering this thats going to impact that. In the automotive business, there is. So, yes, it may make us perceived as cautious, it may make us perceived as a little bit slower, but weve got to be right all of the time, and thats what we want to do. Host cybersecurity and privacy. Weve all seen the reports on hacking and cybersecurity. What about with these cars as they develop more and more technology and more and more software . Guest without a doubt, this is a massive and big and robust issue. I do not think we have all of the answers, and, you know, without a doubt that is a top priority on our list. And our 100 stated goal is to bring technologies that are embraced by customers, embraced by government regulators and secure and safe. Now, certainly im not going to go into specifics about what we are and are not doing, but we certainly recognize the challenge, without a doubt. Host how did somebody who majored in comparative literature [laughter] end up at a car company . Guest thats a very good question. I majored in comparative literature. My ideal at the time was i was going to become a journalist for the New York Times working in latin america. That was my goal. I speak spanish, i wrote my thesis on latin american authors and, of course, life takes a lot of turns. One of the turns that it took in my career path was to get an opportunity to work for another german car company, and i remember saying to myself, i was living in new york city at the time, and this company was up in new jersey, and i said, well, you know what . Ill just work there for one year. Itll look good on my resume, they were looking for somebody in the digital space, and lo and behold, 24 years later, here i am as president of audi. But one of the things i like to say about my father whos now 80, 81, 82 years old. He bought an audi in 1971, 1972, and at the time having a 100ls in the streets of america with all of the, you know, camaros and dusters and and be country squires and javelins and all the other cars out there, this car was a spaceship. Andi always thought, man, what was my dad thinking . And i loved the car. Loved him and its just something ma got in my in my mind with this brand and very proud to be here. Host have you found so far the federal government to be relatively passive when it comes to developing this technology . Guest i wouldnt say passive is the right word. I would say highly engaged. I know you had host encouraging . Guest for me encouraging . Absolutely 100 encouraging. I know youve had mr. Rosekind on your program. Weve had him in our office, weve had a number of conversations with him, weve had a number of meetings with the regulators, and i think its clear. Obama said, and he wrote in his oped by the way, i was in the wall street journal, and he was in the pittsburgh post gazette, but he said we embrace this technology 100 . And the government regulations, if you simplify them, they said we want to move forward. So i am encouraged, and i have no reason yet to be discouraged. This is a technology if you take all the noise and drama aside, 9094 of every accident that happens out there on the road is caused by human error from distraction or miscalculation. A whole lot of that can be alleviated with this technology. Sensors are always on, radar is always on, theyre not looking at cell phones, theyre not 17 years old holding their girlfriends hand, theyre not talking to jimmy about whats happening at the party. These sensors dont do that. Theres no High School Prom for them, theres no twitter, there is on. And so i think that is the upside. And if you look at it and its quite, you knowing troubling, accidents and fatalities are up, i think, 10 . There was just an article in the New York Times the other day. How can that be when we have all these technologies in the car . Yet fatal todays are up fatalities are up . Granted, or theres slightly more miles being driven, but certainly i theyre higher. So something is going on, be i think this technology is a big, big help. No debate. Host finally, this is the end of your wall street journal oped. Whether you develop software or bend metal, were all automakers now. [laughter] guest well, this is a little ode to it seems to be the trendy thing now that Everyone Wants to get into the car business. Uber, obviously, the rumors of apple pending, whatever theyre doing with project titan, and google, of course, with an Autonomous Car and a host of other people. Frankly, in my mind we love this, you know . The automotive business was sort of or ma ginnallized marginalized to the automotive page, now were on the front page with technologies, with government regulations, were on the front page of conversation. And if you look at the big three thats causing that, primary, number one is the conversation we had on autonomous and piloted. The second one, of course, is the regulationed and the emergence of battery and what thatll lead to, and the third is a changed business not el. The uber ors and the lyfts, a subscriberbassed model versus what weve been used to. So you are going to see a profound amount of change in the automotive business over the coming years. Thats why i reference ared so many players coming in. But i think basic truths wont go away. You need to have a strong brand, you need to embrace Technology Like crazy. Dont defend the old world with, embrace the new world, and thats what were doing here even if it is a little challenging sometimes. Host scott keogh is president of audi of america. The communicators has several recent programs on car technology. If youd like to see those and programs on other communications and technology topics, go to cspan. Org. Cspan, where history unfolds daily. In 1979, cspan was create as a Public Service by americas Cable Television companies and is brought to you today by your cable or satellite provider. Were asking students to participate in this years student cam video documentary competition by telling us what is the most urgent issue for our next president , donald trump, and the Incoming Congress to address in 2017 . Our competition is open to all middle school and High School Students grades 612. Students can work alone or in a group of up to three to produce a 57 minute documentary on the issue selected. A grand prize of 5,000 will go to the student or team with the best overall entry. 100,000 in cash prizes will be awarded and shared between 150 students and 53 teachers. This years deadline is january 20, 2017. Thats inauguration day. For more information about the competition, go to our web site, studentcam. Org. Now a look at the fight against isis. Middle east experts talk about how the terrorist group is responding to recent attacks in mosul and the challenges facing other parts of iraq that were once under isis control. From the atlantic council, this is an hour and 20 minutes. Want to, first, introduce our panelists before i begin to give a lay of the land and sign post our conversation today. Sitting to my immediate left, your right, is hassan as san, hes a resident at the Tahrir Institute and the coauthor of isis inside the army of terror. And next to hasan is Jessica Mcveigh lewis, director of trade craft innovation at the institute for the study of war, and also on the far left is howard jatts, whose latest publication is called foundations of the islamic state. And were going to, rather than have sort of set, prepared speeches today, were going to have this more of a discussion format about current related events related to the islamic state, but also building upon that a lot of the history, its foundations, where it came from and what we can learn from that for perhaps future policy operations for the next American Administration after the election. So i think its actually best to start with hassan and jessica as we look forward, as we start here. Obviously, in the news we have the battle for mosul going on. It began, i believe, about two
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